Labor Law 2 A2010 -1-
BACKGROUND MATERIAL
FROM COMPULSORY ARBITRATION TO COLLECTIVE
BARGAINING IN THE PHILIPPINES
Cicero Calderon
2 Contrasting Approaches to the Regulation of Labor Relations
1. System of Compulsory Arbitration (1936)
2. Collective Bargaining
COMPULSORY ARBITRATION
Factors that Contributed to its Adoption
- On the basis of Art. 2, sec. 5 and Art. 14, sec. 6 of the 1935
Constitution, the National Assembly of the Philippines in 1936,
adopted compulsory arbitration by providing for a Court of
Industrial Relation under C.A. No. 103
- The adoption of compulsory arbitration was a deliberate
response of the policy-makers to the social scene characterized
by acute agrarian and industrial unrest of disturbing proportions.
Other factors contributing to the adoption were:
1. the poor state of organization of the workers and farm
workers and the resultant
2. lack of effective collective bargaining
3. the customary reliance of the Filipino upon courts of justice in
the adjudication of controversies of whatever nature
3. the desire to experiment with compulsory arbitration which
had been rejected at least 3 times under American Rule
4. the apparent inadequacy or effectiveness of the
Government’s policy of non-intervention in the area of labor
management relations
5. the strong influence of the then President, Manuel L. Quezon
who advocated its adoption before the National Assembly
Court of Industrial Relation
- The CIR was organized at the close of 1936 but started to
function only in 1937.
- The Court’s docket started to clog in 1947. This number rose
very rapidly on the succeeding 6 years, from 137 in 1948 to over
1, 500 in 1953.
- The adjudication of labor disputes was being delayed and that
the main machinery to enforce the system of compulsory
arbitration was unable, or was no longer able, to cope
adequately and effectively with h responsibilities placed upon it.
- Major factors responsible for the accumulation of cases:
1. Lack of adequate support from the Government itself
2. Consequent inefficiency of the Court
3. The extremely generous discretionary powers vested in the
Court to grant continuances, modify its orders and hear motions
for reconsideration (sitting as full court) and to other aspects of
its procedure.
Weaknesses of the System of Compulsory Arbitration
1. There were varied concepts of what constituted “fair and just
wage,” “just or unjust cause for dismissal,” public interest,”
“social justice” and other technical abstractions. Under such
conditions instability and confusion characterized labor
management relations.
2. A judicial approach was adopted to the settlement of labor
disputes, with the result that policy considerations and economic
factors played a less important role than technicalities of law.
3. Excessive dependence on the CIR.
4. The system of compulsory arbitration and the law failed to
provide adequate protection for the exercise of the right of self-
organization by the workers.
5. The Supreme Court and the CIR failed to perceive that the
best means of protecting the workers was to help them build
strong unions free from company domination.
6. The legal provisions on strikes and the wide latitude given to
the CIR in exercising powers to issue injunctions made it difficult
to use strikes and other concerted activities, or the threat of
them, as a means of improving the bargaining position of labor.
Disini
7. The CIR found that not all differences between workers
and employers could be proper subjects of compulsory
arbitration.
8. The failure of the CIR to resolve conflicting demands for
recognition of unions for collective bargaining purposes did
not lead to stability in labor management relations.
An Evaluation of the System of Compulsory Arbitration
- The basic objectives underlying the adoption of compulsory
arbitration
1. To afford protection to labor because of the great
disparity in bargaining power
- On the whole, terms and conditions of employment were
improved for those workers who had the courage and
staying power to fight their case before the CIR. But its
effectiveness in affording protection to labor was greatly
reduced when disputes dragged out in interminable
litigation and the Government failed to meet the increased
demand for the Court’s services.
2. Stability in Labor Management Relations
- Labor management greatly improved for a while. The
effectiveness of the system in promoting stability of labor-
management relations was greatly reduced, however,
during the post-war years.
- Under compulsory arbitration an interesting phenomenon
developed: the emergence of a labor movement under the
leadership of lawyers.
3. Stability of Society in General
- The Cir appeared effective in playing the role from its
organization until the Philippines were engulfed in the
Second World War in 1941.
- It was unable to play the role ineffectively during the post-
war years. This failure contributed to no small measure to
the resurgence of agrarian unrest and strikes in the country.
THE ADOPTION OF COLLECTIVE BARGAINING
- Collective bargaining was adopted as the labor relations
policy of the Philippines on June 17, 1953, when R.A. No. 875
was approved.
- Its adoption can be attributed to several factors the most
significant of which were:
1. The rising discontent of labor groups with the operation of
the CIR because of protracted delays in the adjudication
cases.
2. The exposure of Filipino labor leaders to concepts of
collective bargaining resulting either from contacts with
foreign labor leaders visiting the Philippines or from visits
made to other countries by several of the Filipino labor
leaders
3. The participation by the Philippines in the adoption of 2
important Conventions by the International .Labor
Conference namely the Freedom of Association and
Protection of the Right to Organise Convention, 1948, and
the Right to Organise and Collective Bargaining Convention,
1949.
4. The influence of experience in the United States under
the National Labor Relations Act of 1953 ( Wagner Act),
which greatly encouraged the development of trade unions
and collective bargaining in that country and the enactment
of the Labor Management Relations Act of 1947 (Taft-
Hartley).
Basic Features of the Act of 1953
1. Registration of Labor Organizations
- to obtain the status of a legitimate labor organization and
to avail itself of the right to be certified as the exclusive
bargaining representative in an appropriate bargaining unit
and act as such – a labor organization, association or union
must register with the Department of Labor by filing with the
Office of the Secretary of Labor notice of its organization
and existence.
2. Certification Election
 Labor Law 2 A2010
- When a number of union seeks to bargain for a particular group
of workers or when the employer doubts the claim of a particular
union to be representative of the majority of the workers in his
factory or establishment, the CIR shall order the Department of
Labor to conduct a certification election by secret ballot, either
on its own initiative or when it is petitioned to do so by the
employer or by at least 10% of the employees in the appropriate
unit.
3. Collective Bargaining Process
- In recognition “the real industrial peace cannot be achieved by
compulsion of law” and that sound stable industrial relations
must rest, in keeping with the spirit of… democratic institutions,
on an essentially voluntary basis” the Act provides that “no court
of the Philippines shall have the power to set wages, rates of
pay, hours of employment or conditions of employment except
as in this Act is otherwise provided.”
4. Unfair Labor Practice
- The Act prohibits certain practices on the part of employers and
trade unions which it characterizes as “unfair labor practices.”
5. Procedure for the Prevention of Unfair Labor Practices
- The Act gives the CIR, following a special procedure, the power
to prevent unfair labor practices, with exclusive jurisdiction to
hear all complaints relating thereto.
6. Labor Disputes in Industries Indispensable to the National
Interest
- In cases of labor disputes in industries indispensable to the
national interest and certified as such by the President of the
Philippines to the CIR, the Court is empowered by the Act to
issue restraining orders enjoining an employer from locking out
his employees and employees from striking.
7. The Labor Injunction
- The Act provides that, except in labor disputes affecting the
national, no restraining order or temporary or permanent
injunction shall be issued in any case involving or growing out of
a labor dispute except to restrain the commission of violence,
fraud and other illegal acts committed in the course of the labor
dispute.
8. Role of State Agencies
- Though the Industrial Peace Act was designed to reduce the
role of the State in the field of labor-management relations to a
minimum, it also recognizes that the State cannot merely
perform a passive role.
2 state agencies play an important part in the collective
bargaining process, namely the Court of Industrial Relations and
the Department of Labor and are charged with various functions
under the Act.
Effects of the New Policy
- Increase in the number of trade unions
- Development of a more cohesive labor movement
- Emergence of union leadership from the rank and file
- Collective bargaining agreements
- Labor disputes
Difficulties Encountered
- Ease of registering unions
- Delay in determination of unfair labor practice cases
- Delay in hearing petitions for certification elections
- Excessive use of injunctions in labor disputes
- Failure to adopt voluntary arbitration as a method of settling
disputes.
Possible Avenues of Improvement
- Requiring the officers of a union applying for registration to
make a sworn statement that the union is free from employer
support, control or influence.
- The CIR should be given exclusive power to issue labor
injunctions and conduct certification elections. The appeals to
the Supreme Court should not be allowed in certification election
cases.
- The CIR should not be limited to granting of relief in the form of
“cease and desist” orders or reinstatement with or without back
-2- Disini
pay in cases where workers have been dismissed for trade
union membership or activity; it should be empowered to
award damages in proper cases.
- The Labor Management Advisory Council of the
Department of Labor should bring the various Chambers of
Commerce and the major labor \federations together to
discuss the question of voluntary arbitration as a final step
in the grievance machinery and a substitute for direct action
in the enforcement of collective bargaining and assume
responsibility for the adoption of appropriate measures for
its general introduction.
- The Conciliation Service should be provided with enough
trained conciliators to ensure that the process of collective
bargaining will operate smoothly.
- Backing these measures is the program of workers’
education.
Conclusion
- 3 important stages of development of the labor relations
policy of the Philippines Government:
1. Before 1936 – pattern of non-interference on the part of
the Government
2. As early as 1933 – when the world found itself in the
throes of economic depression, Frank Murphy, stated before
the Legislature that “ a responsibility rests upon
government for control and guidance in a field that was
formerly left to the automatic regulation of self-interest and
individual ambition” and the policy of non-interference was
completely abandoned when compulsory arbitration was
adopted under C.A. 103.
3. Re-examination of policy and the adoption of collective
bargaining under the Industrial Peace Act of 1953 reflected
as new and new objectives.
I. INTRODUCTORY MATERIALS
1.1 STATUTORY BASIS
B.F. GOODRICH PHILIPPINES, INC. vs. B.F.
GOODRICH (MARIKINA FACTORY)
CONFIDENTIAL & SALARIED EMPLOYEES
UNION-NATU, B.F. GOODRICH (MAKATI
OFFICE) CONFIDENTIAL & SALARIED
EMPLOYEES UNION-NATU, and COURT OF
INDUSTRIAL RELATIONS
49 SCRA 532
FERNANDO; February 28, 1973
Facts:
The Goodrich Unions were seeking to be recognized as the
bargaining agent of BF Goodrich Phils’ employees so that
there could negotiations for a collective contract. BF
Goodrich countered this by filing for two petitions for
certification election with the CIR. Strike notices were sent
to the company by the union demanding recognition and
soon after a strike was actually held. The company then filed
a case of illegal strike and unfair labor practice against the
unions.
ISSUE:
WON the determination of an unfair labor practice case,
brought against unions, must precede the holding of a
certification election
HELD: No.
REASONING:
- If under the circumstances disclosed, management is
allowed to have its way, the result might be to dilute or
 Labor Law 2 A2010
fritter away the strength of an organization bent on a more
zealous defense of labor's prerogatives.
- This is not to say that management is to be precluded from
filing an unfair labor practice case. It is merely to stress that
such a suit should not be allowed to lend itself as a means,
whether intended or not, to prevent a truly free expression of
the will of the labor group as to the organization that will
represent it.
- There is no valid reason then for the postponement sought.
This is one instance that calls for the application of the maxim,
lex dilationes semper exhorret. (The law abhors delays.)
- The law clearly contemplates all the employees, not only some
of them, to take part in the certification election. (Some of the
employees could possibly lose such status, by virtue of a
pending unfair labor practice case, if such case is to be
resolved first before the election.)
- Another reason (re: no point in the postponement of said
election) is that even if the company wins in the pending case,
it does not mean that the employees involved automatically
would lose their jobs making them ineligible to participate in
the cert. election. (Ergo the respondent court decided in the
negative.)
- Besides, it was said in General Maritime Stevedores' Union v.
South Sea Shipping Line: the question of whether or not a
certification election shall be held "may well be left to the
sound discretion of the Court of Industrial Relations,
considering the conditions involved in the case…."
FN 25 under page 542
- As a matter of fact, the only American Supreme Court
decision cited in the petition, National Labor Relations Board
v. A.J. Tower Co., 25 likewise, sustains the same principle
(under Gen. Maritime case). It was there held that the
discretion of the labor tribunal, in this case, the National
Labor Relations Board of the United States, is not lightly to
be interfered with. (The issue in that case, concerns the
procedure used in elections under the National Labor
Relations Act in which employees choose a statutory
representative for purposes of collective bargaining. The
propriety of the National Labor Relations Board's refusal to
accept an employers post-election challenge to the
eligibility of a voter who participated in a consent election
must be determined. The First Circuit Court of Appeals set
aside the Board's order and so the matter was then taken to
the US SC on certiorari.)
- In reversing the Circuit Court of Appeals, Justice Murphy
made clear the acceptance of such a doctrine in the light of
the National Labor Relations Act thus: "As we have noted
before, Congress has entrusted the Board with a wide
degree of discretion in establishing the procedure and
safeguards necessary to insure the fair and free choice of
bargaining representatives by employees."
- In the United States as in the Philippines, the decision in
such matters by the administrative agency is
accorded the utmost respect. CJ Concepcion: “in such
proceedings, the determination of what is an
appropriate bargaining unit is "entitled to almost
complete finality."
25
329 US 324 (1946). Reference was made in the earlier portion
of this opinion that the petition contains "copious references to
National Labor Relations Board cases." While not to be
discouraged as the Industrial Peace Act owes much to the
National Labor Relations Act of 1935, commonly known as the
Warner Act, as well as to the Norris-La Guardia Act of 1932, still
their persuasive force would depend on the fuller discussion of
the facts in each of the cases cited and the rulings arrived at.
Such feature is conspicuously lacking in the petition.
-3- Disini
- The prevailing principle then on questions as to
certification, as well as in other labor cases, is that only
where there is a showing of clear abuse of discretion
would this Tribunal be warranted in reversing the
actuation of respondent Court. There is no showing of
such a failing in this case.
DISPOSITIVE: The petition for certiorari is dismissed.
1.2 DEFINITIONS
1.2.1 Employer and employee
FEATI UNIVERSITY V BAUTISTA
18 SCRA 1191
ZALDIVAR; December 27, 1966
NATURE
Consolidated cases/petitions for certiorari, prohibition w/
writ of preliminary injunction
FACTS
-Jan 14, 1963: the President of the Faculty Club wrote to the
President of the University a letter informing the latter of the
organization of the Faculty Club as a labor union, duly
registered with the Bureau of Labor Relations
-Jan 22, 1963: another letter was sent, to which was
attached a list of demands consisting of 26 items, and
asking the President of the University to answer within ten
days from date of receipt thereof.
-The University questioned the right of the Faculty Club to
be the exclusive representative of the majority of the
employees and asked proof that the Faculty Club had been
designated or selected as exclusive representative by the
vote of the majority of said employees.
-Feb 1, 1963: the Faculty Club filed with the Bureau of Labor
Relations a notice of strike alleging as reason therefore the
refusal of the University to bargain collectively with the
representative of the faculty members.
-Feb 18, 1963: the members of the Faculty Club went on
strike and established picket lines in the premises of the
University, thereby disrupting the schedule of classes.
-March 1, 1963: the Faculty Club filed Case No. 3666-ULP for
unfair labor practice against the University, but which was
later dismissed (on April 2, 1963 after Case 41-IPA was
certified to the CIR).
-March 7, 1963: a petition for certification election, Case No.
1183-MC, was filed by the Faculty Club in the CIR
ISSUES
1. WON the definition of employer in RA875 covers an
educational institution like Feati University
2. WON the members of the Faculty Club are independent
contractors (If they are, then they are not employees within
the purview of the said Act.)
HELD
1. YES. It is true that the SC has ruled that certain
educational institutions and other juridical entities are
beyond the purview of RA875 in the sense that the CIR has
no jurisdiction to take cognizance of ULP charges against
them, but the principal reason in ruling in those cases is that
those entities are not organized, maintained and operated
for profit and do not declare dividends to stockholders.
-In the decisions in the cases of the Boy Scouts of the
Philippines, the University of San Agustin, the UST, and
LaConsolacion College, this Court was not unanimous in the
view that the Industrial Peace Act (Republic Act No. 875) is
not applicable to charitable, or non-profit organizations
which include educational institutions not operated for
profit. There are members of this Court who hold the view
 Labor Law 2 A2010
that the Industrial Peace Act would apply also to non-profit
organizations or entities, the only exception being the
Government, including any political subdivision or
instrumentality thereof, in so far as governmental functions are
concerned. However, in the Far Eastern University case this
Court is unanimous in supporting the view that an educational
institution that is operated for profit comes within the scope of
the Industrial Peace Act. We consider it a settled doctrine of this
Court, therefore, that the Industrial Peace Act is applicable to
any organization or entity whatever may be its purpose when it
was created.
-TEST: Does the University operate as an educational institution
for profit? Does it declare dividends for its stockholders? If it
does not, it must be declared beyond the purview of Republic
Act No. 875; but if it does, Republic Act No. 875 must apply to it.
In this case, Feati University itself admits that it has declared
dividends. CIR also found that the University is not for strictly
educational purposes and that "It realizes profits and parts of
such earning is distributed as dividends to private stockholders
or individuals. Under this circumstance, and in consonance with
the rulings in the decisions of this Court, above cited, it is
obvious that Republic Act No. 875 is applicable to herein
petitioner Feati University.
-RA 875, Sec 2(c): The term employer includes any person acting
in the interest of an employer, directly or indirectly, but shall not
include any labor organization (otherwise than when acting as an
employer) or any one acting in the capacity or agent of such
labor organization.
-It will be noted that in defining the term "employer" the Act
uses the word "includes" and not the word "means". In using the
word "includes" and not "means", Congress did not intend to
give a complete definition of "employer", but rather that such
definition should be complementary to what is commonly
understood as employer. Congress intended the term to be
understood in a broad meaning because, firstly, the statutory
definition includes not only "a principal employer but also a
person acting in the interest of the employer"; and, secondly, the
Act itself specifically enumerated those who are not included
in the term "employer", namely: (1) a labor organization
(otherwise than when acting as an employer), (2) anyone
acting in the capacity of officer or agent of such labor
organization [Sec. 2(c)], and (3) the Government and any
political subdivision or instrumentality thereof insofar as the
right to strike for the purpose of securing changes or
modifications in the terms and conditions of employment is
concerned (Section 11). Among these statutory exemptions,
educational institutions are not included; hence, they can be
included in the term "employer". This Court, however, has ruled
that those educational institutions that are not operated for
profit are not within the purview of Republic Act No. 875.
-RA 875 does not give a comprehensive but only a
complementary definition of the term "employer". The term
encompasses those that are in ordinary parlance "employers."
What is commonly meant by "employer"? The term "employer"
has been given several acceptations. The lexical definition is
"one who employs; one who uses; one who engages or keeps in
service;" and "to employ" is "to provide work and pay for; to
engage one's service; to hire." [see full case for other definitions
of the word employer as provided for by the Workmen's
Compensation Act, the Minimum Wage Law, the Social
Security Act, etc]
-Jurisprudence: An employer is one who employs the services
of others; one for whom employees work and who pays their
wages or salaries (Black Law Dictionary, 4th ed., p. 618).
-Under none of these definitions may the University be excluded.
The University engaged the services of the professors, provided
them work, and paid them compensation or salary for their
services. Even if the University may be considered as a lessee of
services under a contract between it and the members of its
Faculty, still it is included in the term "employer". "Running
through the word `employ' is the thought that there has been an
agreement on the part of one person to perform a certain
-4- Disini
service in return for compensation to be paid by an
employer.
2. NO.
-RA 875, Section 2 (d): The term "employee" shall include
any employee and shall not be limited to the “employee”
of a particular employer unless the act explicitly states
otherwise and shall include any individual whose work
has ceased as a consequence of, or in connection
with, any current labor dispute or because of any
unfair labor practice and who has not obtained any
other substantially equivalent and regular
employment.
-This definition, by the use of the term “include” is again
complementary. This Court has defined the term
"employer" as "one who employs the services of others;
one for whom employees work and who pays their wages or
salaries. Correlatively, an employee must be one who is
engaged in the service of another; who performs services
for another; who works for salary or wages.
-It is admitted by the University that the striking professors
and/or instructors are under contract to teach particular
courses and that they are paid for their services. They are,
therefore, employees of the University.
-The contention of the University that the professors and/or
instructors are independent contractors, because the
University does not exercise control over their work, is
likewise untenable. This Court takes judicial notice that a
university controls the work of the members of its faculty;
that a university prescribes the courses or subjects that
professors teach, and when and where to teach; that the
professors' work is characterized by regularity and
continuity for a fixed duration; that professors are
compensated for their services by wages and salaries,
rather than by profits; that the professors and/or instructors
cannot substitute others to do their work without the
consent of the university; and that the professors can be laid
off if their work is found not satisfactory. All these indicate
that the university has control over their work; and
professors are, therefore, employees and not independent
contractors.
-Moreover, even if university professors are considered
independent contractors, still they would be covered by RA
875. This law modelled after the Wagner Act, or the National
Labor Relations Act, of the United States, did not exclude
"independent contractors" from the orbit of "employees". It
was in the subsequent legislation the Labor Management
Relation Act (Taft-Harley Act) that "independent contractors"
together with agricultural laborers, individuals in domestic
service of the home, supervisors, and others were excluded.
Disposition Petition for certiorari & prohibition with
preliminary injunction dismissed. Writs prayed for therein
denied. Writ of preliminary injunction dissolved. Costs
against Feati University.
NYK INTERNATIONAL KNITWEAR CORP.
PHILS. V NLRC (PUBLICO)
397 SCRA 607
QUISUMBING; February 17, 2003
NATURE
Petition for review on certiorari
FACTS
- Petitioner NYK hired respondent Virginia Publico as a
 Labor Law 2 A2010
sewer. She was paid on a piece-rate basis, and was required to
work from 8 AM to 12 midnight.
- May 7, 1997 Publico left the work place early as she was not
feeling well due to flu. Publico did not come to work the next
day. Due to this absence, Publico was informed by Stephen Ng
(owner of NYK) that she was dismissed.
ISSUE/S
1. WON there was illegal dismissal;
2. WON petitioners are solidarily liable to pay backwages
and separation pay as there was no malice or bad faith.
HELD
1. YES
Ratio The petitioners’ allegations of abandonment cannot stand
the unswerving conclusion by the NLRC and Labor Arbiter.
Reasoning Petitioners raised factual questions which are
improper in a petition for review on certiorari. Finding of facts of
the NLRC, particularly in a case where the NLRC and the Labor
Arbiter are in agreement, are deemed binding and conclusive
upon this Court.
2. YES
Ratio Cathy Ng falls within the meaning of an “employer” as
contemplated by the Labor Code, who may be held jointly and
severally liable for the obligations of the corporation to its
dismissed employees.
Reasoning Since a corporation is an artificial person, it must
have an officer who can be presumed to be the employer, being
the “person acting in the interest of the employer.”1 In this case,
Cathy Ng, in her capacity as manager, is deemed the employer,
and is thus solidarily liable regardless of absence malice. She
cannot be exonerated from her liability in the payment to private
respondent.
Disposition Instant petition is denied.
1.2.2 LABOR ORGANIZATION-
LEGITIMATE LABOR
ORGANIZATION
AIRLINE PILOTS ASSOCIATION OF THE
PHILIPPINES V. CIR
76 SCRA 274
CASTRO; April 15, 1977
Definition of Legitimate Labor Organization:
Section 2(e) of R.A. 875 defines "labor organization" as any
union or association of employees which exist, in whole or in
part, for the purpose of the collective bargaining or dealing with
employers concerning terms and conditions of employment."
The emphasis of Industrial Peace Act is clearly on the pourposes
for which a union or association of employees established rather
than that membership therein should be limited only to the
employees of a particular employer. Under Section 2(h) of R.A
875 "representative" is define as including "a legitimate labor
organization or any officer or agent of such organization,
whether or not employed by the employer or employee whom he
represents." It cannot be overemphasized likewise that labor
dispute can exist "regardless of whether the disputants stand in
the proximate relation of employer and employee.”
DUNLOP SLAZENGER V SEC. OF LABOR (RUIZ)
300 SCRA 120
PUNO; DECEMBER 11, 1998
NATURE
Petition for certiorari
1
A.C. Ransom Labor union-CCLU v NLRC
-5- Disini
FACTS
- Respondent union filed a Petition for Certification Election
among the supervisory, office and technical employees of
the petitioner company before the DOLE, Regional Office No.
III.
- Petitioner company filed a motion to dismiss based on 1)
that the respondent union is comprised of supervisory and
rank-and-file employees and cannot act as bargaining agent
for the proposed unit; (2) that a single certification election
cannot be conducted jointly among supervisory and rank-
and-file employees; and (3) that the respondent union lacks
legal standing since it failed to submit its books of accounts.
- Respondent alleges that it is composed only of supervisory
employees and that it has no obligation to attach its books
of accounts since it is a legitimate labor organization.
- The mediator arbiter granted the petition of the union. It
said that the contention of the respondent that the
petitioning union is composed of both supervisory and rank
and file employees is not sufficient to dismiss the petition. It
can be remedied thru the exclusion-inclusion proceedings
wherein those employees who are occupying rank and file
positions will be excluded from the list of eligible voters. The
secretary of labor affirmed.
ISSUE/S
WON the union can be composed of supervisory and rank
and file employees
HELD
NO.
Ratio Article 245 of the Labor Code clearly provides that
"supervisory employees shall not be eligible for membership
in a labor organization of the rank-and-file employees.”
Reasoning Public respondent gravely misappreciates the
basic antipathy between the interest of supervisors and the
interest of rank-and-file employees. There is a
irreconcilability of their interests which cannot be cured
even in the exclusion-inclusion proceedings.
-Appropriate bargaining unit: Group of employees of a giver
employer, composed of all or less than 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.
Disposition Petition is granted.
Lopez Sugar Corporation v. Sec. of Labor
(and NATIONAL CONGRESS OF UNIONS IN
THE SUGAR INDUSTRY OF THE PHILIPPINES
(NACUSIP) and COMMERCIAL AND AGRO-
INDUSTRIAL LABOR ORGANIZATION
(CAILO))
Vitug ; August 1995
247 SCRA 1
Facts
-The Med-Arbiter, sustained by the Secretary of Labor and
Employment, has ruled that Art. 257 is mandatory and give
him no other choice than to conduct a certification election
upon the receipt of the corresponding petition.
"Art. 257. Petitions in unorganized
establishments. - In any establishment where there is no
certified bargaining agent, a certification election shall
automatically be conducted by the Med-Arbiter upon the
filing of a petition by a legitimate labor organization."
-National Congress of Unions in the Sugar Industry of the
Philippines-TUCP ("NACUSIP-TUCP") filed with the
Department of Labor and Employment ("DOLE") a petition
for direct certification or for certification election to
 Labor Law 2 A2010
determine the sole and exclusive collective bargaining
representative of the supervisory employees of herein petitioner,
Lopez Sugar Corporation ("LSC"). NACUSIP-TUCP averred that it
was a legitimate national labor organization; that LSC was
employing 55 supervisory employees, the majority of whom
were members of the union; that no other labor organization was
claiming membership over the supervisory employees; that
there was no existing collective bargaining agreement covering
said employees; and that there was no legal impediment either
to a direct certification of NACUSIP-TUCP or to the holding of a
certification election.
-LSC contended it. NACUSIP-TUCP submitted Charter Certificate
No. 003-89, dated 20 July 1989, of the NACUSIP-TUCP Lopez
Sugar Central Supervisory Chapter.
-LSC appealed to the DOLE and asseverated that the order was a
patent nullity and that the Med-Arbiter acted with grave abuse of
discretion, Sec. of Labor denied it. Petition for certiorari was
filed.
Issue
WON the certification election should push through
Held
No, because the labor organization is not legitimate.
It was held in Progressive Development Corporation vs.
Secretary, Department of Labor and Employment:
"But while Article 257 cited by the Solicitor General directs the
automatic conduct of a certification election in an unorganized
establishment, it also requires that the petition for certification
election must be filed by a legitimate labor organization. Article
212(h) defines a legitimate labor organization as 'any labor
organization duly registered with the DOLE and includes any
branch or local thereof.' Rule 1, Section 1(j), Book V of the
Implementing Rules likewise defines a legitimate labor
organization as 'any labor organization duly registered with the
DOLE and includes any branch, local or affiliate thereof .' "
Indeed, the law did not reduce the Med-Arbiter to an
automaton which can instantly be set to impulse by the
mere filing of a petition for certification election. He is
still tasked to satisfy himself that all the conditions of
the law are met, and among the legal requirements is
that the petitioning union must be a legitimate labor
organization in good standing.
The petition for certification election, in the case at bench, was
filed by the NACUSIP-TUCP, a national labor organization duly
registered with the DOLE. The legitimate status of NACUSIP-
TUCP might be conceded; being merely, however, an agent for
the local organization (the NACUSIP-TUCP Lopez Sugar Central
Supervisory Chapter), the federation's bona fide status
alone would not suffice. The local chapter, as its
principal, should also be a legitimate labor organization
in good standing. Accordingly, in Progressive Development,
we elucidated:
"In the case of union affiliation with a federation, the
documentary requirements are found in Rule II, Section 3(e),
Book V of the Implementing Rules, which we again quote as
follows:
"'(c ) The local or chapter of a labor federation or national union
shall have and maintain a constitution and by laws, set of
officers and books of accounts. For reporting purposes, the
procedure governing the reporting of independently registered
unions, federations or national unions shall be observed.'
"Since the 'procedure governing the reporting independently
registered unions' refers to the certification and attestation
requirements contained in Article 235, paragraph 2, it follows
that the constitution and by-laws, set of officers and books of
accounts submitted by the local and chapter must likewise
comply with these requirements. The same rationale for
requiring the submission of duly subscribed documents upon
union registration exists in the case of union affiliation.
-6- Disini
Moreover, there is greater reason to exact compliance with
the certification and attestation requirements because, as
previously mentioned, several requirements applicable to
independent union registration are no longer required in the
case of the formation a local or chapter. The policy of the
law in conferring greater bargaining power upon labor
unions must be balanced with the policy of providing
preventive measures against the commission of fraud.
"A local or chapter therefore becomes a legitimate
labor organization only upon submission of the
following to the BLR:
"1) A charter certificate, within 30 days from its issuance by
the labor federation or national union, and
"2) The constitution and by-laws, a statement on the set of
officers, and the books of accounts all of which are certified
under oath by the secretary or treasurer, as the case may
be, of such local or chapter, and attested to by its president.
"Absent compliance with these mandatory requirements,
the local or chapter does not become legitimate labor
organization."
The only document extant on record to establish the
legitimacy of the NACUSIP-TUCP Lopez Sugar Central
Supervisory Chapter is a charter certificate and nothing else.
Disposition
WHEREFORE, the assailed Decision of the Secretary of
Labor, dated 06 March 1990, affirming that of the Med-
Arbiter, is ANNULLED and SET ASIDE. The petition for
certification election is dismissed.
1.2.3 LABOR DISPUTE
FEATI UNIVERSITY V BAUTISTA
18 SCRA 1191
ZALDIVAR; December 27, 1966
NATURE
Consolidated cases/petitions for certiorari, prohibition w/
writ of preliminary injunction
FACTS
-Jan 14, 1963: the President of the Faculty Club wrote to the
President of the University a letter informing the latter of the
organization of the Faculty Club as a labor union, duly
registered with the Bureau of Labor Relations
-Jan 22, 1963: another letter was sent, to which was
attached a list of demands consisting of 26 items, and
asking the President of the University to answer within ten
days from date of receipt thereof.
-The University questioned the right of the Faculty Club to
be the exclusive representative of the majority of the
employees and asked proof that the Faculty Club had been
designated or selected as exclusive representative by the
vote of the majority of said employees.
-Feb 1, 1963: the Faculty Club filed with the Bureau of Labor
Relations a notice of strike alleging as reason therefor the
refusal of the University to bargain collectively with the
representative of the faculty members.
-Feb 18, 1963: the members of the Faculty Club went on
strike and established picket lines in the premises of the
University, thereby disrupting the schedule of classes.
-March 1, 1963: the Faculty Club filed Case No. 3666-ULP for
unfair labor practice against the University, but which was
later dismissed (on April 2, 1963 after Case 41-IPA was
certified to the CIR).
-March 7, 1963: a petition for certification election, Case No.
1183-MC, was filed by the Faculty Club in the CIR.
ISSUES
WON there is a labor dispute between the University and the
Faculty Club
 Labor Law 2 A2010
HELD
YES.
-RA 875 provides that the term "labor dispute" includes any
controversy concerning terms, tenure or conditions of
employment, or concerning the association or representation of
persons in negotiating, fixing, maintaining, changing, or seeking
to arrange terms or conditions of employment regardless of
whether the disputants stand in proximate relation of employer
and employees.
-The test of whether a controversy comes within the
definition of "labor dispute" depends on whether the
controversy involves or concerns "terms, tenure or
condition of employment" or "representation."
-All the admitted facts show that the controversy between the
University and the Faculty Club involved terms and conditions of
employment, and the question of representation. Hence, there
was a labor dispute between the University and the Faculty Club,
as contemplated by Republic Act No. 875.
-Recall: RA 875, sec10: When in the opinion of the President of
the Philippines there exists a labor dispute in an industry
indispensable to the national interest and when such labor
dispute is certified by the President to the Court of Industrial
Relations, said Court may cause to be issued a restraining order
forbidding the employees to strike or the employer to lockout
the employees, and if no other solution to the dispute is found,
the Court may issue an order fixing the terms and conditions of
employment.
-To certify a labor dispute to the CIR is the prerogative of the
President under the law, and this Court will not interfere in,
much less curtail, the exercise of that prerogative. Once the
jurisdiction is acquired pursuant to the presidential certification,
the CIR may exercise its broad powers as provided in
Commonwealth Act 103. All phases of the labor dispute and the
employer-employee relationship may be threshed out before the
CIR, and the CIR may issue such order or orders as may be
necessary to make effective the exercise of its jurisdiction. The
parties involved in the case may appeal to the Supreme Court
from the order or orders thus issued by the CIR.
Disposition Petition for certiorari & prohibition with preliminary
injunction dismissed. Writs prayed for therein denied. Writ of
preliminary injunction dissolved. Costs against Feati University.
SAN MIGUEL EMPLOYEES UNION V BERSAMIRA
186 SCRA 496
MELENCIO-HERRERA; June 13, 1990
NATURE
Special civil action for certiorari
FACTS
- SMC entered into contracts for merchandising services with
Lipercon and D'Rite (L&D), independent contractors duly
licensed by DOLE. In said contracts, it was expressly understood
and agreed that the EEs employed by the contractors were to be
paid by the latter and that none of them were to be deemed EEs
or agents of SanMig. There was to be no employer-employee
relation between the contractors and/or its workers, on the one
hand, and SMC on the other.
- Petitioner SMCEU-PTWGO (Union) is duly authorized
representative of the monthly paid rank-and-file EEs of SMC.
Their CBA provides that temporary, probationary, or contract EEs
-7- Disini
are excluded from the bargaining unit and outside scope of
CBA.
- Union advised SMC that some L&D workers had signed up
for union membership and sought the regularization of their
employment with SMC. Union alleged that this group of EEs,
while appearing to be contractual workers of supposedly
independent contractors, have been continuously working
for SMC for a period of 6 months to 15 years and that their
work is neither casual nor seasonal as they are performing
work or activities necessary or desirable in the usual
business or trade of SMC, and that there exists a "labor-
only" contracting situation. It was then demanded that the
employment status of these workers be regularized. This
was not acted upon by SMC, and so Union filed a notice of
strike, and then a second notice.
- Series of pickets were staged by L&D workers in various
SMC plants and offices. SMC RTC to enjoin the Union from:
representing and or acting for and in behalf of the
employees of L&D for the purposes of collective bargaining;
calling for and holding a strike vote to compel plaintiff to
hire the employees or workers of L&D, among others.
- Union filed a Motion to Dismiss SMC's Complaint on the
ground of lack of jurisdiction over the case/nature of the
action, which motion was opposed by SMC, which was
denied by respondent Judge. And after several hearings,
issued Injunction. RTC reasoned that the absence of ER-EE
relationship negates the existence of labor dispute, so court
has jurisdiction to take cognizance of SMC's grievance.
Hence, this action.
ISSUE
1. WON RTC correctly assumed jurisdiction over the
controversy and properly issued the Writ of Preliminary
Injunction.
HELD
1. NO
Re: Definition of Labor Dispute (p4 of Outline)
Ratio A labor dispute can nevertheless exist “regardless of
whether the disputants stand in the proximate relationship
of employer and employee, provided the controversy
concerns, among others, the terms and conditions of
employment or a "change" or "arrangement" thereof” The
existence of a labor dispute is not negatived by the fact that
the plaintiffs and defendants do not stand in the proximate
relation of employer and employee. (A212 LC)
Reasoning Crucial to the resolution of the question on
jurisdiction, is the matter of whether or not the case at bar
involves, or is in connection with, or relates to a labor
dispute. An affirmative answer would bring the case within
the original and exclusive jurisdiction of labor tribunals to
the exclusion of the regular Courts. In this case, the matter
re terms, tenure and conditions of EE’s employment and the
arrangement of those terms as well as the matter of
representation bring these issues within the scope of a labor
dispute. Hence it is the labor tribunals that have jurisdiction
and not the regular courts
Re: ER Functions and ULP (p30 of Outline)
- As the case is indisputably linked with a labor dispute,
jurisdiction belongs to the labor tribunals. So, Labor Arbiters
have original and exclusive jurisdiction to hear and decide
the following cases involving all workers including: [a] unfair
labor practice cases; [b] those that workers may file
involving wages, hours of work and other terms and
conditions of employment; and [c] cases arising from any
violation of A265 LC, including questions involving the
legality of striker and lockouts.
- SMC’s claim that the action is for damages under A19, 20
and 21 of CC is not enough to keep the case within the
jurisdictional boundaries of regular Courts. That claim for
damages is interwoven with a labor dispute. To allow the
 Labor Law 2 A2010
action filed below to prosper would bring about "split
jurisdiction" which is obnoxious to the orderly administration of
justice.
- SC recognizes the proprietary right of SMC to exercise an
inherent management prerogative and its best business
judgment to determine whether it should contract out the
performance of some of its work to independent contractors.
However, the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law (S3, A13,
1987 Constitution) equally call for recognition and protection.
Those contending interests must be placed in proper perspective
and equilibrium.
Disposition Petition is GRANTED.
NESTLE PHILS., INC. V NLRC (NUÑEZ)
195 SCRA 340
GRIÑO-AQUINO; March 18, 1991
NATURE
Petition for certiorari
FACTS
- The private respondents, who were employed by Nestlé either
as sales representatives or medical representatives, availed of
the petitioner's car loan policy. Under that policy, the company
advances the purchase price of a car to be paid back by the
employee through monthly deductions from his salary, the
company retaining the ownership of the motor vehicle until it
shall have been fully paid for.
- After having participated in an illegal strike, the private
respondents were dismissed from service. Nestlé directed the
private respondents to either settle the remaining balance of the
cost of their respective cars, or return them to the company for
proper disposition.
- Private respondents failed and refused to avail of either option,
so the company filed in the Regional Trial Court of Makati a civil
suit to recover possession of the cars. The private respondents
sought a temporary restraining order in the NLRC to stop the
company from cancelling their car loans and collecting their
monthly amortizations. The NLRC, en banc, granted their petition
for injunction.
- The company filed a motion for reconsideration, but it was
denied for tardiness. Hence, this petition for certiorari alleging
that the NLRC acted with grave abuse of discretion amounting to
lack of jurisdiction when it issued a labor injunction without legal
basis and in the absence of any labor dispute related to the
same.
ISSUE
WON there is a labor dispute between the petitioner and
the private respondents
HELD
NO
Ratio Paragraph (1) of Article 212 of the Labor Code defines a
labor dispute as follows:
"(1) 'Labor dispute' includes any controversy or
matters concerning terms or conditions of employment
or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging
the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation
of employer and employee."
Nestlé’s demand for payment of the private respondents'
amortizations on their car loans, or, in the alternative, the return
of the cars to the company, is not a labor, but a civil, dispute. It
involves debtor-creditor relations, rather than employee-
employer relations.
-8- Disini
Reasoning Whether or not the private respondents remain
as employees of the petitioner, there is no escape from their
obligation to pay their outstanding accountabilities to the
petitioner; and if they cannot afford it, to return the cars
assigned to them. The options given to the private
respondents are civil in nature arising from contractual
obligations. There is no labor aspect involved in the
enforcement of those obligations. The NLRC gravely abused
its discretion and exceeded its jurisdiction by issuing the
writ of injunction to stop the company from enforcing the
civil obligation of the private respondents under the car loan
agreements and from protecting its interest in the cars
which, by the terms of those agreements, belong to it (the
company) until their purchase price shall have been fully
paid by the employee. The terms of the car loan agreements
are not in issue in the labor case. The rights and obligations
of the parties under those contracts may be enforced by a
separate civil action in the regular courts, not in the NLRC.
Disposition Petition is granted.
1.3 LABOR RELATIONS POLICY
1.3.1 Method Dispute Settlement
KIOK LOY VS NLRC (PAMBANSANG
KILUSAN NG PAGGAWA)
141 SCRA 179
CUEVAS: January 22, 1986
NATURE:
- Petition for certiorari to annul the decision of the
National Labor Relations Commission
FACTS:
- In a certification election held on October 3, 1978, the
Pambansang Kilusang Paggawa (Union for short) was
subsequently certified in a resolution dated November 29,
1978 by the Bureau of Labor Relations as the sole and
exclusive bargaining agent of the rank-and-file employees
of Sweden Ice Cream Plant (Company for short). The
Company's motion for reconsideration of the said
resolution was denied on January 25, 1978.
- December 7, 1978, the Union furnished the Company with
two copies of its proposed collective bargaining
agreement. It also requested the Company for its counter
proposals. Both requests were ignored and remained
unacted upon by the Company.
- The Union, on February 14, 1979, filed a "Notice of Strike",
with the Bureau of Labor Relations (BLR) on ground of
unresolved economic issues in collective bargaining.
- Conciliation proceedings then followed during the thirty-
day statutory cooling-off period.
- The Bureau of Labor Relations to certify the case to the
National Labor Relations Commission for compulsory
arbitration.
- The labor arbiter set the initial hearing for April 29, 1979.
For failure however, of the parties to submit their
respective position papers as required, the said hearing
was cancelled and reset to another date.
- The Union submitted its position paper.
- On July 20, 1979, the National Labor Relations
Commission rendered its decision declaring the
respondent guilty of unjustified refusal to bargain
- Petitioner contends that the National Labor Relations
Commission acted without or in excess of its jurisdiction
or with grave abuse of discretion amounting to lack of
jurisdiction in rendering the challenged decision.
 Labor Law 2 A2010
- Petitioner further contends that the National Labor Relations
Commission's finding of unfair labor practice for refusal to
bargain is not supported by law
ISSUE/S:
WON the respondent is guilty of unjustified refusal to bargain
HELD:
YES
unfair labor practice is committed when it is shown that the
respondent employer, after having been served with a written
bargaining proposal by the petitioning Union, did not even
bother to submit an answer or reply to the said proposal
Ratio
Unfair labor practice is committed when it is shown that the
respondent employer, after having been served with a written
bargaining proposal by the petitioning Union, did not even
bother to submit an answer or reply to the said proposal
Reaspmomg
Collective bargaining which is defined as negotiations towards a
collective agreement, is one of the democratic frameworks
under the New Labor Code, designed to stabilize the relation
between labor and management and to create a climate of
sound and stable industrial peace. It is a mutual responsibility of
the employer and the Union and is characterized as a legal
obligation. So much so that Article 249, par. (g) of the Labor
Code makes it an unfair labor practice for an employer to refuse
"to meet and convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement with respect to
wages, hours of work, and all other terms and conditions of
employment including proposals for adjusting any grievance or
question arising under such an agreement and executing a
contract incorporating such agreement, if requested by either
party.
While it is a mutual obligation of the parties to bargain, the
employer, however, is not under any legal duty to initiate
contract negotiation. The mechanics of collective bargaining is
set in motion only when the following jurisdictional preconditions
are present, namely, (1) possession of the status of majority
representation of the employees' representative in accordance
with any of the means of selection or designation provided for by
the Labor Code; (2) proof of majority representation; and (3) a
demand to bargain under Article 251, par. (a) of the New Labor
Code .
- From the over-all conduct of petitioner company in relation to
the task of negotiation, there can be no doubt that the Union has
a valid cause to complain against its (Company's) attitude, the
totality of which is indicative of the latter's disregard of, and
failure to live up to, what is enjoined by the Labor Code to
bargain in good faith.
DISPOSITION:
- Petition dismissed
MANILA DIAMOND HOTEL EMPLOYEES UNION
V CA (MANILA DIAMOND HOTEL)
447 SCRA 97
AZCUNA; December 16, 2004
Nature
Petition for review on certiorari of a decision of the Court of
Appeals
Facts
-Union filed a petition for certification election to be declared the
exclusive bargaining representative of the Hotel’s employees.
This petition was dismissed by DOLE for lack of legal
requirements.
-after a few months, Union sent a letter to Hotel informing it of
its desire to negotiate for a collective bargaining agreement.
This was rejected by the Hotel stating that the Union was not the
-9- Disini
employee’s bargaining agent as their petition for cetification
election was denied.
-Union filed a Notice of Strike with the NCMB alleging the
Hotel’ refusal to bargain and for acts of unfair labor
practices. NCMB summoned both parties and held series of
dialogues. Union however suddenly went on strike
-Secretary of DOLE assumed jurisdiction and ordered
compulsory arbitration pursuant to art. 263 (g) of LC. And
Union members were directed to return to work and for
Hotel to accept them back. Hotel refused to accept the
employees return. The order was modified (by a different
Secretary) such that reinstatement was to be done only in
the payroll.
-Union filed for certiorari alleging grave abuse of discretion.
Case was referred to the CA. CA affirmed that the “payroll
reinstatement” was not a grave abuse of discretion.
ISSUE
WON the CA commit grave abuse of discretion in affirming
the validity of “payroll reinstatement”
HELD Yes
-CA based its decision on the UST v NLRC case which affirms
validity of payroll reinstatement. However, the UST case was
made in light of a very important fact- the teachers could
not be given back their academic assignments because the
semester was already halfway. In the present case, there is
no showing that the facts called for payroll reinstatement as
an ALTERNATIVE remedy.
-as to the nature of art.263(g), the State encourages
an environment wherein employers and employees
themselves must deal with their problems in a
manner that mutually suits them best (as embodied
in Art 3, Sec 3 of the Constitution). Hence a voluntary
instead of compulsory mode of dispute settlement is
the general rule.
-Art. 263 (g) is an exception to this rule by allowing the
Secretary of the DOLE to assume jurisdiction over a dispute
involving an industry indispensable to the national interest.
And under this rule, the law uses the phrase “under the
same terms and conditions” which contemplates only
ACTUAL REINSTATEMENT.
1.3.2 TRADE UNIONISM
ART. 211. Declaration of Policy. - A. It is the policy of the
State:
(b) To promote free trade unionism as an instrument for the
enhancement of democracy and the promotion of social
justice and development;
(c) To foster the free and voluntary organization of a strong
and united labor movement;
1.3.3 WORKER ENLIGHTENMENT
VICTORIA V INCIONG
157 SCRA 339
FERNAN; January 26, 1988
NATURE
Review of Order of Labor Secretary reversing decision of
NLRC
FACTS
- Complainant Saturno Victoria is the president of the Far
East Broadcasting Company Employees Union. On
September 8, 1972, the said union declared a strike against
respondent company for refusal to recognize them. On
September 11, 1972, respondent filed with the Court of First
Instance of Bulacan, Civil Case No. 750-V, for the issuance of
an injunction and a prayer that the strike be declared illegal.
- Strikers filed case with NLRC for reinstatement.
 Labor Law 2 A2010
Reinstatement granted without prejudice to outcome of Civil
Case 750-V.
- Strike was declared illegal because company was a non-profit
organization. Company dismissed complainant.
- Complainant filed for illegal dismissal. NLRC granted. Sec.
Inciong reversed.
ISSUE/S
1. WON company should obtain clearance under Art. 267 before
dismissing complainant.
HELD
1. NO
The purpose in requiring a prior clearance from the Secretary of
Labor in cases of shutdown or dismissal of employees, is to
afford the Secretary ample opportunity to examine and
determine the reasonableness of the request. Consequently,
private respondent acted in good faith when it terminated the
employment of petitioner upon a declaration of illegality of the
strike.
Ratio This is a matter of responsibility and of answerability.
Petitioner as a union leader, must see to it that the policies and
activities of the union in the conduct of labor relations are within
the precepts of law and any deviation from the legal boundaries
shall be imputable to the leader. He bears the responsibility of
guiding the union along the path of law and to cause the union
to demand what is not legally demandable, would foment
anarchy which is a prelude to chaos.
Reasoning As a strike is an economic weapon at war with the
policy of the Constitution and the law at that time, a resort
thereto by laborers shall be deemed to be a choice of remedy
peculiarly their own and outside of the statute, and as such, the
strikers must accept all the risks attendant upon their choice. If
they succeed and the employer succumbs, the law will not stand
in their way in the enjoyment of the lawful fruits of their victory.
But if they fail, they cannot thereafter invoke the protection of
the law for the consequences of their conduct unless the right
they wished vindicated is one which the law will, by all means,
protect and enforce.
Disposition WHEREFORE, the petition is dismissed. The decision
of the acting Secretary of Labor is AFFIRMED in toto.
1.3.4 MACHINERY DISPUTE
SETTLEMENT
ST MARTIN FUNERAL HOME V NLRC
(ARICAYOS)
495 SCRA 295
REGALADO; September 16, 1998
NATURE
Special civil action of certiorari
FACTS
- stemmed from a complaint for illegal dismissal
- Labor Arbiter in that case declared that no employer-employee
relationship existed between the parties.
- the private-respondent “employee” appealed to the NLRC, and
the NLRC set aside the questioned decision and remanded the
case to the labor arbiter
- petitioner then filed a motion for reconsideration which the
NLRC denied. Hence this present petition.
ISSUES
1. Where should appeals from the NLRC be initially filed,
considering that Section 9 of BP 129 seems to say that there are
cases which fall within the appellate jurisdiction of the SC in
accordance with the labor code, and not the CA
- 10 - Disini
HELD
1. The CA
Reasoning All references in the amended Section 9 of BP
No. 129 to supposed appeals from the NLRC to the Supreme
Court are interpreted and declared to mean and refer to
petitions for certiorari under Rule 65.
Therefore, all such petitions should be initially filed
in the CA in strict observance of the doctrine on the
hierarchy of courts.
Disposition The instant petition for certiorari is REMANDED,
and all pertinent recorsd thereof ordered to be
FORWARDED, to the CA for approporiate action and
disposition.
DELTA VENTURES V. CABATO
327 SCRA 521
QUISUMBING; MARCH 9, 2000
NATURE
Special civil action for certiorari seeks to annul the Order
Judge Cabato of the RTC, dismissing petitioner's amended
third-party complaint, as well as the Order denying motion
for reconsideration.
FACTS
A Decision was rendered by LA declaring the Green
Mountain Farm, Roberto Ongpin and Almus Alabe guilty of
Illegal Dismissal and Unfair Labor Practice and ordering
them to pay the complainants, in solidum plus attorney's
fees in the amount of P10,000.00. Almus Alabe is also
ordered to answer in exemplary damages in the amount of
P5,000.00 each to all the complainants.
LA issued a writ of execution directing NLRC Deputy Sheriff
Adam Ventura to execute the judgment. Sheriff Ventura
then proceeded to enforce the writ by garnishing certain
personal properties of respondents. Finding that said
judgment debtors do not have sufficient personal properties
to satisfy the monetary award, Sheriff Ventura proceeded to
levy upon a real property registered in the name of Roberto
Ongpin, one of the respondents in the labor case.
Before the scheduled auction sale, herein petitioner filed
before the Commission a third-party claim asserting
ownership over the property levied upon and subject of the
Sheriff’s notice of sale. Labor Arbiter Rivera thus issued an
order directing the suspension of the auction sale until the
merits of petitioner's claim has been resolved.
However, petitioner filed with the RTC a complaint for
injunction and damages, with a prayer for the issuance of a
temporary restraining order against Sheriff Ventura. Judge
Cabato issued a temporary restraining order, enjoining
respondents in the civil case before him to hold in abeyance
any action relative to the enforcement of the decision in the
labor case.
Further, petitioner filed with the Commission a manifestation
questioning the latter's authority to hear the case, the
matter being within the jurisdiction of the regular courts.
The manifestation, however, was dismissed by Labor Arbiter
Rivera.
ISSUE
WON the trial court may take cognizance of the complaint
filed by petitioner and consequently provide the injunctive
relief sought.
HELD
NO. Basic as a hornbook principle, jurisdiction over the
subject matter of a case is conferred by law and
 Labor Law 2 A2010
determined by the allegations in the complaint which
comprise a concise statement of the ultimate facts constituting
the petitioner's cause of action. Ostensibly the complaint before
the trial court was for the recovery of possession and injunction,
but in essence it was an action challenging the legality or
propriety of the levy vis-a-vis the alias writ of execution,
including the acts performed by the Labor Arbiter and the
Deputy Sheriff implementing the writ. The complaint was in
effect a motion to quash the writ of execution of a decision
rendered on a case properly within the jurisdiction of the Labor
Arbiter, to wit: Illegal Dismissal and Unfair Labor Practice.
Considering the factual setting, it is then logical to conclude that
the subject matter of the third party claim is but an incident of
the labor case, a matter beyond the jurisdiction of regional trial
courts.
Precedent abound confirming the rule that said courts have no
jurisdiction to act on labor cases or various incidents arising
therefrom, including the execution of decisions, awards or
orders. Jurisdiction to try and adjudicate such cases pertains
exclusively to the proper labor official concerned under the
Department of Labor and Employment. To hold otherwise is to
sanction split jurisdiction which is obnoxious to the orderly
administration of justice.
The broad powers granted to the Labor Arbiter and to the
National Labor Relations Commission by Articles 217, 218 and
224 of the Labor Code can only be interpreted as vesting in them
jurisdiction over incidents arising from, in connection with or
relating to labor disputes, as the controversy under
consideration, to the exclusion of the regular courts.
Having established that jurisdiction over the case rests with the
Commission, we find no grave abuse of discretion on the part of
respondent Judge Cabato in denying petitioner's motion for the
issuance of an injunction against the execution of the decision of
the National Labor Relations Commission.
1.3.5 INDUSTRIAL PEACE
ART. 211. Declaration of Policy. - A. It is the policy of the State:
(f) To ensure a stable but dynamic and just industrial peace;
ART. 273. Study of labor-management relations. - The Secretary
of Labor shall have the power and it shall be his duty to inquire
into:
(a) the existing relations between employers and
employees in the Philippines;
(b) the growth of associations of employees and the
effect of such associations upon employer-employee
relations;
(c) the extent and results of the methods of collective
bargaining in the determination of terms and conditions
of employment;
(d) the methods which have been tried by employers
and associations of employees for maintaining mutually
satisfactory relations;
(e) desirable industrial practices which have been
developed through collective bargaining and other
voluntary arrangements;
(f) the possible ways of increasing the usefulness and
efficiency of collective bargaining for settling
differences;
(g) the possibilities for the adoption of practical and
effective methods of labor-management cooperation;
(h) any other aspects of employer-employee relations
concerning the promotion of harmony and
understanding between the parties;
(i) the relevance of labor laws and labor relations to
national development.
The Secretary of Labor shall also inquire into the causes of
industrial unrest and take all the necessary steps within his
- 11 - Disini
power as may be prescribed by law to alleviate the same,
and shall from time to time recommend the enactment of
such remedial legislation as in his judgment may be
desirable for the maintenance and promotion of industrial
peace.
1.3.6 WORKER PARTICIPATION
1987 CONSTI, ART XIII, Sec 3. The State shall afford full
protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They
shall also participate in policy and decision-making
processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared
responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in
the fruits of production and the right of enterprises to
reasonable returns to investments, and to expansion and
growth.
ART. 211. Declaration of Policy. - A. It is the policy of the
State:
(g) To ensure the participation of workers in decision and
policy-making processes affecting their rights, duties and
welfare.
ART. 255. Exclusive bargaining representation and workers’
participation in policy and decision-making. - The labor
organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall
be the exclusive representative of the employees in such
unit for the purpose of collective bargaining. However, an
individual employee or group of employees shall have the
right at any time to present grievances to their employer.
Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
regulations as the Secretary of Labor and Employment may
promulgate, to participate in policy and decision-making
processes of the establishment where they are employed
insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and
employers may form labor-management councils: Provided,
That the representatives of the workers in such labor-
management councils shall be elected by at least the
majority of all employees in said establishment. (As
amended by Section 22, Republic Act No. 6715, March 21,
1989).
ART. 277. Miscellaneous provisions. - (a) All unions are
authorized to collect reasonable membership fees, union
dues, assessments and fines and other contributions for
labor education and research, mutual death and
hospitalization benefits, welfare fund, strike fund and credit
and cooperative undertakings. (As amended by Section 33,
Republic Act No. 6715, March 21, 1989).
(g) The Ministry shall help promote and gradually develop,
with the agreement of labor organizations and employers,
labor-management cooperation programs at appropriate
levels of the enterprise based on the shared responsibility
and mutual respect in order to ensure industrial peace and
 Labor Law 2 A2010
improvement in productivity, working conditions and the quality
of working life. (Incorporated by Batas Pambansa Bilang 130,
August 21, 1981).
PHIL. AIRLINES V NLRC (PALEA)
225 SCRA 301
MELO; August 13, 1993
NATURE
Petition for certiorari
FACTS
- On March 15, 1985, PAL completely revised its 1966 Code of
Discipline. The Code was circulated among the employees and
was immediately implemented, and some employees were
subjected to the disciplinary measures.
- The Philippine Airlines Employees Association (PALEA) filed a
complaint before the NLRC contending that PAL, by its unilateral
implementation of the Code, was guilty of unfair labor practice,
specifically Paragraphs E and G of Art 249 and Art 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 reinstated and their cases
subjected to further hearing; and that PAL be declared guilty of
unfair labor practice and be ordered to pay damages.
- PAL filed a MTD, asserting its prerogative as an employer to
prescribe rules and regulations regarding employees' conduct in
carrying out their duties and functions, and alleging that it had
not violated the CBA or any provision of the Labor Code.
ISSUE
1. WON the formulation of a Code of Discipline among
employees is a shared responsibility of the employer and the
employees
HELD
1. YES.
Ratio Employees have a right to participate in the deliberation
of matters which may affect their rights and the formulation of
policies relative thereto and one such matter is the formulation
of a code of discipline.
Reasoning It was only on March 2, 1989, with the approval of
RA 6715, amending Art 211 of the Labor Code, that the law
explicitly considered it a State policy "to ensure the participation
of workers in decision and policy-making processes affecting
their 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, it was held that management's prerogatives must be
without abuse of discretion.
- In San Miguel Brewery Sales Force Union vs. Ople, 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 the employer's interest and not for the
purpose of defeating or circumventing the rights of the
employee, under special laws or under valid agreements, this
Court will uphold them.
- All this points to the conclusion that the exercise of managerial
prerogatives is not unlimited. It is circumscribed by limitations
found in law, a CBA, or the general principles of fair play and
justice. Moreover, it must be duly established that the
prerogative being invoked is clearly a managerial one.
- Verily, a line must be drawn between management
prerogatives regarding business operations per se and those
- 12 - Disini
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 of
action. PAL asserts that all its employees have been
furnished copies of the Code, the LA and the NLRC found to
the contrary, which finding, is entitled to great respect.
- PALEA recognizes the right of the Company to determine
matters of management 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 CBA 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 matter
is the formulation of a code of discipline. Industrial peace
cannot be achieved if the employees are denied their just
participation in the discussion of matters affecting their
rights.
Disposition Petition is DISMISSED.
MANILA ELECTRIC CO.. V QUISUMBING
(MEWA).
326 SCRA 172
YNARES-SANTIAGO; February 22, 2000
NATURE
Motion for Reconsideration
FACTS
- Members of the Meralco Employees and Workers
Association (MEWA) filed a motion for reconsideration of an
earlier decision of this Court directing the parties to execute
a CBA incorporating the terms and conditions contained in
the unaffected portions of the Secretary of Labor's orders,
and prayed for certain modifications.
ISSUE/S
1. WON the decision should be modified
HELD
1. YES
Ratio (On the requirement of consultation imposed by the
Secretary in cases of contracting out for 6 months or more)
A line must be drawn between management prerogatives
regarding business operations per se and those which affect
the rights of employees, and in treating the latter, the
employer should see to it that its employees are at least
properly informed of its decision or modes of action in order
to attain a harmonious labor-management relationship and
enlighten the workers concerning their rights. Hiring of
workers is within the employer's inherent freedom to
regulate and is a valid exercise of its management
prerogative subject only to special laws and agreements on
the matter and the fair standards of justice.
Reasoning The management cannot be denied the faculty
of promoting efficiency and attaining economy by a study of
what units are essential for its operation. It has the ultimate
determination of whether services should be performed by
its personnel or contracted to outside agencies. Absent
proof that management acted in a malicious or arbitrary
manner, the Court will not interfere with the exercise of
 Labor Law 2 A2010
judgment by an employer.
Obiter
- On increasing the wage awards: The Court does "not seek to
enumerate in this decision the factors that should affect wage
determination" because collective bargaining disputes
particularly those affecting the national interest and public
service "requires due consideration and proper balancing of the
interests of the parties to the dispute and of those who might be
affected by the dispute.”
- On the retroactivity of the arbitral awards: The law is silent as
to the retroactivity of a CBA arbitral award or that granted not by
virtue of the mutual agreement of the parties but by intervention
of the government. Despite the silence of the law, the Court
rules herein that CBA arbitral awards granted after six months
from the expiration of the last CBA shall retroact to such time
agreed upon by both employer and the employees or their
union. Absent such an agreement as to retroactivity, the award
shall retroact to the first day after the six-month period following
the expiration of the last day of the CBA should there be one. In
the absence of a CBA, the Secretary's determination of the date
of retroactivity as part of his discretionary powers over arbitral
awards shall control
- On the grant of a housing loan but not a cooperative loan: The
award of loans for housing is justified because it pertains to a
basic necessity of life. It is part of a privilege recognized by the
employer and allowed by law. In contrast, providing seed money
for the establishment of the employee's cooperative is a matter
in which the employer has no business interest or legal
obligation.
Disposition Petition PARTIALLY GRANTED. The arbitral award
was made to retroact and the award of wages was increased
from P1,900 to P2,000 for the years 1995 and 1996, subject to
the monetary advances granted by petitioner to its rank-and-file
employees during the pendency of this case assuming such
advances had
1.3.7 WAGE FIXING
ART. 211. Declaration of Policy. - A. It is the policy of the State:
B. To encourage a truly democratic method of regulating the
relations between the employers and employees by means of
agreements freely entered into through collective bargaining, no
court or administrative agency or official shall have the power to
set or fix wages, rates of pay, hours of work or other terms and
conditions of employment, except as otherwise provided under
this Code. (As amended by Section 3, Republic Act No. 6715,
March 21, 1989).
ART. 263. Strikes, picketing and lockouts. - (a) It is the policy of
the State to encourage free trade unionism and free collective
bargaining.
(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 return-to-
work and the employer 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.
In line with the national concern for and the highest respect
accorded to the right of patients to life and health, strikes and
lockouts in hospitals, clinics and similar medical institutions
shall, to every extent possible, be avoided, and all serious
- 13 - Disini
efforts, not only by labor and management but government
as well, be exhausted to substantially minimize, if not
prevent, their adverse effects on such life and health,
through the exercise, however legitimate, by labor of its
right to strike and by management to lockout. 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 may 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
RA 6727 “WAGE RATIONALIZATION ACT” Sec. 2. It is hereby
declared the policy of the State to rationalize the fixing of
minimum wages and to promote productivity-improvement
and gain-sharing measures to ensure a decent standard of
living for the workers and their families; to guarantee the
rights of labor to its just share in the fruits of production; to
enhance employment generation in the countryside through
industry dispersal; and to allow business and industry
reasonable returns on investment, expansion and growth.
1.3.8 LABOR INJUNCTION
ART. 254. Injunction prohibited. - No temporary or
permanent injunction or restraining order in any case
involving or growing out of labor disputes shall be issued by
any court or other entity, except as otherwise provided in
Articles 218 and 264 of this Code. (As amended by Batas
Pambansa Bilang 227, June 1, 1982).
ART. 218. Powers of the Commission. - The Commission
shall have the power and authority:
(e) To enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful acts or to
require the performance of a particular act in any labor
dispute which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party: Provided,
That no temporary or permanent injunction in any case
involving or growing out of a labor dispute as defined in this
Code shall be issued except after hearing the testimony of
witnesses, with opportunity for cross-examination, in
support of the allegations of a complaint made under oath,
and testimony in opposition thereto, if offered, and only
after a finding of fact by the Commission, to the effect:
(1) That prohibited or unlawful acts have been
threatened and will be committed and will be
continued unless restrained, but no injunction or
temporary restraining order shall be issued on
 Labor Law 2 A2010 - 14 - Disini
account of any threat, prohibited or unlawful act, Relations Commission for compulsory arbitration. However,
except against the person or persons, association or the President of the Philippines may at any time intervene
organization making the threat or committing the and assume jurisdiction over such labor dispute in order to
prohibited or unlawful act or actually authorizing or settle or terminate the same. (6-E)
ratifying the same after actual knowledge thereof;
(2) That substantial and irreparable injury to 1.3.9 TRIPARTISM
complainant’s property will follow;
ART. 275. Tripartism and tripartite conferences. - (a)
Tripartism in labor relations is hereby declared a State
(3) That as to each item of relief to be granted, greater
policy. Towards this end, workers and employers shall, as far
injury will be inflicted upon complainant by the denial of
as practicable, be represented in decision and policy-making
relief than will be inflicted upon defendants by the
bodies of the government.
granting of relief;
(b) The Secretary of Labor and Employment or his duly
(4) That complainant has no adequate remedy at law;
authorized representatives may, from time to time, call a
and
national, regional, or industrial tripartite conference of
representatives of government, workers and employers for
(5) That the public officers charged with the duty to
the consideration and adoption of voluntary codes of
protect complainant’s property are unable or unwilling
principles designed to promote industrial peace based on
to furnish adequate protection.
social justice or to align labor movement relations with
established priorities in economic and social development.
Such hearing shall be held after due and personal notice thereof
In calling such conference, the Secretary of Labor and
has been served, in such manner as the Commission shall direct,
Employment may consult with accredited representatives of
to all known persons against whom relief is sought, and also to
workers and employers. (As amended by Section 32,
the Chief Executive and other public officials of the province or
Republic Act No. 6715, March 21, 1989).
city within which the unlawful acts have been threatened or
committed, charged with the duty to protect complainant’s
property: Provided, however, that if a complainant shall also
allege that, unless a temporary restraining order shall be issued
without notice, a substantial and irreparable injury to
II. RIGHT TO SELF-ORGANIZATION
complainant’s property will be unavoidable, such a temporary 2.1 BASIS OF RIGHT
restraining order may be issued upon testimony under oath, 1. CONSTITUTION
sufficient, if sustained, to justify the Commission in issuing a
1987, Art III Sec 8.- The right of the people, including those
temporary injunction upon hearing after notice. Such a
employed in the public and private sectors, to form unions,
temporary restraining order shall be effective for no longer than
associations, or societies for purposes not contrary to law
twenty (20) days and shall become void at the expiration of said
shall not be abridged.
twenty (20) days. No such temporary restraining order or
temporary injunction shall be issued except on condition that
1987 CONSTI, ART XIII, Sec 3. The State shall afford full
complainant shall first file an undertaking with adequate security
protection to labor, local and overseas, organized and
in an amount to be fixed by the Commission sufficient to
unorganized, and promote full employment and equality of
recompense those enjoined for any loss, expense or damage
employment opportunities for all.
caused by the improvident or erroneous issuance of such order
It shall guarantee the rights of all workers to self-
or injunction, including all reasonable costs, together with a
organization, collective bargaining and negotiations, and
reasonable attorney’s fee, and expense of defense against the
peaceful concerted activities, including the right to strike in
order or against the granting of any injunctive relief sought in
accordance with law. They shall be entitled to security of
the same proceeding and subsequently denied by the
tenure, humane conditions of work, and a living wage. They
Commission.
shall also participate in policy and decision-making
The undertaking herein mentioned shall be understood to
processes affecting their rights and benefits as may be
constitute an agreement entered into by the complainant and
provided by law.
the surety upon which an order may be rendered in the same
The State shall promote the principle of shared
suit or proceeding against said complainant and surety, upon a
responsibility between workers and employers and the
hearing to assess damages, of which hearing, complainant and
preferential use of voluntary modes in settling disputes,
surety shall have reasonable notice, the said complainant and
including conciliation, and shall enforce their mutual
surety submitting themselves to the jurisdiction of the
compliance therewith to foster industrial peace.
Commission for that purpose. But nothing herein contained shall
The State shall regulate the relations between workers and
deprive any party having a claim or cause of action under or
employers, recognizing the right of labor to its just share in
upon such undertaking from electing to pursue his ordinary
the fruits of production and the right of enterprises to
remedy by suit at law or in equity: Provided, further, That the
reasonable returns to investments, and to expansion and
reception of evidence for the application of a writ of injunction
growth.
may be delegated by the Commission to any of its Labor Arbiters
who shall conduct such hearings in such places as he may
determine to be accessible to the parties and their witnesses 1935 , Art III Sec 6- The right to form associations or
and shall submit thereafter his recommendation to the societies for purposes not contrary to law shall not be
Commission. (As amended by Section 10, Republic Act No. 6715, abridged.
March 21, 1989).
1973, Art IV, Sec 7- Section 7. The right to form associations
RA 8791 , Section 22. Strikes and Lockouts. — The banking or societies for purposes not contrary to the law shall not be
industry is hereby declared as indispensable to the national abridged.
interest and, not withstanding the provisions of any law to the
contrary, any strike or lockout involving banks, if unsettled after 2. STATUTORY
seven (7) calendar days shall be reported by the Bangko Sentral ART. 243. Coverage and employees’ right to self-
to the Secretary of Labor who may assume jurisdiction over the organization. - All persons employed in commercial,
dispute or decide it or certify the same to the National Labor industrial and agricultural enterprises and in religious,
 Labor Law 2 A2010
charitable, medical, or educational institutions, whether
operating for profit or not, shall have the right to self-
organization and to form, join, or assist labor organizations of
their own choosing for purposes of collective bargaining.
Ambulant, intermittent and itinerant workers, self-employed
people, rural workers and those without any definite employers
may form labor organizations for their mutual aid and protection.
(As amended by Batas Pambansa Bilang 70, May 1, 1980).
ART. 244. Right of employees in the public service. - Employees
of government corporations established under the Corporation
Code shall have the right to organize and to bargain collectively
with their respective employers. All other employees in the civil
service shall have the right to form associations for purposes not
contrary to law. (As amended by Executive Order No. 111,
December 24, 1986).
ART. 245. Ineligibility of managerial employees to join any labor
organization; right of supervisory employees. - Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor
organizations of their own. (As amended by Section 18, Republic
Act No. 6715, March 21, 1989).
UST FACULTY UNION V. BITONIO, JR.
318 SCRA 185
PANGANIBAN; November 16, 1999
NATURE
Special civil action in the Supreme Court. Certiorari.
FACTS
- Union announced a general assembly to elect next union
officers.
- TRO was issued by med-arbiter enjoining them from conducting
election.
- UST held a general faculty assembly, attended by both
union members and non-members. Here, appellants were
elected as new union officers by acclamation and clapping of
hands.
- Appellees filed instant petition to seek injunctive relief and to
nullify results of election.
- Bitonio upheld med-arbiter and said election was void. He
rejected contention that it was a legitimate exercise of right to
self organization
ISSUE/S
Basis of right to self-organization (p5 of outline) / Workers with
right of self-organization
HELD
Ratio Self-organization is a fundamental right to form, join or
assist labor organizations for collective bargaining, mutual
aid and protection. Whether employed for a definite
period or not, employee shall be considered as such,
beginning on 1st day of service, for purposes of
membership in a labor union. Corollary to this right is the
prerogative not to join.
Reasoning The election can’t be considered as exercise of right
to self-organization because the petitioners’ frustration over the
performance of the respondents could not justify the method
they chose to impose their will on the union.
NATIONAL UNION OF BANK EMPLOYEES v
MINISTER OF LABOR, PRODUCERS
BANK OF THE PHILIPPINES
110 SCRA 275
MAKASIAR; December 14, 1981
- 15 - Disini
NATURE: MANDAMUS
FACTS:
-The Union filed this action to compel the public respondents
to hold a certification election among the rank and file
employees of Producers Bank.
-The Bank agreed to recognize and negotiate with the Union
as soon as the latter obtained its registration certificate as
local union.
-However, even if said certificate had already been secured,
the Bank failed to submit its payroll of employees (which
was required previously at the hearing for direct
certification. )
- The Med- Arbiter issued an order for the holding of a
certification election, a proceeding which was sought to be
suspended by the Bank on the grounds that a prejudicial
question was pending re: cancellation of the Union’s
registration for allegedly engaging in prohibited and
unlawful activities.
ISSUE:
WON a certification election should be held despite the
pending petition to cancel the Union’s certificate of
Registration
HELD: YES. The pendency of the petition for cancellation of
the registration certificate of herein petitioner union is not a
bar to the holding of a certification election.
Reasoning:
-The pendency of the petition for cancellation of the
registration certificate of petitioner union founded on the
alleged illegal strikes staged by the leaders and members of
the intervenor union and petitioner union should not
suspend the holding of a certification election, because
there is no order directing such cancellation.
- Aside from the fact that the petition for cancellation of the
registration certificate of petitioner union has not yet been
finally resolved, there is another fact that militates against
the stand of the Bank, the liberal approach observed by this
Court as to matters of certification election.
- Atlas Free Workers Union (AFWU)-PSSLU Local vs.
Hon. Carmelo C. Noriel, et al. : "[T]he Court resolves to
grant the petition (for mandamus) in line with the liberal
approach consistently adhered to by this Court in matters of
certification election. The whole democratic process is
geared towards the determination of representation, not
only in government but in other sectors as well, by election.
Thus, the Court has declared its commitment to the view
that a certification election is crucial to the institution of
collective bargaining, for it gives substance to the principle
of majority rule as one ' of the basic concepts of a
democratic policy" (National Mines and Allied Workers Union
vs. Luna, 83 SCRA 610).
- Scout Ramon V. Albano Memorial College vs. Noriel,
et al.:
... The institution of collective bargaining is, to recall Cox, a
prime manifestation of industrial democracy at work. The
two parties to the relationship, labor and management,
make their own rules by coming to terms. That is to govern
themselves in matters that really count. As labor, however,
is composed of a number of individuals, it is indispensable
that they be represented by a labor organization of their
choice. Thus may be discerned how crucial is a certification
election. So our decisions from the earliest case of PLDT
Employees Union v. PLDT Co. Free Telephone Workers Union
to the latest, Philippine Communications, Electronics &
Electricity Workers' Federation (PCWF) v. Court of Industrial
Relations, had made clear. The same principle was again
given expression in language equally emphatic in the
subsequent case of Philippine Association of Free Labor
Unions v. Bureau of Labor Relations: 'Petitioner thus appears
to be woefully lacking in awareness of the significance of a
 Labor Law 2 A2010
certification election for the collective bargaining process. It is
the fairest and most effective way of determining which labor
organization can truly represent the working force. It is a
fundamental postulate that the will of the majority, if given
expression in an honest election with freedom on the part of the
voters to make their choice, is controlling. No better device can
assure the institution of industrial democracy with the two
parties to a business enterprise, management and labor,
establishing a regime of self-rule.' That is to accord respect to
the policy of the Labor Code, indisputably partial to the holding
of a certification election so as to arrive in a manner definitive
and certain concerning the choice of the labor organization to
represent the workers in a collective bargaining unit (emphasis
supplied).
- Cancellation of the registration certificate is not the only
resultant penalty in case of any violation of the Labor Code. (See
Sec. 8 Rule II Book V of Labor Code, in relation to A273)
- As aptly ruled by respondent Bureau of Labor Relations Director
Noriel: "The rights of workers to self-organization finds general
and specific constitutional guarantees. Section 7, Article IV of the
Philippine Constitution provides that the right to form
associations or societies for purposes not contrary to law shall
not be abridged. This right is more pronounced in the case of
labor. Section 9, Article II (ibid) specifically declares that the
State shall assure the rights of workers to self-organization,
collective bargaining, security of tenure and just and humane
conditions of work. Such constitutional guarantees should not be
lightly taken much less easily nullified. A healthy respect for the
freedom of association demands that acts imputable to officers
or members be not easily visited with capital punishments
against the association itself"
Dispositive: THE WRIT OF mandamus IS GRANTED; BLR DIR
ORDERED TO CALL AND DIRECT THE IMMEDIATE HOLDING OF A
CERTIFICATION ELECTION.
3. UNIVERSAL DECLARATION OF HUMAN
RIGHTS
PREAMBLE
Whereas recognition of the inherent dignity and of the equal
and inalienable rights of all members of the human family is
the foundation of freedom, justice and peace in the world,
Whereas disregard and contempt for human rights have
resulted in barbarous acts which have outraged the
conscience of mankind, and the advent of a world in which
human beings shall enjoy freedom of speech and belief and
freedom from fear and want has been proclaimed as the
highest aspiration of the common people,
Whereas it is essential, if man is not to be compelled to
have recourse, as a last resort, to rebellion against tyranny
and oppression, that human rights should be protected by
the rule of law,
Whereas it is essential to promote the development of
friendly relations between nations,
Whereas the peoples of the United Nations have in the
Charter reaffirmed their faith in fundamental human rights,
in the dignity and worth of the human person and in the
equal rights of men and women and have determined to
promote social progress and better standards of life in larger
freedom,
Whereas Member States have pledged themselves to
achieve, in co-operation with the United Nations, the
promotion of universal respect for and observance of human
rights and fundamental freedoms,
Whereas a common understanding of these rights and
freedoms is of the greatest importance for the full
realization of this pledge,
- 16 - Disini
Now, Therefore THE GENERAL ASSEMBLY proclaims
THIS UNIVERSAL DECLARATION OF HUMAN RIGHTS as
a common standard of achievement for all peoples and all
nations, to the end that every individual and every organ of
society, keeping this Declaration constantly in mind, shall
strive by teaching and education to promote respect for
these rights and freedoms and by progressive measures,
national and international, to secure their universal and
effective recognition and observance, both among the
peoples of Member States themselves and among the
peoples of territories under their jurisdiction.
Article 2.
Everyone is entitled to all the rights and freedoms set forth
in this Declaration, without distinction of any kind, such as
race, colour, sex, language, religion, political or other
opinion, national or social origin, property, birth or other
status. Furthermore, no distinction shall be made on the
basis of the political, jurisdictional or international status of
the country or territory to which a person belongs, whether
it be independent, trust, non-self-governing or under any
other limitation of sovereignty.
Article 23. (4) Everyone has the right to form and to join
trade unions for the protection of his interests.
INTERNATIONAL COVENANT ON
ECONOMIC, SOCIAL AND CULTURAL
RIGHTS
Article 2 - 1. Each State Party to the present Covenant
undertakes to take steps, individually and through
international assistance and co-operation, especially
economic and technical, to the maximum of its available
resources, with a view to achieving progressively the full
realization of the rights recognized in the present Covenant
by all appropriate means, including particularly the adoption
of legislative measures.
2. The States Parties to the present Covenant undertake to
guarantee that the rights enunciated in the present
Covenant will be exercised without discrimination of any
kind as to race, colour, sex, language, religion, political or
other opinion, national or social origin, property, birth or
other status.
3. Developing countries, with due regard to human rights
and their national economy, may determine to what extent
they would guarantee the economic rights recognized in the
present Covenant to non-nationals.
Article 8
1. The States Parties to the present Covenant undertake to
ensure:
(a) The right of everyone to form trade unions and
join the trade union of his choice, subject only to
the rules of the organization concerned, for the
promotion and protection of his economic and
social interests. No restrictions may be placed on
the exercise of this right other than those
prescribed by law and which are necessary in a
democratic society in the interests of national
security or public order or for the protection of the
rights and freedoms of others;
(b) The right of trade unions to establish national
federations or confederations and the right of the
latter to form or join international trade-union
organizations;
(c) The right of trade unions to function freely
subject to no limitations other than those
prescribed by law and which are necessary in a
democratic society in the interests of national
security or public order or for the protection of the
rights and freedoms of others;
 Labor Law 2 A2010
(d) The right to strike, provided that it is exercised in
conformity with the laws of the particular country.
2. This article shall not prevent the imposition of lawful
restrictions on the exercise of these rights by members of the
armed forces or of the police or of the administration of the
State.
3. Nothing in this article shall authorize States Parties to the
International Labour Organisation Convention of 1948
concerning Freedom of Association and Protection of the Right to
Organize to take legislative measures which would prejudice, or
apply the law in such a manner as would prejudice, the
guarantees provided for in that Convention.
INTERNATIONAL COVENANT ON CIVIL AND
POLITICAL RIGHTS
Article 22
1. Everyone shall have the right to freedom of association with
others, including the right to form and join trade unions for the
protection of his interests.
2. No restrictions may be placed on the exercise of this right
other than those which are prescribed by law and which are
necessary in a democratic society in the interests of national
security or public safety, public order (ordre public), the
protection of public health or morals or the protection of the
rights and freedoms of others. This article shall not prevent the
imposition of lawful restrictions on members of the armed forces
and of the police in their exercise of this right.
3. Nothing in this article shall authorize States Parties to the
International Labour Organisation Convention of 1948
concerning Freedom of Association and Protection of the Right to
Organize to take legislative measures which would prejudice, or
to apply the law in such a manner as to prejudice, the
guarantees provided for in that Convention.
4. ILO CONVENTION NO. 48
STANDARD CHARTERED BANK EMPLOYEES
UNION (NUBE) V CONFESOR
432 SCRA 371
CALLEJO, SR; JUNE 16, 2004
NATURE
Special civil action in the SC. Certiorari.
FACTS
The Union alleged that the Bank violated its duty to bargain,
hence, committed ULP under Article 248 (g) when it engaged in
surface bargaining without any intent of reaching an agreement,
as evident in the Bank’s counter-proposals. It explained that of
the 34 economic provisions it presented, the Bank made only 6
economic counterproposals. Further, as borne by the minutes of
the meetings, the Bank, after indicating the economic provisions
it had rejected, accepted, retained or were open for discussion,
refused to make a list of items it agreed to include in the
economic package.
ISSUES
1. WON the Union was able to substantiate its claim of unfair
labor practice against the Bank arising from the latter’s alleged
“interference” with its choice of negotiator (P. 6)
2. WON the Union was able to substantiate its claim of unfair
labor practice against the Bank arising from the latter’s surface
bargaining; making bad faith non-economic proposals; and
refusal to furnish the Union with copies of the relevant data (P.
25)
3. WON the petitioner is estopped from filing the instant action
(P. 28)
HELD
- 17 - Disini
1. No. 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.” Workers’ and employers’ organizations shall
have the right to draw up their constitutions and rules, to
elect their representatives in full freedom to organize their
administration and activities and to formulate their
programs. Article 2 of ILO Convention No. 98 pertaining to
the Right to Organize and Collective Bargaining, provides:
Article 2
1. Workers’ and employers’ organizations shall enjoy
adequate protection against any acts or interference by
each other or each other’s agents or members in their
establishment, functioning or administration.
2. In particular, acts which are designed to promote the
establishment of workers’ organizations under the
domination of employers or employers’ organizations or to
support workers’ organizations by financial or other means,
with the object of placing such organizations under the
control of employers or employers’ organizations within the
meaning of this Article.
The aforecited ILO Conventions are incorporated in our
Labor Code, particularly in Article 243 thereof, which
provides:
ART. 243. COVERAGE AND EMPLOYEES’ RIGHT TO
SELF-ORGANIZATION. — All persons employed in
commercial, industrial and agricultural enterprises and in
religious, charitable, medical or educational institutions
whether operating for profit or not, shall have the right to
self-organization and to form, join, or assist labor
organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those
without any definite employers may form labor
organizations for their mutual aid and protection.
and Articles 248 and 249 respecting ULP of employers and
labor organizations.
The said ILO Conventions were ratified on December 29,
1953. However, even as early as the 1935 Constitution, 44
the State had already expressly bestowed protection to
labor as part of the general provisions. The 1973
Constitution, 45 on the other hand, declared it as a policy of
the state to afford protection to labor, specifying that the
workers’ rights to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work
would be assured. For its part, the 1987 Constitution, aside
from making it a policy to “protect the rights of workers and
promote their welfare,” devotes an entire section,
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.
Parenthetically, 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-
 Labor Law 2 A2010
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.
In order to show that the employer committed ULP under the
Labor Code, substantial evidence is required to support the
claim. Substantial evidence has been defined as such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion. In the case at bar, the Union bases its
claim of interference on the alleged suggestions of Diokno to
exclude Umali from the Union’s negotiating panel.
The circumstances that occurred during the negotiation do not
show that the suggestion made by Diokno to Divinagracia is an
anti-union conduct from which it can be inferred that the Bank
consciously adopted such act to yield adverse effects on the free
exercise of the right to self-organization and collective
bargaining of the employees, especially considering that such
was undertaken previous to the commencement of the
negotiation and simultaneously with Divinagracia’s suggestion
that the bank lawyers be excluded from its negotiating panel.
The records show that after the initiation of the collective
bargaining process, with the inclusion of Umali in the Union’s
negotiating panel, the negotiations pushed through. The
complaint was made only on August 16, 1993 after a deadlock
was declared by the Union on June 15, 1993.
2. No. The Union alleges that the Bank violated its duty to
bargain; hence, committed ULP under Article 248(g) when it
engaged in surface bargaining.
Surface bargaining is defined as “going through the motions of
negotiating” without any legal intent to reach an agreement. 50
The resolution of surface bargaining allegations never presents
an easy issue. The determination of whether a party has
engaged in unlawful surface bargaining is usually a difficult one
because it involves, at bottom, a question of the intent of the
party in question, and usually such intent can only be inferred
from the totality of the challenged party’s conduct both at and
away from the bargaining table. 51 It involves the question of
whether an employer’s conduct demonstrates an unwillingness
to bargain in good faith or is merely hard bargaining.
The minutes of meetings from March 12, 1993 to June 15, 1993
do not show that the Bank had any intention of violating its duty
to bargain with the Union. Records show that after the Union
sent its proposal to the Bank on February 17, 1993, the latter
replied with a list of its counter-proposals on February 24, 1993.
Thereafter, 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.
The Union has not been able to show that the Bank had done
acts, both at and away from the bargaining table, which tend to
show that it did not want to reach an agreement with the Union
or to settle the differences between it and the Union. Admittedly,
the parties were not able to agree and reached a deadlock.
However, it is herein emphasized that 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.
We, likewise, find that the Union failed to substantiate its claim
that the Bank refused to furnish the information it needed.
While the refusal to furnish requested information is in itself an
unfair labor practice, and also supports the inference of surface
bargaining, in the case at bar, Umali, [the federation president]
in a meeting dated May 18, 1993, requested the Bank to validate
- 18 - Disini
its guestimates on the data of the rank and file. However,
Umali failed to put his request in writing as provided for in
Article 242(c) of the Labor Code:
Article 242. Rights of Legitimate Labor Organization . . .
(c) 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;
The Union, did not, as the Labor Code requires, send a
written request for the issuance of a copy of the data about
the Bank’s rank and file employees. Moreover, as alleged by
the Union, the fact that the Bank made use of the aforesaid
guestimates, amounts to a validation of the data it had used
in its presentation.
3. No. The respondent Bank argues that the petitioner is
estopped from raising the issue of ULP when it signed the
new CBA.
Article 1431 of the Civil Code provides:
Through estoppel an admission or representation is
rendered conclusive upon the person making it, and cannot
be denied or disproved as against the person relying
thereon.
A person, who by his deed or conduct has induced another
to act in a particular manner, is barred from adopting an
inconsistent position, attitude or course of conduct that
thereby causes loss or injury to another.
In the case, however, 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. After all, the conclusion of the CBA was
included in the order of the SOLE, while the signing bonus
was included in the CBA itself. Moreover, the Union twice
filed a motion for reconsideration respecting its ULP charges
against the Bank before the SOLE.
Dispositive Assailed order and resolutions affirmed.
2.2 EXTENT AND SCOPE OF RIGHT
REYES V TRAJANO
209 SCRA 484
NARVASA; June 2, 1992
NATURE
Special civil action of certiorari
FACTS
-The officer-in-charge of the Bureau of Labor Relations (Hon.
Cresenciano Trajano) sustained the denial by the Med
Arbiter of the right to vote of one hundred forty-one (141)
members of the "Iglesia ni Kristo" (INK), all employed in the
same company, at a certification election at which two (2)
labor organizations were contesting the right to be the
exclusive representative of the employees in the bargaining
unit.
-The certification election was authorized to be conducted
by the Bureau of Labor Relations among the employees of
 Labor Law 2 A2010
Tri-Union Industries Corporation on October 20, 1987. The
competing unions were the Tri-Union Employees Union-
Organized Labor Association in Line Industries and Agriculture
(TUEU-OLALIA), and Trade Union of the Philippines and Allied
Services (TUPAS). Of the 348 workers initially deemed to be
qualified voters, only 240 actually took part in the election,
conducted under the supervision of the Bureau of Labor
Relations. Among the 240 employees who cast their votes were
141 members of the INK.
The ballots provided for three (3) choices. They provided for
votes to be cast, of course, for either of the two (2) contending
labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and,
conformably with established rule and practice, 1 for (c) a third
choice: "NO UNION."
The final tally of the votes showed the following results:
TUPAS 1
TUEU-OLALIA 95
NO UNION 1
SPOILED 1
CHALLENGED 141
ISSUE/S
WON the right to self-organization includes the right NOT to join,
affiliate with, or assist any union, and to disaffiliate or resign
from a labor organization
HELD: YES.
Ratio EXTENT AND SCOPE OF RIGHT TO SELF-
ORGANIZATION. Logically, the right NOT to join, affiliate with,
or assist any union, and to disaffiliate or resign from a labor
organization, is subsumed in the right to join, affiliate with, or
assist any union, and to maintain membership therein.
Reasoning The right to form or join a labor organization
necessarily includes the right to refuse or refrain from exercising
said right. It is self-evident that just as no one should be denied
the exercise of a right granted by law, so also, no one should be
compelled to exercise such a conferred right. The fact that a
person has opted to acquire membership in a labor union does
not preclude his subsequently opting to renounce such
membership.
PAN-AMERICAN WORLD AIRWAYS, INC. V.
PAN-AMERICAN EMPLOYEES ASSN.
27 SCRA 1202
FERNANDO; April 29, 1969
NATURE
Special civil action for certiorari
FACTS
-CIR could not agree to exclude from a return-to-work order five
union officials of respondent Pan American Employees
Association on the ground of having led an illegal strike, in itself,
according to Pan-American World Airways, a sufficient cause for
dismissal thus resulting in their losing their incentive and
motivation for doing their jobs properly with the consequent fear
that they could cause grave injury to it
ISSUE
1. WON CIR committed grave abuse of discretion in ordering the
return to work of the union officials
HELD
1. NO.
Ratio There is both a constitutional and statutory recognition
that laborers have the right to form unions to take care of their
interests vis-a-vis their employers.
Reasoning The moment management displays what in this case
appears to be a grave but unwarranted distrust in the union
officials discharging their functions just because a strike was
resorted to, then the integrity of the collective bargaining
process itself is called into question. It would have been different
- 19 - Disini
if there were a rational basis for such fears, purely
speculative in character. The record is bereft of the slightest
indication that any danger, much less one clear and present,
is to be expected from their return to work. If petitioner
were to succeed in their unprecedented demand, the
laborers in this particular union would thus be confronted
with the sad spectacle of the leaders of their choice
condemned as irresponsible, possibly even constituting a
menace to the operations of the enterprise. That is an
indictment of the gravest character, devoid of any factual
basis. What is worse, the result, even if not intended, would
be to call into question their undeniable right to choose their
leaders, who must be treated as such with all the respect to
which they are legitimately entitled. The fact that they
would be paid but not be allowed to work is, to repeat, to
add to the infamy that would thus attach, to them
necessarily, but to respondent union equally.
Disposition PETITION DENIED.
UNION OF SUPERVISORS (R.B)-NATU V
SECRETARY OF LABOR (REPUBLIC BANK)
109 SCRA 139
MAKASIAR; November 12, 1981
NATURE
Petition for review on certiorari of the order of the Secretary
of Labor
FACTS
-The Republic Bank Provident Fund was established for the
benefit of the officers and employees of the Republic Bank.
-The fund is supposed to be managed by a Board of Trustees
composed of 5 members, of which 3, including the
chairman, are to be designated by the bank president, and
the other 2 are the presidents of the Republic Bank Union of
Supervisors and of the Republic Bank Employees' Union
-Mr. Norberto Luna, president of the petitioner union and ex-
officio member of the fund's Board of Trustees, became the
fund's administrator and secretary. During the three (3)
years of his incumbency as administrator, the resources of
the fund grew from P278,445.27 to P1,779,159.85
-On February 12, 1974, a meeting of the PF Board of
Trustees was held, attended by Mr. Restituto de Vera who
had then just been designated to sit on the board, and who
opened the meeting stating that they would like to have
control of the funds of the PF and for that matter the
administration of the Fund, because the Provident Fund PF is
an entity of the Republic Bank considering that the main
bulk of contributions is put up by the RB into the PF.
-Mr. Luna, the erstwhile administrator and Secretary of the
Fund, vigorously objected.
-Messrs. Armando Abad (chairman) and Mario Galicia, the
two other management-appointed trustees sided with de
Vera, and forced the issue of reorganization.
-The same was carried by a vote of 3 to 2, with all the
management appointed trustees voting for it, and the two
labor representatives voting against
-Mr. Luna moved that all the trustees execute a trust
agreement and a bond in favor of the PF members to protect
the interests of the PF Messrs. Abad, de Vera and Galicia
counter argued against the proposal.
-De Vera questioned Luna's apprehensions. In answer, Luna
made the allegedly derogatory statements
- Luna and Antonio Canizares the other labor representative
walked out of the meeting.
-The remaining 3 trustees unanimously elected Galicia as
the new administrator
-The bank moved for the dismissal of Luna, and sought
clearance from the Sec. of Labor for his termination
-Labor Sec issued an order granting the same, and this is
 Labor Law 2 A2010
the subject of this petition
ISSUE
WON Mr. Luna's utterances and alleged acts of insubordination
constitute just cause for his dismissal
HELD
NO.
Luna's remarks at the meeting of an official board are privileged
in nature as a valid exercise of his constitutional freedom of
expression. He addressed his remarks to the body that has
jurisdiction over the question of management of the assets of
the Provident Fund. Luna's remarks were intended to protect the
interests of the members of the Provident Fund from what he
honestly believed was a risky venture on the part of the
management.
-His protests could even be treated as union activity by
the Industrial Peace Act, which assures the employees'
right "to self-organization and to form, join or assist
labor organizations of their own choosing and to engage
in concerted activities for the purpose of collective
bargaining and other mutual aid and protection ... " (Sec.
3, Rep. Act 875).
-This is so because Luna's membership in the PF Board of
Trustees was by virtue of his being president of the RB Union of
Supervisors. The Provident Fund was itself created as a result of
the union's collective bargaining agreement with the bank. Luna
was therefore acting out his role as protector of his constituents
when he voiced out his apprehension and protests over the plan
of management. It matters not that he acted singly or
individually. What is important is that he had been selected by
the supervisors of respondent bank to be their president and
representative in the PF Board of Trustees. His actuations as
such should therefore be considered as legitimate
exercise of the employees' right to self-organization and
as an activity for their mutual aid and protection, aside
from being privileged communication protected by the
constitutional guarantee on free speech. His remarks
were in defense of the interest of the Provident Fund,
part of which comes from the contribution of the rank
and file employees.
Disposition Petition is granted.
CENTRAL NEGROS ELECTRIC COOPERATIVE
INC V DOLE SECRETARY
201 SCRA 584
REGALADO; September 13, 1991
NATURE
Special civil action for certiorari
FACTS
- Petitioner Central Negros Electric Cooperative, Inc.
(CENECO) seeks to annul the order issued by then Acting
Secretary of Labor Laguesma declaring the projected
certification election unnecessary and directing petitioner
CENECO to continue recognizing private respondent CENECO
Union of Rational Employees (CURE) as the sole and
exclusive bargaining representative of all the rank-and-file
employees of petitioner's electric cooperative.
- Previous events: Their CBA was valid for a term of 3 years;
CURE then wrote CENECO proposing that negotiations be
conducted for a new agreement. CENECO denied CURE's request
on the ground that, under applicable decisions of the
Supreme Court, employees who at the same time are
members of an electric cooperative are not entitled to
form or join a union.
- CURE filed a petition for direct recognition or for certification
election; CENECO filed a motion to dismiss on the ground of legal
restraints.
- 20 - Disini
- Some employees of CENECO then filed for withdrawal of
membership in the cooperative but CENECO contended that
this cannot be allowed.
ISSUE/S
1. WON the employees were allowed to withdraw
membership from the cooperative so as to entitle them to
form or join CURE for purposes of the negotiations for a
collective bargaining agreement
HELD
1. YES
Ratio Membership in the cooperative is on a voluntary
basis. Hence, withdrawal therefrom cannot be restricted
unnecessarily. The right to join an organization necessarily
includes the equivalent right not to join the same.
EXTENT AND SCOPE OF RIGHT TO SELF-
ORGANIZATION
- The right of the employees to self-organization is a
compelling reason why their withdrawal from the
cooperative must be allowed. As pointed out by CURE, the
resignation of the member- employees is an expression of
their preference for union membership over that of
membership in the cooperative. The avowed policy of the
State to afford fall protection to labor and to promote the
primacy of free collective bargaining mandates that the
employees' right to form and join unions for purposes of
collective bargaining be accorded the highest consideration.
- Membership in an electric cooperative which merely vests
in the member a right to vote during the annual meeting
becomes too trivial and insubstantial vis-a-vis the primordial
and more important constitutional right of an employee to
join a union of his choice. Besides, the 390 employees of
CENECO, some of whom have never been members of the
cooperative, represent a very small percentage of the
cooperative's total membership of 44,000. It is
inconceivable how the withdrawal of a negligible number of
members could adversely affect the business concerns and
operations of CENECO.
No Right of Self-Organization: WORKER/MEMBER OF
COOPERATIVE
- It was held in Batangas I Electric Cooperative Labor Union
vs. Romeo A. Young that "employees who at the same time
are members of an electric cooperative are not entitled to
form or join unions for purposes of collective bargaining
agreement, for certainly an owner cannot bargain with
himself or his co-owners."
- However, nowhere in said case is it stated that member-
employees are prohibited from withdrawing their
membership in the cooperative in order to join a labor union.
2. NO
- By virtue of EO 111, which became effective on March 4,
1987, the direct certification originally allowed under Article
257 of the Labor Code has apparently been discontinued as
a method of selecting the exclusive bargaining agent of the
workers. The mere fact that no opposition is made does not
warrant a direct certification. The most effective way of
determining which labor organization can truly represent the
working force is by certification election.
Disposition The questioned order is hereby ANNULLED and
SET ASIDE. The med-arbiter is hereby ordered to conduct a
certification election among the rank-and- file employees of
CENECO with CURE and No Union as the choices therein.
2.3 WORKERS WITH RIGHT OF SELF-
ORGANIZATION
 Labor Law 2 A2010
1.Worker Qualifications
ART. 277. Miscellaneous provisions. - (c) Any employee, whether
employed for a definite period or not, shall, beginning on his first
day of service, be considered as an employee for purposes of
membership in any labor union. (As amended by Section 33,
Republic Act No. 6715).
UST FACULTY UNION V. BITONIO, JR.
318 SCRA 185
PANGANIBAN; November 16, 1999
NATURE
Special civil action in the Supreme Court. Certiorari.
FACTS
- Union announced a general assembly to elect next union
officers.
- TRO was issued by med-arbiter enjoining them from conducting
election.
- UST held a general faculty assembly, attended by both
union members and non-members. Here, appellants were
elected as new union officers by acclamation and clapping of
hands.
- Appellees filed instant petition to seek injunctive relief and to
nullify results of election.
- Bitonio upheld med-arbiter and said election was void. He
rejected contention that it was a legitimate exercise of right to
self organization
ISSUE/S
Basis of right to self-organization (p5 of outline) / Workers with
right of self-organization (p6 of outline)
HELD
Ratio Self-organization is a fundamental right to form, join or
assist labor organizations for collective bargaining, mutual
aid and protection. Whether employed for a definite
period or not, employee shall be considered as such,
beginning on 1st day of service, for purposes of
membership in a labor union. Corollary to this right is the
prerogative not to join.
Reasoning The election can’t be considered as exercise of right
to self-organization because the petitioners’ frustration over the
performance of the respondents could not justify the method
they chose to impose their will on the union.
1. All Employees
ART. 243. Coverage and employees’ right to self-organization. -
All persons employed in commercial, industrial and agricultural
enterprises and in religious, charitable, medical, or educational
institutions, whether operating for profit or not, shall have the
right to self-organization and to form, join, or assist labor
organizations of their own choosing for purposes of collective
bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and
protection. (As amended by Batas Pambansa Bilang 70, May 1,
1980).
Non-Profit Organization
FEU v TRAJANO(FEU-AFW)
152 SCRA 725
PARAS, July 31, 1987
NATURE
petition for certiorari seeking to annul and set aside the decision
affirming the Order of the Med-Arbiter for the holding of a
certification election among the rank and file employees of FEU
FACTS
- 21 - Disini
FEU was a non-stock, non-profit medical institution and
before 1980, workers of these institutions were not allowed
to form, join or organize labor unions under Article 244 of
the LC. So when the FEU Alliance of Filipino Workers (FEU-
AFW) filed a petition for consent and/or certification election
and was denied, they assailed the constitutionality of Article
244 with the SC. But with BP70 which amended the said
provision by granting even employees of non-stock, non-
profit institutions the right to form, join and organize labor
unions of their choice, the respondent union filed again for
certification election and was granted by the Med Arbiter,
and was affirmed by the respondent director Trajano. FEU
now assails the validity of the order by Director Trajano.
ISSUES
1. WON workers of non-stock, non-profit institutions could
now form, join and organize labor unions of their choice
(focus in the outline)
2. WON Director Trajano gravely abused his discretion in
granting the petition for certification election despite the
pendency of a similar petition
HELD
1. YES
Ratio. Article 244 of the Labor Code was already amended
by BP7 which provides that rank and file employees of non-
profit medical institutions were now permitted to form,
organize or join labor unions of their choice for purposes of
collective bargaining. Since private respondent had
complied with the requisites provided by law for calling a
certification election, it was incumbent upon respondent
Director to conduct such certification election to ascertain
the bargaining representative of petitioner's employees.
2. NO
Ratio. In order that the pendency of another action
between the same parties for the same cause may be
availed of as a ground to dismiss a case, there must be,
between the action under consideration and the other
action: (1) identity of parties, or at least such as
representing the same interest in both actions; (2) identity
of rights asserted and relief prayed for, the relief being
founded on the same facts; and (3) the identity on the two
preceding particulars should be such that any judgment
which may be rendered on the other action will, regardless
of which party is successful, amount to res judicata in the
action under consideration.
Reasoning. Any judgment which may be rendered in the
petition for certiorari pending before the SC will not
constitute res judicata in the petition for certification
election under consideration, for while in the former, private
respondent questioned the constitutionality of Article 244 of
the Labor Code before its amendment, in the latter, private
respondent invokes the same article as already amended.
Disposition. WHEREFORE, this petition is DISMISSED, and
the decision appealed from is hereby AFFIRMED.
Members of Religious Group
VICTORIANO vs ELIZALDE ROPE WORKERS'
UNION
59 SCRA 54
ZALDIVAR; September 12, 1974
FACTS
- Victoriano was an employee of the Elizalde Rope Factory,
Inc. and was a member of the Elizalde Rope Workers' Union.
The Union had with the Company a CBA containing a closed
shop agreement, by virtue of which, if any person,
regardless of his religious beliefs, wishes to be employed or
to keep his employment, he must become a member of the
collective bargaining union.
 Labor Law 2 A2010
- In 1961, RA No. 3350 was enacted (amending the industrial
peace act), providing that a closed shop agreement shall not
cover members of any religious sects which prohibit affiliation of
their members in any such labor organization.
- Being a member of a member of the religious sect "Iglesia ni
Cristo" that prohibits the affiliation of its members with any labor
organization, Victoriano resigned from the union. Thereupon, the
Union asked the Company to separate Victoriano from the
service.
ISSUE
WON RA No. 3350 infringes on the freedom of association and
discriminates in favor of members of the INC (hence,
unconstitutional)
HELD NO.
RA No. 3350 introduced an exception to the closed shop
agreement under the Industrial Peace Act. It excluded ipso jure
from the application and coverage of the closed shop agreement
the employees belonging to any religious sects which prohibit
affiliation of their members with any labor organization. What
the exception provides is that members of said religious sects
cannot be compelled or coerced to join labor unions even when
said unions have closed shop agreements with the employers;
that in spite of any closed shop agreement, members of said
religious sects cannot be refused employment or dismissed from
their jobs on the sole ground that they are not members of the
collective bargaining union. It is clear, therefore, that the
assailed Act, far from infringing the constitutional provision on
freedom of association, upholds and reinforces it. It does not
prohibit the members of said religious sects from affiliating with
labor unions. It still leaves to said members the liberty and the
power to affiliate, or not to affiliate, with labor unions. If,
notwithstanding their religious beliefs, the members of said
religious sects prefer to sign up with the labor union, they can do
so. If in deference and fealty to their religious faith, they refuse
to sign up, they can do so; the law does not coerce them to join;
neither does the law prohibit them from joining; and neither may
the employer or labor union compel them to join. Republic Act
No. 3350, therefore, does not violate the constitutional provision
on freedom of association.
The purpose sought to be achieved by RA 3350 was to insure
freedom of belief and religion, and to promote the general
welfare by preventing discrimination against those members of
religious sects which prohibit their members from joining labor
unions, confirming thereby their natural, statutory and
constitutional right to work, the fruits of which work are usually
the only means whereby they can maintain their own life and the
life of their dependents. It cannot be gainsaid that said purpose
is legitimate.
The purpose of RA 3350 is secular, worldly, and temporal, not
spiritual or religious or holy and eternal. It was intended to serve
the secular purpose of advancing the constitutional right to the
free exercise of religion, by averting that certain persons be
refused work, or be dismissed from work, or be dispossessed of
their right to work and of being impeded to pursue a modest
means of livelihood, by reason of union security agreements. To
help its citizens to find gainful employment whereby they can
make a living to support themselves and their families is a valid
objective of the state.
The primary effects of the exemption from closed shop
agreements in favor of members of religious sects that prohibit
their members from affiliating with a labor organization, is the
protection of said employees against the aggregate force of the
collective bargaining agreement, and relieving certain citizens of
a burden on their religious beliefs; and by eliminating to a
certain extent economic insecurity due to unemployment, which
is a serious menace to the health, morals, and welfare of the
people of the State, the Act also promotes the well-being of
society. It is our view that the exemption from the effects of
closed shop agreement does not directly advance, or diminish,
the interests of any particular religion. Although the exemption
- 22 - Disini
may benefit those who are members of religious sects that
prohibit their members from joining labor unions, the benefit
upon the religious sects is merely incidental and indirect.
The "establishment clause" (of religion) does not ban
regulation on conduct whose reason or effect merely
happens to coincide or harmonize with the tenets of some or
all religions. The free exercise clause of the Constitution has
been interpreted to require that religious exercise be
preferentially aided.
To compel persons to join and remain members of a union
to keep their jobs in violation of their religious scrupples,
would hurt, rather than help, labor unions, Congress has
seen it fit to exempt religious objectors lest their resistance
spread to other workers, for religious objections have
contagious potentialities more than political and philosophic
objections.
Furthermore, let it be noted that coerced unity and loyalty
even to the country, and a fortiori to a labor union
assuming that such unity and loyalty can be attained
through coercion is not a goal that is constitutionally
obtainable at the expense of religious liberty. A desirable
end cannot be promoted by prohibited means.
KAPATIRAN SA MEAT AND CANNING V.
CALLEJA
162 SCRA 367
HELD: In Victoriano v Elizalde Rope Workers Union, the
refusal of the members of the INC sect not to join a labor
union for being contrary to their religious beliefs does not
bar the members of the
sect from forming their own union. The recognition of the
tenets of the sect should not infringe on the basic right of
self-organization
granted by the Constitution to workers, regardless of
religious affiliation.
2. Government Corporation Employees
ART. 244. Right of employees in the public service. -
Employees of government corporations established under
the Corporation Code shall have the right to organize and to
bargain collectively with their respective employers. All
other employees in the civil service shall have the right to
form associations for purposes not contrary to law. (As
amended by Executive Order No. 111, December 24, 1986).
3. Supervisors
ART. 245. Ineligibility of managerial employees to join any
labor organization; right of supervisory employees. -
Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-
and-file employees but may join, assist or form separate
labor organizations of their own. (As amended by Section
18, Republic Act No. 6715, March 21, 1989).
Right
FILOIL REFINERY CORPORATION vs.
FILOIL SUPERVISORY & CONFIDENTIAL
EMPLOYEES ASSOCIATION
46 SCRA 512
TEEHANKEE; Aug 18, 1972
NATURE
Appeal from the orders of the Court of Industrial Relations
FACTS
- Filoil Refinery Corporation executed a collective
bargaining agreement with the Filoil Employees & Workers
Association (FEWA), a labor association composed of the
 Labor Law 2 A2010
corporation's rank-and-file employees . This collective bargaining
agreement expressly excluded from its coverage petitioner's
supervisory and confidential employees, who in turn organized
their own labor association, respondent herein.
- The Corporation filed a motion to dismiss the petition for
certification of the respondent association as the sole and
exclusive collective bargaining agent of all petitioner’s
supervisory and confidential employees working at its refinery in
Rosario, Cavite. Their reason being, since they are part of the
management, they do not have the right to bargain collectively
although they may organize an organization of their own.
ISSUE
WON supervisors '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
HELD
YES.
Reasoning As stated for the Court by the now Chief Justice in
AG & P Co. of Manila, Inc. vs. C.I.R., 8 section 3 of the Industrial
Peace Act "explicitly provides that 'employees' and this term
includes supervisors '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
representations of their own choosing and to engage in
concerted activities for the purpose of collective bargaining and
other mutual aid or protection' and that 'individuals employed as
supervisors . . . may form separate organizations of their own'.
Indeed, it is well settled that 'in relation to his employer,' a
foreman or supervisor 'is an employee within the meaning of the
Act' . . . For this reason, supervisors are entitled to engage in
union activities and any discrimination against them by reason
thereof constitutes an unfair labor practice."
Supervisors and confidential employees, even though they may
exercise the prerogatives of management as regards the rank
and file employees are indeed employees in relation to their
employer, the company which is owned by the stockholders and
bondholders (capital) and should therefore be entitled under the
law to bargain collectively with the top management with
respect to their terms and conditions of employment.
DISPOSITION
Petition DISMISSED.
STA ROSA COCA-COLA PLANT EMPLOYEES
UNION (union), ET AL V COCA-COLA BOTTLERS
PHILS INC (company)
312 SCRA 437
CALLEJO, SR; January 24, 2007
NATURE
This is a petition for review on certiorari of the Decision of the
CA, which affirmed the ruling of the NLRC and the Labor Arbiter
FACTS
- The union is the sole and exclusive bargaining representative
of the regular paid workers and the manthly paid non-
ccommission earning employees of the comopany. individual
petitioners are union officers,directors and shop stewards.
- The union and the company entered into a 3 year CBA. upon
the expiration, the union told the company that they wanted to
negotiate the terms. the union insisted that representatives from
Alyansa ng mga Unyon ng Coca Cola be allowed to observe the
CBA meetings. the company refused to allow alyansa to observe
and an impasse ensued. union officers, directors and stewards
filed a notice of strrice with NCMB based on deadlock on CBA
and unfair labor practice arising from the company's refusal to
bargain. the grounds were ammended to unfair labor practice for
the company's refusal to bargain in good faith and interference
- 23 - Disini
with the exercise if their right to self-organization.
- pending the notice to strike, the union decided to
participate in a mass action by alyansa in front of the
company's premises. operations would come to complete
stops for insufficiency of contractual employees who would
take over. after the mass strike (separate and distinct from
the mass action), the company filed to declare strike illegal,
to declare the officers of union and individual respondents
to have lost their employment status, to declare the union,
its officers and members guilty of unfair labor practice to
violation of the CBA, and to award them damages.
- the LA found the strike to be illegal such that the
participants lost their employment status. the CA affirmed
the decision.
ISSUE/S
1. WON the mass action wit Alyansa is actually a strike
HELD
1. YES
Ratio The factual findings and conclusions of tribunals, as
long as based on substantial evidence, are conclusive on the
SC.
Reasoning The term strike2 encompasses not only
concerted work stoppages, but also slowdowns, mass
leaves, sit-downs, attempts to damage, destroy or sabotage
plant equipment and facilities, and similar activities.
Picketing involves merely the marching to and fro at the
premises of the employer, usually accompanied by the
display of placards and other signs making known the facts
involved in a labor dispute. That there was a labor dispute
between the parties is not an issue. Petitioners notified the
respondent of their intention to stage a strike, and not
merely to picket.
Disposition Petition is denied for lack of merit. CA decision
is affirmed.
PENARADA VS BANGANGA PLYWOOD
CORP. AND HUDSON CHUA
489 SCRA 95
PANGANIBAN; May 3, 2006
NATURE
Petition for review under rule 45 of the ROC
FACTS
- Charlito Peñaranda was hired as a
foreman/boiler/shift engineer of Baganga Plywood
Corporation (BPC) to take charge of the operations
and maintenance of its steam plant boiler.
- He filed a complaint for illegal dismissal with
money claims. He claims that he was not paid his
overtime pay, premium pay for working during
holidays/rest days, night shift differentials and
finally claims for payment of damages and
attorney’s fees having been forced to litigate the
present complaint.
- BPC on the other hand claims that Penaranda’s the
separation from service was due to the temporary
closure due to repair and general maintenance of
the company. When BPC partially reopened,
Peñaranda failed to reapply. Hence, he was not
terminated from employment much less illegally.
He opted to severe employment when he insisted
payment of his separation benefits. Furthermore,
being a managerial employee he is not entitled to
overtime pay and if ever he rendered services
2
Article 212(o) of the Labor Code defines strike as a temporary stoppage of work by the concerted
action of employees as a result of an industrial or labor dispute.
 Labor Law 2 A2010
beyond the normal hours of work, [there] was no office
order/or authorization for him to do so.
- LA found Penaranda to be entitled of the overtime pay
and premium pay. NLRc, deleted the award because he
was a managerial employee. CA dismissed Penaranda’s
petition for certiorari.
ISSUE
1. WON Penaranda is a regular, common employee
entitled to overtime pay and other monetary benefits.
HELD
NO.
Managerial employees and members of the managerial
staff are exempted from the provisions of the Labor Code on
labor standards. Since petitioner belongs to this class of
employees, he is not entitled to overtime pay and premium pay
for working on rest days.
The Court disagrees with the NLRC’s finding that the petitioner
was a managerial employee. However, he was a member of the
managerial staff, which also takes him out of the coverage of
labor standards. Like managerial employees, officers and
members of the managerial staff are not entitled to the
provisions of law on labor standards.
Article 82 of the Labor Code exempts managerial employees
from the coverage of labor standards. Labor standards provide
the working conditions of employees, including entitlement to
overtime pay and premium pay for working on rest days. Under
this provision, managerial employees are "those whose primary
duty consists of the management of the establishment in which
they are employed or of a department or subdivision." (1) Their
primary duty consists of the management of the establishment
in which they are employed or of a department or subdivision
thereof; (2) They customarily and regularly direct the work of
two or more employees therein; (3) They have the authority to
hire or fire other employees of lower rank; or their suggestions
and recommendations as to the hiring and firing and as to the
promotion or any other change of status of other employees are
given particular weight.
Penaranda’s duty as a shift engineer, particularly, ((1)To supply
the required and continuous steam to all consuming units at
minimum cost, (2) To supervise, check and monitor manpower
workmanship as well as operation of boiler and accessories, (3)
To evaluate performance of machinery and manpower, (5) To
train new employees for effective and safety while working)
illustrates that petitioner was a member of the managerial staff.
His duties and responsibilities conform to the definition of a
member of a managerial staff under the Implementing Rules. He
supervised the engineering section of the steam plant boiler. His
work involved overseeing the operation of the machines and the
performance of the workers in the engineering section. This work
necessarily required the use of discretion and independent
judgment to ensure the proper functioning of the steam plant
boiler. As supervisor, petitioner is deemed a member of the
managerial staff.
On the basis of the foregoing, the Court finds no justification to
award overtime pay and premium pay for rest days to petitioner.
Disposition
Petition is denied.
TEST
DUNLOP SLAZENGER V SEC. OF LABOR (RUIZ)
300 SCRA 120
PUNO; DECEMBER 11, 1998
NATURE
Petition for certiorari
FACTS
- Respondent union filed a Petition for Certification Election
- 24 - Disini
among the supervisory, office and technical employees of
the petitioner company before the DOLE, Regional Office No.
III.
- Petitioner company filed a motion to dismiss based on 1)
that the respondent union is comprised of supervisory and
rank-and-file employees and cannot act as bargaining agent
for the proposed unit; (2) that a single certification election
cannot be conducted jointly among supervisory and rank-
and-file employees; and (3) that the respondent union lacks
legal standing since it failed to submit its books of accounts.
- Respondent alleges that it is composed only of supervisory
employees and that it has no obligation to attach its books
of accounts since it is a legitimate labor organization.
- The mediator arbiter granted the petition of the union. It
said that the contention of the respondent that the
petitioning union is composed of both supervisory and rank
and file employees is not sufficient to dismiss the petition. It
can be remedied thru the exclusion-inclusion proceedings
wherein those employees who are occupying rank and file
positions will be excluded from the list of eligible voters. The
secretary of labor affirmed.
(as regards the TEST)
The TEST of supervisory status as we have repeatedly
ruled is:
-Whether an employee possesses authority to act in the
interest of his employer,
- Which authority should not be merely routinary or clerical
in nature
- But requires the use of independent judgment.
- Corollary, what determines the nature of
employment is not the employee's title, but his
job description.
- It is not decisive that these employees are monthly paid
employees. Their mode of compensation is usually a matter
of convenience and does not necessarily determine the
nature and character of their job.
PAPER INDUSTRIES CORP. OF THE PHILS. V
LAGUESMA
330 SCRA 295
DE LEON; April 12, 2000
NATURE
Petition for certiorari seeking to annul the Resolution and
the Order Laguesma, acting then as Undersecretary, now
the Secretary, of the DOLE
FACTS
- PICOP-Bislig Supervisory and Technical Staff Employees
Union (PBSTSEU) instituted a Petition for Certification
Election to determine the sole and exclusive bargaining
agent of the supervisory and technical staff employees of
PICOP for CBA purposes.
- Federation of Free Workers (FFW) and Associated Labor
Union (ALU) filed their respective petitions for intervention.
- Med-Arbiter granted the petitions for interventions of the
FFW and ALU. Another Order set the holding of a
certification election among PICOP's supervisory and
technical staff employees in Tabon, Bislig, Surigao del Sur,
with four (4) choices, namely: (1) PBSTSEU; (2) FFW; (3)
ALU; and (4) no union.
- PICOP appealed the Order which set the holding of the
certification election contending that the Med-Arbiter
committed grave abuse of discretion in deciding the case
without giving PICOP the opportunity to file its
comments/answer, and that PBSTSEU had no personality to
file the petition for certification election.
- DOLE Sec. Drilon upheld the Med-Arbiter's Order with
modification allowing the supervising and staff employees in
 Labor Law 2 A2010
Cebu, Davao and Iligan City to participate in the certification
election.
- PICOP questioned and objected to the inclusion of some section
heads and supervisors in the list of voters whose positions it
averred were reclassified as managerial employees in the light
of the reorganization effected by it.
ISSUE
WON the positions Section Heads and Supervisors, who have
been designated as Section Managers and Unit Managers who
were converted to managerial employees are ineligible for union
membership
HELD
- NO. The mere fact that an employee is designated “manager”
does not ipso facto make him one. Designation should be
reconciled with the actual job description of the employee, for it
is the job description that determines the nature of employment.
- Managerial employees are ranked as Top Managers, Middle
Managers and First Line Managers. Top and Middle Managers
have the authority to devise, implement and control strategic
and operational policies while the task of First-Line Managers is
simply to ensure that such policies are carried out by the rank-
and- file employees of an organization.
- A thorough dissection of the job description of the concerned
supervisory employees and section heads indisputably show that
they are not actually managerial but only supervisory
employees since they do not lay down company policies.
Any authority they exercise is not supreme but merely advisory
in character. Theirs is not a final determination of the company
policies inasmuch as any action taken by them on matters
relative to hiring, promotion, transfer, suspension and
termination of employees is still subject to confirmation and
approval by their respective superior.
Disposition WHEREFORE, the petition is hereby DISMISSED, and
the Resolution and Order of public respondent Bienvenido E.
Laguesma dated April 17, 1991 and August 17, 1991,
respectively, finding the subject supervisors and section heads
as supervisory employees eligible to vote in the certification
election are AFFIRMED.
Samson vs NLRC (Schering-Plough Corp)
330 SCRA 460
Kapunan, J.; April 12, 2000
NATURE
Special civil action of certiorari
FACTS
- Rufino Norberto F. Samson was dismissed from the Company
for uttering what was considered by the company as obscene,
insulting, and offensive words and for making malicious and lewd
gestures directed at the President and General Manager of the
company during an informal Sales and Marketing gathering in
relation to the decision of the Management Committee on a
dispute with another employee. He was also accused of
threatening to disrupt or create violence in a forthcoming
National Sales Conference.
- The Labor Arbiter found that Samson was illegally dismissed
but the decision was reversed by NLRC.
ISSUE/S
WON the dismissal on the ground of loss of confidence is valid
HELD
No. As a ground for dismissal, the term “trust and confidence” is
restricted to managerial employees. And before one may be
properly considered a managerial employee, three conditions
must be met:
a. Their primary duty consists of the management of
the establishment in which they are employed or of a
- 25 - Disini
department or subdivision thereof:
b. They customarily and regularly direct the work of
two or more employees therein;
c. They have the authority to hire or fire other
employees of lower rank; or their suggestions and
recommendations as to hiring an firing and as to the
promotion or any other change of status of other
employees are given particular weight.
-In this case the job description of Samson does not mention
that petitioner possesses the power “to lay down policies
nor to hire, transfer, suspend, lay off, recall. discharge,
assign or discipline employees”. Absent this crucial
element, petitioner cannot be considered a managerial
employee despite his designation as District Sales Manager.
Disposition Petition is granted. NLRC decision is reversed
and set aside. Samson is reinstated to his position without
loss of seniority rights and is awarded payment of his full
backwages.
TAGAYTAY HIGHLANDS INTERNATIONAL
GOLF CLUB INC V
TAGAYTAY HIGHLANDS EMPLOYEES UNION-
PGTWO
395 SCRA 699
CARPIO-MORALES; January 22, 2003
NATURE
Petition for Certiorari under Rule 45 THIGCI assailing CA
decision denying its petition to annul the Department of
Labor and Employment (DOLE) Resolutions of November 12,
1998 and December 29, 1998
FACTS
- October 16, 1997 > Tagaytay Highlands Employees Union
(THEU), Philippine Transport and General Workers
Organization (PTGWO), Local Chapter No. 776, a legitimate
labor organization said to represent majority of the rank-
and-file employees of THIGCI, filed a petition for certification
election before the DOLE Mediation-Arbitration Unit,
Regional Branch No. IV
- November 27, 1997 > opposed petition for certification
election because the list of union members submitted by it
was defective and fatally flawed as it included the names
and signatures of supervisors, resigned, terminated and
absent without leave (AWOL) employees, as well as
employees of The Country Club, Inc., a corporation distinct
and separate from THIGCI; and that out of the 192
signatories to the petition, only 71 were actual rank-and-file
employees of THIGCI. Also, some of the signatures in the list
of union members were secured through fraudulent and
deceitful means, and submitted copies of the handwritten
denial and withdrawal of some of its employees from
participating in the petition.
-
THEU asserted that it complied with all the requirements for
valid affiliation and inclusion in the roster of legitimate labor
organizations pursuant to DOLE Department Order No. 9,
series of 1997, on account of which it was duly granted a
Certification of Affiliation by DOLE on October 10, 1997; and
that Section 5, Rule V of said Department Order provides
that the legitimacy of its registration cannot be subject to
collateral attack, and for as long as there is no final order of
cancellation, it continues to enjoy the rights accorded to a
legitimate organization. Therefore, the Med-Arbiter should,
pursuant to Article 257 of the Labor Code and Section 11,
Rule XI of DOLE Department Order No. 09, automatically
order the conduct of a certification election.
- January 28, 1998 > DOLE Med-Arbiter Anastacio Bactin
ordered the holding of a certification election
 Labor Law 2 A2010
- DOLE Resolution of November 12, 1998 > setting aside the
1
June 4, 1998 Resolution dismissing the petition for certification
election. MFR denied
- CA - denied THIGCI’s Petition for Certiorari and affirmed the
DOLE Resolution dated November 12, 1998. It held that while a
petition for certification election is an exception to the innocent
bystander rule, hence, the employer may pray for the dismissal
of such petition on the basis of lack of mutuality of interests of
the members of the union as well as lack of employer-employee
relationship and petitioner failed to adduce substantial evidence
to support its allegations.
ISSUES
1. WON the inclusion of the supervisors should affect the result
of the certification election
HELD
1. NO
Reasoning Article 245 of the Labor Code
Article 245. Ineligibility of managerial employees to join any
labor organization; right of supervisory employees. Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor
organizations of their own.
- As this Court put it in Pepsi-Cola Products Philippines, Inc. v.
Secretary of Labor:
Designation should be reconciled with the actual job description
of subject employees x x x The mere fact that an employee is
designated manager does not necessarily make him one.
Otherwise, there would be an absurd situation where one can be
given the title just to be deprived of the right to be a member of
a union. In the case of National Steel Corporation vs. Laguesma
(G. R. No. 103743, January 29, 1996), it was stressed that:
What is essential is the nature of the employee’s function
and not the nomenclature or title given to the job which
determines whether the employee has rank-and-file or
managerial status or whether he is a supervisory
employee.
Disposition Petition is DENIED. Let the records of the case be
remanded to the office of origin, the Mediation-Arbitration Unit,
Regional Branch No. IV, for the immediate conduct of a
certification election subject to the usual pre-election
conference.
CAINTA CATHOLIC SCHOOL V CAINTA
CATHOLIC SCHOOL EMPLOYEES’ UNION
489 SCRA 468
TINGA; May 4, 2006
NATURE
Special civil action of certiorari
FACTS
- the school and union entered into a CBA. Then the union in the
school became inactive for several years. When it became active
again, led by Llagas (Pres) and Javier (VP), the school decided to
enforce the provision on the CBA re: retirement (that
management can retire an employee if s/he has reached age of
60 or rendered at least 20 years of service, the last 3 years
continuous). The school retired Llagas and Javier, both having
rendered more than 20 years of continuous service. The union
struck, alleging unfair labor practice and unlawful termination.
The school countered with a petition to declare the strike illegal.
- school claims that it could validly retire Llagas and Javier, at its
prerogative granted to it by law and the CBA. Union claims that
retirement was equivalent to union busting, as the dismissed EEs
- 26 - Disini
were their leaders.
- NLRC ruled in favor of the school, declaring that the
management prerogative on retirement of EEs was validly
exercised. Also, it gave, as another justification for the
retirement, the reason that as managerial employees
(LLagas was the Dean of Student Affairs while Javier was the
Subject Area Coordinator), when they joined and became
officers of the union. They lost the trust and confidence of
the school. They allowed their loyalties be divided between
the union and the school.
- appeal of the union to the CA was granted, saying that the
retirement of the 2 union officers was a mere subterfuge to
bust the union. The school then filed this petition.
ISSUE/S
WON Llagas and Javier were managerial EES, thus making
the strike called by the union on their behalf (as unqualified
union members) illegal
HELD
YES
Ratio The 2 employees are not rank and file employees,
thus disqualified from joining a union. Thus, the strike called
in their behalf is illegal.
Reasoning Art.212(m) defines a managerial employee as:
one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial
actions. On the other hand, Supervisory EEs are those
who, in the interest of the ER, effectively recommend
such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature
but requires the use of independent judgment.
- court reviewed the functions of the positions of the retired
EEs found in the Faculty Manual in order to determine their
classification. As the Dean of Student Affairs, Llagas was
clearly a managerial employee. As a Subject Area
Coordinator, Javier falls under supervisory EEs
- thus, Llagas is proscribed from joining a labor union, more
so being elected as union officer. In the case of Javier, a
supervisory EE, she may join a labor union composed only of
supervisory employees. Finding both union officers to be
employees not belonging to the rank-and-file, their
membership in the Union has become questionable,
rendering the Union inutile to represent their cause.
Disposition Petition is granted. NLRC resolution reinstated.
PENARADA VS BANGANGA PLYWOOD
CORP. AND HUDSON CHUA
489 SCRA 95
PANGANIBAN; May 3, 2006
NATURE
Petition for review under rule 45 of the ROC
FACTS
- Charlito Peñaranda was hired as a foreman/boiler/shift
engineer of Baganga Plywood Corporation (BPC) to take
charge of the operations and maintenance of its steam
plant boiler.
- He filed a complaint for illegal dismissal with money
claims. He claims that he was not paid his overtime pay,
premium pay for working during holidays/rest days, night
shift differentials and finally claims for payment of
damages and attorney’s fees having been forced to
litigate the present complaint.
- BPC on the other hand claims that Penaranda’s the
separation from service was due to the temporary closure
due to repair and general maintenance of the company.
When BPC partially reopened, Peñaranda failed to reapply.
 Labor Law 2 A2010
Hence, he was not terminated from employment much less
illegally. He opted to severe employment when he insisted
payment of his separation benefits. Furthermore, being a
managerial employee he is not entitled to overtime pay and if
ever he rendered services beyond the normal hours of work,
[there] was no office order/or authorization for him to do so.
- LA found Penaranda to be entitled of the overtime pay and
premium pay. NLRc, deleted the award because he was a
managerial employee. CA dismissed Penaranda’s petition for
certiorari.
ISSUE
WON Penaranda is a regular, common employee entitled to
overtime pay and other monetary benefits.
HELD
NO.
- Managerial employees and members of the managerial staff
are exempted from the provisions of the Labor Code on labor
standards. Since petitioner belongs to this class of employees,
he is not entitled to overtime pay and premium pay for
working on rest days.
- The Court disagrees with the NLRC’s finding that the petitioner
was a managerial employee. However, he was a member of
the managerial staff, which also takes him out of the coverage
of labor standards. Like managerial employees, officers
and members of the managerial staff are not entitled
to the provisions of law on labor standards.
- Article 82 of the Labor Code exempts managerial employees
from the coverage of labor standards. Labor standards provide
the working conditions of employees, including entitlement to
overtime pay and premium pay for working on rest days.
Under this provision, managerial employees are "those
whose primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision." (1) Their primary duty
consists of the management of the establishment in
which they are employed or of a department or
subdivision thereof; (2) They customarily and regularly
direct the work of two or more employees therein; (3)
They have the authority to hire or fire other employees
of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to
the promotion or any other change of status of other
employees are given particular weight.
- Penaranda’s duty as a shift engineer, particularly, ((1)To
supply the required and continuous steam to all consuming
units at minimum cost, (2) To supervise, check and monitor
manpower workmanship as well as operation of boiler and
accessories, (3) To evaluate performance of machinery and
manpower, (5) To train new employees for effective and safety
while working) illustrates that petitioner was a member of the
managerial staff. His duties and responsibilities conform to the
definition of a member of a managerial staff under the
Implementing Rules. He supervised the engineering section of
the steam plant boiler. His work involved overseeing the
operation of the machines and the performance of the workers
in the engineering section. This work necessarily required the
use of discretion and independent judgment to ensure the
proper functioning of the steam plant boiler. As supervisor,
petitioner is deemed a member of the managerial staff.
- On the basis of the foregoing, the Court finds no justification to
award overtime pay and premium pay for rest days to
petitioner.
4. Aliens
ART. 269. Prohibition against aliens; exceptions. - All aliens,
natural or juridical, as well as foreign organizations are strictly
prohibited from engaging directly or indirectly in all forms of
trade union activities without prejudice to normal contacts
between Philippine labor unions and recognized international
- 27 - Disini
labor centers: Provided, however, That aliens working in the
country with valid permits issued by the Department of
Labor and Employment, may exercise the right to self-
organization and join or assist labor organizations of their
own choosing for purposes of collective bargaining:
Provided, further, That said aliens are nationals of a country
which grants the same or similar rights to Filipino workers.
(As amended by Section 29, Republic Act No. 6715, March
21, 1989).
5. Security Guards
MANILA ELECTRIC COMPANY V SECRETARY
OF LABOR.
197 SCRA 275
MEDIALDEA; May 20, 1991
NATURE: Petition for review
FACTS:
- The Staff and Technical Employees Association of
MERALCO filed a petition for certification election to
represent regular employees of MERALC0 who are: (a) non
managerial employees with Pay Grades VII and above; (b)
non-managerial employees in the Patrol Division, Treasury
Security Services Section. Secretaries who are automatically
removed from the bargaining unit; and (c) employees within
the rank and file unit who are automatically disqualified
from becoming union members of any organization within
the same bargaining unit.
MERALCO moved for dismissal of the petition on ground that
some of the employees they sought to represent are
security services personnel who are prohibited from joining
or assisting the rank-and-file union
ISSUE:WON Security Guards may join a rank and file
organization
HELD:
-Pres. Corazon C. Aquino issued E.O. No. 111 which
eliminated the disqualification of security guards. While
therefore under the old rules, security guards were barred
from joining a labor organization of the rank and file, under
RA 6715, they may now freely join a labor organization of
the rank and file or that of the supervisory union, depending
on their rank. By accommodating supervisory employees,
the Secretary of Labor must likewise apply the provisions of
RA 6715 to security guards by favorably allowing them free
access to a labor organization, whether rank and file or
supervisory, in recognition of their constitutional right to
self-organization.
- The implementing rules of RA 6715, therefore, insofar as
they disqualify security guards from joining a rank and file
organization are null and void, for being not germane to the
object and purposes of EO 111 and RA 6715 upon which
such rules purportedly derive statutory moorings.
2.4 WORKERS WITH NO RIGHT OF
SELF-ORGANIZATION
1. MANAGERIAL AND CONFIDENTIAL
EMPLOYEES
SEC. 8. Article 245 of the Labor Code is hereby amended to
read as follows:
“ART. 245. Ineligibility of Managerial Employees to
Join any Labor Organization; Right of Supervisory
Employees. - Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory
employees shall not be eligible for membership in the
collective bargaining unit of the rank-and-file employees but
may join, assist or form separate collective bargaining units
 Labor Law 2 A2010
and/or legitimate labor organizations of their own. The rank and
file union and the supervisors’ union operating within the same
establishment may join
the same federation or national union.”
TEST
SAN MIGUEL CORPORATION SUPERVISORS
AND EXEMPT UNION, VS. LAGUESMA
277 SCRA 370 (1997)
ROMERO, J.:
NATURE Petition for Certiorari
FACTS
-On October 5, 1990, petitioner union filed before the
Department of Labor and Employment (DOLE) a Petition for
Direct Certification or Certification Election among the
supervisors and exempt employees of the SMC Magnolia Poultry
Products Plants of Cabuyao, San Fernando and Otis.
-On December 19, 1990, Med-Arbiter Danilo L. Reynante issued
an Order ordering the conduct of certification election among the
supervisors and exempt employees of the SMC Magnolia Poultry
Products Plants of Cabuyao, San Fernando and Otis as ONE
BARGAINING UNIT.
-On January 18, 1991, respondent San Miguel Corporation
appealed pointing out, among others, the Med-Arbiter's error in
grouping together all three (3) separate plants, Otis, Cabuyao
and San Fernando, into one bargaining unit, and in including
SUPERVISORY LEVELS 3 AND ABOVE WHOSE POSITIONS ARE
CONFIDENTIAL IN NATURE.
-Upon petitioner-union's motion dated August 7, 1991,
Undersecretary Laguesma granted the reconsideration prayed
for on September 3, 1991 and directed the conduct of separate
certification elections among the supervisors ranked as
supervisory levels 1 to 4 (S1 to S4) and the exempt employees in
each of the three plants at Cabuyao, San Fernando and Otis.
ISSUES
1. Whether Supervisory employees 3 and 4 and the exempt
employees of the company are considered confidential
employees, hence ineligible from joining a union.
2. Whether or not it was proper for Usec Laguesma to consider
that the employees of the three plants constitute an appropriate
single bargaining unit.
HELD
1. NO.
RATIO
- An employee of a labor union, or of a management association,
must have access to confidential labor relations information with
respect to his employer, the union, or the association, to be
regarded a confidential employee, and knowledge of labor
relations information pertaining to the companies with which the
union deals, or which the association represents, will not cause
an employee to be excluded from the bargaining unit
representing employees of the union or association.
- Access to information which is regarded by the employer to be
confidential from the business standpoint, such as financial
information or technical trade secrets, will not render an
employee a confidential employee."
REASONING
-Confidential employees are those who (1) assist or act in
a confidential capacity, (2) to persons who formulate,
determine, and effectuate management policies in the
field of labor relations. The two criteria are cumulative,
and both must be met if an employee is to be considered
a confidential employee that is, the confidential
relationship must exist between the employee and his
supervisor, and the supervisor must handle the
prescribed responsibilities relating to labor relations.
- 28 - Disini
-The exclusion from bargaining units of employees
who, in the normal course of their duties, become
aware of management policies relating to labor
relations is a principal objective sought to be
accomplished by the ''confidential employee rule."
THE BROAD RATIONALE BEHIND THIS RULE IS THAT
EMPLOYEES SHOULD NOT BE PLACED IN A POSITION
INVOLVING A POTENTIAL CONFLICT OF INTERESTS.
"Management should not be required to handle labor
relations matters through employees who are
represented by the union with which the company is
required to deal and who in the normal performance
of their duties may obtain advance information of the
company's position with regard to contract
negotiations, the disposition of grievances, or other
labor relations matters."
-AN IMPORTANT ELEMENT OF THE "CONFIDENTIAL
EMPLOYEE RULE" IS THE EMPLOYEE'S NEED TO USE LABOR
RELATIONS INFORMATION. Thus, in determining the
confidentiality of certain employees, a key question
frequently considered is the employee's necessary access to
confidential labor relations information.
-Granting arguendo that an employee has access to
confidential labor relations information but such is merely
incidental to his duties and knowledge thereof is not
necessary in the performance of such duties, said access
does not render the employee a confidential employee.
- It must be borne in mind that Section 3 of Article XIII of the
1987 Constitution mandates the State to guarantee to "all"
workers the right to self-organization. Hence, confidential
employees who may be excluded from bargaining unit must
be strictly defined so as not to needlessly deprive many
employees of their right to bargain collectively through
representatives of their choosing.
-In the case at bar, supervisors 3 and above
may not be considered confidential employees
merely because they handle "confidential data"
as such must first be strictly classified as
pertaining to labor relations for them to fall
under said restrictions. The information they
handle are properly classifiable as technical and
internal business operations data which, to our
mind, has no relevance to negotiations and
settlement of grievances wherein the interests
of a union and the management are invariably
adversarial.
2. NO
RATIO
- An appropriate bargaining unit may be defined as "a group
of employees of a given employer, comprised of all or less
than all of the entire body of employees, which the
collective interest of all the employees, consistent with
equity to the employer, indicate to be best suited to serve
the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law."
- A unit to be appropriate must effect a grouping of
employees who have SUBSTANTIAL, MUTUAL INTERESTS IN
WAGES, HOURS, WORKING CONDITIONS AND OTHER
SUBJECTS OF COLLECTIVE BARGAINING.
REASONING
- It is readily seen that the employees in the instant case
have "community or mutuality of interests," which is the
standard in determining the proper constituency of a
collective bargaining unit. It is undisputed that they all
belong to the Magnolia Poultry Division of San Miguel
 Labor Law 2 A2010
Corporation. This means that, although they belong to three
different plants, they perform work of the same nature, receive
the same wages and compensation, and most importantly, share
a common stake in concerted activities.
SUGBUANON RURAL BANK, INC. VS
LAGUESMA
325 SCRA 425
QUISUMBING: February 2, 2000
NATURE:
- Special civil action for certiorari and prohibition
FACTS:
- Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for
brevity) is a duly-registered banking institution with
principal office in Cebu City and a branch in Mandaue
City. Private respondent SRBI Association of
Professional, Supervisory, Office, and Technical
Employees Union (APSOTEU) is a legitimate labor
organization affiliated with the Trade Unions Congress
of the Philippines (TUCP).
- On October 8, 1993, the DOLE Regional Office in Cebu
City granted Certificate of Registration to APSOTEU-
TUCP, hereafter referred to as the union.
- On October 26, 1993, the union filed a petition for
certification election of the supervisory employees of
SRBI. It alleged, among others, that: (1) APSOTEU-TUCP
was a labor organization duly-registered with the Labor
Department; (2) SRBI employed 5 or more supervisory
employees; (3) a majority of these employees
supported the petition: (4) there was no existing
collective bargaining agreement (CBA) between any
union and SRBI; and (5) no certification election had
been held in SRBI during the past 12 months prior to
the petition.
- On November 12, 1993, SRBI filed a motion to dismiss
the union's petition. It sought to prevent the holding of
a certification election on two grounds. First, that the
members of APSOTEU-TUCP were in fact managerial or
confidential employees. Second, the Association of
Labor Unions-Trade Unions Congress of the Philippines
or ALU-TUCP was representing the union.
- The union filed its opposition to the motion to dismiss
on December 1, 1993. It argued that its members were
not managerial employees but merely supervisory
employees.
- On December 9, 1993, the Med-Arbiter denied
petitioner's motion to dismiss.
- SRBI appealed the Med-Arbiter's decision to the
Secretary of Labor and Employment. The appeal was
denied for lack of merit. The certification election was
ordered.
- On June 16, 1994, the Med-Arbiter scheduled the
holding of the certification election for June 29, 1994.
- On June 17, 1994, SRBI filed with the Med-Arbiter an
urgent motion to suspend proceedings. The Med-Arbiter
denied the same. SRBI then filed a motion for
reconsideration. Two days later, the Med-Arbiter
cancelled the certification election scheduled for June
29, 1994 in order to address the motion for
reconsideration.
- The Med-Arbiter later denied petitioner's motion for
reconsideration
- SRBI appealed the order of denial to the DOLE
Secretary
- Petitioner proceeded to file a petition with the DOLE
Regional Office seeking the cancellation of the
respondent union's registration. It averred that the
- 29 - Disini
APSOTEU-TUCP members were actually managerial
employees who were prohibited by law from joining
or organizing unions.
- DOLE Undersecretary denied SRBI's appeal for lack
of merit. He ruled that APSOTEU-TUCP was a
legitimate labor organization. It was fully entitled to
all the rights and privileges granted by law to a
legitimate labor organization, including the right to
file a petition for certification election. He also held
that until and unless a final order is issued
cancelling APSOTEU-TUCP's registration certificate,
it had the legal right to represent its members for
collective bargaining purposes.
- SRBI moved for reconsideration of the
Undersecretary's decision
ISSUE/S:
(1) WON the members of the respondent union are
managerial employees and/or highly-placed confidential
employees, hence prohibited by law from joining labor
organizations and engaging in union activities
(2) WON the Med-Arbiter may validly order the holding of a
certification election
HELD:
1. NO
Reasoning
- Article 212 (m) of the Labor Code defines the terms
"managerial employee" and "supervisory employees" as
follows:
Art. 212. Definitions
(m) "Managerial employee" is one who is vested
with powers or prerogatives to lay down and
execute management policies and/or hire, transfer,
suspend, lay-off, recall, discharge, assign or
discipline employees. Supervisory employees are
those who, in the interest of the employer,
effectively recommend such managerial actions if
the exercise of such authority is not merely
routinary or clerical in nature but requires the use
of independent judgment. All employees not falling
within any of the above definitions are considered
rank-and-file employees for purposes of
- Petitioner submitted detailed job descriptions to support
its contention that the union members are managerial
employees and/or confidential employees proscribed from
engaging in labor activities. In the present case, however,
petitioner failed to show that the employees in question
were vested with managerial powers. At best they only had
recommendatory powers subject to evaluation, review, and
final decision by the bank's management. The job
description forms submitted by petitioner clearly show that
the union members in question may not transfer, suspend,
lay-off, recall, discharge, assign, or discipline employees.
Moreover, the forms also do not show that the Cashiers,
Accountants, and Acting Chiefs of the Loans Department
formulate and execute management policies which are
normally expected of management officers.
2. YES
Reasoning
- One of the rights of a legitimate labor organization
under Article 242(b) of the Labor Code is the right
to be certified as the exclusive representative of all
employees in an appropriate bargaining unit for
purposes of collective bargaining. Having complied
with the requirements of Art. 234, it is our view that
respondent union is a legitimate labor union. Article
257 of the Labor Code mandates that a certification
election shall automatically be conducted by the
Med-Arbiter upon the filing of a petition by a
legitimate labor organization.
 Labor Law 2 A2010
DISPOSITIVE:
Petition dismissed.
PAPER INDUSTRIES CORP. OF THE PHILS. V
LAGUESMA
330 SCRA 295
DE LEON; April 12, 2000
NATURE
Petition for certiorari seeking to annul the Resolution and the
Order Laguesma, acting then as Undersecretary, now the
Secretary, of the DOLE
FACTS
- PICOP-Bislig Supervisory and Technical Staff Employees Union
(PBSTSEU) instituted a Petition for Certification Election to
determine the sole and exclusive bargaining agent of the
supervisory and technical staff employees of PICOP for CBA
purposes.
- Federation of Free Workers (FFW) and Associated Labor Union
(ALU) filed their respective petitions for intervention.
- Med-Arbiter granted the petitions for interventions of the FFW
and ALU. Another Order set the holding of a certification election
among PICOP's supervisory and technical staff employees in
Tabon, Bislig, Surigao del Sur, with four (4) choices, namely: (1)
PBSTSEU; (2) FFW; (3) ALU; and (4) no union.
- PICOP appealed the Order which set the holding of the
certification election contending that the Med-Arbiter committed
grave abuse of discretion in deciding the case without giving
PICOP the opportunity to file its comments/answer, and that
PBSTSEU had no personality to file the petition for certification
election.
- DOLE Sec. Drilon upheld the Med-Arbiter's Order with
modification allowing the supervising and staff employees in
Cebu, Davao and Iligan City to participate in the certification
election.
- PICOP questioned and objected to the inclusion of some section
heads and supervisors in the list of voters whose positions it
averred were reclassified as managerial employees in the light
of the reorganization effected by it.
ISSUE
WON the positions Section Heads and Supervisors, who have
been designated as Section Managers and Unit Managers who
were converted to managerial employees are ineligible for union
membership
HELD
- NO. The mere fact that an employee is designated “manager”
does not ipso facto make him one. Designation should be
reconciled with the actual job description of the employee, for it
is the job description that determines the nature of employment.
- Managerial employees are ranked as Top Managers, Middle
Managers and First Line Managers. Top and Middle Managers
have the authority to devise, implement and control strategic
and operational policies while the task of First-Line Managers is
simply to ensure that such policies are carried out by the rank-
and- file employees of an organization.
- A thorough dissection of the job description of the concerned
supervisory employees and section heads indisputably show that
they are not actually managerial but only supervisory employees
since they do not lay down company policies. Any authority they
exercise is not supreme but merely advisory in character. Theirs
is not a final determination of the company policies inasmuch as
any action taken by them on matters relative to hiring,
promotion, transfer, suspension and termination of employees is
still subject to confirmation and approval by their respective
superior.
Disposition
- 30 - Disini
WHEREFORE, the petition is hereby DISMISSED, and the
Resolution and Order of public respondent Bienvenido E.
Laguesma dated April 17, 1991 and August 17, 1991,
respectively, finding the subject supervisors and section
heads as supervisory employees eligible to vote in the
certification election are AFFIRMED.
SAMSON VS NLRC (SCHERING-PLOUGH
CORP)
330 SCRA 460
Kapunan, J.; April 12, 2000
NATURE
Special civil action of certiorari
FACTS
- Rufino Norberto F. Samson was dismissed from the
Company for uttering what was considered by the company
as obscene, insulting, and offensive words and for making
malicious and lewd gestures directed at the President and
General Manager of the company during an informal Sales
and Marketing gathering in relation to the decision of the
Management Committee on a dispute with another
employee. He was also accused of threatening to disrupt or
create violence in a forthcoming National Sales Conference.
- The Labor Arbiter found that Samson was illegally
dismissed but the decision was reversed by NLRC.
ISSUE/S
WON the dismissal on the ground of loss of confidence is
valid
HELD
No. As a ground for dismissal, the term “trust and
confidence” is restricted to managerial employees. And
before one may be properly considered a managerial
employee, three conditions must be met:
a. Their primary duty consists of the
management of the establishment in
which they are employed or of a department
or subdivision thereof:
b. they customarily and regularly direct the
work of two or more employees therein;
c. They have the authority to hire or fire
other employees of lower rank; or their
suggestions and recommendations as to
hiring an firing and as to the promotion or
any other change of status of other
employees are given particular weight.
In this case the job description of Samson does not mention
that petitioner possesses the power “to lay down policies
nor to hire, transfer, suspend, lay off, recall. discharge,
assign or discipline employees”. Absent this crucial
element, petitioner cannot be considered a managerial
employee despite his designation as District Sales Manager.
Disposition Petition is granted. NLRC decision is reversed
and set aside. Samson is reinstated to his position without
loss of seniority rights and is awarded payment of his full
backwages
PAPER INDUSTRIES CORP. OF THE PHILS. V
LAGUESMA
330 SCRA 295
DE LEON; April 12, 2000
NATURE
 Labor Law 2 A2010
Petition for certiorari seeking to annul the Resolution and the
Order Laguesma, acting then as Undersecretary, now the
Secretary, of the DOLE
FACTS
- PICOP-Bislig Supervisory and Technical Staff Employees Union
(PBSTSEU) instituted a Petition for Certification Election to
determine the sole and exclusive bargaining agent of the
supervisory and technical staff employees of PICOP for CBA
purposes.
- Federation of Free Workers (FFW) and Associated Labor Union
(ALU) filed their respective petitions for intervention.
- Med-Arbiter granted the petitions for interventions of the FFW
and ALU. Another Order set the holding of a certification election
among PICOP's supervisory and technical staff employees in
Tabon, Bislig, Surigao del Sur, with four (4) choices, namely: (1)
PBSTSEU; (2) FFW; (3) ALU; and (4) no union.
- PICOP appealed the Order which set the holding of the
certification election contending that the Med-Arbiter committed
grave abuse of discretion in deciding the case without giving
PICOP the opportunity to file its comments/answer, and that
PBSTSEU had no personality to file the petition for certification
election.
- DOLE Sec. Drilon upheld the Med-Arbiter's Order with
modification allowing the supervising and staff employees in
Cebu, Davao and Iligan City to participate in the certification
election.
- PICOP questioned and objected to the inclusion of some section
heads and supervisors in the list of voters whose positions it
averred were reclassified as managerial employees in the light
of the reorganization effected by it.
ISSUE
WON the positions Section Heads and Supervisors, who have
been designated as Section Managers and Unit Managers who
were converted to managerial employees are ineligible for union
membership
HELD
- NO. The mere fact that an employee is designated “manager”
does not ipso facto make him one. Designation should be
reconciled with the actual job description of the employee, for it
is the job description that determines the nature of employment.
- Managerial employees are ranked as Top Managers, Middle
Managers and First Line Managers. Top and Middle Managers
have the authority to devise, implement and control strategic
and operational policies while the task of First-Line Managers is
simply to ensure that such policies are carried out by the rank-
and- file employees of an organization.
- A thorough dissection of the job description of the concerned
supervisory employees and section heads indisputably show that
they are not actually managerial but only supervisory employees
since they do not lay down company policies. Any authority they
exercise is not supreme but merely advisory in character. Theirs
is not a final determination of the company policies inasmuch as
any action taken by them on matters relative to hiring,
promotion, transfer, suspension and termination of employees is
still subject to confirmation and approval by their respective
superior.
- Thus, where such power, which is in effect RECOMMENDATORY
in character, is SUBJECT TO EVALUATION, REVIEW, and FINAL
ACTION by department heads and other higher executives of the
company. The same, although present, is not effective and not
an exercise of INDEPENDENT JUDGMENT as required by law.
Disposition WHEREFORE, the petition is hereby DISMISSED, and
the Resolution and Order of public respondent Bienvenido E.
Laguesma dated April 17, 1991 and August 17, 1991,
respectively, finding the subject supervisors and section heads
as supervisory employees eligible to vote in the certification
election are AFFIRMED.
- 31 - Disini
CAINTA CATHOLIC SCHOOL V CAINTA
CATHOLIC SCHOOL EMPLOYEES’ UNION
489 SCRA 468
TINGA; May 4, 2006
NATURE
Special civil action of certiorari
FACTS
- the school and union entered into a CBA. Then the union in
the school became inactive for several years. When it
became active again, led by Llagas (Pres) and Javier (VP),
the school decided to enforce the provision on the CBA re:
retirement (that management can retire an employee if s/he
has reached age of 60 or rendered at least 20 years of
service, the last 3 years continuous). The school retired
Llagas and Javier, both having rendered more than 20 years
of continuous service. The union struck, alleging unfair labor
practice and unlawful termination. The school countered
with a petition to declare the strike illegal.
- school claims that it could validly retire Llagas and Javier,
at its prerogative granted to it by law and the CBA. Union
claims that retirement was equivalent to union busting, as
the dismissed EEs were their leaders.
- NLRC ruled in favor of the school, declaring that the
management prerogative on retirement of EEs was validly
exercised. Also, it gave, as another justification for the
retirement, the reason that as managerial employees
(LLagas was the Dean of Student Affairs while Javier was the
Subject Area Coordinator), when they joined and became
officers of the union. They lost the trust and confidence of
the school. They allowed their loyalties be divided between
the union and the school.
- appeal of the union to the CA was granted, saying that the
retirement of the 2 union officers was a mere subterfuge to
bust the union. The school then filed this petition.
ISSUE/S
WON Llagas and Javier were managerial EES, thus making
the strike called by the union on their behalf (as unqualified
union members) illegal
HELD
YES
Ratio The 2 employees are not rank and file employees,
thus disqualified from joining a union. Thus, the strike called
in their behalf is illegal.
Reasoning Art.212(m) defines a managerial employee as:
one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial
actions. On the other hand, Supervisory EEs are those
who, in the interest of the ER, effectively recommend
such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature
but requires the use of independent judgment.
- court reviewed the functions of the positions of the retired
EEs found in the Faculty Manual in order to determine their
classification. As the Dean of Student Affairs, Llagas was
clearly a managerial employee. As a Subject Area
Coordinator, Javier falls under supervisory EEs
- thus, Llagas is proscribed from joining a labor union, more
so being elected as union officer. In the case of Javier, a
supervisory EE, she may join a labor union composed only of
supervisory employees. Finding both union officers to be
employees not belonging to the rank-and-file, their
membership in the Union has become questionable,
rendering the Union inutile to represent their cause.
Disposition Petition is granted. NLRC resolution reinstated.
 Labor Law 2 A2010
PROHIBITION AND RATIONALE
METROLAB INDUSTRIES, INC VS ROLDAN-
CONFESSOR
254 SCRA 182
KAPUNAN; February 28, 1996
NATURE
Petition for certiorari seeking the annulment of the Resolution
and Omnibus Resolution of the Secretary of Labor and
Employment
FACTS
- On 31 December 1990, the Collective Bargaining Agreement
(CBA) between Metrolab and the Private respondent Metro Drug
Corporation Employees Association-Federation of Free Workers
(hereinafter referred to as the Union) expired. The negotiations
for a new CBA, however, ended in a deadlock. The Union filed a
notice of strike against Metrolab and Metro Drug Inc. The parties
failed to settle their dispute despite the conciliation efforts of the
National Conciliation and Mediation Board.
-To contain the escalating dispute, the then Secretary of Labor
and Employment, Ruben D. Torres, issued an assumption order,
the dispositive portion of which states, among others:
Accordingly, any strike or lockout is hereby strictly enjoined. The
Companies and the Metro Drug Corp. Employees Association ?
FFW are likewise directed to cease and desist from committing
any and all acts that might exacerbate the situation.
- Thereafter, the union filed a motion for reconsideration. during
the pendency of the abovementioned motion for reconsideration,
Metrolab laid off 94 of its rank and file employees. On the same
date, the Union filed a motion for a cease and desist order to
enjoin Metrolab from implementing the mass layoff, alleging that
such act violated the prohibition against committing acts that
would exacerbate the dispute as specifically directed in the
assumption order. 2
- On the other hand, Metrolab contended that the layoff was
temporary and in the exercise of its management prerogative. It
maintained that the company would suffer a yearly gross
revenue loss of approximately sixty-six (66) million pesos due to
the withdrawal of its principals in the Toll and Contract
Manufacturing Department.
- Thereafter, on various dates, Metrolab recalled some of the laid
off workers on a temporary basis due to availability of work in
the production lines.On 14 April 1992, Acting Labor Secretary
Nieves Confesor issued a resolution declaring the layoff of
Metrolab's 94 rank and file workers illegal and ordered their
reinstatement with full backwages.
- Labor Secretary Confesor issued the assailed Pending the
resolution of the aforestated motions. Metrolab laid off 73 of its
employees on grounds of redundancy due to lack of work which
the union again promptly opposed on. Labor Secretary Confesor
again issued a cease and desist order. Metrolab moved for a
reconsiderations. The Omnibus Resolution contains the following
orders: 1. MII's motion for partial reconsideration of our 14 April
1992 resolution specifically that portion thereof assailing our
ruling that the layoff of the 94 employees is illegal, is hereby
denied. MII is hereby ordered to pay such employees their full
backwages computed from the time of actual layoff to the time
of actual recall; Labor Secretary Confesor also ruled that
executive secretaries are excluded from the closed-shop
provision of the CBA, not from the bargaining unit.
ISSUE/S
1. WON the Sec of Labor erred in declaring the temporary layoff
illegal, and ordering the reinstatement and payment of
backwages to the affected employees
2. WON the Sec of Labor erred in excluding executive
secretaries as part of the bargaining unit of rank and file
employees
HELD
- 32 - Disini
1. NO
Ratio
This Court recognizes the exercise of management
prerogatives and often declines to interfere with the
legitimate business decisions of the employer. However, this
privilege is not absolute but subject to limitations imposed
by law.
Reasoning
-That Metrolab's business is of national interest is not
disputed. Metrolab is one of the leading manufacturers and
suppliers of medical and pharmaceutical products to the
country.Metrolab's management prerogatives, therefore, are
not being unjustly curtailed but duly balanced with and
tempered by the limitations set by law, taking into account
its special character and the particular circumstances in the
case at bench.
- As aptly declared by public respondent Secretary of Labor
in its assailed resolution: one of the substantive evils which
Article 263 (g) of the Labor Code seeks to curb is the
exacerbation of a labor dispute to the further detriment of
the national interest. When a labor dispute has in fact
occurred and a general injunction has been issued
restraining the commission of disruptive acts, management
prerogatives must always be exercise consistently with the
statutory objective.
2. NO
Ratio
Although Article 245 of the Labor Code 20 limits the
ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by
reason of their positions or nature of work are required to
assist or act in a fiduciary manner to managerial employees
and hence, are likewise privy to sensitive and highly
confidential records
Reasoning
In the case at bench, the Union does not disagree with
petitioner that the executive secretaries are confidential
employees. (I)n the collective bargaining process,
managerial employees are supposed to be on the side of the
employer, to act as its representatives, and to see to it that
its interest are well protected. The employer is not assured
of such protection if these employees themselves are union
members. Collective bargaining in such a situation can
become one-sided. It is the same reason that impelled this
Court to consider the position of confidential employees as
included in the disqualification found in Art. 245 as if the
disqualification of confidential employees were written in
the provision. If confidential employees could unionize in
order to bargain for advantages for themselves, then they
could be governed by their own motives rather than the
interest of the employers. Moreover, unionization of
confidential employees for the purpose of collective
bargaining would mean the extension of the law to persons
or individuals who are supposed to act "in the interest of the
employers. It is not farfetched that in the course of
collective bargaining, they might jeopardize that interest
which they are duty-bound to protect.
Disposition Petition is partly granted. The resolutions of
the Sec of Labor are hereby MODIFIED to the extent that
executive secretaries of petitioner Metrolab's General
Manager and the executive secretaries of the members of
its Management Committee are excluded from the
bargaining unit of petitioner's rank and file employees.
PEPSI COLA PRODUCTS VS SEC. OF LABOR
(PEPSI-COLA SUPERVISORY EMPLOYEES
ORGANIZATION-UOEF)
 Labor Law 2 A2010 - 33 - Disini
312 SCRA 104 2. WON the Petition to cancel/revoke registration is a
prejudicial question to the petition for certification election.
PURISIMA; August 10, 1999
3. WON confidential employees can join the labor union of
the rank and file.
NATURE Petitions for certiorari
HELD
FACTS
1. NO
- the Pepsi-Cola Employees Organization-UOEF (Union) filed a
Ratio If the intent of the law is to avoid a situation where
petition for certification election with the Med-Arbiter seeking to
supervisors would merge with the rank-and-file or where the
be the exclusive bargaining agent of supervisors of Pepsi-Cola
supervisors' labor organization would represent conflicting
Philippines, Inc. (PEPSI).
interests, then a local supervisors' union should not be
-the Med-Arbiter granted the Petition, with the explicit statement
allowed to affiliate with the national federation of union of
that it was an affiliate of Union de Obreros Estivadores de
rank-and-file employees where that federation actively
Filipinas (federation) together with two (2) rank and file unions.
participates in union activity in the company.
Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola Employees Union
Reasoning The Court emphasizes that the limitation is not
of the Philippines (PEUP).
confined to a case of supervisors' wanting to join a rank-
- PEPSI filed with the Bureau of Labor Relations a petition to Set
and-file union. The prohibition extends to a supervisors'
Aside, Cancel and/or Revoke Charter Affiliation of the Union on
local union applying for membership in a national federation
the grounds that (a) the members of the Union were managers
the members of which include local unions of rank and file
and (b) a supervisors' union can not affiliate with a federation
employees. The intent of the law is clear especially where,
whose members include the rank and file union of the same
as in this case at bar, the supervisors will be co-mingling
company.
with those employees whom they directly supervise in their
- the Federation argued that:
own bargaining unit.
The pertinent portion of Art.245 of the Labor Code states that.
2. NO
"Supervisory employees shall not be eligible for membership in a
Ratio The Court applies the established rule correctly
labor organization of the rank and file employees but may join,
followed by the public respondent that an order to hold a
assist or form separate labor organization of their own.
certification election is proper despite the pendency of the
This provision of law does not prohibit a local union composed of
petition for cancellation of the registration certificate of the
supervisory employees from being affiliated to a federation
respondent union. The rationale for this is that at the time
which has local unions with rank-and-file members as affiliates.
the respondent union filed its petition, it still had the legal
- the Secretary of Labor and Employment, sent in a Comment,
personality to perform such act absent an order directing
alleging inter alia, that:
the cancellation.
…Art. 245 of the New Labor Code does not preclude the
3. NO
supervisor's union and the rank-and-file union from being
Ratio A confidential employee is one entrusted with
affiliated with the same federation.
confidence on delicate matters, or with the custody,
A federation of local union is not the labor organization referred
handling, or care and protection of the employer's property.
to in Art.245 but only becomes entitled to all the rights enjoyed
While Art. 245 of the Labor Code singles out managerial
by the labor organization (at the company level) when it has
employee as ineligible to join, assist or form any labor
complied with the registration requirements found in Art.234 and
organization, under the doctrine of necessary implication,
237. Hence, what is prohibited by Art.245 is membership of
confidential employees are similarly disqualified.
supervisory employees in a labor union (at the company level) of
Reasoning
the rank and file. . . .
- if these managerial employees would belong to or be
. . . In other words, the affiliation of the supervisory employee's
affiliated with a Union, the latter might not be assured of
union with the same federation with which the rank and file
their loyalty to the Union in view of evident conflict of
employees union is affiliated did not make the supervisory
interests. The Union can also become company dominated
employees members of the rank and file employee's union and
with the presence of managerial employees in Union
vice versa.2 . . .
membership."
- PEPSI, in its Reply, asserted:
- in the collective bargaining process, managerial employees
It is our humble contention that a final determination of the
are supposed to be on the side of the employer, to act as its
Petition to Set-Aside, Cancel, Revoke Charter Union Affiliation
representatives, and to see to it that its interest are well
should first be disposed of before granting the Petition for the
protected. The employer is not assured of such protection if
Conduct of Certification Election.
these employees themselves are union members. Collective
- Petitioner again filed a Supplemental Reply stressing:
bargaining in such a situation can become one-sided. It is
The respondent supervisory union could do indirectly what it
the same reason that impelled this Court to consider the
could not do directly as the simple expedient of affiliating with
position of confidential employees as included in the
UOEF would negate the manifest intent and letter of the law that
disqualification found in Art. 245 as if the disqualification of
supervisory employees can only "join, assist or form separate
confidential employees were written in the provision. If
labor organizations of their own" and cannot "be eligible for
confidential employees could unionize in order to bargain for
membership in a labor organization of the rank and file
advantages for themselves, then they could be governed by
employees."
their own motives rather than the interest of the employers.
Moreover, unionization of confidential employees for the
ISSUES
purpose of collective bargaining would mean the extension
1. WON a supervisors' union can affiliate with the same
of the law to persons or individuals who are supposed to act
Federation of which 2 rank and file unions are likewise members,
"in the interest of" the employers. It is not farfetched that in
without violating Art. 245 of the Labor Code3
the course of collective bargaining, they might jeopardize
3 that interest which they are duty bound to protect.
Art. 245. Ineligibility of managerial employees to join any labor
organization; right of supervisory employees. Managerial DISPOSITION
employees are not eligible to join, assist or form any labor Petitions DISMISSED but Decision of the Secretary of Labor
organization. Supervisory employees shall not be eligible for is MODIFIED in that Credit and Collection Managers and
membership in a labor organization of the rank-and-file Accounting Managers are highly confidential employees not
employees but may join, assist or form separate labor eligible for membership in a supervisors' union.
organizations of their own.
 Labor Law 2 A2010
2. WORKER/MEMBER OF COOPERATIVE
BENGUET ELECTRIC COOPERATIVE v CALLEJA
180 SCRA 740
Cortes; Dec.29, 1989
NATURE
Petition for certiorari to review the resolution of the Director of
the Bureau of Labor Relations
FACTS
- A certification election was held to determine which of 2
BENECO (Benguet Electric Cooperative) labor unions would be
the sole and exclusive bargaining representative of all rank and
file employees of BENECO. The 2 disputing labor unions were: 1.
BWLU-ADLO (Benguet electric cooperative Workers’ Labor Union-
Association of Democratic Labor Organizations) and 2. BELU
(BENECO Employees Labor Union)
- After BELU won, BENECO filed a protest claiming that some
employees who are members and co-owners of the cooperative
had voted in the election when they are ineligible to do so.
BENECO claimed that these employees are not eligible to form,
join or assist labor orgs. of their own choosing because they are
members and joint owners of the cooperative.
BENECO’s protest was dismissed by the med-arbiter.
- Bureau of Labor Relations (BLR) director Calleja affirmed the
med-arbiter’s order and certified BELU as the sole and exclusive
bargaining agent of all the rank and file employees of BENECO.
ISSUE
1. WON employees of a cooperative are qualified to form or join
a labor organization for purposes of collective bargaining
HELD
1. NO
Ratio The right to collective bargaining is not available to an
employee of a cooperative who at the same time is a member
and co-owner thereof. But employees who are neither members
nor co-owners of the cooperative are entitled to exercise the
rights to self-organization, collective bargaining and negotiation
as mandated by the 1987 Constitution and applicable statutes.
Reasoning As members of the cooperative they are co-owners
thereof. As such, they cannot invoke the right to collective
bargaining for “certainly an owner cannot bargain with himself
or his co-owners.” (Cooperative Rural Bank of Davao City, Inc. v.
Ferrer-Calleja, et al.)
- The fact that the members-employees of petitioner do not
participate in the actual management of the cooperative does
not make them eligible to form, assist or join a labor
organization for the purpose of collective bargaining with
petitioner. It is the fact of ownership of the cooperative, and not
involvement in the management thereof, which disqualifies a
member from joining any labor organization within the
cooperative. Thus, irrespective of the degree of their
participation in the actual management of the cooperative, all
members thereof cannot form, assist or join a labor organization
for the purpose of collective bargaining.
Disposition Petition is granted. Resolution of respondent
director of BLR is annulled. Certification election is set aside.
CENTRAL NEGROS ELECTRIC COOPERATIVE V
DOLE SECRETARY
201 SCRA 584
REGALADO; September 13, 1991
NATURE
Special civil action for certiorari
- 34 - Disini
FACTS
- Petitioner Central Negros Electric Cooperative, Inc.
(CENECO) seeks to annul the order issued by then Acting
Secretary of Labor Laguesma declaring the projected
certification election unnecessary and directing petitioner
CENECO to continue recognizing private respondent
CENECO Union of Rational Employees (CURE) as the
sole and exclusive bargaining representative of all the rank-
and-file employees of petitioner's electric cooperative.
- Previous events: Their CBA was valid for a term of 3 years;
CURE then wrote CENECO proposing that negotiations be
conducted for a new agreement. CENECO denied CURE's
request on the ground that, under applicable decisions
of the Supreme Court, employees who at the same
time are members of an electric cooperative are not
entitled to form or join a union.
- CURE filed a petition for direct recognition or for
certification election; CENECO filed a motion to dismiss on
the ground of legal restraints.
- Some employees of CENECO then filed for withdrawal of
membership in the cooperative but CENECO contended that
this cannot be allowed.
ISSUE/S
1. WON the employees were allowed to withdraw
membership from the cooperative so as to entitle them to
form or join CURE for purposes of the negotiations for a
collective bargaining agreement
HELD
1. YES
Ratio Membership in the cooperative is on a voluntary
basis. Hence, withdrawal therefrom cannot be restricted
unnecessarily. The right to join an organization necessarily
includes the equivalent right not to join the same.
No Right of Self-Organization: WORKER/MEMBER OF
COOPERATIVE
- It was held in Batangas I Electric Cooperative Labor Union
vs. Romeo A. Young that "employees who at the same time
are members of an electric cooperative are not entitled to
form or join unions for purposes of collective bargaining
agreement, for certainly an owner cannot bargain with
himself or his co-owners."
- However, nowhere in said case is it stated that member-
employees are prohibited from withdrawing their
membership in the cooperative in order to join a labor union.
Disposition The questioned order is hereby ANNULLED and
SET ASIDE. The med-arbiter is hereby ordered to conduct a
certification election among the rank-and- file employees of
CENECO with CURE and No Union as the choices therein.
3. NON-EMPLOYEES
REPUBLIC PLANTERS BANK GENERAL
SERVICES EMPLOYEES UNION - NATU v
LAGUESMA
264 SCRA 637
PUNO; Nov 21, 1996
NATURE
Petition for certiorari
FACTS
-on January 21, 1991, Republic Planters Bank General
Services Employees Union-National Association of Trade
Unions (petitioner) filed a petition for certification election to
determine the sole and exclusive bargaining representative
of all regular employees outside the bargaining unit of
 Labor Law 2 A2010
Republic Planters Bank.
-The proposed bargaining unit is composed of clerks,
messengers, janitors, plumbers, telex operators, mailing and
printing personnel, drivers, mechanics and computer personnel.
Allegedly, these employees are regular employees but are
considered as contractual employees by the bank and are
excluded from the existing collective bargaining agreement.
-The bank filed moved to dismiss the petition for certification
election on the contentions that they are employed on
contractual basis, that there was already an existing bargaining
unit, and that the petition failed to state the number of
employees in the proposed bargaining unit.
- The petition was dismissed by the Med-Arbiter. On Dec 21,
1992, Undersecretary Bienvenido Laguesma reversed the Order
of the Med-arbiter. Petitioner filed a Motion for Reconsideration.
Usec Laguesma modified the December 21, 1992 Resolution,
finding 6 employees as regular and included in the existing rank
and file unit.
- Both parties moved for reconsideration. Petitioner sought a
ruling that the other workers in the proposed bargaining unit
should also be considered regular employees. On Feb 24, 1995,
Usec Laguesma issued another Order reinstating the Resolution
dated December 21, 1992.
ISSUE
WON petitioners have the right to self-organization, and thus be
allowed to file a petition for certification election.
HELD NO.
- In the case of Singer Sewing Machine Company vs. Drilon, et
al., it was rules that if the union members are not employees, no
right to organize for purposes of bargaining, nor to be certified
as bargaining agent can be recognized. Since the persons
involved are not employees of the company, they are not
entitled to the constitutional right to join or form a labor
organization for purposes of collective bargaining.
Disposition Petition is dismissed
2.05 PARTY PROTECTED
MACTAN WORKERS UNION vs. DON RAMON
ABOITIZ, President, Cebu Shipyard &
Engineering Works, Inc.
45 SCRA 577
FERNANDO; June 30, 1972
NATURE
Appeal from CFI Cebu by intervenor Associated Labor Union
FACTS
- The employees and laborers of Cebu Shipyard and Eng’g Works
belong to two rival unions: the Mactan Workers Union and
Associated Labor Union.
- Associated Labor Union (ALU), as exclusive bargaining
representative of the workers, entered into a CBA with Cebu
Shipyard where they agreed on a profit-sharing bonus scheme. It
was agreed that Cebu Shipyard will release the money to ALU
then ALU will deliver it to the members. Any unclaimed money
will be returned to the company after 60 days.
-The 72 members of Mactan Workers Union failed to get their
money (bec they did not like to go to ALU’s office). Their money
was returned to the company and ALU advised the company not
to deliver the amount to the members of the Mactan Workers
Union unless ordered by the Court, otherwise the ALU will take
steps to protect the interest of its members.
-So Cebu Shipyard did not pay to the plaintiffs, but instead,
deposited the said amount with the Labor Administrator. For the
recovery of their money, Mactan Workers filed money claims
against Cebu Shipyard.
-The lower court declared the Cebu Shipyard to deliver the
- 35 - Disini
money to ALU, and for ALU to distribute it immediately to
Mactan Workers members.
- ALU appealed, alleging lack of a cause of action, of
jurisdiction of the City Court of Lapulapu and of personality
of the Mactan Workers Union to represent its members.
ISSUES
WON CFI Cebu was correct in ordering ALU to deliver Mactan
Workers Union’s share
HELD YES
-The lower court just required literal compliance with the
terms of a collective bargaining contract
-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.
- The benefits of a collective bargaining agreement
extend to the laborers and employees in the
collective bargaining unit, including those who do not
belong to the chosen bargaining labor organization.
… The labor union that gets the majority vote as the
exclusive bargaining representative does not act for
its members alone. It represents all the employees in
such a bargaining unit.
- The raison d’etre of labor unions: it is not to be forgotten
that what is entitled to constitutional protection is labor, or
more specifically the working men and women, not labor
organizations. The latter are merely the instrumentalities
through which their welfare may be promoted and fostered.
That is the raison d'etre of labor unions.
Disposition CFI Decision affirmed
2.06 NON-ABRIDGMENT OF RIGHT
ART. 246. Non-abridgment of right to self-organization. - It
shall be unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with employees and
workers in their exercise of the right to self-organization.
Such right shall include the right to form, join, or assist labor
organizations for the purpose of collective bargaining
through representatives of their own choosing and to
engage in lawful concerted activities for the same purpose
for their mutual aid and protection, subject to the provisions
of Article 264 of this Code. (As amended by Batas Pambansa
Bilang 70, May 1, 1980).
ART. 248. Unfair labor practices of employers. - It shall be
unlawful for an employer to commit any of the following
unfair labor practice:
(a) To interfere with, restrain or coerce employees in the
exercise of their right to self-organization;
(b) To require as a condition of employment that a person or
an employee shall not join a labor organization or shall
withdraw from one to which he belongs;
(c) To contract out services or functions being performed by
union members when such will interfere with, restrain or
coerce employees in the exercise of their rights to self-
organization;
(d) To initiate, dominate, assist or otherwise interfere with
the formation or administration of any labor organization,
including the giving of financial or other support to it or its
organizers or supporters;
(e) To 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. Nothing in this Code or in any other law shall
stop the parties from requiring membership in a recognized
collective bargaining agent as a condition for employment,
 Labor Law 2 A2010
except those employees who are already members of another
union at the time of the signing of the collective bargaining
agreement. Employees of an appropriate bargaining unit who
are not members of the recognized collective bargaining agent
may be assessed a reasonable fee equivalent to the dues and
other fees paid by members of the recognized collective
bargaining agent, if such non-union members accept the
benefits under the collective bargaining agreement: Provided,
that the individual authorization required under Article 242,
paragraph (o) of this Code shall not apply to the non-members of
the recognized collective bargaining agent;
(f) To dismiss, discharge or otherwise prejudice or discriminate
against an employee for having given or being about to give
testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by
this Code;
(h) To pay negotiation or attorney’s fees to the union or its
officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only
the officers and agents of corporations, associations or
partnerships who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable. (As
amended by Batas Pambansa Bilang 130, August 21, 1981).
ART. 249. Unfair labor practices of labor organizations. - It shall
be unfair labor practice for a labor organization, its officers,
agents or representatives:
(a) To restrain or coerce employees in the exercise of their right
to self-organization. However, a labor organization shall have the
right to prescribe its own rules with respect to the acquisition or
retention of membership;
(b) To cause or attempt to cause an employer to discriminate
against an employee, including discrimination against an
employee with respect to whom membership in such
organization has been denied or to terminate an employee on
any ground other than the usual terms and conditions under
which membership or continuation of membership is made
available to other members;
(c) To violate the duty, or refuse to bargain collectively with the
employer, provided it is the representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver
or agree to pay or deliver any money or other things of value, in
the nature of an exaction, for services which are not performed
or not to be performed, including the demand for fee for union
negotiations;
(e) To ask for or accept negotiation or attorney’s fees from
employers as part of the settlement of any issue in collective
bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only
the officers, members of governing boards, representatives or
agents or members of labor associations or organizations who
have actually participated in, authorized or ratified unfair labor
practices shall be held criminally liable. (As amended by Batas
Pambansa Bilang 130, August 21, 1981).
III. LABOR ORGANIZATION
3.1 POLICY
ART. 211. Declaration of Policy. - A. It is the policy of the
State:
(b) To promote free trade unionism as an instrument for the
enhancement of democracy and the promotion of social
justice and development;
(c) To foster the free and voluntary organization of a strong
and united labor movement;
- 36 - Disini
3.2 LABOR ORGANIZATION –
UNIONS
DEFINITION
AIRLINE PILOTS ASSOCIATION OF THE
PHILIPPINES V. CIR
76 SCRA 274
CASTRO; April 15, 1977
Definition of Legitimate Labor Organization:
Section 2(e) of R.A. 875 defines "labor organization" as any
union or association of employees which exist, in whole or in
part, for the purpose of the collective bargaining or dealing
with employers concerning terms and conditions of
employment." The emphasis of Industrial Peace Act is
clearly on the purposes for which a union or
association of employees established rather than that
membership therein should be limited only to the
employees of a particular employer. Under Section 2(h)
of R.A 875 "representative" is define as including "a
legitimate labor organization or any officer or agent of such
organization, whether or not employed by the employer or
employee whom he represents." It cannot be
overemphasized likewise that labor dispute can exist
"regardless of whether the disputants stand in the
proximate relation of employer and employee.”
DUNLOP SLAZENGER V SEC. OF LABOR
(RUIZ)
300 SCRA 120
PUNO; DECEMBER 11, 1998
NATURE
Petition for certiorari
FACTS
- Respondent union filed a Petition for Certification Election
among the supervisory, office and technical employees of
the petitioner company before the DOLE, Regional Office No.
III.
- Petitioner company filed a motion to dismiss based on 1)
that the respondent union is comprised of supervisory and
rank-and-file employees and cannot act as bargaining agent
for the proposed unit; (2) that a single certification election
cannot be conducted jointly among supervisory and rank-
and-file employees; and (3) that the respondent union lacks
legal standing since it failed to submit its books of accounts.
- Respondent alleges that it is composed only of supervisory
employees and that it has no obligation to attach its books
of accounts since it is a legitimate labor organization.
- The mediator arbiter granted the petition of the union. It
said that the contention of the respondent that the
petitioning union is composed of both supervisory and rank
and file employees is not sufficient to dismiss the petition. It
can be remedied thru the exclusion-inclusion proceedings
wherein those employees who are occupying rank and file
positions will be excluded from the list of eligible voters. The
secretary of labor affirmed.
ISSUE/S
WON the union can be composed of supervisory and rank
and file employees
HELD
NO.
Ratio Article 245 of the Labor Code clearly provides that
"supervisory employees shall not be eligible for membership
in a labor organization of the rank-and-file employees.”
 Labor Law 2 A2010
Reasoning Public respondent gravely misappreciates the basic
antipathy between the interest of supervisors and the interest of
rank-and-file employees. There is a irreconcilability of their
interests which cannot be cured even in the exclusion-inclusion
proceedings.
Disposition Petition is granted.
DOLE REGISTRATION AS BASIS
LEGITIMACY
TAGAYTAY HIGHLANDS INTERNATIONAL GOLF
CLUB INC V
TAGAYTAY HIGHLANDS EMPLOYEES UNION-
PGTWO
395 SCRA 699
CARPIO-MORALES; January 22, 2003
NATURE
Petition for Certiorari under Rule 45 THIGCI assailing CA decision
denying its petition to annul the Department of Labor and
Employment (DOLE) Resolutions of November 12, 1998 and
December 29, 1998
FACTS
- October 16, 1997 > Tagaytay Highlands Employees Union
(THEU), Philippine Transport and General Workers Organization
(PTGWO), Local Chapter No. 776, a legitimate labor organization
said to represent majority of the rank-and-file employees of
THIGCI, filed a petition for certification election before the DOLE
Mediation-Arbitration Unit, Regional Branch No. IV
- November 27, 1997 > opposed petition for certification election
because the list of union members submitted by it was defective
and fatally flawed as it included the names and signatures of
supervisors, resigned, terminated and absent without leave
(AWOL) employees, as well as employees of The Country Club,
Inc., a corporation distinct and separate from THIGCI; and that
out of the 192 signatories to the petition, only 71 were actual
rank-and-file employees of THIGCI. Also, some of the signatures
in the list of union members were secured through fraudulent
and deceitful means, and submitted copies of the handwritten
denial and withdrawal of some of its employees from
participating in the petition.
-
THEU asserted that it complied with all the requirements for
valid affiliation and inclusion in the roster of legitimate labor
organizations pursuant to DOLE Department Order No. 9, series
of 1997, on account of which it was duly granted a Certification
of Affiliation by DOLE on October 10, 1997; and that Section 5,
Rule V
of said Department Order provides that the legitimacy of its registration
cannot be subject to collateral attack, and for as long as there is no final
order of cancellation, it continues to enjoy the rights accorded to a
legitimate organization. Therefore, the Med-Arbiter should, pursuant to
Article 257 of the Labor Code and Section 11, Rule XI of DOLE
Department Order No. 09, automatically order the conduct of a
certification election.
- January 28, 1998 > DOLE Med-Arbiter Anastacio Bactin ordered the
holding of a certification election
- DOLE Resolution of November 12, 19981 > setting aside the June 4,
1998 Resolution dismissing the petition for certification election. MFR
denied
- CA - denied THIGCI’s Petition for Certiorari and affirmed the DOLE
Resolution dated November 12, 1998. It held that while a petition for
certification election is an exception to the innocent bystander rule, hence,
the employer may pray for the dismissal of such petition on the basis of
lack of mutuality of interests of the members of the union as well as lack
of employer-employee relationship and petitioner failed to adduce
substantial evidence to support its allegations.
ISSUE. WON DOLE registration can be the basis for legitimacy
HELD NO
- 37 - Disini
- Continuing, petitioner argues that without resolving the status of
THEU, the DOLE Undersecretary "conveniently deferred the
resolution on the serious infirmity in the membership of [THEU] and
ordered the holding of the certification election" which is frowned
upon as the following ruling of this Court shows:
We also do not agree with the ruling of the respondent Secretary of
Labor that the infirmity in the membership of the respondent union
can be remedied in "the pre-election conference thru the
exclusion-inclusion proceedings wherein those employees who are
occupying rank-and-file positions will be excluded from the list of
eligible voters." Public respondent gravely misappreciated the basic
antipathy between the interest of supervisors and the interest of
rank-and-file employees. Due to the irreconcilability of their interest
we held in Toyota Motor Philippines v. Toyota Motors Philippines
Corporation Labor Union, viz:
"Clearly, based on this provision [Article 245], 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
posses 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." (Emphasis by petitioner) (Dunlop Slazenger (Phils.), v.
Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and
emphasis supplied by petitioner.)
LAGUNA AUTOPARTS V OFFICE OF THE DOLE
SECRETARY
457 SCRA 730
CALLEJO; April 29, 2005
NATURE
Petition to review the decision of the Court of Appeals
FACTS
- May 3, 1999 - Laguna Autoparts Manufacturing
Corporation Obrero Pilipino-LAMCOR Chapter filed a
petition for certification election with the DOLE. In its
petition, it noted its registration certificate number
along with the registration certificate number of
chapter affiliate. The petition alleged that the union
was composed of all rank-and-file employees, that the
bargaining unit is unorganized and that there had been
no certification election for the past 12 months prior to
the filing of the petition.
- Laguna Autoparts moved to cancel the certification
election because the union was not considered a
legitimate labor organization for failure to show that it
had complied with registration requirements such as
submission of required documents to the Bureau of
Labor Relations.
- Med-Arbiter Bactin dismissed the certification
election petition because of the union’s lack of
personality. DOLE Secretary Sto. Tomas reversed
Bactin’s order. This was affirmed by the CA.
- The CA stressed that a local or
chapter need not be registered to
become a legitimate labor
organization. It pointed out that a
local or chapter acquires legal
personality as a labor organization
from the date of filing of the
complete documents.
- The CA noted that it was the
employer which offered the most
tenacious resistance to the holding
of a certification election among its
regular rank-and-file employees. It
 Labor Law 2 A2010
opined that this must not be so for the
choice of a collective bargaining agent
was the sole concern of the employees,
and the employer should be a mere
bystander.
ISSUE/S
1. WON the union is a legitimate labor
organization
2. WON the chapter’s legal personality can
be attacked collaterally in an election action
HELD
1. YES
Ratio A local or chapter need not be independently
registered to acquire legal personality. A local/chapter
constituted in accordance with Section 1 of Rule 6 shall
acquire legal personality from the date of filing of the
complete documents enumerated.
Reasoning
The task of determining whether the local or chapter has
submitted the complete documentary requirements is lodged
with the Regional Office or the BLR, as the case may be. The
records of the case show that the respondent union submitted
the said documents to the regional office and was issued a
certification.
2. NO
Ratio
Reasoning
- It may not be subject to a collateral attack but only through a
separate action instituted particularly for the purpose of
assailing the chapter, as prescribed in Section 5, Rule 5 of the
implementing rules of Book 5 which states: “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.[”
- The pronouncement of the Labor Relations Division Chief, that
the respondent union acquired a legal personality with the
submission of the complete documentary requirement, cannot
be challenged in a petition for certification election.
Disposition Petition is denied. No costs.
COASTAL SUBIC BAY TERMINAL, INC. V DOLE
507 SCRA 300
QUISUMBING; November 20, 2006
NATURE
For review on certiorari
FACTS
- Respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union
(CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union
(CSBTI-SU) filed separate petitions for certification election
- The rank-and-file union insists that it is a legitimate labor organization
having been issued a charter certificate by the Associated Labor Union
(ALU), and the supervisory union by the Associated Professional,
Supervisory, Office and Technical Employees Union (APSOTEU).
- Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both
petitions for certification election alleging that the rank-and-file union and
supervisory union were not legitimate labor organizations
- Petitioner argues that APSOTEU improperly secured its registration from
the DOLE Regional Director and not from the BLR
- Petitioner insists 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.
- Without ruling on the legitimacy of the respondent unions, the Med-
Arbiter dismissed, both petitions
- Both parties appealed to the Secretary of Labor and Employment, who
- 38 - Disini
reversed the decision of the Med-Arbiter. The Secretary ruled that
CSBTI-SU and CSBTI-RFU have separate legal personalities to file
their separate petitions for certification election. The Secretary held
that APSOTEU is a legitimate labor organization because it was
properly registered pursuant to the 1989 Revised Rules and
Regulations implementing Republic Act No. 6715, the rule applicable
at the time of its registration. It further ruled that ALU and APSOTEU
are separate and distinct labor unions having separate certificates of
registration from the DOLE. They also have different sets of locals.
- The motion for reconsideration was also denied.
- On appeal, the Court of Appeals affirmed the decision of the
Secretary.
- The motion for reconsideration was likewise denied. Hence, the
instant petition by the company anchored on the following grounds:
ISSUES
1. WON the CA erred in relying on the “1989 Revised Rules and
Regulations implementing RA 6715” as basis to recognize private
respondent APSOTEU’s registration by the DOLE Regional Director.
2. WON ALU, a rank-and-file union and APSOTEU, a supervisory
union one and the same because of the commonalities between
them.
3. WON the supervisory and rank-and-file unions could separately
petition for certification elections.
HELD
1. NO.
Ratio Article 235 of LC 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.
- Section 2, Rule II, Book V of the 1989 Revised Implementing Rules
of the Labor Code (Implementing Rules) provides that:
Section 2. Where to file application; procedure - Any national labor
organization or labor federation or local union may file an
application for registration with the Bureau or the Regional Office
where the applicant’s principal offices is located. The Bureau or
the Regional Office shall immediately process and approve or
deny the application. In case of approval, the Bureau or the
Regional Office shall issue the registration certificate within thirty
(30) calendar days from receipt of the application, together with all
the requirements for registration as hereinafter provided.
The Implementing Rules specifically Section 1, Rule III of Book V, as
amended by Department Order No. 9, thus:
SECTION 1. Where to file applications. - The application for
registration of any federation, national or industry union or trade
union center shall be filed with the Bureau. Where the application
is filed with the Regional Office, the same shall be immediately
forwarded to the Bureau within forty-eight (48) hours from filing
thereof, together with all the documents supporting the
registration.
The applications for registration of an independent union shall be
filed with and acted upon by the Regional Office where the
applicant’s principal office is located ….
- 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.
- Even after the amendments, the rules did not divest the Regional
Office and the BLR of their jurisdiction over applications for
registration by labor organizations. The amendments to the
implementing rules merely specified that when the application was
filed with the Regional Office, the application would be acted upon by
the BLR.
Reasoning The records in this case showed that APSOTEU was
registered on March 1, 1991. Accordingly, the law applicable at that
time was Section 2, Rule II, Book V of the Implementing Rules, and
not Department Order No. 9 which took effect only on June 21, 1997.
Thus, considering further that APSOTEU’s principal office is located
in Diliman, Quezon City, and its registration was filed with the NCR
Regional Office, the certificate of registration is valid.
 Labor Law 2 A2010
2. NO.
Ratio 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. In
addition, the legal personality of a labor organization cannot be collaterally
attacked.
Reasoning In the absence of any independent action for cancellation of
registration against either APSOTEU or ALU, and unless and until their
registrations are cancelled, each continues to possess a separate legal
personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with
distinct and separate federations, despite the commonalities of APSOTEU
and ALU.
- Under the rules implementing the Labor Code, a chartered local union
acquires legal personality through the charter certificate issued by a duly
registered federation or national union, and reported to the Regional
Office in accordance with the rules implementing the Labor Code. 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.
3. NO.
Ratio 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. 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. Thus, the limitation is not confined to a case of
supervisors wanting to join a rank-and-file union. The prohibition extends
to a supervisors’ local union applying for membership in a national
federation the members of which include local unions of rank-and-file
employees.
Reasoning In the instant case, the national federations that exist as
separate entities to which the rank-and-file and supervisory unions are
separately affiliated with, do have a common set of officers. In addition,
APSOTEU, the supervisory federation, actively participates in the CSBTI-
SU while ALU, the rank-and-file federation, actively participates in the
CSBTI-RFU, giving occasion to possible conflicts of interest among the
common officers of the federation of rank-and-file and the federation of
supervisory unions. For as long as they are affiliated with the APSOTEU
and ALU, the supervisory and rank-and-file unions both do not meet the
criteria to attain the status of legitimate labor organizations, and thus
could not separately petition for certification elections.
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.
Disposition The petition was GRANTED.
CEBU SEAMEN'S ASSO., INC., V FERRER-CALLEJA
212 SCRA 50
- 39 - Disini
MEDIALDEA; August 4, 1992
NATURE
Petition seeking the reversal of the resolution of the Bureau of Labor
Relations which affirmed the decision of the Med-Arbiter holding that
the set of officers of Seamen's Association of the Philippines headed
by Dominica C. Nacua, as president, was the lawful set of officers
entitled to the release and custody of the union dues as well as
agency fees of said association.
FACTS
-23Oct 1950: a group of deck officers and marine engineers on
board vessels plying Cebu and other ports of the Philippines
organized themselves into an association and registered the same
as a non-stock corporation known as Cebu Seamen's Association,
Inc. (CSAI), with the Securities and Exchange Commission (SEC).
Later, on 23 June 1969, the same group registered its association
with this Bureau as a labor union known as the Seamen's
Association of the Philippines, Incorporated (SAPI).
-SAPI has an existing CBA with the Aboitiz Shipping Corporation due
to expire on 31 Dec 1988. In consonance with the CBA, said
company has been remitting checked-off union dues to said union
until February, 1987 when Banayoyo, et al introducing themselves to
be the new set of officers, went to the company and claimed that
they are entitled to the remittance and custody of such union dues.
-26 May 1987: another group headed by Dominica C. Nacua,
claiming as the duly elected set of union officers, filed a complaint,
for and in behalf of the union, against the CSAI as represented by
Manuel Gabayoyo for the security of the aforementioned CBA,
seeking such relief, among others, as an order restraining the
respondent from acting on behalf of the union and directing the
Aboitiz Shipping Corp. to remit the checked-off union dues for the
months of March and April 1987.
-CSAI filed its Answer alleging that the complainant union and CSAI
are one and the same union; that Dominica C. Nacua and Atty.
Prospero Paradilla who represented the union had been expelled as
members/officers as of November 1984 for lawful causes; and, that
its set of officers headed by Manuel Gabayoyo has the lawful right to
the remittance and custody of the corporate funds (otherwise known
as union dues) in question pursuant to the resolution of the SEC
dated 22 April 1987. The following day, CSAI filed MTD on the
grounds, among others, that the SEC, not the Med-Arbiter, has
jurisdiction over the dispute as provided under P.D. No. 902-A; that
there can neither be a complainant nor respondent in the instant
case as the parties involved are one and the same labor union, and
that Mrs. Dominica C. Nacua and Atty. Prospero Paradilla have no
personality to represent the union as they had already been expelled
as members/officers thereof in two resolutions of the Board of
Directors dated November 1984 and January 17, 1987.
-19 June 1987: the Med-Arbiter issued an Order denying said motion
but directing the Aboitiz Shipping Corporation to remit the already
checked-off union dues to the complainant union through its officers
and to continue remitting any checked-off union dues until further
notice. The Med-Arbiter also set further hearing of the complaint on
July 1, 1987.
-The Med-Arbiter eventually held that SAPI, headed by Nacua, was
the lawful set of officers entitled to the release and custody of the
union dues as well as agency fees of said association. CSAI headed
by Gabayoyo filed an appeal with the Bureau of Labor Relations
(BLR). But the latter affirmed the Med-Arbiter’s decision. The
Gabayoyo group also appealed to the Office of the SOLE, but this
was also denied for lack of merit. Hence, this petition.
ISSUES
1. WON the med-arbiter of Region VII has jurisdiction over the case
2. WON SAPI was registered as a labor federation with the BLR
3. WON Nacua and Paradilla have the personality to represent the
union
HELD
1. YES
- Article 226 of the Labor Code vests upon the Bureau of Labor
Relations and Labor Relations Division the original and exclusive
 Labor Law 2 A2010
authority and jurisdiction to act on all inter-union and intra-union disputes.
The controversy between the aforesaid two sets of officers (Cebu
Seamen's Association headed by Gabayoyo & Seamen's Association of
the Philippines headed by Nacua) is an intra-union dispute. Both sets of
officers claim to be entitled to the release of the union dues collected by
the company with whom it had an existing CBA.
2. YES.
-As stated in the findings of fact in the questioned resolution of Director
Pura Ferrer-Calleja, on October 23, 1950, a group of deck officers
organized the Cebu Seamen's Association, Inc., (CSAI), a non-stock
corporation and registered it with the Securities and Exchange
Commission (SEC). The same group registered the organization with the
Bureau of Labor Relations (BLR) as Seamen's Association of the
Philippines (SAPI). It is the registration of the organization with the
BLR are not with the SEC which made it a legitimate labor
organization with rights and privileges granted under the Labor
Code.
3. YES.
-CSAI, the corporation was already inoperational before the controversy in
this case arose. In fact, on August 24, 1984 the SEC ordered the CSAI to
show cause why its certificate of registration should not be revoked for
continuous inoperation. There is nothing in the records which would show
that CSAI answered said show-cause order.
-Also, before the controversy, Nacua was elected president of the labor
union, SAPI. It had an existing CBA with Aboitiz Shipping Corporation.
Before the end of the Nacua’s term, some union members including
Gabayoyo showed signs of discontentment with the leadership of Nacua.
This break-away group revived the moribund corporation and issued an
undated resolution expelling Nacua from association. It later held its own
election of officers supervised by the SEC and filed a case of estafa
against Nacua.
-The expulsion of Nacua from the corporation, of which she denied being
a member, has however, not affected her membership with the labor
union. In fact, in the elections of officers for 1987-1989, she was re-
elected as the president of the labor union.
-In this connection, We cannot agree with the contention of Gabayoyo that
Nacua was already expelled from the union. Whatever acts their group
had done in the corporation do not bind the labor union. Moreover,
Gabayoyo cannot claim leadership of the labor group by virtue of his
having been elected as a president of the dormant corporation CSAI.
- Bureau of Labor Relations correctly ruled on the basis of the evidence
presented by the parties that SAPI, the legitimate labor union, registered
with its office, is not the same association as CSAI, the corporation,
insofar as their rights under the Labor Code are concerned. Hence, the
former and not the latter association is entitled to the release and custody
of union fees with Aboitiz Shipping and other shipping companies with
whom it had an existing CBA.
-It is undisputed from the records that the election of the so-called set of
officers headed by Gabayoyo was conducted under the supervision of the
SEC, presumably in accordance with its constitution and by-laws as well
as the articles of incorporation of respondent CSAI, and the Corporation
Code. That had been so precisely on the honest belief of the participants
therein that they were acting in their capacity as members of the said
corporation. That being the case, the aforementioned set of officers is of
the respondent corporation and not of the complainant union. It follows,
then, that any proceedings, and actions taken by said set of officers can
not, in any manner, affect the union and its members.
-The other set of officers headed by Dominica C. Nacua is the lawful set
of officers of SAPI and therefore, is entitled to the release and custody of
the union dues as well as the agency fees, if any, there be.
Disposition Petition dismissed.
PROGRESSIVE DEVELOPMENT CORP. V. LAGUESMA
244 SCRA 173
GUTIERREZ; FEB. 4,1992
- 40 - Disini
NATURE
Petition for certiorari to set aside the resolution of Med-arbiter and
two orders the of the Sec. of Labor.
FACTS
Respondent Kilusan filed with the Department of Labor and
Employment (DOLE) a petition for certification election among the
rank-and-file employees of the petitioner alleging that it is a
legitimate labor federation and its local chapter, Progressive
Development Employees Union, was issued charter certificate No.
90-6-1-153. Kilusan claimed that there was no existing collective
bargaining agreement and that no other legitimate labor organization
existed in the bargaining unit.
Petitioner PDC filed its motion to dismiss contending that the local
union failed to comply with Rule II, Section 3, Book V of the Rules
Implementing the Labor Code, as amended, which requires the
submission of: (a) the constitution and by-laws; (b) names,
addresses and list of officers and/or members; and (c) books of
accounts.
Kilusan claimed that it had submitted the necessary documentary
requirements for registration, such as the constitution and by-laws of
the local union, and the list of officers/members with their addresses.
Kilusan further averred that no books of accounts could be submitted
as the local union was only recently organized.
Petitioner insisted that upon verification with the Bureau of Labor
Relations (BLR), it found that the alleged minutes of the
organizational meeting was unauthenticated, the list of members did
not bear the corresponding signatures of the purported members,
and the constitution and by-laws did not bear the signatures of the
members and was not duly subscribed. It argued that the private
respondent therefore failed to substantially comply with the
registration requirements provided by the rules.
Med-Arbiter held that there was substantial compliance with the
requirements for the formation of a chapter. Undersecretary
Laguesma denied PDC's motion for reconsideration. Hence, this
petition.
ISSUE
When does a branch, local or affiliate of a federation become a
legitimate labor organization.
HELD
Ordinarily, a labor organization acquires legitimacy only upon
registration with the BLR. Under Article 234 (Requirements of
Registration):
Any applicant labor organization, association or group of unions or
workers shall acquire legal personality and shall be entitled to the
rights and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the following
requirements:
(a) Fifty-pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address
of the labor organization, the minutes of the organizational meetings
and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty 20%
percent of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant has been in existence for one or more years,
copies of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant
union, the minutes of its adoption or ratification and the list of the
members who participated in it."
And under Article 235 (Action on Application):
"The Bureau shall act on all applications for registration within thirty
(30) days from filing.
 Labor Law 2 A2010
All requisite documents and papers shall be certified under oath by the
secretary or the treasurer of the organization, as the case may be, and
attested to by its president."
Moreover, section 4 of Rule II, Book V of the Implementing Rules requires
that the application should be signed by at least twenty percent (20%) of
the employees in the appropriate bargaining unit and be accompanied by
a sworn statement of the applicant union that there is no certified
bargaining agent or, where there is an existing collective agreement duly
submitted to the DOLE, that the application is filed during the last sixty
(60) days of the agreement.
RATIONALE: The registration prescribed in is not a limitation to the right
of assembly or association, which may be exercised with or without said
registration. The latter is merely a condition sine qua non for the
acquisition of legal personality by labor organizations, associations or
unions and the possession of the "rights and privileges granted by law to
legitimate labor organizations." The Constitution does not guarantee these
rights and privileges, much less said personality, which are mere statutory
creations, for the possession and exercise of which registration is required
to protect both labor and the public against abuses, fraud, or impostors
who pose as organizers, although not truly accredited agents of the union
the purport to represent. Such requirement is a valid exercise of the police
power, because the activities in which labor organizations, associations
and unions of workers are engaged affect public interest, which should be
protected. Furthermore, the obligation to submit financial statements, as a
condition for the non-cancellation of a certificate of registration, is a
reasonable regulation for the benefit of the members of the organization,
considering that the same generally solicits funds or membership, as well
as oftentimes collects, on behalf of its members, huge amounts of money
due to them or to the organization.
But when an unregistered union becomes a branch, local or chapter of a
federation, some of the aforementioned requirements for registration are
no longer required. The provisions governing union affiliation are found in
Rule II, Section 3, Book V of the Implementing Rules.
A local or chapter therefore becomes a legitimate labor organization
only upon submission of the following to the BLR:
1) A charter certificate, within 30 days from its issuance by the labor
federation or national union, and
2) The constitution and by-laws, a statement on the set of officers,
and the books of accounts all of which are certified under oath by
the secretary or treasurer, as the case may be, of such local or
chapter, and attested to by its president.
RATIONALE: The intent of the law in imposing lesser requirements in the
case of a branch or local of a registered federation or national union is to
encourage the affiliation of a local union with a federation or national
union in order to increase the local union's bargaining powers respecting
terms and conditions of labor.
Absent compliance with these mandatory requirements, the local or
chapter does not become a legitimate labor organization.
In the case at bar, the failure of the secretary of PDEU-Kilusan to certify
the required documents under oath is fatal to its acquisition of a legitimate
status.
DISPOSITION
Petition is GRANTED. The assailed resolution and orders of respondents
Med-Arbiter and Secretary of Labor and Employment, respectively, are
hereby SET ASIDE.
- 41 - Disini
3.3 UNION FUNCTION AND
RATIONALE
UNITED SEAMEN’S UNION V DAVAO
SHIPOWNERS ASSOCIATION
MAKALINTAL, J.; August 31, 1967
A labor organization is wholesome if it serves its legitimate purpose
of promoting the interests of labor without unnecessary labor
disputes. That is why it is given personality and recognition in
concluding collective bargaining agreements. But if it is made use of
as a subterfuge, or as a means to subvert valid commitments, it
defeats its own purpose, for it tends to undermine the harmonious
relations between management and labor.
GUIJARNO V CIR
52 SCRA 307
FERNANDO; August 27, 1973
NATURE
Special civil action of certiorari
FACTS
- Three unfair labor practice cases for unlawful dismissal
allegedly based on legitimate union activity were filed
against respondent Central Santos Lopez Co., Inc. and
respondent United Sugar Workers Union-ILO
- The respondent company, in its answer, alleged that the
only reason for the dismissal of the complainants herein is
because their said dismissal was asked by the USWU-ILO of
which union respondent company has a valid and existing
collective bargaining contract with a closed-shop provision
to the effect that those laborers who are no longer members
of good standing in the union may be dismissed by the
respondent company if their dismissal is sought by the
union; that respondent company has never committed acts
of unfair labor practice against its employees or workers
much less against the complainants herein but that it has a
solemn obligation to comply with the terms and conditions
of the contract.
- Petitioners were employed by the company long before the
collective bargaining contract.
ISSUE/S
1. WON petitioners were validly dismissed
HELD
1. NO
Ratio A closed-shop provision in a collective bargaining
agreement is not to be given a retroactive effect so as to
preclude its being applied to employees already in the
service
Reasoning In order that an employer may be deemed
bound, under a collective bargaining agreement, to dismiss
employees for non-union membership, the stipulation to this
effect must be so clear and unequivocal as to leave no room
for doubt thereon. An undertaking of this nature is so harsh
that it must be strictly construed, and doubts must be
resolved against the existence of "closed shop".
- The function of a labor union is to assure that
Constitution’s fundamental objectives for labor would be
achieved. It is the instrumentality through which an
individual laborer who is helpless as against a powerful
employer may, through concerted effort and activity,
achieve the goal of economic well-being
Disposition Petition is granted.
RATIONALE: Where does that leave a labor union?
Correctly understood, it is nothing but the means of
 Labor Law 2 A2010 - 42 - Disini
assuring that such fundamental objectives would be achieved. It The issuance of the certificate of registration by the Bureau or
is the instrumentality through which an individual laborer who is Regional Office is not the operative act that vests legal
helpless as against a powerful employer may, through concerted personality upon a local/chapter under Department Order No. 9.
effort and activity achieve the goal of economic well-being. Such legal personality is acquired from the filing of the
Workers unorganized are weak, workers organized are strong. complete documentary requirements enumerated in Section 1,
Unions are merely instrumentalities through which their welfare Rule VI. Admittedly, the manner by which respondent was
may be protected and fostered. That is the raison d’être of labor deemed to have acquired legal personality by the DOLE and the
Court of Appeals was not in strict conformity with the
unions. It is the instrumentality by which the weak laborer up
provisions of Department Order No. 9.
against the strong employer, may, by concerted effort, achieve
Thus, in order to ascertain when respondent acquired legal
economic well-being. personality, we only need to determine on what date the
3.4 LABOR UNION AND GOVERNMENT Regional Office or Bureau received the complete documentary
requirements enumerated under Section 1, Rule VI of
REGULATION Department Order No. 9. There is no doubt that on 15 June 1998,
or the date respondent filed its petition for certification election,
attached thereto were respondent’s constitution, the names and
1. Union Registration and Procedure addresses of its officers, and the charter certificate issued by
A. Requirements the national union FFW. The first two of these documents were
duly certified under oath by respondent’s secretary Bathan and
attested to by president Sagun.
SAN MIGUEL CORP. V MANDAUE What about the lack of documents containing the by-laws? Not
467 SCRA 107 needed so long as it is part of the union’s constitution.
An examination of respondent’s constitution reveals it sufficiently
Tinga ; Aug. 16, 2005
comprehensive in establishing the necessary rules for its
operation. Article IV establishes the requisites for membership in the
Facts
local/chapter. Articles V and VI name the various officers and what
-CA affirmes DOLE Undersecretary for Labor Relations, Rosalinda
their respective functions are. The procedure for election of these
Dimapilis-Baldoz, ordering the immediate conduct of a certification
officers, including the necessary vote requirements, is provided for in
election among the petitioner’s rank-and-file employees.
Article IX, while Article XV delineates the procedure for the
- Federation of Free Workers (FFW/ respondent) filed a petition for
impeachment of these officers. Article VII establishes the standing
certification election with the DOLE Regional Office No. VII. It sought to
committees of the local/chapter and how their members are
be certified and to represent the permanent rank-and-file monthly paid
appointed. Article VIII lays down the rules for meetings of the union,
employees of the petitioner. The following documents were attached to
including the notice and quorum requirements thereof. Article X
the petition: (1) a Charter Certificate certifying that respondent as of that
enumerates with particularity the rules for union dues, special
date was duly certified as a local or chapter of FFW; (2) a copy of the
assessments, fines, and other payments. Article XII provides the
constitution of respondent prepared by its Secretary, Noel T. Bathan and
general rule for quorum in meetings of the Board of Directors and of
attested by its President, Wilfred V. Sagun; (3) a list of respondent’s
the members of the local/chapter, and cites the applicability of the
officers and their respective addresses, again prepared by Bathan and
Robert’s Rules of Order[43] in its meetings. And finally, Article XVI
attested by Sagun; (4) a certification signifying that respondent had just
governs and institutes the requisites for the amendment of the
been organized and no amount had yet been collected from its members,
constitution.
signed by respondent’s treasurer Chita D. Rodriguez and attested by
The Court likewise sees no impediment in deeming
Sagun; and (5) a list of all the rank-and-file monthly paid employees of the
respondent as having acquired legal personality as of 15 June
Mandaue Packaging Products Plants and Mandaue Glass Plant prepared
1998, the fact that it was the local/chapter itself, and not the
by Bathan and attested by Sagun.
FFW, which submitted the documents required under Section 1,
-SMC (Petitioner) filed a motion to dismiss the petition for certification
Rule VI of Department Order No. 9. The evident rationale why
election on the sole ground that herein respondent is not listed or included
the rule states that it is the federation or national union that
in the roster of legitimate labor organizations based on the certification
submits said documents to the Bureau or Regional Office is that
issued by the Officer-In-Charge, Regional Director of the DOLE Regional
the creation of the local/chapter is the sole prerogative of the
Office No. VII, Atty. Jesus B. Gabor.
federation or national union, and not of any other entity.
-Respondent submitted to the Bureau of Labor Relations the same
Certainly, a putative local/chapter cannot, without the
documents earlier attached to its petition for certification. The
imprimatur of the federation or national union, claim affiliation
accompanying letter, signed by respondent’s president Sagun, stated that
with the larger unit or source its legal personality therefrom.
such documents were submitted in compliance with the requirements for
In the ordinary course, it should have been FFW, and not
the creation of a local/chapter pursuant to the Labor Code and its
respondent, which should have submitted the subject documents to
Implementing Rules; and it was hoped that the submissions would
the Regional Office. Nonetheless, there is no good reason to
facilitate the listing of respondent under the roster of legitimate labor
deny legal personality or defer its conferral to the local/chapter
organizations.The Chief of Labor Relations Division of DOLE Regional
if it is evident at the onset that the federation or national union
Office No. VII issued a Certificate of Creation of Local/Chapter No. ITD. I-
itself has already through its own means established the
ARFBT-058/98, certifying that from 30 July 1998, respondent has
local/chapter. In this case, such is evidenced by the Charter
acquired legal personality as a labor organization/worker’s association, it
Certificate dated 9 June 1998, issued by FFW, and attached to the
having submitted all the required documents.
petition for certification election. The Charter Certificate expressly
states that respondent has been issued the said certificate “to
Issues
operate as a local or chapter of the [FFW]”. The Charter Certificate
1. When did the union acquire legal personality?
expressly acknowledges FFW’s intent to establish respondent as of 9
2. Whether or not the inclusion of the two alleged supervisory employees
June 1998. This being the case, we consider it permissible for
in appellee union’s membership amounts to fraud, misrepresentation, or
respondent to have submitted the required documents itself to the
false statement within the meaning of Article 239(a) and (c) of the Labor
Regional Office, and proper that respondent’s legal personality be
Code.
deemed existent as of 15 June 1998, the date the complete
3. Whether or not subsequent developments change the disposition of the
documents were submitted.
case
2. No, it does not.
Held
Under the law, a managerial employee is “one who is vested
1. 15 June 1998, the date the complete documents were submitted.
with powers or prerogatives to lay down and execute management
 Labor Law 2 A2010
policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign
or discipline employees.” A supervisory employee is “one who, in the
interest of the employer, effectively recommends managerial actions if the
exercise of such recommendatory authority is not merely routinary or
clerical in nature but requires the use of independent judgment.’” Finally,
“all employees not falling within the definition of managerial or supervisory
employee are considered rank-and-file employees”. It is also well-settled
that the actual functions of an employee, not merely his job title, are
determinative in classifying such employee as managerial, supervisory or
rank and file. Good faith is presumed in all representations, an
essential element of fraud, false statement and misrepresentation in
order for these to be actionable is intent to mislead by the party
making the representation. In this case, there is no proof to show
that Bathan, or appellee union for that matter, intended to mislead
anyone. If this was appellee union’s intention, it would have
refrained from using a more precise description of the organization
instead of declaring that the organization is composed of ‘rank and
file monthlies’. Hence, the charge of fraud, false statement or
misrepresentation cannot be sustained.
Even if they are supervisory employees, no action can be done that
emasculates the right to self-organization and the promotion of free trade
unionism. We take administrative notice of the realities in union
organizing, during which the organizers must take their chances,
oftentimes unaware of the fine distinctions between managerial,
supervisory and rank and file employees. The grounds for cancellation of
union registration are not meant to be applied automatically, but indeed
with utmost discretion. Where a remedy short of cancellation is available,
that remedy should be preferred. In this case, no party will be prejudiced if
Bathan were to be excluded from membership in the union. The vacancy
he will thus create can then be easily filled up through the succession
provision of appellee union’s constitution and by-laws. What is important
is that there is an unmistakeable intent of the members of appellee union
to exercise their right to organize. We cannot impose rigorous restraints
on such right if we are to give meaning to the protection to labor and
social justice clauses of the Constitution.
3. No, it does not affect the case.
The allegation that the bargaining unit that respondent sought to
represent is no longer the same because of the dynamic nature of
petitioner’s business, a lot of changes having occurred in the work
environment, and that four of respondent’s officers are no longer
connected with petitioner have no effect on the Court’s ruling that a
certification election should be immediately conducted with respondent as
one of the available choices. Petitioner’s bare manifestations adduce no
reason why the certification election should not be conducted forthwith. If
there are matters that have arisen since the filing of the petition that serve
to delay or cancel the election, these can be threshed out during the pre-
election conferences. Neither is the fact that some of respondent’s officers
have since resigned from petitioner of any moment. The local/chapter
retains a separate legal personality from that of its officers or members
that remains viable notwithstanding any turnover in its officers or
members.
DISPOSITION The Petition is DENIED. Costs against petitioner.
COASTAL SUBIC BAY TERMINAL, INC. V DOLE
507 SCRA 300
QUISUMBING; November 20, 2006
NATURE
For review on certiorari
FACTS
- Respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union
(CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union
(CSBTI-SU) filed separate petitions for certification election
- The rank-and-file union insists that it is a legitimate labor organization
having been issued a charter certificate by the Associated Labor Union
(ALU), and the supervisory union by the Associated Professional,
Supervisory, Office and Technical Employees Union (APSOTEU).
- Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both
- 43 - Disini
petitions for certification election alleging that the rank-and-file union
and supervisory union were not legitimate labor organizations
- Petitioner argues that APSOTEU improperly secured its registration
from the DOLE Regional Director and not from the BLR
- Petitioner insists 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.
- Without ruling on the legitimacy of the respondent unions, the Med-
Arbiter dismissed, both petitions
- Both parties appealed to the Secretary of Labor and Employment,
who reversed the decision of the Med-Arbiter. The Secretary ruled
that CSBTI-SU and CSBTI-RFU have separate legal personalities to
file their separate petitions for certification election. The Secretary
held that APSOTEU is a legitimate labor organization because it was
properly registered pursuant to the 1989 Revised Rules and
Regulations implementing Republic Act No. 6715, the rule applicable
at the time of its registration. It further ruled that ALU and APSOTEU
are separate and distinct labor unions having separate certificates of
registration from the DOLE. They also have different sets of locals.
- The motion for reconsideration was also denied.
- On appeal, the Court of Appeals affirmed the decision of the
Secretary.
- The motion for reconsideration was likewise denied. Hence, the
instant petition by the company anchored on the following grounds:
ISSUES
1. WON the CA erred in relying on the “1989 Revised Rules and
Regulations implementing RA 6715” as basis to recognize private
respondent APSOTEU’s registration by the DOLE Regional Director.
2. WON ALU, a rank-and-file union and APSOTEU, a supervisory
union one and the same because of the commonalities between
them.
3. WON the supervisory and rank-and-file unions could separately
petition for certification elections.
HELD
1. NO.
Ratio Article 235 of LC 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.
- Section 2, Rule II, Book V of the 1989 Revised Implementing Rules
of the Labor Code (Implementing Rules) provides that:
Section 2. Where to file application; procedure - Any national labor
organization or labor federation or local union may file an
application for registration with the Bureau or the Regional Office
where the applicant’s principal offices is located. The Bureau or
the Regional Office shall immediately process and approve or
deny the application. In case of approval, the Bureau or the
Regional Office shall issue the registration certificate within thirty
(30) calendar days from receipt of the application, together with all
the requirements for registration as hereinafter provided.
The Implementing Rules specifically Section 1, Rule III of Book V, as
amended by Department Order No. 9, thus:
SECTION 1. Where to file applications. - The application for
registration of any federation, national or industry union or trade
union center shall be filed with the Bureau. Where the application
is filed with the Regional Office, the same shall be immediately
forwarded to the Bureau within forty-eight (48) hours from filing
thereof, together with all the documents supporting the
registration.
The applications for registration of an independent union shall be
filed with and acted upon by the Regional Office where the
applicant’s principal office is located ….
- 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.
- Even after the amendments, the rules did not divest the Regional
Office and the BLR of their jurisdiction over applications for
registration by labor organizations. The amendments to the
implementing rules merely specified that when the application was
 Labor Law 2 A2010
filed with the Regional Office, the application would be acted upon by the
BLR.
Reasoning The records in this case showed that APSOTEU was
registered on March 1, 1991. Accordingly, the law applicable at that time
was Section 2, Rule II, Book V of the Implementing Rules, and not
Department Order No. 9 which took effect only on June 21, 1997. Thus,
considering further that APSOTEU’s principal office is located in Diliman,
Quezon City, and its registration was filed with the NCR Regional Office,
the certificate of registration is valid.
2. NO.
Ratio 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. In
addition, the legal personality of a labor organization cannot be collaterally
attacked.
Reasoning In the absence of any independent action for cancellation of
registration against either APSOTEU or ALU, and unless and until their
registrations are cancelled, each continues to possess a separate legal
personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with
distinct and separate federations, despite the commonalities of APSOTEU
and ALU.
- Under the rules implementing the Labor Code, a chartered local union
acquires legal personality through the charter certificate issued by a duly
registered federation or national union, and reported to the Regional
Office in accordance with the rules implementing the Labor Code. 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.
3. NO.
Ratio 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. 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. Thus, the limitation is not confined to a case of
supervisors wanting to join a rank-and-file union. The prohibition extends
to a supervisors’ local union applying for membership in a national
federation the members of which include local unions of rank-and-file
employees.
Reasoning In the instant case, the national federations that exist as
separate entities to which the rank-and-file and supervisory unions are
separately affiliated with, do have a common set of officers. In addition,
APSOTEU, the supervisory federation, actively participates in the CSBTI-
SU while ALU, the rank-and-file federation, actively participates in the
CSBTI-RFU, giving occasion to possible conflicts of interest among the
common officers of the federation of rank-and-file and the federation of
supervisory unions. For as long as they are affiliated with the APSOTEU
and ALU, the supervisory and rank-and-file unions both do not meet the
criteria to attain the status of legitimate labor organizations, and thus
could not separately petition for certification elections.
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.
- 44 - Disini
Disposition The petition was GRANTED.
B. Requirements and
Rationale
PROGRESSIVE DEVELOPMENT CORP. V
LAGUESMA
205 SCRA 802
GUTIERREZ; FEB. 4,1992
NATURE
Petition for certiorari to set aside the resolution of Med-arbiter
and two orders the of the Sec. of Labor.
FACTS
Respondent Kilusan filed with the Department of Labor and
Employment (DOLE) a petition for certification election
among the rank-and-file employees of the petitioner alleging
that it is a legitimate labor federation and its local chapter,
Progressive Development Employees Union, was issued
charter certificate No. 90-6-1-153. Kilusan claimed that there
was no existing collective bargaining agreement and that no
other legitimate labor organization existed in the bargaining
unit.
Petitioner PDC filed its motion to dismiss contending that the
local union failed to comply with Rule II, Section 3, Book V
of the Rules Implementing the Labor Code, as amended,
which requires the submission of: (a) the constitution and by-
laws; (b) names, addresses and list of officers and/or
members; and (c) books of accounts.
Kilusan claimed that it had submitted the necessary
documentary requirements for registration, such as the
constitution and by-laws of the local union, and the list of
officers/members with their addresses. Kilusan further
averred that no books of accounts could be submitted as the
local union was only recently organized.
Petitioner insisted that upon verification with the Bureau of
Labor Relations (BLR), it found that the alleged minutes of
the organizational meeting was unauthenticated, the list of
members did not bear the corresponding signatures of the
purported members, and the constitution and by-laws did not
bear the signatures of the members and was not duly
subscribed. It argued that the private respondent therefore
failed to substantially comply with the registration
requirements provided by the rules.
Med-Arbiter held that there was substantial compliance with
the requirements for the formation of a chapter.
Undersecretary Laguesma denied PDC's motion for
reconsideration. Hence, this petition.
ISSUE
When does a branch, local or affiliate of a federation become
a legitimate labor organization.
HELD
 Labor Law 2 A2010
Ordinarily, a labor organization acquires legitimacy only upon
registration with the BLR. Under Article 234 (Requirements of
Registration):
Any applicant labor organization, association or group of unions or
workers shall acquire legal personality and shall be entitled to the
rights and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the following
requirements:
(a) Fifty-pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address
of the labor organization, the minutes of the organizational meetings
and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty 20%
percent of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant has been in existence for one or more years,
copies of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union,
the minutes of its adoption or ratification and the list of the members
who participated in it."
And under Article 235 (Action on Application):
"The Bureau shall act on all applications for registration within thirty
(30) days from filing.
All requisite documents and papers shall be certified under oath by
the secretary or the treasurer of the organization, as the case may be,
and attested to by its president."
Moreover, section 4 of Rule II, Book V of the Implementing Rules
requires that the application should be signed by at least twenty
percent (20%) of the employees in the appropriate bargaining unit
and be accompanied by a sworn statement of the applicant union
that there is no certified bargaining agent or, where there is an
existing collective agreement duly submitted to the DOLE, that
the application is filed during the last sixty (60) days of the
agreement.
RATIONALE: The registration prescribed in is not a limitation to
the right of assembly or association, which may be exercised with
or without said registration. The latter is merely a condition sine
qua non for the acquisition of legal personality by labor
organizations, associations or unions and the possession of the
"rights and privileges granted by law to legitimate labor
organizations." The Constitution does not guarantee these rights
and privileges, much less said personality, which are mere
statutory creations, for the possession and exercise of which
registration is required to protect both labor and the public against
abuses, fraud, or impostors who pose as organizers, although not
truly accredited agents of the union the purport to represent. Such
requirement is a valid exercise of the police power, because the
activities in which labor organizations, associations and unions of
workers are engaged affect public interest, which should be
protected. Furthermore, the obligation to submit financial
statements, as a condition for the non-cancellation of a certificate
of registration, is a reasonable regulation for the benefit of the
members of the organization, considering that the same generally
solicits funds or membership, as well as oftentimes collects, on
behalf of its members, huge amounts of money due to them or to
the organization.
But when an unregistered union becomes a branch, local or
chapter of a federation, some of the aforementioned requirements
for registration are no longer required. The provisions governing
- 45 - Disini
union affiliation are found in Rule II, Section 3, Book V of
the Implementing Rules.
A local or chapter therefore becomes a legitimate labor
organization only upon submission of the following to the
BLR:
1) A charter certificate, within 30 days from its issuance by the
labor federation or national union, and
2) The constitution and by-laws, a statement on the set of
officers, and the books of accounts all of which are certified
under oath by the secretary or treasurer, as the case may
be, of such local or chapter, and attested to by its president.
RATIONALE: The intent of the law in imposing lesser
requirements in the case of a branch or local of a registered
federation or national union is to encourage the affiliation of a
local union with a federation or national union in order to
increase the local union's bargaining powers respecting
terms and conditions of labor.
Absent compliance with these mandatory requirements, the
local or chapter does not become a legitimate labor
organization.
In the case at bar, the failure of the secretary of PDEU-
Kilusan to certify the required documents under oath is fatal
to its acquisition of a legitimate status.
DISPOSITION
Petition is GRANTED. The assailed resolution and orders of
respondents Med-Arbiter and Secretary of Labor and
Employment, respectively, are hereby SET ASIDE.
PHOENIX IRON & STEEL CORP V SEC. OF LABOR
244 SCRA 173
BELLOSILLO; May 16, 1995
NATURE
Petition for review
FACTS
- Private respondent PISCOR-ANGLO (Union)asserting to be
legitimate labor organization filed a petition for certification election
with the Med-Arbiter. Petitioner Phoenix Iron and Steel Corporation
(Phoenix) sought clarification of the legal personality of PISCOR-
ANGLO.
- Med-Arbiter’s ruling: Dismissed petition, holding that PISCOR-
ANGLO is not a duly registered labor organization. Record shows
that for purposes of registering Piscor Workers Union as an affiliate
of ANGLO no books of account was filed before the Burueau of
Labor Relations (BLR). The constitution and by-laws and the list of
members who ratified the same were not attested to by the union
president. The constitution and by-laws was not likewise verified
under oath. So, the authority to file petition for certification election is
without force and effect. Thus, in the absence of legal personality
Piscor Workers Union may not validly authorize ANGLO to file the
present petition.
- Sec. of Labor reversed Med-Arbiter’s ruling: On appeal, USec.
Laguesma, acting by authority of the Sec. of Labor, ruled that
PISCOR has complied with the requirements of the law on
organization of a local after it was shown that it has submitted duly
certified copies of its constitution and by-laws, list of officers and
charter certificate and called for the immediate conduct of a
certification election
ISSUE
 Labor Law 2 A2010
WON PISCOR-ANGLO has complied with the requirements to be
legitimate labor organization
HELD
NO
Ratio A local or chapter becomes a legitimate labor organization only
upon submission of the following to the BLR: 1) A charter certificate,
within 30 days from its issuance by the labor federation or national union,
and 2) The constitution and by-laws, a statement on the set of officers,
and the books of accounts all of which are certified under oath by the
secretary or treasurer, as the case may be, of such local or chapter, and
attested to by its president. Failure of a labor union to submit and certify
under oath the required documents submitted with the BLR is fatal to the
attainment of a legitimate status. (Progressive Dev’t Corp v. Sec. of
Labor)
Reasoning The rationale for the requirements enunciated above: The
certification and attestation requirements are preventive measures against
the commission of fraud. They likewise afford a measure of protection to
unsuspecting employees who may be lured into joining unscrupulous or
fly-by-night unions whose sole purpose is to control union funds or to use
the union for dubious ends.
Disposition Petition is GRANTED.
PAGAPALAIN HAULERS, INC. V TRAJANO
310 SCRA 354
ROMERO; July 15, 1999
NATURE
Petition for certiorari
FACTS
- Integrated Labor Organization-Pagpalain Haulers Worker’s Union (ILO-
PHILS), in a bid to represent the rank-and-file drivers and helpers of
petitioner Pagpalain Haulers, Inc. (Pagpalain), filed a petition for
certification election with the Department of Labor and Employment. ILO-
PHILS attached to the petition copies of its charter certificate, its
constitution and by-laws, its books of account, and a list of its officers and
their addresses.
- Pagpalain filed a motion to dismiss the petition, alleging that ILO-PHILS
was not a legitimate labor organization due to its failure to comply with the
requirements for registration under the Labor Code. Specifically, it
claimed that the books of account submitted by ILO-PHILS were not
verified under oath by its treasurer and attested to by its president, a
required by Rule II, Book V of the Omnibus Rules Implementing the Labor
Code.
- ILO-PHILS dismissed Pagpalain’s claims, saying that Department Order
No. 9, Series of 1997 had dispensed with the requirement that a local or
chapter of a national union submit books of account in order to be
registered with the Department of Labor and Employment.
- Med-Arbiter decided in favor of ILO-PHILS. Pagpalain appealed.
Secretary of Labor dismissed appeal. Hence, this petition. Pagpalain
maintains that Department Order No. 9 is null and void because it is illegal
for contravening rulings of this Court which, according to Article 8 of the
Civil Code, form a part of the legal system of the Philippines; and that
dispensing with the books of accounts contravenes public policy.
ISSUE
WON Department Order No. 09 is null and void.
HELD
NO
Ratio Article 234 of the Labor Code does not require the submission of
books of account in order for a labor organization to be registered as a
legitimate labor organization. The requirement that books of account be
submitted as a requisite for a registration can be found only in Book V of
the Omnibus Rules Implementing the Labor Code. Specifically, the old
Section 3(e), Rule II, of Book V provided that ‘[t]he local or chapter of a
labor federation or national union shall have and maintain a constitution
- 46 - Disini
and by-laws, set of officers and books of accounts. For reporting
purposes, the procedure governing the reporting of independently
registered unions, federations or national unions shall be observed.”
- By virtue of Department Order No. 9, Series of 1997, however, the
submission of books of account as a requisite for registration has
been done away with, and the documents needed to be submitted by
a local or chapter have been reduced to the following:
(a) A charter certificate issued by the federation or national
union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapter’s officers, their addresses,
and the principal office of the local/chapter;
(c) The local/chapter’s constitution and by-laws; provided that
where the local/chapter’s constitution and by-laws is the same
as that of the federation or national union, this fact shall be
indicated accordingly.
Reasoning Department Order No. 9 has been issued on authority of
law. Under the law, the Secretary is authorized to promulgate rules
and regulations to implement the Labor Code. Specifically, Article 5
of the Labor Code provides that “[t]he Department of Labor and other
government agencies charged with the administration and
enforcement of this Code or any of its parts shall promulgate the
necessary implementing rules and regulations.” Consonant with this
article, the Secretary of Labor and Employment promulgated the
Omnibus Rules Implementing the Labor Code. By virtue of this self-
same authority, the Secretary amended the above-mentioned
omnibus rules by issuing Department Order No. 9, Series of 1997.
- Cases cited by Pagpalain are not to be deemed as laws on the
registration of unions. They merely interpret and apply the
implementing rules of the Labor Code as to registration of unions. It
is this interpretation that forms part of the legal system of the
Philippines, for the interpretation placed upon the written law by a
competent court has the force of law. The cited cases, however,
applied and interpreted the then existing Book V of the Omnibus
Rules Implementing the Labor Code. Since Book V of the Omnibus
Rules, as amended by Department Order No. 9, no longer requires a
local or chapter to submit books of accounts as a prerequisite for
registration, the doctrines enunciated in the cases, with respect to
books of account, are already passe and therefore, no longer
applicable. Hence, Pagpalain cannot insist that ILO-PHILS comply
with the requirements prescribed in said rulings, for the current
implementing rules have deleted the same.
- Pagpalain cannot also allege that Department Order No. 9 is
violative of public policy. As adverted to earlier, the sole function of
our courts is to apply or interpret the laws. It does not formulate
public policy, which is the province of the legislative and executive
branches of government.
- Furthermore, the controlling intention in requiring the submission of
books of account is the protection of labor through the minimization
of the risk of fraud and diversion in the handling of union funds. As
correctly pointed out by the Solicitor General, this intention can still
be realized through other provisions of the Labor Code. (Article 241
and 274)
Disposition Petition is dismissed.
C. Constitution—by law
SAN MIGUEL CORP. V. MANDAUE
Tinga ; Aug. 16, 2005
467 SCRA 107
Facts
-CA affirmes DOLE Undersecretary for Labor Relations, Rosalinda
Dimapilis-Baldoz, ordering the immediate conduct of a certification
election among the petitioner’s rank-and-file employees.
- Federation of Free Workers (FFW/ respondent) filed a petition for
certification election with the DOLE Regional Office No. VII. It sought
to be certified and to represent the permanent rank-and-file monthly
paid employees of the petitioner. The following documents were
 Labor Law 2 A2010
attached to the petition: (1) a Charter Certificate certifying that
respondent as of that date was duly certified as a local or chapter of FFW;
(2) a copy of the constitution of respondent prepared by its Secretary,
Noel T. Bathan and attested by its President, Wilfred V. Sagun; (3) a list
of respondent’s officers and their respective addresses, again prepared
by Bathan and attested by Sagun; (4) a certification signifying that
respondent had just been organized and no amount had yet been
collected from its members, signed by respondent’s treasurer Chita D.
Rodriguez and attested by Sagun; and (5) a list of all the rank-and-file
monthly paid employees of the Mandaue Packaging Products Plants and
Mandaue Glass Plant prepared by Bathan and attested by Sagun.
-SMC (Petitioner) filed a motion to dismiss the petition for certification
election on the sole ground that herein respondent is not listed or included
in the roster of legitimate labor organizations based on the certification
issued by the Officer-In-Charge, Regional Director of the DOLE Regional
Office No. VII, Atty. Jesus B. Gabor.
-Respondent submitted to the Bureau of Labor Relations the same
documents earlier attached to its petition for certification. The
accompanying letter, signed by respondent’s president Sagun, stated that
such documents were submitted in compliance with the requirements for
the creation of a local/chapter pursuant to the Labor Code and its
Implementing Rules; and it was hoped that the submissions would
facilitate the listing of respondent under the roster of legitimate labor
organizations.The Chief of Labor Relations Division of DOLE Regional
Office No. VII issued a Certificate of Creation of Local/Chapter No. ITD. I-
ARFBT-058/98, certifying that from 30 July 1998, respondent has
acquired legal personality as a labor organization/worker’s association, it
having submitted all the required documents.
Issues
1. When did the union acquire legal personality?
2. Whether or not the inclusion of the two alleged supervisory employees
in appellee union’s membership amounts to fraud, misrepresentation, or
false statement within the meaning of Article 239(a) and (c) of the Labor
Code.
3. Whether or not subsequent developments change the disposition of the
case
Held
1. 15 June 1998, the date the complete documents were submitted.
The issuance of the certificate of registration by the Bureau or
Regional Office is not the operative act that vests legal personality
upon a local/chapter under Department Order No. 9. Such legal
personality is acquired from the filing of the complete documentary
requirements enumerated in Section 1, Rule VI. Admittedly, the
manner by which respondent was deemed to have acquired legal
personality by the DOLE and the Court of Appeals was not in strict
conformity with the provisions of Department Order No. 9.
Thus, in order to ascertain when respondent acquired legal
personality, we only need to determine on what date the Regional
Office or Bureau received the complete documentary requirements
enumerated under Section 1, Rule VI of Department Order No. 9.
There is no doubt that on 15 June 1998, or the date respondent filed
its petition for certification election, attached thereto were
respondent’s constitution, the names and addresses of its officers,
and the charter certificate issued by the national union FFW. The
first two of these documents were duly certified under oath by
respondent’s secretary Bathan and attested to by president Sagun.
What about the lack of documents containing the by-laws? Not needed so
long as it is part of the union’s constitution.
An examination of respondent’s constitution reveals it sufficiently
comprehensive in establishing the necessary rules for its operation.
Article IV establishes the requisites for membership in the local/chapter.
Articles V and VI name the various officers and what their respective
functions are. The procedure for election of these officers, including the
necessary vote requirements, is provided for in Article IX, while Article XV
delineates the procedure for the impeachment of these officers. Article VII
establishes the standing committees of the local/chapter and how their
members are appointed. Article VIII lays down the rules for meetings of
the union, including the notice and quorum requirements thereof. Article X
enumerates with particularity the rules for union dues, special
assessments, fines, and other payments. Article XII provides the general
rule for quorum in meetings of the Board of Directors and of the members
- 47 - Disini
of the local/chapter, and cites the applicability of the Robert’s Rules
of Order[43] in its meetings. And finally, Article XVI governs and
institutes the requisites for the amendment of the constitution.
The Court likewise sees no impediment in deeming
respondent as having acquired legal personality as of 15 June
1998, the fact that it was the local/chapter itself, and not the
FFW, which submitted the documents required under Section 1,
Rule VI of Department Order No. 9. The evident rationale why
the rule states that it is the federation or national union that
submits said documents to the Bureau or Regional Office is that
the creation of the local/chapter is the sole prerogative of the
federation or national union, and not of any other entity.
Certainly, a putative local/chapter cannot, without the
imprimatur of the federation or national union, claim affiliation
with the larger unit or source its legal personality therefrom.
In the ordinary course, it should have been FFW, and not
respondent, which should have submitted the subject documents to
the Regional Office. Nonetheless, there is no good reason to
deny legal personality or defer its conferral to the local/chapter
if it is evident at the onset that the federation or national union
itself has already through its own means established the
local/chapter. In this case, such is evidenced by the Charter
Certificate dated 9 June 1998, issued by FFW, and attached to the
petition for certification election. The Charter Certificate expressly
states that respondent has been issued the said certificate “to
operate as a local or chapter of the [FFW]”. The Charter Certificate
expressly acknowledges FFW’s intent to establish respondent as of 9
June 1998. This being the case, we consider it permissible for
respondent to have submitted the required documents itself to the
Regional Office, and proper that respondent’s legal personality be
deemed existent as of 15 June 1998, the date the complete
documents were submitted.
2. No, it does not.
Under the law, a managerial employee is “one who is vested
with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, layoff, recall, discharge,
assign or discipline employees.” A supervisory employee is “one
who, in the interest of the employer, effectively recommends
managerial actions if the exercise of such recommendatory authority
is not merely routinary or clerical in nature but requires the use of
independent judgment.’” Finally, “all employees not falling within the
definition of managerial or supervisory employee are considered
rank-and-file employees”. It is also well-settled that the actual
functions of an employee, not merely his job title, are determinative
in classifying such employee as managerial, supervisory or rank and
file. Good faith is presumed in all representations, an essential
element of fraud, false statement and misrepresentation in order
for these to be actionable is intent to mislead by the party
making the representation. In this case, there is no proof to
show that Bathan, or appellee union for that matter, intended to
mislead anyone. If this was appellee union’s intention, it would
have refrained from using a more precise description of the
organization instead of declaring that the organization is
composed of ‘rank and file monthlies’. Hence, the charge of
fraud, false statement or misrepresentation cannot be
sustained.
Even if they are supervisory employees, no action can be done that
emasculates the right to self-organization and the promotion of free
trade unionism. We take administrative notice of the realities in union
organizing, during which the organizers must take their chances,
oftentimes unaware of the fine distinctions between managerial,
supervisory and rank and file employees. The grounds for
cancellation of union registration are not meant to be applied
automatically, but indeed with utmost discretion. Where a remedy
short of cancellation is available, that remedy should be preferred. In
this case, no party will be prejudiced if Bathan were to be excluded
from membership in the union. The vacancy he will thus create can
then be easily filled up through the succession provision of appellee
union’s constitution and by-laws. What is important is that there is an
unmistakeable intent of the members of appellee union to exercise
their right to organize. We cannot impose rigorous restraints on such
right if we are to give meaning to the protection to labor and social
 Labor Law 2 A2010
justice clauses of the Constitution.
3. No, it does not affect the case.
The allegation that the bargaining unit that respondent sought to
represent is no longer the same because of the dynamic nature of
petitioner’s business, a lot of changes having occurred in the work
environment, and that four of respondent’s officers are no longer
connected with petitioner have no effect on the Court’s ruling that a
certification election should be immediately conducted with respondent as
one of the available choices. Petitioner’s bare manifestations adduce no
reason why the certification election should not be conducted forthwith. If
there are matters that have arisen since the filing of the petition that serve
to delay or cancel the election, these can be threshed out during the pre-
election conferences. Neither is the fact that some of respondent’s officers
have since resigned from petitioner of any moment. The local/chapter
retains a separate legal personality from that of its officers or members
that remains viable notwithstanding any turnover in its officers or
members.
DISPOSITION
WHEREFORE, the Petition is DENIED. Costs against petitioner.
SO ORDERED.
D. Effect on Constitution –
Statutory Guarantee
Freedom of Association
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS
V SEC. OF LABOR
27 SCRA 40
The requirement of registration does NOT curtail the freedoms of
assembly and association. Said freedoms may still be exercised with or
without registration. The latter is merely a condition sine qua non for the
acquisition of legal personality by labor unions and the possessions of
rights and privileges granted by law. The constitution does not guarantee
these rights and privileges, much less legal personality, which are mere
statutory creations.
E. Question of Legitimacy
PHILIPPINE DIAMOND HOTEL V MANILA DIAMOND
HOTEL EMPLOYEES ASSOCIATION
494 SCRA 195
PHILIPPINE DIAMOND HOTEL AND RESORT INC
(MANILA DIAMOND HOTEL V MANILA
DIAMOND HOTEL EMPLOYEES UNION
494 SCRA 195
CARPIO MORALES; June 30, 2006
FACTS
-Union filed a petition for certification election to be declared the
exclusive bargaining representative of the Hotel’s employees.
This petition was dismissed by DOLE for lack of legal
requirements.
-after a few months, Union sent a letter to Hotel informing it of
its desire to negotiate for a collective bargaining agreement.
This was rejected by the Hotel stating that the Union was not the
employee’s bargaining agent as their petition for certification
election was denied.
-Union filed a Notice of Strike with the NCMB alleging the Hotel’
refusal to bargain and for acts of unfair labor practices. NCMB
summoned both parties and held series of dialogues. Union
however suddenly went on strike
-Secretary of DOLE assumed jurisdiction and ordered compulsory
arbitration pursuant to art. 263 (g) of LC. And Union members
were directed to return to work and for Hotel to accept them
back. Hotel refused to accept the employees return. The order
- 48 - Disini
was modified (by a different Secretary) such that
reinstatement was to be done only in the payroll.
-Union filed for certiorari alleging grave abuse of discretion.
Case was referred to the CA. CA affirmed that the “payroll
reinstatement” was not a grave abuse of discretion. On
appeal, it modified NLRC decision ordering reinstatement
with back wages of union members.
ISSUE
1) WON the Union can bargain only in behalf of its members
and not for all the employees of the Hotel.
2) WON the strike conducted by the Union was illegal.
3) WON those employees who participated in the strike
should be given back wages
HELD
1) No.
-As provided by art 255 of the LC only the labor organization
designated or selected by the majority of the employees in
an appropriate collective bargaining unit is the exclusive
representative of the employees in such unit for the purpose
of collective bargaining.
-The Union’s petition for certificate election was denied by
the DOLE. The union thus is admittedly not the exclusive
representative of the majority of the employees of
petitioner, hence, it could not demand from petitioner the
right to bargain collectively in their behalf
-Respondent insists, however, that it could validly bargain in
behalf of "its members," relying on Article 242 of the Labor
Code.
-the CA ruled that “what [respondent] will be achieving is to
divide the employees, more particularly, the rank-and-file
employees of [petitioner] . . . the other workers who are not
members are at a serious disadvantage, because if the
same shall be allowed, employees who are non-union
members will be economically impaired and will not be able
to negotiate their terms and conditions of work, thus
defeating the very essence and reason of collective
bargaining, which is an effective safeguard against the evil
schemes of employers in terms and conditions of work”
- Petitioner’s refusal to bargain then with respondent can not
be considered a ULP to justify the staging of the strike.
TOPICS: Union registration and procedure, factors, majority
union
2) yes.
-as was mentioned, the first ground mentioned by the
Union- the Hotel’s refusal to bargain- was not a valid ground
to stage the strike.
-The second ground – that petitioner prevented or
intimidated some workers from joining the union before,
during or after the strike – was correctly discredited by the
appellate court.. Since it is the union who alleges that unfair
labor practices were committed by the Hotel, the burden of
proof is on the union to prove its allegations by substantial
evidence. “the facts and the evidence did not establish
events [sic] least a rational basis why the union would
[wield] a strike based on alleged unfair labor practices it did
not even bother to substantiate”.
-It is doctrinal that the exercise of the right of private sector
employees to strike is not absolute. Thus Section 3 of Article
XIII of the Constitution, provides:
SECTION 3. x x x
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations and
peaceful concerted activities, including the right to strike
in accordance with law…”
-Even if the purpose of a strike is valid, the strike may still
be held illegal where the means employed are illegal. Thus,
the employment of violence, intimidation, restraint or
coercion in carrying out concerted activities which are
injurious to the rights to property renders a strike illegal.
 Labor Law 2 A2010
Evidence show s that some of the workers-strikers who joined
the strike indeed committed illegal acts – blocking the free
ingress to and egress from the Hotel, holding noise barrage,
threatening guests, and the like.
TOPICS: right to engage in concerted activities-limitations
3) No.
-The general rule is that backwages shall not be awarded in an
economic strike on the principle that "a fair day’s wage" accrues
only for a "fair day’s labor. If there is no work performed by the
employee there can be no wage or pay, unless of course, the
laborer was able, willing and ready to work but was illegally
locked out, dismissed or suspended. "when employees
voluntarily go on strike, even if in protest against unfair labor
practices," no back wages during the strike is awarded.”
-The Court ruled that “only those members of the union who did
not commit illegal acts during the course of the illegal strike
should be reinstated but without back wages”
TOPIC: illegal strikes- burden of economic loss
SAN MIGUEL CORP. V MANDAUE
467 SCRA 107
Tinga ; Aug. 16, 2005
Facts
-CA affirmes DOLE Undersecretary for Labor Relations, Rosalinda
Dimapilis-Baldoz, ordering the immediate conduct of a certification
election among the petitioner’s rank-and-file employees.
- Federation of Free Workers (FFW/ respondent) filed a petition for
certification election with the DOLE Regional Office No. VII. It sought to
be certified and to represent the permanent rank-and-file monthly paid
employees of the petitioner. The following documents were attached to
the petition: (1) a Charter Certificate certifying that respondent as of that
date was duly certified as a local or chapter of FFW; (2) a copy of the
constitution of respondent prepared by its Secretary, Noel T. Bathan and
attested by its President, Wilfred V. Sagun; (3) a list of respondent’s
officers and their respective addresses, again prepared by Bathan and
attested by Sagun; (4) a certification signifying that respondent had just
been organized and no amount had yet been collected from its members,
signed by respondent’s treasurer Chita D. Rodriguez and attested by
Sagun; and (5) a list of all the rank-and-file monthly paid employees of the
Mandaue Packaging Products Plants and Mandaue Glass Plant prepared
by Bathan and attested by Sagun.
-SMC (Petitioner) filed a motion to dismiss the petition for certification
election on the sole ground that herein respondent is not listed or included
in the roster of legitimate labor organizations based on the certification
issued by the Officer-In-Charge, Regional Director of the DOLE Regional
Office No. VII, Atty. Jesus B. Gabor.
-Respondent submitted to the Bureau of Labor Relations the same
documents earlier attached to its petition for certification. The
accompanying letter, signed by respondent’s president Sagun, stated that
such documents were submitted in compliance with the requirements for
the creation of a local/chapter pursuant to the Labor Code and its
Implementing Rules; and it was hoped that the submissions would
facilitate the listing of respondent under the roster of legitimate labor
organizations.The Chief of Labor Relations Division of DOLE Regional
Office No. VII issued a Certificate of Creation of Local/Chapter No. ITD. I-
ARFBT-058/98, certifying that from 30 July 1998, respondent has
acquired legal personality as a labor organization/worker’s association, it
having submitted all the required documents.
Issues
1. When did the union acquire legal personality?
2. Whether or not the inclusion of the two alleged supervisory employees
in appellee union’s membership amounts to fraud, misrepresentation, or
false statement within the meaning of Article 239(a) and (c) of the Labor
Code.
3. Whether or not subsequent developments change the disposition of the
case
Held
1. 15 June 1998, the date the complete documents were submitted.
- 49 - Disini
The issuance of the certificate of registration by the Bureau or
Regional Office is not the operative act that vests legal
personality upon a local/chapter under Department Order No. 9.
Such legal personality is acquired from the filing of the
complete documentary requirements enumerated in Section 1,
Rule VI. Admittedly, the manner by which respondent was
deemed to have acquired legal personality by the DOLE and the
Court of Appeals was not in strict conformity with the
provisions of Department Order No. 9.
Thus, in order to ascertain when respondent acquired legal
personality, we only need to determine on what date the
Regional Office or Bureau received the complete documentary
requirements enumerated under Section 1, Rule VI of
Department Order No. 9. There is no doubt that on 15 June 1998,
or the date respondent filed its petition for certification election,
attached thereto were respondent’s constitution, the names and
addresses of its officers, and the charter certificate issued by
the national union FFW. The first two of these documents were
duly certified under oath by respondent’s secretary Bathan and
attested to by president Sagun.
What about the lack of documents containing the by-laws? Not
needed so long as it is part of the union’s constitution.
An examination of respondent’s constitution reveals it sufficiently
comprehensive in establishing the necessary rules for its
operation. Article IV establishes the requisites for membership in the
local/chapter. Articles V and VI name the various officers and what
their respective functions are. The procedure for election of these
officers, including the necessary vote requirements, is provided for in
Article IX, while Article XV delineates the procedure for the
impeachment of these officers. Article VII establishes the standing
committees of the local/chapter and how their members are
appointed. Article VIII lays down the rules for meetings of the union,
including the notice and quorum requirements thereof. Article X
enumerates with particularity the rules for union dues, special
assessments, fines, and other payments. Article XII provides the
general rule for quorum in meetings of the Board of Directors and of
the members of the local/chapter, and cites the applicability of the
Robert’s Rules of Order[43] in its meetings. And finally, Article XVI
governs and institutes the requisites for the amendment of the
constitution.
The Court likewise sees no impediment in deeming
respondent as having acquired legal personality as of 15 June
1998, the fact that it was the local/chapter itself, and not the
FFW, which submitted the documents required under Section 1,
Rule VI of Department Order No. 9. The evident rationale why
the rule states that it is the federation or national union that
submits said documents to the Bureau or Regional Office is that
the creation of the local/chapter is the sole prerogative of the
federation or national union, and not of any other entity.
Certainly, a putative local/chapter cannot, without the
imprimatur of the federation or national union, claim affiliation
with the larger unit or source its legal personality therefrom.
In the ordinary course, it should have been FFW, and not
respondent, which should have submitted the subject documents to
the Regional Office. Nonetheless, there is no good reason to
deny legal personality or defer its conferral to the local/chapter
if it is evident at the onset that the federation or national union
itself has already through its own means established the
local/chapter. In this case, such is evidenced by the Charter
Certificate dated 9 June 1998, issued by FFW, and attached to the
petition for certification election. The Charter Certificate expressly
states that respondent has been issued the said certificate “to
operate as a local or chapter of the [FFW]”. The Charter Certificate
expressly acknowledges FFW’s intent to establish respondent as of 9
June 1998. This being the case, we consider it permissible for
respondent to have submitted the required documents itself to the
Regional Office, and proper that respondent’s legal personality be
deemed existent as of 15 June 1998, the date the complete
documents were submitted.
2. No, it does not.
Under the law, a managerial employee is “one who is vested
with powers or prerogatives to lay down and execute management
 Labor Law 2 A2010
policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign
or discipline employees.” A supervisory employee is “one who, in the
interest of the employer, effectively recommends managerial actions if the
exercise of such recommendatory authority is not merely routinary or
clerical in nature but requires the use of independent judgment.’” Finally,
“all employees not falling within the definition of managerial or supervisory
employee are considered rank-and-file employees”. It is also well-settled
that the actual functions of an employee, not merely his job title, are
determinative in classifying such employee as managerial, supervisory or
rank and file. Good faith is presumed in all representations, an
essential element of fraud, false statement and misrepresentation in
order for these to be actionable is intent to mislead by the party
making the representation. In this case, there is no proof to show
that Bathan, or appellee union for that matter, intended to mislead
anyone. If this was appellee union’s intention, it would have
refrained from using a more precise description of the organization
instead of declaring that the organization is composed of ‘rank and
file monthlies’. Hence, the charge of fraud, false statement or
misrepresentation cannot be sustained.
Even if they are supervisory employees, no action can be done that
emasculates the right to self-organization and the promotion of free trade
unionism. We take administrative notice of the realities in union
organizing, during which the organizers must take their chances,
oftentimes unaware of the fine distinctions between managerial,
supervisory and rank and file employees. The grounds for cancellation of
union registration are not meant to be applied automatically, but indeed
with utmost discretion. Where a remedy short of cancellation is available,
that remedy should be preferred. In this case, no party will be prejudiced if
Bathan were to be excluded from membership in the union. The vacancy
he will thus create can then be easily filled up through the succession
provision of appellee union’s constitution and by-laws. What is important
is that there is an unmistakeable intent of the members of appellee union
to exercise their right to organize. We cannot impose rigorous restraints
on such right if we are to give meaning to the protection to labor and
social justice clauses of the Constitution.
3. No, it does not affect the case.
The allegation that the bargaining unit that respondent sought to
represent is no longer the same because of the dynamic nature of
petitioner’s business, a lot of changes having occurred in the work
environment, and that four of respondent’s officers are no longer
connected with petitioner have no effect on the Court’s ruling that a
certification election should be immediately conducted with respondent as
one of the available choices. Petitioner’s bare manifestations adduce no
reason why the certification election should not be conducted forthwith. If
there are matters that have arisen since the filing of the petition that serve
to delay or cancel the election, these can be threshed out during the pre-
election conferences. Neither is the fact that some of respondent’s officers
have since resigned from petitioner of any moment. The local/chapter
retains a separate legal personality from that of its officers or members
that remains viable notwithstanding any turnover in its officers or
members.
DISPOSITION
WHEREFORE, the Petition is DENIED. Costs against petitioner.
SO ORDERED.
LAGUNA V OFFICE OF THE SECRETARY
457 SCRA 730
CALLEJO; April 29, 2005
NATURE
Petition to review the decision of the Court of Appeals
FACTS
- May 3, 1999 - Laguna Autoparts Manufacturing Corporation
Obrero Pilipino-LAMCOR Chapter filed a petition for certification
election with the DOLE. In its petition, it noted its registration
certificate number along with the registration certificate number of
chapter affiliate. The petition alleged that the union was composed
of all rank-and-file employees, that the bargaining unit is
- 50 - Disini
unorganized and that there had been no certification election
for the past 12 months prior to the filing of the petition.
- Laguna Autoparts moved to cancel the certification election
because the union was not considered a legitimate labor
organization for failure to show that it had complied with
registration requirements such as submission of required
documents to the Bureau of Labor Relations.
- Med-Arbiter Bactin dismissed the certification election petition
because of the union’s lack of personality. DOLE Secretary
Sto. Tomas reversed Bactin’s order. This was affirmed by the
CA.
- The CA stressed that a local or chapter need not
be registered to become a legitimate labor
organization. It pointed out that a local or chapter
acquires legal personality as a labor organization
from the date of filing of the complete documents.
- The CA noted that it was the employer which
offered the most tenacious resistance to the holding
of a certification election among its regular rank-and-
file employees. It opined that this must not be so for
the choice of a collective bargaining agent was the
sole concern of the employees, and the employer
should be a mere bystander.
ISSUE/S
1. WON the union is a legitimate labor organization
2. WON the chapter’s legal personality can be
attacked collaterally in an election action
HELD
1. YES
Ratio A local or chapter need not be independently registered
to acquire legal personality. A local/chapter constituted in
accordance with Section 1 of Rule 6 shall acquire legal
personality from the date of filing of the complete documents
enumerated.
Reasoning
The task of determining whether the local or chapter has submitted
the complete documentary requirements is lodged with the Regional
Office or the BLR, as the case may be. The records of the case show
that the respondent union submitted the said documents to the
regional office and was issued a certification.
2. NO
Ratio
Reasoning
- It may not be subject to a collateral attack but only through a
separate action instituted particularly for the purpose of assailing the
chapter, as prescribed in Section 5, Rule 5 of the implementing rules
of Book 5 which states: “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.[”
- The pronouncement of the Labor Relations Division Chief, that the
respondent union acquired a legal personality with the submission of
the complete documentary requirement, cannot be challenged in a
petition for certification election.
Disposition Petition is denied. No costs.
TAGAYTARY HIGHLANDS INTERNATIONAL GOLF
CLUB, INC. V TAGAYTAY HIGHLANDS
EMPLOYEES UNION
395 SCRA 699
CARPIO-MORALES; January 22, 2003
NATURE
Petition for Certiorari under Rule 45 THIGCI assailing CA
decision denying its petition to annul the Department of
Labor and Employment (DOLE) Resolutions of November 12,
1998 and December 29, 1998
 Labor Law 2
FACTS
- October 16, 1997 > Tagaytay Highlands Employees Union
(THEU), Philippine Transport and General Workers Organization
(PTGWO), Local Chapter No. 776, a legitimate labor organization
said to represent majority of the rank-and-file employees of
THIGCI, filed a petition for certification election before the DOLE
Mediation-Arbitration Unit, Regional Branch No. IV
- November 27, 1997 > opposed petition for certification election
because the list of union members submitted by it was defective
and fatally flawed as it included the names and signatures of
supervisors, resigned, terminated and absent without leave
(AWOL) employees, as well as employees of The Country Club,
Inc., a corporation distinct and separate from THIGCI; and that
out of the 192 signatories to the petition, only 71 were actual
rank-and-file employees of THIGCI. Also, some of the signatures
in the list of union members were secured through fraudulent
and deceitful means, and submitted copies of the handwritten
denial and withdrawal of some of its employees from
participating in the petition.
-
THEU asserted that it complied with all the requirements for
valid affiliation and inclusion in the roster of legitimate labor
organizations pursuant to DOLE Department Order No. 9, series
of 1997, on account of which it was duly granted a Certification
of Affiliation by DOLE on October 10, 1997; and that Section 5,
Rule V of said Department Order provides that the legitimacy of
its registration cannot be subject to collateral attack, and for as
long as there is no final order of cancellation, it continues to
enjoy the rights accorded to a legitimate organization.
Therefore, the Med-Arbiter should, pursuant to Article 257 of the
Labor Code and Section 11, Rule XI of DOLE Department Order
No. 09, automatically order the conduct of a certification
election.
- January 28, 1998 > DOLE Med-Arbiter Anastacio Bactin
ordered the holding of a certification election
- DOLE Resolution of November 12, 19981 > setting aside the
June 4, 1998 Resolution dismissing the petition for certification
election. MFR denied
- CA - denied THIGCI’s Petition for Certiorari and affirmed the
DOLE Resolution dated November 12, 1998. It held that while a
petition for certification election is an exception to the innocent
bystander rule, hence, the employer may pray for the dismissal
of such petition on the basis of lack of mutuality of interests of
the members of the union as well as lack of employer-employee
relationship and petitioner failed to adduce substantial evidence
to support its allegations.
Issue:
WON question of legitimacy would affect the certification
election
Held: YES
- Pizza Hut v. Ledesma which held that:
"The Labor Code requires that in organized and unorganized
establishments, a petition for certification election must be filed by a
legitimate labor organization. The acquisition of rights by any union or
labor organization, particularly the right to file a petition for certification
election, first and foremost, depends on whether or not the labor
organization has attained the status of a legitimate labor organization.
In the case before us, the Med-Arbiter summarily disregarded the
petitioner’s prayer that the former look into the legitimacy of the
respondent Union by a sweeping declaration that the union was in the
possession of a charter certificate so that for all intents and purposes,
Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate
organization"
2. Action or Denial of Application and
Remedy
SAN MIGUEL CORP. V. MANDAUE
Tinga ; Aug. 16, 2005
A2010 - 51 - Disini
467 SCRA 107
Facts
-CA affirmes DOLE Undersecretary for Labor Relations, Rosalinda
Dimapilis-Baldoz, ordering the immediate conduct of a certification
election among the petitioner’s rank-and-file employees.
- Federation of Free Workers (FFW/ respondent) filed a petition for
certification election with the DOLE Regional Office No. VII. It sought
to be certified and to represent the permanent rank-and-file monthly
paid employees of the petitioner. The following documents were
attached to the petition: (1) a Charter Certificate certifying that
respondent as of that date was duly certified as a local or chapter of
FFW; (2) a copy of the constitution of respondent prepared by its
Secretary, Noel T. Bathan and attested by its President, Wilfred V.
Sagun; (3) a list of respondent’s officers and their respective
addresses, again prepared by Bathan and attested by Sagun; (4) a
certification signifying that respondent had just been organized and
no amount had yet been collected from its members, signed by
respondent’s treasurer Chita D. Rodriguez and attested by Sagun;
and (5) a list of all the rank-and-file monthly paid employees of the
Mandaue Packaging Products Plants and Mandaue Glass Plant
prepared by Bathan and attested by Sagun.
-SMC (Petitioner) filed a motion to dismiss the petition for certification
election on the sole ground that herein respondent is not listed or
included in the roster of legitimate labor organizations based on the
certification issued by the Officer-In-Charge, Regional Director of the
DOLE Regional Office No. VII, Atty. Jesus B. Gabor.
-Respondent submitted to the Bureau of Labor Relations the same
documents earlier attached to its petition for certification. The
accompanying letter, signed by respondent’s president Sagun,
stated that such documents were submitted in compliance with the
requirements for the creation of a local/chapter pursuant to the Labor
Code and its Implementing Rules; and it was hoped that the
submissions would facilitate the listing of respondent under the roster
of legitimate labor organizations.The Chief of Labor Relations
Division of DOLE Regional Office No. VII issued a Certificate of
Creation of Local/Chapter No. ITD. I-ARFBT-058/98, certifying that
from 30 July 1998, respondent has acquired legal personality as a
labor organization/worker’s association, it having submitted all the
required documents.
Issues
1. When did the union acquire legal personality?
2. Whether or not the inclusion of the two alleged supervisory
employees in appellee union’s membership amounts to fraud,
misrepresentation, or false statement within the meaning of Article
239(a) and (c) of the Labor Code.
3. Whether or not subsequent developments change the disposition
of the case
Held
1. 15 June 1998, the date the complete documents were submitted.
The issuance of the certificate of registration by the Bureau or
Regional Office is not the operative act that vests legal
personality upon a local/chapter under Department Order No. 9.
Such legal personality is acquired from the filing of the
complete documentary requirements enumerated in Section 1,
Rule VI. Admittedly, the manner by which respondent was
deemed to have acquired legal personality by the DOLE and the
Court of Appeals was not in strict conformity with the
provisions of Department Order No. 9.
Thus, in order to ascertain when respondent acquired legal
personality, we only need to determine on what date the
Regional Office or Bureau received the complete documentary
requirements enumerated under Section 1, Rule VI of
Department Order No. 9. There is no doubt that on 15 June 1998,
or the date respondent filed its petition for certification election,
attached thereto were respondent’s constitution, the names and
addresses of its officers, and the charter certificate issued by
the national union FFW. The first two of these documents were
duly certified under oath by respondent’s secretary Bathan and
attested to by president Sagun.
What about the lack of documents containing the by-laws? Not
 Labor Law 2 A2010
needed so long as it is part of the union’s constitution.
An examination of respondent’s constitution reveals it sufficiently
comprehensive in establishing the necessary rules for its operation.
Article IV establishes the requisites for membership in the local/chapter.
Articles V and VI name the various officers and what their respective
functions are. The procedure for election of these officers, including the
necessary vote requirements, is provided for in Article IX, while Article XV
delineates the procedure for the impeachment of these officers. Article VII
establishes the standing committees of the local/chapter and how their
members are appointed. Article VIII lays down the rules for meetings of
the union, including the notice and quorum requirements thereof. Article X
enumerates with particularity the rules for union dues, special
assessments, fines, and other payments. Article XII provides the general
rule for quorum in meetings of the Board of Directors and of the members
of the local/chapter, and cites the applicability of the Robert’s Rules of
Order[43] in its meetings. And finally, Article XVI governs and institutes
the requisites for the amendment of the constitution.
The Court likewise sees no impediment in deeming respondent
as having acquired legal personality as of 15 June 1998, the fact that
it was the local/chapter itself, and not the FFW, which submitted the
documents required under Section 1, Rule VI of Department Order
No. 9. The evident rationale why the rule states that it is the
federation or national union that submits said documents to the
Bureau or Regional Office is that the creation of the local/chapter is
the sole prerogative of the federation or national union, and not of
any other entity. Certainly, a putative local/chapter cannot, without
the imprimatur of the federation or national union, claim affiliation
with the larger unit or source its legal personality therefrom.
In the ordinary course, it should have been FFW, and not
respondent, which should have submitted the subject documents to the
Regional Office. Nonetheless, there is no good reason to deny legal
personality or defer its conferral to the local/chapter if it is evident at
the onset that the federation or national union itself has already
through its own means established the local/chapter. In this case,
such is evidenced by the Charter Certificate dated 9 June 1998, issued by
FFW, and attached to the petition for certification election. The Charter
Certificate expressly states that respondent has been issued the said
certificate “to operate as a local or chapter of the [FFW]”. The Charter
Certificate expressly acknowledges FFW’s intent to establish respondent
as of 9 June 1998. This being the case, we consider it permissible for
respondent to have submitted the required documents itself to the
Regional Office, and proper that respondent’s legal personality be
deemed existent as of 15 June 1998, the date the complete documents
were submitted.
2. No, it does not.
Under the law, a managerial employee is “one who is vested with
powers or prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, layoff, recall, discharge, assign or
discipline employees.” A supervisory employee is “one who, in the interest
of the employer, effectively recommends managerial actions if the
exercise of such recommendatory authority is not merely routinary or
clerical in nature but requires the use of independent judgment.’” Finally,
“all employees not falling within the definition of managerial or supervisory
employee are considered rank-and-file employees”. It is also well-settled
that the actual functions of an employee, not merely his job title, are
determinative in classifying such employee as managerial, supervisory or
rank and file. Good faith is presumed in all representations, an
essential element of fraud, false statement and misrepresentation in
order for these to be actionable is intent to mislead by the party
making the representation. In this case, there is no proof to show
that Bathan, or appellee union for that matter, intended to mislead
anyone. If this was appellee union’s intention, it would have
refrained from using a more precise description of the organization
instead of declaring that the organization is composed of ‘rank and
file monthlies’. Hence, the charge of fraud, false statement or
misrepresentation cannot be sustained.
Even if they are supervisory employees, no action can be done that
emasculates the right to self-organization and the promotion of free trade
unionism. We take administrative notice of the realities in union
organizing, during which the organizers must take their chances,
oftentimes unaware of the fine distinctions between managerial,
supervisory and rank and file employees. The grounds for cancellation of
- 52 - Disini
union registration are not meant to be applied automatically, but
indeed with utmost discretion. Where a remedy short of cancellation
is available, that remedy should be preferred. In this case, no party
will be prejudiced if Bathan were to be excluded from membership in
the union. The vacancy he will thus create can then be easily filled
up through the succession provision of appellee union’s constitution
and by-laws. What is important is that there is an unmistakeable
intent of the members of appellee union to exercise their right to
organize. We cannot impose rigorous restraints on such right if we
are to give meaning to the protection to labor and social justice
clauses of the Constitution.
3. No, it does not affect the case.
The allegation that the bargaining unit that respondent
sought to represent is no longer the same because of the dynamic
nature of petitioner’s business, a lot of changes having occurred in
the work environment, and that four of respondent’s officers are no
longer connected with petitioner have no effect on the Court’s ruling
that a certification election should be immediately conducted with
respondent as one of the available choices. Petitioner’s bare
manifestations adduce no reason why the certification election
should not be conducted forthwith. If there are matters that have
arisen since the filing of the petition that serve to delay or cancel the
election, these can be threshed out during the pre-election
conferences. Neither is the fact that some of respondent’s officers
have since resigned from petitioner of any moment. The
local/chapter retains a separate legal personality from that of its
officers or members that remains viable notwithstanding any turnover
in its officers or members.
DISPOSITION
WHEREFORE, the Petition is DENIED. Costs against petitioner.
SO ORDERED.
UMALI V LOVINA
86 Phil 313
PADILLA; April 29, 1950
NATURE
Petition for writ of mandamus
FACTS
- 201 employees of the Jai Alai Corporation of the Philippines
organized themselves into an association as the "Independent
Employees Union". They filed with the Department of Labor a copy of
its constitution and by-laws.
- Its President wrote a letter to the Secretary of Labor requesting
immediate and favorable action on the pending application for
registration of their labor organization. On the same date, the
Secretary of Labor wrote a letter to the President of the Jai Alaistas
Union of Employees, a registered and licensed union, granting it an
extension of time to hold an election under the supervision of the
Department of Labor, and warning the President of the union that
should the election be not held within the time granted, he would be
compelled to register and issue a permit to the Independent
Employees Union.
-Despite the failure of the Jai Alaistas Union of Employees to hold a
general election and the promise of the Secretary of Labor that
should such an election be not held, he would register the
Independent Employees Union the following day, the said secretary
has refused and still refuses to register the application and to issue a
permit to the Independent Employees Union to operate as a
legitimate labor organization.
- respondent justifies his failure to register and to issue permit
applied for upon the following grounds: (1) that he has not
investigated the activities, real aims, and purposes of the
Independent Employees Union, as required of him by section 3 of
Commonwealth Act 213, due to the failure of the petitioner's union or
its officials to accomplish and submit to him the mimeographed
questionnaire required to be filled out by the labor union applicant;
(2) that there is no fixed period provided for in Commonwealth Act
213, within which he as Secretary of Labor must complete his
 Labor Law 2 A2010
investigation and act upon the application; and (3) that he is clothed the
discretion to issue or not the permit applied for.
ISSUE/S
1. WON the Secretary’s refusal is justified
HELD
1. No.
Disposition There being no lawful reason for the respondent to refuse
the registration of the application for the petitioner's union and permission
to operate as a legitimate labor organization; it being the duty of the
respondent to register the application and issue the permit upon payment
of the required fee, as provided for in section 3 of Commonwealth Act No.
213, the investigation to be conducted by him, as required by law, having
been conducted and completed, as may be inferred from his official
statements in connection therewith, the conclusion in connection
therewith, the conclusion is inescapable that he has neglected the
performance of an act which the law specifically enjoins him to perform as
a duty resulting from his office, and that such neglect unlawfully excludes
the petitioner's union from the use and enjoyment of a right to which it is
entitled. It appearing further that there is no other plain, speedy, and
adequate remedy in the ordinary course of law, the writ prayed for should
be, as is hereby, granted, without costs.
VASSAR INDUSTRIES EMPLOYEES UNION V
ESTRELLA
82 SCRA 280
FERNANDO; March 31, 1978
NATURE Petition for certiorari
FACTS
- there was a CBA between ALU and Vassar Industries which expired.
Before it expired, 111 of the 150 employees of the firm disaffiliated from
the labor org and formed their own union. They filed an application for
registration of their union.
- respondent Estrella, then Acting Director of Bureau of Labor Relations,
refused to register petitioner Vassar Industries Employees Union “on the
ground that there is already a registered collective bargaining agent in the
company.”
ISSUES
1. What is the appropriate remedy for the applicant union?
HELD
1. The union should be registered.
Reasoning As long as the applicant union complies with all the legal
requirements for registration, it becomes the BLR’s ministerial duty to
register the union. Therefore the petitioner Union should be registered in
this case. Then it can be part of a certification election to decide who
would be the exclusive bargaining representative of the workers.
(Philippine Labor Alliance Council v BLR: Once the fact of disaffiliation
has been demonstrated beyond doubt, a certification election is the most
expeditious way of determining which labor organization is to be the
exclusive bargaining representative.)
Until the appropriate bargaining representative is chosen and a
new CBA is concluded, the interim CBA which was entered into earlier
and has favorable terms for the workers of Vassar Industries shall
continue in full force and effect. This is to assure that both social justice
and the protection to labor provisions would be effectively implemented
without sanctioning an attempt to frustrate the exercise of this court’s
jurisdiction in a pending case.
Disposition writ of certiorari is granted. Bureau of Labor Relations is
ordered to conduct a certification election with petitioner labor union,
Vassar Industries Labor Union, and private respondent labor union ALU,
participating therein to determine the exclusive bargaining representative
of the workers employed in Vassar Industries. Immediately executory.
PROGRESSIVE DEVELOPMENT CORP. V LAGUESMA
(Nagkakaisang-Lakas ng Manggagawa)
271 SCRA 593
- 53 - Disini
KAPUNAN; April 18, 1997
NATURE
Special civil action of certiorari
FACTS
- July 9, 1993: Nagkakaisang Lakas ng Manggagawa (NLM)-
Katipunan (respondent Union) filed a petition for certification election
with the Department of Labor in behalf of the rank and file employees
of the Progressive Development Corporation (Pizza Hut).
- August 20, 1993: Progressive (petitioner) filed a verified Motion to
Dismiss the petition alleging fraud, falsification and misrepresentation
in the respondent Union's registration making it void and invalid.
Among the bases of fraud was the fact that while the application for
registration of the charter was supposed to have been approved in
the organizational meeting held on June 27, 1993, the charter
certification issued by the federation KATIPUNAN was dated June
26, 1993 or one (1) day prior to the formation of the chapter, and that
the Constitution and by Laws submitted in support of its petition were
not properly acknowledged and notarized.
- August 30, 1993: Progressive filed a Petition seeking the
cancellation of the Union's registration on the grounds of fraud and
falsificatio. Motion was likewise filed by petitioner with the Med-
Arbiter requesting suspension of proceedings in the certification
election case until after the prejudicial question of the Union's legal
personality is determined in the proceedings for cancellation of
registration.
- In an Order dated September 29, 1993, Med-Arbiter Rasidali C.
Abdullah directed the holding of a certification election among
petitioner's rank and file employees.
- On appeal to the office of the Secretary of Labor, Labor
Undersecretary Bienvenido E. Laguesma in a Resolution dated
December 29, 1993 denied the same.
ISSUE/S
1. WON after the necessary papers and documents have been filed
by a labor organization, recognition by the Bureau of Labor Relations
merely becomes a ministerial function. (Action and Denial of
Application and Remedy)
HELD
1. NO
Ratio Registration requirements specifically afford a measure of
protection to unsuspecting employees who may be lured into joining
unscrupulous or fly-by-night unions whose sole purpose is to control
union funds or use the labor organization for illegitimate ends. Such
requirements are a valid exercise of the police power, because the
activities in which labor organizations, associations and unions of
workers are engaged directly affect the public interest and should be
protected.
Reasoning
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 xxx. (financial reports,
names of officers, names of members, P50.00 filing fee)
- The Med-Arbiter summarily disregarded the petitioner's prayer that
the former look into the legitimacy of the respondent Union by a
sweeping declaration that the union was in the possession of a
charter certificate so that "for all intents and purposes, Sumasaklaw
sa Manggagawa sa Pizza Hut (was) a legitimate labor organization."
- The requirements embodied in Art 234 are intended as preventive
measures against the commission of fraud. After a labor
organization has filed the necessary papers and documents for
registration, it becomes mandatory for the Bureau of Labor
Relations to check if the requirements under Article 234 have
been sedulously complied with.
- Any action taken by the Bureau of Labor Relations is made in
consonance with the mandate of the Labor Code, which, it bears
emphasis, specifically requires that the basis for the issuance of a
certificate of registration should be compliance with the requirements
 Labor Law 2 A2010
for recognition under Article 234.
- The Court's conclusion should not be misconstrued as impairing the
local union's right to be certified as the employees' bargaining agent in the
petitioner's establishment. The Court is merely saying that the local union
must first comply with the statutory requirements in order to exercise this
right.
REMEDY: It would have been more prudent for the Med-Arbiter and
public respondent to have granted petitioner's request for the suspension
of proceedings in the certification election case, until the issue of the
legality of the Union's registration shall have been resolved. Failure of the
Med-Arbiter and public respondent to heed the request constituted a
grave abuse of discretion.
- The grounds ventilated in cancellation proceedings in accordance with
Article 239 of the Labor Code constitute a grave challenge to the right of
respondent Union to ask for certification election. The Med-Arbiter should
have looked into the merits of the petition for cancellation before issuing
an order calling for certification election
EFFECT, PENDING PETITION, CANCELLATION TRADE UNION
REGISTRATION (P.24)
- Once a labor organization attains the status of a legitimate labor
organization it begins to possess all of the rights and privileges granted by
law to such organizations.
- Registration based on false and fraudulent statements and documents
confer no legitimacy upon a labor organization irregularly recognized.
Under such circumstances, the labor organization, not being a legitimate
labor organization, acquires no rights, particularly the right to ask for
certification election in a bargaining unit. The invalidity of respondent
Union's registration would negate its legal personality to participate
in certification election.
Disposition Petition is granted and remanded to Med-Arbiter.
3. Collateral Attack
TAGAYTAY HIGHLANDS V TAGAYTAY GOLF CLUB
EMPLOYEES UNION
395 SCRA 699
CARPIO-MORALES; January 22, 2003
NATURE
Petition for Certiorari under Rule 45 THIGCI assailing CA decision
denying its petition to annul the Department of Labor and Employment
(DOLE) Resolutions of November 12, 1998 and December 29, 1998
FACTS
- October 16, 1997 > Tagaytay Highlands Employees Union (THEU),
Philippine Transport and General Workers Organization (PTGWO), Local
Chapter No. 776, a legitimate labor organization said to represent majority
of the rank-and-file employees of THIGCI, filed a petition for certification
election before the DOLE Mediation-Arbitration Unit, Regional Branch No.
IV
- November 27, 1997 > opposed petition for certification election because
the list of union members submitted by it was defective and fatally flawed
as it included the names and signatures of supervisors, resigned,
terminated and absent without leave (AWOL) employees, as well as
employees of The Country Club, Inc., a corporation distinct and separate
from THIGCI; and that out of the 192 signatories to the petition, only 71
were actual rank-and-file employees of THIGCI. Also, some of the
signatures in the list of union members were secured through fraudulent
and deceitful means, and submitted copies of the handwritten denial and
withdrawal of some of its employees from participating in the petition.
-
THEU asserted that it complied with all the requirements for valid
affiliation and inclusion in the roster of legitimate labor organizations
pursuant to DOLE Department Order No. 9, series of 1997, on account of
which it was duly granted a Certification of Affiliation by DOLE on October
10, 1997; and that Section 5, Rule V of said Department Order provides
that the legitimacy of its registration cannot be subject to collateral attack,
and for as long as there is no final order of cancellation, it continues to
- 54 - Disini
enjoy the rights accorded to a legitimate organization. Therefore,
the Med-Arbiter should, pursuant to Article 257 of the Labor Code
and Section 11, Rule XI of DOLE Department Order No. 09,
automatically order the conduct of a certification election.
- January 28, 1998 > DOLE Med-Arbiter Anastacio Bactin ordered
the holding of a certification election
- DOLE Resolution of November 12, 19981 > setting aside the June
4, 1998 Resolution dismissing the petition for certification election.
MFR denied
- CA - denied THIGCI’s Petition for Certiorari and affirmed the DOLE
Resolution dated November 12, 1998. It held that while a petition for
certification election is an exception to the innocent bystander rule,
hence, the employer may pray for the dismissal of such petition on
the basis of lack of mutuality of interests of the members of the union
as well as lack of employer-employee relationship and petitioner
failed to adduce substantial evidence to support its allegations.
Issue: WON the composition of the union can be subject to collateral
attack
Held:
NO
- After a certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack. It may be
questioned only in an independent petition for cancellation in
accordance with Section 5 of Rule V, Book IV of the "Rules to
Implement the Labor Code" (Implementing Rules) which section
reads:
Sec. 5. Effect of registration. The labor organization or workers’
association shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration.
Such legal personality cannot thereafter be subject to collateral
attack, but may be questioned only in an independent petition
for cancellation in accordance with these Rules.
PROGRESSIVE DEVELOPMENT CORP. V
LAGUESMA (Nagkakaisang-Lakas ng
Manggagawa)
271 SCRA 593
KAPUNAN; April 18, 1997
NATURE
Special civil action of certiorari
FACTS
- July 9, 1993: Nagkakaisang Lakas ng Manggagawa (NLM)-
Katipunan (respondent Union) filed a petition for certification election
with the Department of Labor in behalf of the rank and file employees
of the Progressive Development Corporation (Pizza Hut).
- August 20, 1993: Progressive (petitioner) filed a verified Motion to
Dismiss the petition alleging fraud, falsification and misrepresentation
in the respondent Union's registration making it void and invalid.
Among the bases of fraud was the fact that while the application for
registration of the charter was supposed to have been approved in
the organizational meeting held on June 27, 1993, the charter
certification issued by the federation KATIPUNAN was dated June
26, 1993 or one (1) day prior to the formation of the chapter, and that
the Constitution and by Laws submitted in support of its petition were
not properly acknowledged and notarized.
- August 30, 1993: Progressive filed a Petition seeking the
cancellation of the Union's registration on the grounds of fraud and
falsificatio. Motion was likewise filed by petitioner with the Med-
Arbiter requesting suspension of proceedings in the certification
election case until after the prejudicial question of the Union's legal
personality is determined in the proceedings for cancellation of
registration.
- In an Order dated September 29, 1993, Med-Arbiter Rasidali C.
Abdullah directed the holding of a certification election among
petitioner's rank and file employees.
- On appeal to the office of the Secretary of Labor, Labor
Undersecretary Bienvenido E. Laguesma in a Resolution dated
 Labor Law 2 A2010
December 29, 1993 denied the same.
ISSUE/S
1. WON after the necessary papers and documents have been filed by a
labor organization, recognition by the Bureau of Labor Relations merely
becomes a ministerial function. (Action and Denial of Application and
Remedy)
HELD
1. NO
Ratio Registration requirements specifically afford a measure of
protection to unsuspecting employees who may be lured into joining
unscrupulous or fly-by-night unions whose sole purpose is to control union
funds or use the labor organization for illegitimate ends. Such
requirements are a valid exercise of the police power, because the
activities in which labor organizations, associations and unions of workers
are engaged directly affect the public interest and should be protected.
Reasoning
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
xxx. (financial reports, names of officers, names of members,
P50.00 filing fee)
- The Med-Arbiter summarily disregarded the petitioner's prayer that the
former look into the legitimacy of the respondent Union by a sweeping
declaration that the union was in the possession of a charter certificate so
that "for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza
Hut (was) a legitimate labor organization."
- The requirements embodied in Art 234 are intended as preventive
measures against the commission of fraud. After a labor organization has
filed the necessary papers and documents for registration, it becomes
mandatory for the Bureau of Labor Relations to check if the
requirements under Article 234 have been sedulously complied with.
- Any action taken by the Bureau of Labor Relations is made in
consonance with the mandate of the Labor Code, which, it bears
emphasis, specifically requires that the basis for the issuance of a
certificate of registration should be compliance with the requirements for
recognition under Article 234.
- The Court's conclusion should not be misconstrued as impairing the
local union's right to be certified as the employees' bargaining agent in the
petitioner's establishment. The Court is merely saying that the local union
must first comply with the statutory requirements in order to exercise this
right.
REMEDY: It would have been more prudent for the Med-Arbiter and
public respondent to have granted petitioner's request for the suspension
of proceedings in the certification election case, until the issue of the
legality of the Union's registration shall have been resolved. Failure of the
Med-Arbiter and public respondent to heed the request constituted a
grave abuse of discretion.
- The grounds ventilated in cancellation proceedings in accordance with
Article 239 of the Labor Code constitute a grave challenge to the right of
respondent Union to ask for certification election. The Med-Arbiter should
have looked into the merits of the petition for cancellation before issuing
an order calling for certification election
EFFECT, PENDING PETITION, CANCELLATION TRADE UNION
REGISTRATION (P.24)
- Once a labor organization attains the status of a legitimate labor
organization it begins to possess all of the rights and privileges granted by
law to such organizations.
- Registration based on false and fraudulent statements and documents
confer no legitimacy upon a labor organization irregularly recognized.
Under such circumstances, the labor organization, not being a legitimate
labor organization, acquires no rights, particularly the right to ask for
certification election in a bargaining unit. The invalidity of respondent
Union's registration would negate its legal personality to participate
in certification election.
Disposition Petition is granted and remanded to Med-Arbiter.
- 55 - Disini
4. Rights of Legitimate Labor
Organization
ACEDERA V INTL. CONTAINER TERMINAL
SERVICES
395 SCRA 103
CARPIO-MORALES; January 13, 2003
NATURE
Petition for certiorari
FACTS
- Petitioners Jerry Acedera, et al. are employees of International
Container Terminal Services, Inc. (ICTSI) and are officers/members
of Associated Port Checkers & Workers Union-International
Container Terminal Services, Inc. Local Chapter (APCWU-ICTSI), a
labor organization duly registered as a local affiliate of the
Associated Port Checkers & Workers Union (APCWU).
- In early 1997, ICTSI went on a retrenchment program and laid off
its on-call employees. This prompted the APCWU-ICTSI to file a
notice of strike. The dispute respecting the retrenchment was
resolved by a compromise settlement while another issue with regard
to the computation of wages was referred to the LA.
- Acedera, et al. filed with the LA a Complaint-in-Intervention with
Motion to Intervene. The LA denied their Complaint-in-Intervention
with Motion for Intervention upon a finding that they are already well
represented by APCWU. NLRC affirmed. CA dismissed their petition
for certiorari.
ISSUE
1. WON the CA erred in ruling that the petitioners have no legal right
to intervene and that their intervention is a superfluity.
HELD
1. NO
Ratio For a member of a class to be permitted to intervene in a
representative action, fraud or collusion or lack of good faith on the
part of the representative must be proven. It must be based on facts
borne on record. Mere assertions do not suffice.
Reasoning Petitioners-appellants anchor their right to intervene on
Rule 19 of the 1997 Rules of Civil Procedure, Section 1 of which
reads:
Section 1. Who may intervene.- A person who has legal interest in
the matter in litigation, or in the success of either of the parties, or an
interest against both, or is so situated to be adversely affected by a
distribution or other disposition of property in the custody of the court
or of an officer thereof may, with leave of court, be allowed to
intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the
rights of the original parties, and whether or not the intervenor’s right
may be fully protected in a separate proceeding.
- They, however, failed to consider, in addition to the rule on
intervention, the rule on representation, thusly:
Sec. 3. Representatives as parties.- Where the action is allowed to
be prosecuted or defended by a representative or someone acting in
a fiduciary capacity, the beneficiary shall be included in the title of the
case and shall be deemed to be the real party in interest. A
representative may be a trustee of an express trust, a guardian, an
executor or administrator, or a party authorized by law or these
Rules. . .
- A labor union is one such party authorized to represent its members
under Art 242(a) of the Labor Code which provides that a union may
act as the representative of its members for the purpose of collective
bargaining. This authority includes the power to represent its
members for the purpose of enforcing the provisions of the CBA.
That APCWU acted in a representative capacity “for and in behalf of
its Union members and other employees similarly situated,” the title
of the case filed by it at the LA’s Office so expressly states.
- While a party acting in a representative capacity, such as a union,
 Labor Law 2 A2010
may be permitted to intervene in a case, ordinarily, a person whose
interests are already represented will not be permitted to do the same
except when there is a suggestion of fraud or collusion or that the
representative will not act in good faith for the protection of all interests
represented by him.
- Petitioners cite the dismissal of the case first by the LA, and later by the
CA. The dismissal of the case does not, however, by itself show the
existence of fraud or collusion or a lack of good faith on the part of
APCWU. There must be clear and convincing evidence of fraud or
collusion or lack of good faith independently of the dismissal.
- Petitioners likewise express their fear that APCWU would not prosecute
the case diligently because of its “sweetheart relationship” with ICTSI.
There is nothing on record, however, to support this alleged relationship.
Disposition Petition is hereby DENIED.
PHILIPPINE DIAMOND HOTEL AND RESORT, INC. V
MANILA DIAMOND HOTEL EMPLOYEES UNION
493 SCRA 195
CARPIO MORALES; June 30, 2006
FACTS
-Union filed a petition for certification election to be declared the exclusive
bargaining representative of the Hotel’s employees. This petition was
dismissed by DOLE for lack of legal requirements.
-after a few months, Union sent a letter to Hotel informing it of its desire to
negotiate for a collective bargaining agreement. This was rejected by the
Hotel stating that the Union was not the employee’s bargaining agent as
their petition for certification election was denied.
-Union filed a Notice of Strike with the NCMB alleging the Hotel’ refusal to
bargain and for acts of unfair labor practices. NCMB summoned both
parties and held series of dialogues. Union however suddenly went on
strike
-Secretary of DOLE assumed jurisdiction and ordered compulsory
arbitration pursuant to art. 263 (g) of LC. And Union members were
directed to return to work and for Hotel to accept them back. Hotel refused
to accept the employees return. The order was modified (by a different
Secretary) such that reinstatement was to be done only in the payroll.
-Union filed for certiorari alleging grave abuse of discretion. Case was
referred to the CA. CA affirmed that the “payroll reinstatement” was not a
grave abuse of discretion. On appeal, it modified NLRC decision ordering
reinstatement with back wages of union members.
ISSUE
WON the strike conducted by the Union was illegal.
HELD Yes.
-as was mentioned, the first ground mentioned by the Union- the Hotel’s
refusal to bargain- was not a valid ground to stage the strike.
-The second ground – that petitioner prevented or intimidated some
workers from joining the union before, during or after the strike – was
correctly discredited by the appellate court.. Since it is the union who
alleges that unfair labor practices were committed by the Hotel, the
burden of proof is on the union to prove its allegations by substantial
evidence. “the facts and the evidence did not establish events [sic] least a
rational basis why the union would [wield] a strike based on alleged unfair
labor practices it did not even bother to substantiate”.
-It is doctrinal that the exercise of the right of private sector employees to
strike is not absolute. Thus Section 3 of Article XIII of the Constitution,
provides:
SECTION 3. x x x
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations and peaceful concerted activities, including
the right to strike in accordance with law…”
-Even if the purpose of a strike is valid, the strike may still be held illegal
where the means employed are illegal. Thus, the employment of violence,
intimidation, restraint or coercion in carrying out concerted activities which
are injurious to the rights to property renders a strike illegal. Evidence
show s that some of the workers-strikers who joined the strike indeed
committed illegal acts – blocking the free ingress to and egress from the
Hotel, holding noise barrage, threatening guests, and the like.
TOPICS: right to engage in concerted activities-limitations
- 56 - Disini
CORNISTA V NLRC (CARPIO).
504 SCRA 659
GARCIA; October 17, 2006
NATURE
Review on certiorari of the consolidated decisions of the CA
FACTS
- In 1983, the Philippine Veterans Bank was placed under
receivership. The liquidator terminated all the employees and
commenced payment of separation pay and other benefits to the
terminated employees.
- In 1992, Congress authorized the reopening of the Bank. A
Rehabilitation Committee was created to select and organize
manpower. The Union charged the Bank with unfair labor practices
and prayed for the immediate reinstatement of the Bank's former
employees.
-Labor Arbiter Carpio dismissed the case. NLRC reversed and
ordered the immediate reinstatement of all Union members.
- Bank appealed to the SC. While appeal was pending, the Bank and
the Union, through its officers, entered into a compromise
agreement, which was ratified by a substantial majority of the Union’s
members. Carpio approved the agreement. Parties moved to
dismiss cases pending in SC. As other employees opposed motion
to dismiss, SC denied said motion.
ISSUES
1. WON the employees have the right to be reinstated to their former
employment with the Bank upon its rehabilitation
2. WON the Compromise Agreement was validly entered into by the
Bank and the Union
HELD
1. NO
- The forcible closure of the Bank by operation of law permanently
severed the employer-employee relationship between it and its
employees. The Bank's subsequent rehabilitation did not, by any test
of reason, "revive" what was already a dead relationship between the
petitioners and the Bank.
- Had Congress intended that separated employees be rehired and
given priority in the hiring of new employees, it would have clearly
stated this in R.A. No. 7169. The fact that it did not only shows its
clear legislative intent to give the new bank a free hand in the
selection and hiring of its new staff.
- Giving in to petitioners' demand of wholesale reinstatement with
back wages, bonuses, holiday pay, vacation and sick leave benefits
would be a fatal blow to the very intention of R.A. No. 7169 to
rehabilitate the Bank. The payment of such substantial amounts
would definitely further dissipate the remaining assets of the Bank
and cripple its finances even as, at this point, the Bank is barely
making a profit under the weight of its present liabilities, and
ultimately make impossible its desired rehabilitation. This clearly
contravenes the intent and spirit of R.A. No. 7169
2. NO
Ratio A compromise agreement, once approved, has the effect of
res judicata between the parties and should not be disturbed except
for vices of consent, forgery, fraud, misrepresentation and coercion,
none of which exists in this case.
Reasoning
- A labor union's function is to represent its members. It can file an
action or enter into compromise agreements on behalf of its
members
- Union is a closed shop union. For this reason, it was the only one
with legal authority to negotiate, transact, and enter into any
agreement with the Bank. The Compromise Agreement was ratified
by 282 Union members representing a majority of its entire 529
membership. The ratification of the Compromise Agreement by the
majority of the Union members necessarily binds the minority.
- The submission of the Compromise Agreement on joint motion of
the parties for approval by the Labor Arbiter cured whatever defect
the signing of the agreement in the absence of the Labor Arbiter
 Labor Law 2 A2010
would have caused.
- Furthermore, petitioners cannot belatedly reject or repudiate their acts of
accepting the monetary consideration under the compromise agreement,
to the prejudice of the Bank. They are now estopped from questioning the
validity of the Compromise Agreement.
Dispositive Petition DENIED.
5. Effect of Non-registration
PROTECTION TECHNOLOGY INC. V. SECRETARY,
DEPARTMENT OF LABOR AND EMPLOYMENT
242 SCRA 99
FELICIANO; March 1, 1995
NATURE
Special civil action in the Supreme Court. Certiorari.
FACTS
- Union, which is newly organized and affiliated w/ a federation, filed
Petition for direct certification or for certification election. Company said
that the Union is not legitimate bec it failed to submit books of account w/
BLR at time it was registered.
- Med Arbiter dismissed Union’s petition. DOLE Undersecretary set
aside Med Arbiter’s order, ordering the holding of a certification election.
Petition is now before SC.
- SC issued TRO, but this notwithstanding, certification election was
conducted.
ISSUE/S
WON DOLE Undersecretary committed grave abuse of discretion
HELD
1. YES
Ratio The requirements of registration of legitimate labor organizations
are an exercise of the police power of the State, designed for the
protection of workers against potential abuse by unions.
Registration is a condition sine qua non for acquisition of legal personality
by a labor organization and the exercise of rights and privileges granted
by law.
Reasoning It is immaterial that the Union was organized for less than a
year before its application for registration w/ BLR. Accounting books must
be submitted even if they contain no detailed entries.
The Union must submit its books of account before it may demand
recognition by the Company as exclusive bargaining agent of members.
Disposition Petition is dismissed for being moot and academic.
SUGBUANON RURAL BANK, INC V LAGUESMA
324 SCRA 425
QUISUMBING: February 2, 2000
NATURE:
- Special civil action for certiorari and prohibition
FACTS:
- Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a
duly-registered banking institution with principal office in Cebu
City and a branch in Mandaue City. Private respondent SRBI
Association of Professional, Supervisory, Office, and Technical
Employees Union (APSOTEU) is a legitimate labor organization
affiliated with the Trade Unions Congress of the Philippines
(TUCP).
- On October 8, 1993, the DOLE Regional Office in Cebu City
granted Certificate of Registration to APSOTEU-TUCP,
hereafter referred to as the union.
- On October 26, 1993, the union filed a petition for certification
election of the supervisory employees of SRBI. It alleged,
- 57 - Disini
among others, that: (1) APSOTEU-TUCP was a labor
organization duly-registered with the Labor Department;
(2) SRBI employed 5 or more supervisory employees; (3) a
majority of these employees supported the petition: (4)
there was no existing collective bargaining agreement
(CBA) between any union and SRBI; and (5) no
certification election had been held in SRBI during the past
12 months prior to the petition.
- On November 12, 1993, SRBI filed a motion to dismiss the
union's petition. It sought to prevent the holding of a
certification election on two grounds. First, that the
members of APSOTEU-TUCP were in fact managerial or
confidential employees. Second, the Association of Labor
Unions-Trade Unions Congress of the Philippines or ALU-
TUCP was representing the union.
- The union filed its opposition to the motion to dismiss on
December 1, 1993. It argued that its members were not
managerial employees but merely supervisory employees.
- On December 9, 1993, the Med-Arbiter denied petitioner's
motion to dismiss.
- SRBI appealed the Med-Arbiter's decision to the Secretary
of Labor and Employment. The appeal was denied for lack
of merit. The certification election was ordered.
- On June 16, 1994, the Med-Arbiter scheduled the holding
of the certification election for June 29, 1994.
- On June 17, 1994, SRBI filed with the Med-Arbiter an
urgent motion to suspend proceedings. The Med-Arbiter
denied the same. SRBI then filed a motion for
reconsideration. Two days later, the Med-Arbiter cancelled
the certification election scheduled for June 29, 1994 in
order to address the motion for reconsideration.
- The Med-Arbiter later denied petitioner's motion for
reconsideration
- SRBI appealed the order of denial to the DOLE Secretary
- Petitioner proceeded to file a petition with the DOLE
Regional Office seeking the cancellation of the respondent
union's registration. It averred that the APSOTEU-TUCP
members were actually managerial employees who were
prohibited by law from joining or organizing unions.
- DOLE Undersecretary denied SRBI's appeal for lack of
merit. He ruled that APSOTEU-TUCP was a legitimate
labor organization. It was fully entitled to all the rights and
privileges granted by law to a legitimate labor organization,
including the right to file a petition for certification election.
He also held that until and unless a final order is issued
cancelling APSOTEU-TUCP's registration certificate, it had
the legal right to represent its members for collective
bargaining purposes.
- SRBI moved for reconsideration of the Undersecretary's
decision
ISSUE/S:
(1) WON the members of the respondent union are managerial
employees and/or highly-placed confidential employees, hence
prohibited by law from joining labor organizations and engaging in
union activities
(2) WON the Med-Arbiter may validly order the holding of a
certification election
HELD:
2. NO
Reasoning
- Article 212 (m) of the Labor Code defines the terms "managerial
employee" and "supervisory employees" as follows:
Art. 212. Definitions
(m) "Managerial employee" is one who is vested with
powers or prerogatives to lay down and execute
management policies and/or hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial
 Labor Law 2 A2010
actions if the exercise of such authority is not merely routinary
or clerical in nature but requires the use of independent
judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes
of
- Petitioner submitted detailed job descriptions to support its contention
that the union members are managerial employees and/or confidential
employees proscribed from engaging in labor activities. In the present
case, however, petitioner failed to show that the employees in question
were vested with managerial powers. At best they only had
recommendatory powers subject to evaluation, review, and final decision
by the bank's management. The job description forms submitted by
petitioner clearly show that the union members in question may not
transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees. Moreover, the forms also do not show that the Cashiers,
Accountants, and Acting Chiefs of the Loans Department formulate and
execute management policies which are normally expected of
management officers.
2. YES
Reasoning
- One of the rights of a legitimate labor organization under Article
242(b) of the Labor Code is the right to be certified as the
exclusive representative of all employees in an appropriate
bargaining unit for purposes of collective bargaining. Having
complied with the requirements of Art. 234, it is our view that
respondent union is a legitimate labor union. Article 257 of the
Labor Code mandates that a certification election shall
automatically be conducted by the Med-Arbiter upon the filing of
a petition by a legitimate labor organization.
DISPOSITIVE:
Petition dismissed.
6. Cancellation of Union Certificate
Registration
IN RE: PETITION FOR CANCELLATION OF THE UNION
REGISTRATION OF AIR PHILIPPINES FLIGHT
ATTENDANTS ASSOCIATION
And
AIR PHILIPPINES CORPORATION v. BLR [AIR PHILS
FLIGHT ATTENDANTS ASSOCIATION]
TINGA; June 22, 2006
Nature: Certiorari under Rule 45
FACTS:
- The case initially centered on the union registration of respondent Air
Philippines Flight Attendants Association (APFLAA), which was issued a
Certificate of Registration by the DOLE. After the Med-Arbiter rendered a
ruling ordering the holding of a certification election, such election was
held, with majority of the votes cast in favor of APFLAA.
- APC filed a Petition for De-Certification and Cancellation of Union
Registration against APFLAA with the DOLE alleging that APFLAA could
not be registered as a labor organization, as its composition
consisted of “a mixture of supervisory and rank-and-file flight
attendants.” Particularly, APC alleged that flight attendants holding the
position of “Lead Cabin Attendant,” which according to it is supervisory in
character, were among those who comprised APFLAA.
- The DOLE-NCR dismissed said petition and held that A245 of the LC,
which states that supervisory employees are not eligible for membership
in labor organizations of rank-and-file employees, does not provide a
ground for cancellation of union registration, which is instead governed by
Article 239 of the Labor Code.
- BLR denied the appeal, affirming the rationale of the DOLE-NCR.
- CA also dismissed because APC had “failed to avail of the remedy of a
prior MFR” before the filing of the certiorari petition, which step, it
stressed, is a “condition sine qua non to the filing of a petition for
certiorari.” Denied the MR as well for being defective.
- 58 - Disini
ISSUE: WON the Union’ registration may be cancelled as it is
composed of a mixture of supervisory and rank-and-file employees
(and also, WON Lead Cabin Attendants are indeed supervisory
employees)
HELD: NO. APC did not impute on APFLAA such misrepresentation
of the character necessitated under A239 (a) and (c) of the Labor
Code.
Reasoning:
- APC merely argued that APFLAA was not qualified to become a
legitimate labor organization by reason of its mixed composition of
rank-and-file and supervisory employees; and that APFLAA
committed misrepresentation by making it appear that its
composition was composed purely of rank-and-file employees.
- SPI Technologies Incorporated v. DOLE: the Court observed that
A245 of the LC, the legal basis for the petition for cancellation,
merely prescribed the requirements for eligibility in joining a union
and did not prescribe the grounds for cancellation of union
registration.[
- Tagaytay Highlands International Golf Club v. Tagaytay
Highlands Employees Union: “[t]he inclusion in a union of
disqualified employees is not among the grounds for cancellation,
unless such inclusion is due to misrepresentation, false statement or
fraud under the circumstances enumerated in Sec (a) and (c) of
A239 LC.”
- Clearly then, for the purpose of de-certifying a union, it is not
enough to establish that the rank-and-file union includes
ineligible employees in its membership. Pursuant to Article 239
(a) and (c) of the Labor Code, it must be shown that there was
misrepresentation, false statement or fraud in connection with
the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, or in
connection with the election of officers, minutes of the election
of officers, the list of voters, or failure to submit these
documents together with the list of the newly elected-appointed
officers and their postal addresses to the BLR.
-Consistent with jurisprudence, the rule under A245 barring
supervisory employees from joining the union of rank-and-file
employees is not a ground for cancellation of union
registration.
Dispositive: Petition is DENIED.
LAGUNA AUTO PARTS MANUFACTURING CORP.
V SECRETARY, DOLE
457 SCRA 730
CALLEJO; April 29, 2005
NATURE
Petition to review the decision of the Court of Appeals
FACTS
- May 3, 1999 - Laguna Autoparts Manufacturing Corporation
Obrero Pilipino-LAMCOR Chapter filed a petition for
certification election with the DOLE. In its petition, it noted its
registration certificate number along with the registration
certificate number of chapter affiliate. The petition alleged that
the union was composed of all rank-and-file employees, that
the bargaining unit is unorganized and that there had been no
certification election for the past 12 months prior to the filing of
the petition.
- Laguna Autoparts moved to cancel the certification election
because the union was not considered a legitimate labor
organization for failure to show that it had complied with
registration requirements such as submission of required
documents to the Bureau of Labor Relations.
 Labor Law 2 A2010
- Med-Arbiter Bactin dismissed the certification election petition
because of the union’s lack of personality. DOLE Secretary Sto.
Tomas reversed Bactin’s order. This was affirmed by the CA.
- The CA stressed that a local or chapter need not be
registered to become a legitimate labor organization. It
pointed out that a local or chapter acquires legal
personality as a labor organization from the date of filing
of the complete documents.
- The CA noted that it was the employer which offered the
most tenacious resistance to the holding of a certification
election among its regular rank-and-file employees. It
opined that this must not be so for the choice of a
collective bargaining agent was the sole concern of the
employees, and the employer should be a mere
bystander.
ISSUE/S
1. WON the union is a legitimate labor organization
2. WON the chapter’s legal personality can be attacked
collaterally in an election action
HELD
1. YES
Ratio A local or chapter need not be independently registered to
acquire legal personality. A local/chapter constituted in accordance
with Section 1 of Rule 6 shall acquire legal personality from the
date of filing of the complete documents enumerated.
Reasoning
The task of determining whether the local or chapter has submitted the
complete documentary requirements is lodged with the Regional Office or
the BLR, as the case may be. The records of the case show that the
respondent union submitted the said documents to the regional office and
was issued a certification.
2. NO
Ratio
Reasoning
- It may not be subject to a collateral attack but only through a separate
action instituted particularly for the purpose of assailing the chapter, as
prescribed in Section 5, Rule 5 of the implementing rules of Book 5 which
states: “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.[”
- The pronouncement of the Labor Relations Division Chief, that the
respondent union acquired a legal personality with the submission of the
complete documentary requirement, cannot be challenged in a petition for
certification election.
Disposition Petition is denied. No costs.
TABLANTE-TUNGOL V NORIEL
FERNANDO; AUG 23 1978
NATURE
Petition for certiorari
FACTS
Petitioner, after two unsuccessful attempts to prevent collective
bargaining with respondent union, filed this certiorari proceeding alleging
that public respondents should have cancelled the registration and permit
of respondent labor organization as it had engaged in an illegal strike. It
based its contention on P.D. No. 823 and Article 239 of the New Labor
Code that cancellation of registration follows from "any activity prohibited
by law."
The Solicitor General, in his Comment claimed that the argument
proferred was false and misleading as the law should not be interpreted to
include an illegal strike engaged into by any union. The phrase 'or
otherwise engaging in any activity prohibited by law' should be construed
to mean such activity engaged into by a union that par takes of the nature
of a labor contractor or 'cabo' system and respondent union is not
- 59 - Disini
engaged in any such activity. Subsequently, petitioner and private
respondent filed a joint motion to dismiss alleging that they have
threshed-out their respective disputes.
ISSUE
WON public respondents should have cancelled the registration and
permit of private respondent labor organization as private respondent
labor union had engaged in an illegal strike
HELD
NO. For expediency, we quote in entirety the aforesaid Article relied
upon by the Petitioner for cancellation of the registration and permit
of the union: 'Article 239. Ground for cancellation of union
registration. The following shall constitute grounds for cancellation of
union registration: . . . (e) Acting as a labor contractor or engaging in
the "cabo" system, or otherwise engaging in any activity prohibited
by law. Suppletory to the above provision is Section 6 (c) of Rule II,
Book V of the Rules and Regulations implementing the Labor Code
of the Philippines, as amended, which reads as follows: 'Section 6.
Denial of Registration of local unions - The Regional Office may deny
the application for registration on any of the following grounds: . . .
(c) Engaging in the "cabo" system or other illegal practices.'
It is a fact that [Association of Democratic Labor Organization] is not
a labor contractor or is it engaged in the 'cabo' system or is it
otherwise engaged in any activity of such nature which is prohibited
by law. The above-quoted article should not be interpreted or
construed to include an illegal strike engaged into by any union. This
is so because the phrase 'or otherwise engaging in any activity
prohibited by law' should be construed to mean such activity
engaged into by a union that par takes of the nature of a labor
contractor or 'cabo' system. The law does not intend to include in the
said phrase illegally declared strike simply because strike per se is
legal. Also, if the law intends to include illegally declared strike, the
same could have been expressly placed therein as had been
previously done in Presidential Decree No. 823." Clearly, an
awareness of the relevance of the maxims noscitur a sociis and
ejusdem generis ought to have cautioned counsel for petitioner to
shy away from this approach.
Dispositive Petition dismissed
ALLIANCE OF DEMOCRATIC LABOR
ORGANIZATION V. LAGUESMA
254 SCRA 565
PANGANIBAN; March 11, 1996
NATURE
Petition for certiorari and prohibition under Rule 65
FACTS
-The Alliance of Democratic Free Labor Organization (ADFLO) filed
an application for registration as a national federation alleging,
among others that it has twelve (12) affiliates
-After proper evaluation of its application and finding ADFLO to have
complied with the requirements for registration pursuant to Articles
234 and 237 of the Labor Code, the Bureau (of Labor Relations)
issued a Certificate of Registration No. 11399-FED-LC to the
federation.
-The Confederation of labor and Allied Social Services (CLASS) filed
a petition for the cancellation of the Registration Certificate issued to
ADFLO.
-The Bureau of Labor Relations (BLR), through Director Pura Ferrer-
Calleja, rendered a Decision cancelling the registration of ADFLO.
-BLR Director Pura Ferrer-Calleja, without first ruling on the
admissibility of the exhibits of CLASS and without any further
hearing, rendered an order affirming the cancellation
ISSUE
1. WON decision cancelling the registration of petitioner was
rendered in violation of the due process clause
 Labor Law 2 A2010
HELD
1. YES.
Ratio Under Section 1, Article II of our Constitution, "(n)o person shall be
deprived of life, liberty or property without due process of law . . ." and
under Article 238 of the Labor Code,"(t)he certificate of registration of any
legitimate labor organization, whether national or local, shall be canceled
by the Bureau if it has reason to believe, after due hearing, that the said
labor organization no longer meets one or more of the requirements
herein prescribed."
Reasoning The cancellation of a certificate of registration is the
equivalent of snuffing out the life of a labor organization. For without such
registration, it loses - as a rule - its rights under the Labor Code. Under
the circumstances, petitioner was indisputably entitled to be heard before
a judgment could be rendered cancelling its certificate of registration. In
David vs. Aguilizan, it was held that a decision rendered without any
hearing is null and void.
Disposition Petition GRANTED
PROGRESSIVE DEVELOPMENT CORP. V LAGUESMA
(Nagkakaisang-Lakas ng Manggagawa)
271 SCRA 593
KAPUNAN; April 18, 1997
NATURE
Special civil action of certiorari
FACTS
- July 9, 1993: Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan
(respondent Union) filed a petition for certification election with the
Department of Labor in behalf of the rank and file employees of the
Progressive Development Corporation (Pizza Hut).
- August 20, 1993: Progressive (petitioner) filed a verified Motion to
Dismiss the petition alleging fraud, falsification and misrepresentation in
the respondent Union's registration making it void and invalid. Among the
bases of fraud was the fact that while the application for registration of the
charter was supposed to have been approved in the organizational
meeting held on June 27, 1993, the charter certification issued by the
federation KATIPUNAN was dated June 26, 1993 or one (1) day prior to
the formation of the chapter, and that the Constitution and by Laws
submitted in support of its petition were not properly acknowledged and
notarized.
- August 30, 1993: Progressive filed a Petition seeking the cancellation of
the Union's registration on the grounds of fraud and falsificatio. Motion
was likewise filed by petitioner with the Med-Arbiter requesting
suspension of proceedings in the certification election case until after the
prejudicial question of the Union's legal personality is determined in the
proceedings for cancellation of registration.
- In an Order dated September 29, 1993, Med-Arbiter Rasidali C.
Abdullah directed the holding of a certification election among petitioner's
rank and file employees.
- On appeal to the office of the Secretary of Labor, Labor Undersecretary
Bienvenido E. Laguesma in a Resolution dated December 29, 1993
denied the same.
ISSUE/S
1. WON after the necessary papers and documents have been filed by a
labor organization, recognition by the Bureau of Labor Relations merely
becomes a ministerial function. (Action and Denial of Application and
Remedy)
HELD
1. NO
Ratio Registration requirements specifically afford a measure of
protection to unsuspecting employees who may be lured into joining
unscrupulous or fly-by-night unions whose sole purpose is to control union
funds or use the labor organization for illegitimate ends. Such
requirements are a valid exercise of the police power, because the
activities in which labor organizations, associations and unions of workers
are engaged directly affect the public interest and should be protected.
Reasoning
Art. 234. Requirements of registration. - Any applicant labor organization,
- 60 - Disini
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 xxx. (financial reports, names of
officers, names of members, P50.00 filing fee)
- The Med-Arbiter summarily disregarded the petitioner's prayer that
the former look into the legitimacy of the respondent Union by a
sweeping declaration that the union was in the possession of a
charter certificate so that "for all intents and purposes, Sumasaklaw
sa Manggagawa sa Pizza Hut (was) a legitimate labor organization."
- The requirements embodied in Art 234 are intended as preventive
measures against the commission of fraud. After a labor
organization has filed the necessary papers and documents for
registration, it becomes mandatory for the Bureau of Labor
Relations to check if the requirements under Article 234 have
been sedulously complied with.
- Any action taken by the Bureau of Labor Relations is made in
consonance with the mandate of the Labor Code, which, it bears
emphasis, specifically requires that the basis for the issuance of a
certificate of registration should be compliance with the requirements
for recognition under Article 234.
- The Court's conclusion should not be misconstrued as impairing the
local union's right to be certified as the employees' bargaining agent
in the petitioner's establishment. The Court is merely saying that the
local union must first comply with the statutory requirements in order
to exercise this right.
REMEDY: It would have been more prudent for the Med-Arbiter and
public respondent to have granted petitioner's request for the
suspension of proceedings in the certification election case, until the
issue of the legality of the Union's registration shall have been
resolved. Failure of the Med-Arbiter and public respondent to heed
the request constituted a grave abuse of discretion.
- The grounds ventilated in cancellation proceedings in accordance
with Article 239 of the Labor Code constitute a grave challenge to the
right of respondent Union to ask for certification election. The Med-
Arbiter should have looked into the merits of the petition for
cancellation before issuing an order calling for certification election
EFFECT, PENDING PETITION, CANCELLATION TRADE UNION
REGISTRATION (P.24)
- Once a labor organization attains the status of a legitimate labor
organization it begins to possess all of the rights and privileges
granted by law to such organizations.
- Registration based on false and fraudulent statements and
documents confer no legitimacy upon a labor organization irregularly
recognized. Under such circumstances, the labor organization, not
being a legitimate labor organization, acquires no rights, particularly
the right to ask for certification election in a bargaining unit. The
invalidity of respondent Union's registration would negate its
legal personality to participate in certification election.
Disposition Petition is granted and remanded to Med-Arbiter.
TAGAYTAY HIGHLANDS V TAGAYTAY GOLF
CLUB EMPLOYEES UNION
395 SCRA 699
CARPIO-MORALES; January 22, 2003
NATURE
Petition for Certiorari under Rule 45 THIGCI assailing CA decision
denying its petition to annul the Department of Labor and
Employment (DOLE) Resolutions of November 12, 1998 and
December 29, 1998
FACTS
- October 16, 1997 > Tagaytay Highlands Employees Union (THEU),
Philippine Transport and General Workers Organization (PTGWO),
Local Chapter No. 776, a legitimate labor organization said to
represent majority of the rank-and-file employees of THIGCI, filed a
 Labor Law 2 A2010
petition for certification election before the DOLE Mediation-Arbitration
Unit, Regional Branch No. IV
- November 27, 1997 > opposed petition for certification election because
the list of union members submitted by it was defective and fatally flawed
as it included the names and signatures of supervisors, resigned,
terminated and absent without leave (AWOL) employees, as well as
employees of The Country Club, Inc., a corporation distinct and separate
from THIGCI; and that out of the 192 signatories to the petition, only 71
were actual rank-and-file employees of THIGCI. Also, some of the
signatures in the list of union members were secured through fraudulent
and deceitful means, and submitted copies of the handwritten denial and
withdrawal of some of its employees from participating in the petition.
-
THEU asserted that it complied with all the requirements for valid
affiliation and inclusion in the roster of legitimate labor organizations
pursuant to DOLE Department Order No. 9, series of 1997, on account of
which it was duly granted a Certification of Affiliation by DOLE on October
10, 1997; and that Section 5, Rule V of said Department Order provides
that the legitimacy of its registration cannot be subject to collateral attack,
and for as long as there is no final order of cancellation, it continues to
enjoy the rights accorded to a legitimate organization. Therefore, the
Med-Arbiter should, pursuant to Article 257 of the Labor Code and
Section 11, Rule XI of DOLE Department Order No. 09, automatically
order the conduct of a certification election.
- January 28, 1998 > DOLE Med-Arbiter Anastacio Bactin ordered the
holding of a certification election
- DOLE Resolution of November 12, 19981 > setting aside the June 4,
1998 Resolution dismissing the petition for certification election. MFR
denied
- CA - denied THIGCI’s Petition for Certiorari and affirmed the DOLE
Resolution dated November 12, 1998. It held that while a petition for
certification election is an exception to the innocent bystander rule, hence,
the employer may pray for the dismissal of such petition on the basis of
lack of mutuality of interests of the members of the union as well as lack
of employer-employee relationship and petitioner failed to adduce
substantial evidence to support its allegations.
Issue:
WON the composition of the union can be subject to collateral attack
Held: . NO
- After a certificate of registration is issued to a union, its legal personality
cannot be subject to collateral attack. It may be questioned only in an
independent petition for cancellation in accordance with Section 5 of Rule
V, Book IV of the "Rules to Implement the Labor Code" (Implementing
Rules) which section reads:
Sec. 5. Effect of registration. The labor organization or workers’
association shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration. Such
legal personality cannot thereafter be subject to collateral attack, but
may be questioned only in an independent petition for
cancellation in accordance with these Rules.
3.5 INTERNATIONAL ACTIVITIES OF
UNION—PROHIBITION AND
REGUULATION – 269-271
3.6 UNION-MEMBER RELATIONS
1. Nature of Relationship
HEIRS OF CRUZ V. CIR (SANTIAGO RICE MILL)
30 SCRA 917
TEEHANKEE; Dec. 27, 1969
NATURE
Special civil action for certiorari
FACTS
- 61 - Disini
-This is a case involving union officers who entered into a
compromise concerning backwages of member-employees with the
employer.
-Petitioners are the retained lawyers of the Santiago Labor Union
who question respondent Court's approval of respondent firm's
settlement of the union members' judgment claims with the union
board of directors, without their knowledge and consent,
notwithstanding their duly recorded attorneys' lien, and over the
objection of a board member that the union board had no authority to
compromise or quit-claim the judgment rights of the union members.
-Petitioners are forty-nine (49) claimants-members of the Santiago
Labor Union who assail respondent Court's approval of the
questioned settlement, without their authority as the real parties in
interest, and who denounce the settlement as unconscionable and
having been entered into by the majority of the union board "under
circumstances of fraud, deceit, misrepresentation and/or
concealment, especially where a member of the Court has actively
used his official and personal influence to effect the settlement which
is manifestly unjust to laborers who by reason of their financial
disadvantages in a conflict with their employers need all the aid of
the Court for their protection, consonant with law, justice and equity."
ISSUE
2. WON the real parties in interest are the union members who have
initiated and instituted this petition as against the limited and
formal personality of the respondent labor union to represent them
when so authorized by their collective will
HELD
2. YES.
Ratio The union is but an agent of the individual workers and it has
the duty to inform the members of the labor matters entrusted to it.
Reasoning The employer may rely on the authority of the union to
bring the union members especially in collective bargaining where
the matters to be discussed are still to be observed but this case is
an exception. What is sought here are backwages and other benefits
already earned. Authority for the union to waive this right to
backwages must be express. In a compromise or settlement, the
individual union members are the real judgment creditors and are the
real parties in interest.
Disposition CIR order SET ASIDE..
2. Constitution and By-Laws
SAN MIGUEL CORP. V. MANDAUE
Tinga ; Aug. 16, 2005
467 SCRA 107
Facts
-CA affirmes DOLE Undersecretary for Labor Relations, Rosalinda
Dimapilis-Baldoz, ordering the immediate conduct of a certification
election among the petitioner’s rank-and-file employees.
- Federation of Free Workers (FFW/ respondent) filed a petition for
certification election with the DOLE Regional Office No. VII. It sought
to be certified and to represent the permanent rank-and-file monthly
paid employees of the petitioner. The following documents were
attached to the petition: (1) a Charter Certificate certifying that
respondent as of that date was duly certified as a local or chapter of
FFW; (2) a copy of the constitution of respondent prepared by its
Secretary, Noel T. Bathan and attested by its President, Wilfred V.
Sagun; (3) a list of respondent’s officers and their respective
addresses, again prepared by Bathan and attested by Sagun; (4) a
certification signifying that respondent had just been organized and
no amount had yet been collected from its members, signed by
respondent’s treasurer Chita D. Rodriguez and attested by Sagun;
and (5) a list of all the rank-and-file monthly paid employees of the
 Labor Law 2 A2010
Mandaue Packaging Products Plants and Mandaue Glass Plant prepared
by Bathan and attested by Sagun.
-SMC (Petitioner) filed a motion to dismiss the petition for certification
election on the sole ground that herein respondent is not listed or included
in the roster of legitimate labor organizations based on the certification
issued by the Officer-In-Charge, Regional Director of the DOLE Regional
Office No. VII, Atty. Jesus B. Gabor.
-Respondent submitted to the Bureau of Labor Relations the same
documents earlier attached to its petition for certification. The
accompanying letter, signed by respondent’s president Sagun, stated that
such documents were submitted in compliance with the requirements for
the creation of a local/chapter pursuant to the Labor Code and its
Implementing Rules; and it was hoped that the submissions would
facilitate the listing of respondent under the roster of legitimate labor
organizations.The Chief of Labor Relations Division of DOLE Regional
Office No. VII issued a Certificate of Creation of Local/Chapter No. ITD. I-
ARFBT-058/98, certifying that from 30 July 1998, respondent has
acquired legal personality as a labor organization/worker’s association, it
having submitted all the required documents.
Issues
1. When did the union acquire legal personality?
2. Whether or not the inclusion of the two alleged supervisory employees
in appellee union’s membership amounts to fraud, misrepresentation, or
false statement within the meaning of Article 239(a) and (c) of the Labor
Code.
3. Whether or not subsequent developments change the disposition of the
case
Held
1. 15 June 1998, the date the complete documents were submitted.
The issuance of the certificate of registration by the Bureau or
Regional Office is not the operative act that vests legal personality
upon a local/chapter under Department Order No. 9. Such legal
personality is acquired from the filing of the complete documentary
requirements enumerated in Section 1, Rule VI. Admittedly, the
manner by which respondent was deemed to have acquired legal
personality by the DOLE and the Court of Appeals was not in strict
conformity with the provisions of Department Order No. 9.
Thus, in order to ascertain when respondent acquired legal
personality, we only need to determine on what date the Regional
Office or Bureau received the complete documentary requirements
enumerated under Section 1, Rule VI of Department Order No. 9.
There is no doubt that on 15 June 1998, or the date respondent filed
its petition for certification election, attached thereto were
respondent’s constitution, the names and addresses of its officers,
and the charter certificate issued by the national union FFW. The
first two of these documents were duly certified under oath by
respondent’s secretary Bathan and attested to by president Sagun.
What about the lack of documents containing the by-laws? Not needed so
long as it is part of the union’s constitution.
An examination of respondent’s constitution reveals it sufficiently
comprehensive in establishing the necessary rules for its operation.
Article IV establishes the requisites for membership in the local/chapter.
Articles V and VI name the various officers and what their respective
functions are. The procedure for election of these officers, including the
necessary vote requirements, is provided for in Article IX, while Article XV
delineates the procedure for the impeachment of these officers. Article VII
establishes the standing committees of the local/chapter and how their
members are appointed. Article VIII lays down the rules for meetings of
the union, including the notice and quorum requirements thereof. Article X
enumerates with particularity the rules for union dues, special
assessments, fines, and other payments. Article XII provides the general
rule for quorum in meetings of the Board of Directors and of the members
of the local/chapter, and cites the applicability of the Robert’s Rules of
Order[43] in its meetings. And finally, Article XVI governs and institutes
the requisites for the amendment of the constitution.
The Court likewise sees no impediment in deeming respondent
as having acquired legal personality as of 15 June 1998, the fact that
it was the local/chapter itself, and not the FFW, which submitted the
documents required under Section 1, Rule VI of Department Order
No. 9. The evident rationale why the rule states that it is the
federation or national union that submits said documents to the
- 62 - Disini
Bureau or Regional Office is that the creation of the
local/chapter is the sole prerogative of the federation or national
union, and not of any other entity. Certainly, a putative
local/chapter cannot, without the imprimatur of the federation or
national union, claim affiliation with the larger unit or source its
legal personality therefrom.
In the ordinary course, it should have been FFW, and not
respondent, which should have submitted the subject documents to
the Regional Office. Nonetheless, there is no good reason to
deny legal personality or defer its conferral to the local/chapter
if it is evident at the onset that the federation or national union
itself has already through its own means established the
local/chapter. In this case, such is evidenced by the Charter
Certificate dated 9 June 1998, issued by FFW, and attached to the
petition for certification election. The Charter Certificate expressly
states that respondent has been issued the said certificate “to
operate as a local or chapter of the [FFW]”. The Charter Certificate
expressly acknowledges FFW’s intent to establish respondent as of 9
June 1998. This being the case, we consider it permissible for
respondent to have submitted the required documents itself to the
Regional Office, and proper that respondent’s legal personality be
deemed existent as of 15 June 1998, the date the complete
documents were submitted.
2. No, it does not.
Under the law, a managerial employee is “one who is vested
with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, layoff, recall, discharge,
assign or discipline employees.” A supervisory employee is “one
who, in the interest of the employer, effectively recommends
managerial actions if the exercise of such recommendatory authority
is not merely routinary or clerical in nature but requires the use of
independent judgment.’” Finally, “all employees not falling within the
definition of managerial or supervisory employee are considered
rank-and-file employees”. It is also well-settled that the actual
functions of an employee, not merely his job title, are determinative
in classifying such employee as managerial, supervisory or rank and
file. Good faith is presumed in all representations, an essential
element of fraud, false statement and misrepresentation in order
for these to be actionable is intent to mislead by the party
making the representation. In this case, there is no proof to
show that Bathan, or appellee union for that matter, intended to
mislead anyone. If this was appellee union’s intention, it would
have refrained from using a more precise description of the
organization instead of declaring that the organization is
composed of ‘rank and file monthlies’. Hence, the charge of
fraud, false statement or misrepresentation cannot be
sustained.
Even if they are supervisory employees, no action can be done that
emasculates the right to self-organization and the promotion of free
trade unionism. We take administrative notice of the realities in union
organizing, during which the organizers must take their chances,
oftentimes unaware of the fine distinctions between managerial,
supervisory and rank and file employees. The grounds for
cancellation of union registration are not meant to be applied
automatically, but indeed with utmost discretion. Where a remedy
short of cancellation is available, that remedy should be preferred. In
this case, no party will be prejudiced if Bathan were to be excluded
from membership in the union. The vacancy he will thus create can
then be easily filled up through the succession provision of appellee
union’s constitution and by-laws. What is important is that there is an
unmistakeable intent of the members of appellee union to exercise
their right to organize. We cannot impose rigorous restraints on such
right if we are to give meaning to the protection to labor and social
justice clauses of the Constitution.
3. No, it does not affect the case.
The allegation that the bargaining unit that respondent
sought to represent is no longer the same because of the dynamic
nature of petitioner’s business, a lot of changes having occurred in
the work environment, and that four of respondent’s officers are no
longer connected with petitioner have no effect on the Court’s ruling
that a certification election should be immediately conducted with
 Labor Law 2 A2010
respondent as one of the available choices. Petitioner’s bare
manifestations adduce no reason why the certification election should not
be conducted forthwith. If there are matters that have arisen since the
filing of the petition that serve to delay or cancel the election, these can be
threshed out during the pre-election conferences. Neither is the fact that
some of respondent’s officers have since resigned from petitioner of any
moment. The local/chapter retains a separate legal personality from that
of its officers or members that remains viable notwithstanding any
turnover in its officers or members.
DISPOSITION
WHEREFORE, the Petition is DENIED. Costs against petitioner.
SO ORDERED.
3. Issues
A. Admission and Discipline of
Members
UST FACULTY UNION V BITONIO
318 SCRA 185
PANGANIBAN; November 16, 1999
NATURE
Special civil action in the Supreme Court. Certiorari.
FACTS
- Union announced a general assembly to elect next union officers.
- TRO was issued by med-arbiter enjoining them from conducting
election.
- UST held a general faculty assembly, attended by both union
members and non-members. Here, appellants were elected as new union
officers by acclamation and clapping of hands.
- Appellees filed instant petition to seek injunctive relief and to nullify
results of election.
- Bitonio upheld med-arbiter and said election was void. He rejected
contention that it was a legitimate exercise of right to self organization
ISSUE/S
1. Basis of right to self-organization (p5 of outline) / Workers with right of
self-organization (p6 of outline)
2. Admission and discipline of members (p10 of outline)
3. Voters list (p11 of outline)
HELD
1.
Ratio Self-organization is a fundamental right to form, join or assist labor
organizations for collective bargaining, mutual aid and protection.
Whether employed for a definite period or not, employee shall be
considered as such, beginning on 1st day of service, for purposes of
membership in a labor union. Corollary to this right is the prerogative
not to join.
Reasoning The election can’t be considered as exercise of right to self-
organization because the petitioners’ frustration over the performance of
the respondents could not justify the method they chose to impose their
will on the union.
2.
Ratio The union’s constitution and by-laws embody a covenant
between a union and its members and constitute the fundamental
law governing the members’ rights and obligations.
Reasoning The election was tainted by irregularities. The general faculty
assembly was not the proper forum for the election. Also, the grievances
of the petitioners could have been brought up and resolved in accordance
with the procedure laid down by the union’s CBL and by the Labor Code.
3.
Ratio The union election is pursuant to union’s constitution and by-laws
and right to vote is enjoyed only by union members. On the other hand,
a certification election is the process of determining, through secret
ballot, the sole and executive bargaining agent of the employees and all
- 63 - Disini
employees belonging to the appropriate bargaining unit can
vote. Verily, union affairs cannot be decided in a non-union activity.
Reasoning The election held was not a union election because the
procedure in the CBL was not followed. It was also not a certification
election because representation was not the issue. The participation
of non-union members in the election aggravated its irregularity.
SALUNGA V CIR (NATIONAL BREWERY & ALLIED
INDUSTRIES LABOR UNION OF THE PHILIPPINES,
ET AL)
21 SCRA 216
CONCEPCION; September 27, 1967
NATURE
Appeal from a resolution of the Court of Industrial Relations
FACTS
-Petitioner is an employee of San Miguel Brewery Inc., which, on
October 2, 1959, entered with the Union, into a collective bargaining
agreement.
-Section 3 of the CBA reads: The company agrees to require as a
condition of employment of those workers covered by this agreement
who either are members of the UNION on the date of the signing of
this agreement, or may join the UNION during the effectivity of this
agreement, that they shall not voluntarily resign from the UNION
earlier than thirty (30) days before the expiry date of this agreement
as provided in Article XIII hereof, provided, however, that nothing
herein contained shall be construed to require the company to
enforce any sanction whatsoever against any employee or worker
who fails to retain his membership in the UNION as hereinbefore
stated, for any cause other than voluntary resignation or non-
payment of regular union dues on the part of said employee or
worker.
-On August 18, 1961, petitioner tendered his resignation from the
Union, which accepted it and transmitted it to the Company, with a
request for the immediate implementation of said section 3.
-The Company having informed him that his aforementioned
resignation would result in the termination of his employment, in view
of said section, petitioner wrote to the Union, on August 31, 1961, a
letter withdrawing or revoking his resignation
-On September 8, 1961, the Union told the Company that petitioner's
membership could not be reinstated and insisted on his separation
from the service, conformably with the stipulation above-quoted.
-On September 20, 1961, the Union reiterated its request for
implementation of said section 3, for which reason, on September
22, 1961, the Company notified petitioner that, in view of said letter
and the aforementioned section, he had to be terminated
-Petitioner sought help from the Union’s national president, but to no
avail
-On October 11, 1961, petitioner notified the PAFLU that he was
appealing to its supreme authority, the PAFLU National Convention
and requested that action on his case be deferred until such time as
the Convention shall have acted on his appeal. A letter of the same
date and tenor was sent, also, by the petitioner to the Union.
Furthermore, he asked the Company to maintain the status quo, in
the meantime. This notwithstanding, at the close of the business
hours, on October 15, 1961, petitioner was discharged from the
employment of the Company
-Petitioner filed with the CIR a complaint for unfair labor practice
-CIR found for petitioner but reversed itself upon MFR
ISSUE
WON petitioner was dismissed due to an unfair labor practice on the
part of the Union
HELD
Yes.
Although, generally, a state may not compel ordinary voluntary
associations to admit thereto any given individual, because
membership therein may be accorded or withheld as a matter of
privilege, the rule is qualified in respect of labor unions holding a
 Labor Law 2 A2010
monopoly in the supply of labor, either in a given locality, or as regards a
particular employer with which it has a closed-shop agreement.
-The reason is that the closed shop and the union shop cause the
admission requirements of trade union to become affected with the public
interest. Likewise, a closed shop, a union shop, or maintenance of
membership clauses cause the administration of discipline by unions to
be affected with the public interest.
-Consequently, it is well settled that such unions are not entitled to
arbitrarily exclude qualified applicants for membership, and a closed-shop
provision would not justify the employer in discharging, or a union in
insisting upon the discharge of, an employee whom the union thus
refuses to admit to membership, without any reasonable ground therefor.
Needless to say, if said unions may be compelled to admit new members,
who have the requisite qualifications, with more reason may the law and
the courts exercise the coercive power when the employee involved is a
long standing union member, who, owing to provocations of union
officers, was impelled to tender his resignation, which he forthwith
withdrew or revoked. Surely, he may, at least, invoke the rights of those
who seek admission for the first time, and can not arbitrarily he denied
readmission.
-Having been denied readmission into the Union and having been
dismissed from the service owing to an unfair labor practice on the part of
the Union, petitioner is entitled to reinstatement as member of the Union
and to his former or substantially equivalent position in the Company,
without prejudice to his seniority and/or rights and privileges, and with
back pay, which back pay shall be borne exclusively by the Union.
Disposition
The appealed resolution of the CIR is reversed
B. Retention of Membership
C. Discipline
VILLAR V INCIONG
121 SCRA 44
GUERRERO; April 20, 1983
NATURE
Petition for review by certiorari
FACTS
- Petitioners were members of the Amigo Employees Union-PAFLU, a
duly registered labor organization which was the existing bargaining agent
of the employees in private respondent Amigo Manufacturing, Inc. They
then signed a joint resolution which stated that they were disaffiliating
themselves as members of the PAFLU, and were not further authorizing
PAFLU to represent them in any CBA.
- During a special meeting of the Union, a Resolution was approved which
called for the investigation of all the petitioners for "continuously
maligning, libelling and slandering not only the incumbent officers but
even the union itself and the federation" and for causing divisiveness.
- The union security clause was reincorporated in the new CBA: “any
members who shall resign, be expelled, or shall in any manner cease
to be a member of the UNION, shall be dismissed from his
employment upon written request of the UNION to the Company.”
- Petitioners contend that their acts do not constitute disloyalty as these
are in the exercise of their constitutional right to self-organization.
- The PAFLU President then rendered a decision finding them guilty of the
charges and expelling them from the Union and as a consequence the
Management of the employer is hereby requested to terminate them from
their employment in conformity with the security clause.
ISSUE/S
1. WON PAFLU had the authority to investigate the petitioners and,
thereafter, expel them from the roll of membership of the Amigo
Employees Union-PAFLU
2. WON the petitioners were entitled to disaffiliate from the Union
HELD
1.YES
Ratio That PAFLU had the authority to investigate petitioners on the
charges filed by their co-employees in the local union and after finding
them guilty as charged, to expel them from the roll of membership of the
- 64 - Disini
Amigo Employees Union-PAFLU is clear under the constitution of the
PAFLU to which the local union was affiliated. And pursuant to the
security clause of the new CBA, reiterating the same clause in the
old CBA, PAFLU was justified in applying said security clause.
UNION-MEMBER RELATIONS: Discipline Issues
Inherent in every labor union, or any organization for that matter, is
the right of self-preservation. When members of a labor union,
therefore, sow the seeds of dissension and strife within the union;
when they seek the disintegration and destruction of the very union
to which they belong, they thereby forfeit their rights to remain as
members of the union which they seek to destroy. Prudence and
equity, as well as the dictates of law and justice, therefore,
compelling mandate the adoption by the labor union of such
corrective and remedial measures in keeping with its laws and
regulations, for its preservation and continued existence; lest by its
folly and inaction, the labor union crumble and fall.
2. YES
Ratio Although they are entitled to disaffiliate from their union and
form a new organization of their own, they must, however, suffer the
consequences of their separation from the union under the security
clause of the CBA.
Reasoning Disaffiliation from a labor union is not open to legal
objection. It is implicit in the freedom of association ordained by the
Constitution. But this Court has laid down the ruling that a closed
shop is a valid form of union security, and such provision in a
collective bargaining agreement is not a restriction of the right of
freedom of association guaranteed by the Constitution.
Local Union Disaffiliation: Rule - Legality act - Disaffiliation
There are two hundred thirty four (234) union members in the Amigo
Employees Union-PAFLU, and only 96 signed the "Sama-Samang
Kapasiyahan." They constituted a small minority for which reason
they could not have successfully disaffiliated the local union from
PAFLU. It can be inferred that the majority wanted the union to
remain an affiliate of PAFLU. The action of the majority must,
therefore, prevail over that of the minority members.
Disposition The Order appealed from affirming the joint decision of
the OIC granting clearance to terminate petitioners as well as
dismissing their complaint with application for preliminary injunction,
is hereby AFFIRMED.
D. Due Process Rules
BUGAY V KAPISANAN NG MGA MANGGAGAWA
SA MRR
4 SCRA 487
BAUTISTA ANGELO, February 23, 1962
NATURE
Appeal from decision of lower court
FACTS
-Bugay was the former auditor of the union. He delivered documents
to the management, as ordered by the union secretary without the
approval of the union, which the management used to charge the
union president with falsification of documents. Charges for disloyalty
and conduct unbecoming a union member were filed against Bugay,
the union held investigations even without Bugay’s presence (thus,
no chance to defend himself), and his expulsion was not submitted to
the different chapters of the union as required by its constitution and
by-laws.
-Bugay filed a charge for unfair labor practice against the union
before the CIR which ordered his reinstatement as union member
and restoration of all his rights and privileges. SC affirmed. Bugay
also filed claim for moral damages which the lower court dismissed
based on lack of cause of action.
ISSUES
1. WON Bugay had a cause of action (WON it can be shown that the
 Labor Law 2 A2010
union officers acted in bad faith in expelling him from the union to grant
MD)
2. WON Bugay was afforded due process
HELD
1. YES
Reasoning. The main basis of appellant's action is his claim that because
of the unfair labor practice committed by the officers of defendant union
as found by the Court of Industrial Relations and the Supreme Court he
has suffered moral damages because of the mental anguish, anxiety,
social humiliation and besmirched reputation he has been subjected
among the thousands of employees of the Manila Railroad Company. The
CIR and the SC have found that his expulsion was illegal because of the
irregularities committed in his investigation.
2. NO
Reasoning. In the investigation held and in the board meeting where the
committee’s report recommending Bugay’s expulsion was approved,
Bugay was not present. The committee assigned to summon him failed to
serve notice upon him because he was in Lucena. However, proceedings
still continued anent the absence of Bugay. Also, the union by-laws
provided that majority of the chapters should act on the expulsion within
10days but only 2 did so, therefore, his expulsion was irregular and he is
still a member of the union.
Disposition. WHEREFORE, the order appealed from is set aside. The
case is remanded to the lower court for further proceedings, With costs
against defendant.
E. Election Officers
1. Voters List
TANCINCO V CALLEJA
157 SCRA 203
UST FACULTY UNION V BITONIO
318 SCRA 185
PANGANIBAN; November 16, 1999
NATURE
Special civil action in the Supreme Court. Certiorari.
FACTS
- Union announced a general assembly to elect next union officers.
- TRO was issued by med-arbiter enjoining them from conducting
election.
- UST held a general faculty assembly, attended by both union
members and non-members. Here, appellants were elected as new union
officers by acclamation and clapping of hands.
- Appellees filed instant petition to seek injunctive relief and to nullify
results of election.
- Bitonio upheld med-arbiter and said election was void. He rejected
contention that it was a legitimate exercise of right to self organization
ISSUE/S
Admission and discipline of members (p10 of outline)
HELD
Ratio The union’s constitution and by-laws embody a
covenant between a union and its members and
constitute the fundamental law governing the members’
rights and obligations.
Reasoning The election was tainted by irregularities. The
general faculty assembly was not the proper forum for the
election. Also, the grievances of the petitioners could have been
- 65 - Disini
brought up and resolved in accordance with the procedure
laid down by the union’s CBL and by the Labor Code.
2. Disqualification
Candidate
MANALAD V TRAJANO
174 SCRA 322
Regalado, J.: June 28, 1989
FACTS
-Petitioners were disqualified from running in the election of officers
in their union; the order was set aside on appeal by Trajano, Director
of the Bureau of Labor Relations (BLR). Petitioners won over private
respondents; the latter filed a petition assailing the decision on
appeal. -The Court promulgated a resolution: (1) to dismiss the
petition (2) vacate all offices, including acting president private
respondent Babula and turn over union management to BLR (3)
order the holding of a special election supervised by the NCR Labor
Office, which private respondents later won.
-A petition was filed asking to hold private respondents in contempt
for failure to turn over management of the union, disqualify them and
invalidate votes cast in their favor, electing those with the 2nd highest
votes, or hold a new election. Meanwhile, the terms of the offices in
question had expired.
ISSUE (disqualification of candidate)
WON private respondent candidates should be disqualified
HELD
NO. As observed by respondent Trajano, the submission that Babula
failed to completely turn over management of the union to the
undersigned is within the competence and authority of the Supreme
Court to pass upon considering that the mandate for such a turn-over
came from the Court. Before the alleged disobedient party may be
cited for contempt, the allegations must be clearly established, which
petitioners failed to do. On the contrary, respondents have
satisfactorily answered the averments thereon.
-In any case, it would be pointless to annul expired terms. Even if the
disqualification is justified, petitioners cannot be declared the winners
simply because they received the second highest number of votes.
Absent overriding considerations to the contrary, the will of the
majority in the latter elections should be respected; where people
have elected a man to office, it must be assumed that they did this
with knowledge of his life and character, and that they disregarded of
forgave his faults or misconduct, if he had been guilty of any.
This case is DISMISSED for being moot and academic
3. Expulsion Remedy
KAPISANAN NG MANGGAGAWANG PINAGYAKAP
(KMP) vs. TRAJANO
134 SCRA 236
RELOVA; Jan 21 1985
NATURE
Petition to review
FACTS
- A petition was filed for the expulsion of the union officers of KMP
on the ground of alleged falsification and misrepresentation.
- Public respondent Director Trajano of the Bureau of Labor
Relations directed the said Union to hold and conduct, pursuant to its
constitution and by-laws and under the supervision of the Bureau of
Labor Relations, a general membership meeting, to vote for or
against the expulsion or suspension of the herein petitioner union
officers.
 Labor Law 2 A2010
ISSUE
WON the proper remedy against erring union officers is not referendum
but union expulsion
HELD
YES.
Ratio The remedy against erring union officers is not referendum but
union expulsion.
Reasoning If herein union officers (also petitioners) were guilty of the
alleged acts imputed against them, said public respondent pursuant to
Article 242 of the New Labor Code and in the light of Our ruling in Duyag
vs. Inciong, should have meted out the appropriate penalty on them, i.e.,
to expel them from the Union, as prayed for, and not call for a referendum
to decide the issue.
However, the alleged falsification and misrepresentation of herein union
officers were not supported by substantial evidence. The fact that they
disbursed the amount of P1,278.00 from Union funds and later on was
disallowed for failure to attach supporting papers thereon did not of itself
constitute falsification and/or misrepresentation. The expenditures
appeared to have been made in good faith and the amount spent for the
purpose mentioned in the report, if concurred in or accepted by the
members, are reasonable.
DISPOSITION
Resolution SET ASIDE and the petition for expulsion of herein union
officers is DISMISSED for having been rendered moot and academic by
the election of herein union officers in the general membership
meeting/election.
4. Election Valid
RODRIGUEZ V DIRECTOR, BUREAU OF LABOR
RELATIONS
165 SCRA 239
NARVASA; August 31, 1988
NATURE
Special civil action of certiorari (consolidated).
FACTS
- The disputes concern the validity of the general elections for union
officers and increase in union dues.
- In PLDT, the fees to submit candidacy drastically increases. although
some still paid the frees, complaints were filed with the Bureau of Labor
Relations for its invalidation as excessive, prohibitive and arbitrary.
- Elections for provinces of Visayas and Mindanao were held on dates
different from those specified by the Legislative Council. The validity of
the elections were challenged on the grounds of lack of due notice and
adequate ground rules.
- Med-Arbiter abdullah heard the cases and rendered judgment denying
petitions to nullify the elections as well as the motion for contempt, but
invalidated the increaseof filing fees for for certificates of candidacies. the
OIC of Labor Relations overturned the judgment. The elections were
nullifies for lack of notice to candidates and voters, failure to disseminate
the election ground rules and disregard of the temporary restraining order
of the Med-Arbiter.
- Due to the proceedings assailing the validity of the elections pending
before the Bureau of Labor Relations, the old officers continued to
exercise the functions of their respective offices. the legislative council
increased the union dues from P21-P50 a month.
- Dir of Labor Relations rendered a decision revering that of the med-
arbiter by ordering te cessation of the collection of the P29 increase aned
return the amounts already collected.
ISSUE/S
1. WON the general elections for union officers is valid
2. WON the increase of the union dues is valid
HELD
1. YES
- 66 - Disini
Reasoning The decision is sustained for failure of the record to
disclose any grave abuse of discretion on the part of the Director in
finding that the elections was tainted with irregularities and therefore
invalid. Undue haste, lack of adequate safeguards to ensure integrity
of the voting and absence of the dates of balloting attended the
elections.
2. NO
Reasoning The resolutiion does not bear the signature of at leasT
2/3 of the members of the council, contrary to the requirements of
the union constitution and by-laws. the resolution increasing union
dues is they're struck down as illegal and void, arbitrary and
oppressive.
Disposition Petition is dimissed.
F. Major Policy Matter
HALILI VS CIR
136 SCRA 112
MAKASIAR; April 30, 1985
NATURE
Motion to cite Atty. Benjamin C. Pineda, Ricardo Capuno and Manila
Bank in contempt
FACTS
136 The original cases involve disputes about the claims for
overtime of more than five hundred bus drivers and
conductors of Halili Transit. The disputes were eventually
settled when the contending parties reached an
Agreement wherein the Union shall withdraw and dismiss
with prejudice the case that they have filed before the CIR
in exchange for some parcel of land and negotiable checks
(P 25,000).
137 The parcel of land was eventually registered in the name
of the Union and the cases filed were disposed.
138 The Union, through Atty. Benjamin C. Pineda,
filed an urgent motion with the Ministry of Labor and
Employment requesting for authority to sell and dispose of
the property. The motion was granted. A prospective
buyer, the Manila Memorial Park Cemetery, inc. expressed
its misgivings on the authority of the Union to sell the
property so Atty. Pineda filed a motion with the Supreme
Court requesting for authority to sell the property.
However, Atty. Pineda, without authority from the
Supreme Court but relying on the earlier authority given
him by the Ministry of Labor, filed another urgent motion
with the latter, praying that the Union be authorized to sell
the lot to the Manila Memorial Park Cemetery, Inc. and to
make arrangements with it such that payment will be
advanced for the real estate taxes inclusive of penalties,
attorney's lien which is equivalent to a thirty-five percent
(35%) of the total purchase price, and home developer's
fee of P69,000.00. Apparently, the prospective purchaser
had decided to withdraw its objection regarding the Union's
authority to sell. So, the sale was finally consummated and
Atty. Pineda got 35% as attorney’s fee.
139 When Atty. Jose C. Espinas (herein movant and
alleged original counsel for the Union) learned of the sale
and apportionment of the proceeds from past Union
president Amado Lopez, he requested Labor Arbiter to
allow him to look into the records of the case. He questions
the legality of the orders which authorized the sale of the
awarded property and the distribution of the proceeds from
such purchase as well as the Attorney’s fee that Atty.
Pineda received.
140 Atty. Espinas claims that he is the original counsel. while
Atty. Pineda replied by saying that he handled the said
case ALONE.
 Labor Law 2 A2010
ISSUE:
1. WON Atty. Pineda should be held in contempt of court.
HELD:
YES
When Atty. Pineda appeared for the Union in these cases, he
was still an associate of the law firm of Atty. Espinas. Yet, his
appearance carried the firm name “B.C. Pineda and Associates," giving
the impression that he was the principal lawyer in these cases when in
truth, he was merely an associate to the Espinas firm. When he left the
law firm for a year, Atty. Pineda continued handling the case with the
arrangement that he would report the developments to the Espinas firm.
When Atty. Pineda rejoined the Espinas firm in 1968, he did not reveal to
his partners (he was made the most senior partner) that he had a
retainer's contract with the union. Only the officers of the Union knew of
the contract. Atty. Pineda joined the law firm of Atty. Espinas in 1965
when these cases were pending resolution. He always held office in the
firm's place at Puyat Building, Escolta until 1974, except in 1966 to 1967
when he transferred to the Lakas ng Manggagawa Offices. During this
one-year stint at the latter office, When he rejoined the law firm in 1968,
he continued working on these cases and using the Puyat Building office
as his address in the pleadings. entered into on January 1, 1967 which
allegedly took effect in 1966. He stayed with the law firm until 1974 and
still did not divulge the 1967 retainer's contract. The alleged retainer's
contract between Atty. Pineda and the Union appears anomalous and
even illegal as well as unethical considering that- the contract was
executed only between Atty. Pineda and the officers of the Union chosen
by about 125 members only. It was not a contract with the general
membership, only 14% of the total membership of 897 was represented.
Thus, without notice to the other lawyers and parties, Atty. Pineda
commenced the proceeds before the NLRC with the filing of a motion and
manifestation wherein he asked for authority to sell the property.
Atty. Pineda made the Union officers believe that he would be
the one to pay the fees of Attys. Espinas and Lopez for which reason, the
35% increased fees was approved by the Union's board in good faith. The
Union likewise confirms that Atty. Pineda came into the picture only when
he was assigned by Atty. Espinas in, 1965 to execute the CIR decision
which, thru Atty. Espinas handling, was upheld by this Court in L-24864 in
1968. The Union officers were aware that Atty. Espinas was the principal
counsel even after Atty. Pineda's assignment. They also knew of the
original contract for 20% attorney's fees which was increased to 35% by
Atty. Pineda upon the arrangement that with the increase, he would
answer for the payment of Attys. Espinas and Lopez' fees and for
necessary representation expenses. Thus, based on these malicious
actions and fraudulent misrepresentations, Atty. Pineda must be held
liable.
Dispositive
WHEREFORE, ATTY. BENJAMIN PINEDA IS HEREBY FOUND GUILTY
OF INDIRECT CONTEMPT OF COURT FOR WHICH HE IS HEREBY
SENTENCED TO IMPRISONMENT IN THE MANILA CITY JAIL UNTIL
THE ORDERS OF THIS COURT DATED SEPTEMBER 1 AND
SEPTEMBER 13, 1983 ARE COMPLIED WITH.
ATTY. BENJAMIN PINEDA IS ALSO DIRECTED TO SHOW CAUSE
WHY HE SHOULD NOT BE DISBARRED UNDER RULE 138 OF THE
REVISED RULES OF COURT.
G. Union Funds
1. Source-Payment-Attys
Fees
PACIFIC BANKING CORP. V CLAVE
128 SCRA 112
AQUINO; March 7, 1984
NATURE
Petition for Certiorari
- 67 - Disini
FACTS
- There had been negotiations between the Pacific Banking
Corporation and the Pacific Banking Corporation Employees
Organization (PABECO) for a CBA for 1979 to 1981. Because of a
deadlock, the Minister of Labor assumed jurisdiction over the
controversy and rendered a decision directing the parties to execute
a CBA in accordance with the terms and conditions set forth in his
decision.
- The union was represented in the negotiations by its president
Paug, allegedly assisted as consultant by Umali, Jr., the president of
the National Union of Bank Employees (NUBE) with which it was
formerly affiliated. Lawyer Saavedra's earliest recorded participation
in the case was on July 15 and 27, 1979 when he filed a motion for
reconsideration and a supplemental motion. No action was taken on
said motions.
- The parties appealed to the Office of the President. The CBA
negotiations were resumed. The union president took part in the
second phase of the negotiations. Saavedra filed a memorandum.
The Office of the President issueddirected the parties to execute a
CBA containing the terms and conditions of employment embodied in
the resolution.
- Even before the formalization of the CBA, Saavedra filed in the
case his notice of attorney 's lien.
- The union officials requested the bank to withhold around P345,000
out of the total benefits as ten percent attorney's fees of Saavedra.
At first, the bank interposed no objection to the request in the interest
of harmonious labor-management relations.
- For nearly a year, the Office of the President in four resolutions
wrestled with the propriety of Saavedra's ten percent attorney's fees.
ISSUES
WON the deduction from the monetary benefits awarded in a
collective bargaining agreement the attorney's fees of the lawyer who
assisted the union president in negotiating the agreement is legal.
RULING
- NO. The case is covered squarely by the mandatory and explicit
prescription of article 222 which is another guarantee intended to
protect the employee against unwarranted practices that would
diminish his compensation without his knowledge and consent.
- "ART. 242. Rights and conditions of membership in a labor
organization. - The following are the rights and conditions of
membership in a labor organization:
"(n) No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless authorized
by a written resolution of a majority of all the members at a general
membership meeting duly called for the purpose. The secretary of
the organization shall record the minutes of the meeting including the
list of all members present, the votes cast, the purpose of the special
assessment or fees and the recipient of such assessment or fees.
The record shall be attested to by the president;.
"(o) Other than for mandatory activities under the Code, no special
assessment, attorney's fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due an
employee without an individual written authorization duly signed by
the employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction
- Saavedra is entitled to the payment of his fees but article 222
ordains that union funds should be used for that purpose. The
amount of P345,000 does not constitute union funds. It is money of
the employees. The union, not the employees, is obligated to
Saavedra.
Disposition
WHEREFORE, the petition is granted. The resolutions dated August
12 and December 15, 1980 and April 13, 1981 are reversed and set
aside. The questioned amount of about P345,000, with its
increments, if any, should be paid by the bank directly to its
employees.
2. Examination Books
 Labor Law 2 A2010
DUYAG V INCIONG
98 SCRA 522
Aquino, J.; July 5, 1980
NATURE
Appeal from the decision of the Director of Labor Relation
FACTS
- This case is about the removal of private respondents as union officers
due to alleged irregularities and anomalies in the administration of the
affairs of the union.
- The Medarbiter ordered the expulsion of the union officers for
violations of the constitution of the Union and the refund of the dues
illegally exacted from union members. The Director of Labor
Relations, however, reversed the ruling of the medarbiter in so far
as the expulsion is concerned taking the position that it is only the
membership of the Union which can removed its officers and
claiming that the issue is a political question.
ISSUE/S
WON the dismissal of the labor union officers is valid
HELD
Yes.
Ratio: The Director of Labor Relations erred in holding that, as a matter of
policy, the tenure of union officers, being a "political question" is,
generally, a matter outside his Bureau's jurisdiction and should be passed
upon by the union members themselves.
After hearing and even without submitting the matter to the union
members, erring union officials may be removed by the Director of Labor
Relations as clearly provided in article 242. That paragraph provides that
any violation of the rights and conditions of union membership, as
enumerated in paragraphs (a) to (p) of Article 242, "shall be a ground for
cancellation of union registration or expulsion of officer from office,
whichever is appropriate. At least thirty percent (30%) of all the members
of a union or any member or members specially concerned may report
such violation to the Bureau (of Labor Relations). The Bureau shall have
the power to hear and decide any reported violation to mete the
appropriate penalty".
Reasoning: The labor officials should not hesitate to enforce strictly the
law and regulations governing trade unions even if that course of action
would curtail the so-called union autonomy and freedom from government
interference.
For the protection of union members and in order that the affairs of the
union may be administered honestly, labor officials should be vigilant and
watchful in monitoring and checking the administration of union affairs.
Laxity, permissiveness, neglect and apathy in supervising and regulating
the activities of union officials would result in corruption and oppression.
Internal safeguards within the union can easily be ignored or swept aside
by abusive, arrogant and unscrupulous union officials to the prejudice of
the members.
It is necessary and desirable that the Bureau of Labor Relations and the
Ministry of Labor should exercise close and constant supervision over
labor unions, particularly the handling of their funds, so as to forestall
abuses and venalities.
Disposition: WHEREFORE, (1) that portion of the decision of the med-
arbiter, removing respondents Manalad, Leano and Puerto as union
officers, is affirmed. (Respondent Amparo is no longer an officer of the
union.)
3. Union Dues
RODRIGUEZ V DIRECTOR, BUREAU OF LABOR
RELATIONS
165 SCRA 239
NARVASA; August 31, 1988
NATURE
Special civil action of certiorari (consolidated).
- 68 - Disini
FACTS
- The disputes concern the validity of the general elections
for union officers and increase in union dues.
- In PLDT, the fees to submit candidacy drastically
increases. although some still paid the frees, complaints
were filed with the Bureau of Labor Relations for its
invalidation as excessive, prohibitive and arbitrary.
- Elections for provinces of Visayas and Mindanao were held
on dates different from those specified by the Legislative
Council. The validity of the elections were challenged on the
grounds of lack of due notice and adequate ground rules.
- Med-Arbiter abdullah heard the cases and rendered
judgment denying petitions to nullify the elections as well as
the motion for contempt, but invalidated the increaseof
filing fees for for certificates of candidacies. the OIC of Labor
Relations overturned the judgment. The elections were
nullifies for lack of notice to candidates and voters, failure to
disseminate the election ground rules and disregard of the
temporary restraining order of the Med-Arbiter.
- Due to the proceedings assailing the validity of the
elections pending before the Bureau of Labor Relations, the
old officers continued to exercise the functions of their
respective offices. the legislative council increased the union
dues from P21-P50 a month.
- Dir of Labor Relations rendered a decision revering that of
the med-arbiter by ordering te cessation of the collection of
the P29 increase aned return the amounts already collected.
ISSUE/S
1. WON the general elections for union officers is valid
2. WON the increase of the union dues is valid
HELD
1. YES
Reasoning The decision is sustained for failure of the
record to disclose any grave abuse of discretion on the part
of the Director in finding that the elections was tainted with
irregularities and therefore invalid. Undue haste, lack of
adequate safeguards to ensure integrity of the voting and
absence of the dates of balloting attended the elections.
2. NO
Reasoning The resolutiion does not bear the signature of at
leasT 2/3 of the members of the council, contrary to the
requirements of the union constitution and by-laws. the
resolution increasing union dues is they're struck down as
illegal and void, arbitrary and oppressive.
Disposition Petition is dimissed.
H. Source—Payment—
Special Assessment
PALACOLV FERRER-CALLEJA
182 SCRA 710
GANCAYCO; February 26, 1990
FACTS
- October 12, 1987 > The president of Manila CCBPI Sales Force
Union as the collective bargaining agent of all regular salesmen,
regular helpers, and relief helpers of the Manila Plant and Metro
Manila Sales Office of Coca-Cola Bottlers (Philippines), Inc.
submitted to the Company the ratification by the union members of
the new CBA and authorization for the Company to deduct union
dues equivalent to P10.00 every payday or P20.00 every month and,
in addition, 10% by way of special assessment, from the CBA lump-
sum pay granted to the union members for putting up a cooperative
and credit union; purchase vehicles and other items needed for the
benefit of the officers and the general membership; and for the
payment for services rendered by union officers, consultants and
 Labor Law 2 A2010
others with an additional proviso stating that the "matter of allocation ...
shall be at the discretion of our incumbent Union President."
- This "Authorization and CBA Ratification" was obtained by the Union
through a secret referendum held in separate local membership meetings
on various dates. The total membership of the Union was about 800. Of
this number, 672 members originally authorized the 10% special
assessment, while 173 opposed the same.
- Subsequently however, one hundred seventy (170) members of the
Union submitted documents to the Company stating that although they
have ratified the new CBA, they are withdrawing or disauthorizing the
deduction of any amount from their CBA lump sum. Later, 185 other union
members submitted similar documents expressing the same intent. These
members, numbering 355 in all (170 + 185), added to the original
oppositors of 173, turned the tide in favor of disauthorization for the
special assessment, with a total of 528 objectors and a remainder of 272
supporters.
- Petitioners assailed the 10% special assessment as a violation of Article
241(o) in relation to Article 222(b) of the Labor Code. Article 222(b)
provides as follows:
ART. 222. Appearances and Fees.
(b) No attorney's fees, negotiation fees or similar charges of any kind
arising from any collective bargaining negotiations or conclusion of the
collective agreement shall be imposed on any individual member of the
contracting union; Provided, however, that attorney's fees may be
charged against union funds in an amount to be agreed upon by the
parties. Any contract, agreement or arrangement of any sort to the
contrary shall be null and void.
On the other hand, Article 241(o) mandates that:
ART. 241. Rights and conditions of membership in a labor
organization.
xxx xxx xxx
(o) Other than for mandatory activities under the Code, no special
assessments, attorney's fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due to an
employee without an individual written authorization duly signed by the
employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction
ISSUE
WON a special assessment can be validly deducted by a labor union from
the lump-sum pay of its members, granted under a collective bargaining
agreement (CBA), notwithstanding a subsequent disauthorization of the
same by a majority of the union members
HELD
NO
Doctine N o check-offs from any amount due employees may be effected
without individual written authorizations duly signed by the employees
specifically stating the amount, purpose, and beneficiary of the deduction
(Galvadores v. Trajano). This is in accord with the constitutional principle
of the State affording full protection to labor.
- the failure of the Union to comply strictly with the requirements set out by
the law invalidates the questioned special assessment. Substantial
compliance is not enough in view of the fact that the special assessment
will diminish the compensation of the union members. Their express
consent is required, and this consent must be obtained in accordance with
the steps outlined by law, which must be followed to the letter. No
shortcuts are allowed.
Disposition Petition is hereby GRANTED. Coca-Cola Bottlers
(Philippines), Inc. is hereby ordered to immediately remit the amount of
P1,267,863.39 to the respective union members from whom the said
amount was withheld.
GABRIEL V SECRETARY OF LABOR
328 SCRA 247
QUISUMBING; March 16, 2000
NATURE
Special civil action of certiorari
FACTS
- Petitioners comprise the Executive Board of the Solidbank Union, while
- 69 - Disini
the Private Respondents are the members of the union.
- the union decided to retain the services of an atty Lacsina as union
counsel in connection with the negotiations for a new CBA. Thus, the
board called a general membership meeting for this purpose,
whereby majority of all union members approved and signed a
resolution confirming the decision to engage the services of the atty.
- the resolution provided that 10% of the total economic benefits that
may be secured through the nego will be given to the Atty Lacsina as
atty’s fees. It also contained an authorization for Solidbank Corp to
check-off the atty’s fees from the payment of benefits to the EEs and
turn over the amount to the atty. The bank then complied with the
check-off
- private respondents then filed a complaint against the board for
illegal deduction of atty’s fees. The arbiter ordered the board to
refund the complainants for the illegally deducted anount. The order
was appealed to the Sec. of labor, who in turn ordered that the
refund be limited to those union members who have not signified
their conformity to the check-off. In an MFR, the secretary affirmed
and modified that the reimbursement should be charged to the
union’s general fund. Thus, this petition.
ISSUE
1. WON the check-off was validly made
HELD
1. NO
Ratio The Art.24(o) provides: Other than for mandatory activities
under the Code, no special assessment, attorney's fees, negotiation
fees or any other extraordinary fees may be checked off from any
amount due to an employee without an individual written
authorization duly signed by the employee. The authorization should
specifically state the amount, purpose and beneficiary of the
deduction.
The check-off, made without valid individual authorizations, cannot
be held valid. No deduction can be made from the salaries of the
concerned employees other than those mandated by law.
Reasoning Art.241 has 3 requisites for the validity of special
assessment for the union’s incidental expenses, atty’s fees, and
representation expenses: (1) authorization by a written resolution of
the majority of all members at the general membership meeting
called for the purpose; (2) secretary's record of the minutes of the
meeting; and (3) individual written authorization for check off duly
signed by the EEs concerned.
- The General Membership Resolution of the SolidBank Union didn’t
satisfy requirements laid down by law and jurisprudence. There were
no individual written check off authorizations by the EEs concerned
and so the assessment cannot be legally deducted by the ER.
- Palacol v Ferrer-Calleja: express consent of EEs is required, and
this consent must be obtained in accordance with the steps outlined
by law, which must be followed to the letter. No shortcuts are
allowed.
- BPIEU-ALU vs. NLRC: Art.222(b) prohibits payment of atty's fees
only when it is effected through forced contributions from workers
from their own funds as distinguished from the union funds. The
purpose is to prevent imposition on the workers of the duty to
individually contribute their respective shares in the fee to be paid the
atty for his services on behalf of the union in its negotiations with
mgt. The obligation to pay the atty’s fees belongs to the union and
cannot be shunted to the workers as their direct responsibility.
Neither the lawyer nor the union itself may require the individual
worker to assume the obligation to pay atty’s fees from their own
pockets. So categorical is this intent that the law makes it clear that
any agreement to the contrary shall be null and void ab initio
Disposition Petition is denied.
ABS - CBN SUPERVISORS EMPLOYEE UNION
MEMBERS V. ABS - CBN BROADCASTING CORP.
304 SCRA 489
PURISIMA; March 11, 1999
 Labor Law 2 A2010
NATURE:Special civil action for Certiorari
ABS-CBN Supervisors Emloyees Union and ABS-CBN Broadcasting
Corporation signed and a Collective Bargaining Agreement providing for a
10% special assessment for union incidental expenses, attorneys fees
and representation expenses.
ISSUE:
WON the provisions for the check off regarding the 10% special
assessment for union incidental expenses, attorneys fees and
representation expenses are valid.
HELD: Yes
Article 241 provides for three (3) requisites for the validity of
the special assessment for Union's incidental expenses, attorney's fees
and representation expenses namely:
1) authorization by a written resolution of the majority of all the members
at the general membership meeting duly called for the purpose;
2) secretary's record of the minutes of the meeting; and
3) individual written authorization for check-off duly signed by the
employee concerned.
After a thorough review of the records on hand, we find that the
three (3) requisites for the validity of the ten percent (10%) special
assessment for Union's incidental expenses, attorney's fees and
representation expenses were met.
It can be gleaned that on July 14, 1989, the ABS-CBN
Supervisors Employee Union held its general meeting, whereat it was
agreed that a ten percent (10%) special assessment from the total
economic package due to every member would be checked-off to cover
expenses for negotiation, other miscellaneous expenses and attorney's
fees. The minutes of the said meeting were recorded by the Union's
Secretary and noted by its President.
On May 24, 1991, said Union held its General Membership
Meeting, wherein majority of the members agreed that "in as much as the
Union had already paid Atty. P. Pascual the amount of P500,000.00, the
same must be shared by all the members until this is fully liquidated."
Eighty-five (85) members of the same Union executed individual written
authorizations for check-off. There is then, the presumption that such
check-off authorizations were executed voluntarily by the signatories
thereto.
Petitioners further contend that Article 241 (n) of the Labor
Code, as amended, on special assessments, contemplates a general
meeting after the conclusion of the collective bargaining agreement.
Subject Article does not state that the general membership meeting
should be called after the conclusion of a collective bargaining agreement.
In BPIEU-ALU, the petitioners, impugned the Order of the
NLRC, holding that the validity of the five percent (5%) special
assessment for attorney's fees is contrary to Article 222, paragraph (b) of
the Labor Code, as amended. The court ratiocinated, thus:
"The Court reads the aforecited provision as prohibiting the payment of
attorney's fees only when it is effected through forced contributions from
the workers from their own funds a distinguished from the union funds.
The purpose of the provision is to prevent imposition on the workers of
the duty to individually contribute their respective shares in the fee to be
paid the attorney for his services on behalf of the union in its negotiations
with the management. xxx"
However, the public respondent overlooked the fact that in the
said case, the deduction of the stipulated five percent (5%) of the total
economic benefits under the new collective bargaining agreement was
applied only to workers who gave their individual signed authorizations.
The Court explained:
"xxx And significantly, the authorized deduction affected only the workers
who adopted and signed the resolution and who were the only ones from
whose benefits the deductions were made by BPI. No similar deductions
were taken from the other workers who did not sign the resolution and so
were not bound by it."
The inapplicability of Palacol lies in the fact that it has a different factual
milieu from the present case. In Palacol, the check-off authorization was
declared invalid because majority of the Union members had withdrawn
their individual authorizations.
In this case, the majority of the Union members gave their individual
written check-off authorizations for the ten percent (10%) special
- 70 - Disini
assessment. And they have never withdraw their individual written
authorizations for check-off.
Premises studiedly considered, we are of the irresistable conclusion
and, so find, that the ruling in BPIEU-ALU vs. NLRC that
1) the prohibition against attorney's fees in Article 222, paragraph (b)
of the Labor Code applies only when the payment of attorney's fees
is effected through forced contributions from the workers; and
2) that no deductions must be taken from the workers who did not
sign the check-off authorization, applies to the case under
consideration.
I. Mandatory Activity
Definition
AMBROCIO VENGCO ET. AL vs. DIR. CRESENCIO
B. TRAJANO
170 SCRA 155 (1989)
MEDIALDEA, J.:
NATURE Petition for certiorari
FACTS
-Sometime in the latter part of 1981, the Management of the Anglo-
American Tobacco Corporation and the Kapisanan ng Manggagawa
sa Anglo-American Tobacco Corporation. (FOI-TAF) entered into a
compromise agreement whereby the company will pay to the union
members the sum of P150,000.00 for their claims arising from the
unpaid emergency cost of living allowance (ECOLA) and other
benefits which were the subject of their compliant before the Ministry
of Labor.
-Respondent Emmanuel Timbungco (Timbungco, for short) who is
the union president received the money which was paid in
installments. Thereafter, he distributed the amount among the union
members. Petitioners Ambrocio Vengco, Ramon Moises, Rafael
Wagas and 80 others (Vengco, et al., for short) who are union
members noted that Timbungco was not authorized by the union
workers to get the money; and that ten percent (10%) of the
P150,000.00 had been deducted to pay for attorney's fees without
their written authorization in violation of Article 242(o) of the Labor
Code.
-Vengco et al. demanded from Timbungco an accounting of how the
P150,000.00 was distributed to the members. Timbungco did not
give in to their demand. Thus Vengco, et al. filed a complaint with the
Ministry of Labor.
ISSUE
Whether or not Timbungco is guilty of illegally deducting 10%
attorneys' fees from petitioners' backwages
HELD YES.
RATIO
-Other than for mandatory activities under the
Code, no special assessment, attorney's fees,
negotiation fees or any other extraordinary fees
may be checked off from any amount due an
employee without an individual written
authorization duly signed by an employee. The
authorization should specifically state the amount,
purpose and beneficiary of the deduction. (Article
241, LC)
-A mandatory activity has been defined as a judicial process of
settling dispute laid down by the law. In the instant case, the
amicable settlement entered into by the management and the union
 Labor Law 2 A2010
CAN NOT BE CONSIDERED AS A MANDATORY ACTIVITY UNDER
THE CODE.
REASONING
-The law is explicit. IT REQUIRES THE INDIVIDUAL
WRITTEN AUTHORIZATION OF EACH EMPLOYEE
CONCERNED, TO MAKE THE DEDUCTION OF
ATTORNEY'S FEES VALID.
-Moreover, Book III, Rule VIII, Section II of the Implementing Rules cited
by Timbungco which dispenses with the required written authorization
from the employees concerned does not apply in this case. This provision
envisions a situation where there is a judicial or administrative
proceedings for recovery of wages. Upon termination of the proceedings,
the law allows a deduction for attorney's fees of 10% from the total
amount due to a winning party. In the herein case, the fringe benefits
received by the union members consist of back payments of their unpaid
emergency cost of living allowances which are totally distinct from their
wages. Allowances are benefits over and above the basic salaries of the
employees We have held that such allowances are excluded from the
concept of salaries or wages. In addition, the payment of the fringe
benefits were effected through an amicable settlement and not in an
administrative proceeding.
DISPOSITIVE: ACCORDINGLY, the petition is granted.
CBA Negotiation
GALVADORES V TRAJANO
144 SCRA 138
(not yet available)
J. Union Information
Union Officer-Obligation
CONTINENTAL CEMENT CORP. LABOR UNION V
CONTINENTAL CEMENT
189 SCRA 134
Company was engaged in the manufacture of cement which is a vital
industry in which a strike or lockout is prohibited. The union members
engaged in a lock-out and strike. Even assuming not engaged in a vital
industry, the strike was illegal. It was not in connection with any
unresolved economic issue in collective bargaining which is the only
ground for which a lawful strike can be held as found in Section 7 of the
Rules and Regulations implementing PD 823. The issue concerned
merely the implementation of an arbitration award of the NLRC. Union
had a remedy by applying for a writ of execution to enforce that award.
The strikers did violate the nostrike policy. They repeatedly defied the
orders of the Director of Labor Relations. Officers had the duty to guide
their members to respect the law. Instead, they urged them to violate the
law and defy the duly constituted authorities. Their responsibility is greater
than that of the members. Their (the officers) dismissal from the service is
a just penalty. It is within the power of the NLRC to order the removal of
the officers.
In Art. 242, it shall be the duty of any labor organization and its officers to
inform its members on provisions of the constitution and by-laws,
collective bargaining agreement, the prevailing labor relations system and
all their rights and obligations under existing labor laws. Any violation of
the above rights and conditions shall be a ground for cancellation of union
registration or expulsion of an officer from office. The officers misinformed
the members and led them into staging an illegal strike.
K. Enforcement and
Remedies-Procedure and
Sanctions
- 71 - Disini
Jurisdiction-Exhaustion
Internal Remedies
Requirements:
VILLAR V INCIONG
121 SCRA 44
GUERRERO; April 20, 1983
NATURE
Petition for review by certiorari
FACTS
- Petitioners were members of the Amigo Employees Union-
PAFLU, a duly registered labor organization which was the existing
bargaining agent of the employees in private respondent Amigo
Manufacturing, Inc. They then signed a joint resolution which stated
that they were disaffiliating themselves as members of the PAFLU,
and were not further authorizing PAFLU to represent them in any
CBA.
- During a special meeting of the Union, a Resolution was approved
which
called for the investigation of all the petitioners for "continuously
maligning, libelling and slandering not only the incumbent officers but
even the union itself and the federation" and for causing
divisiveness.
- The union security clause was reincorporated in the new CBA:
“any members who shall resign, be expelled, or shall in any
manner cease to be a member of the UNION, shall be dismissed
from his employment upon written request of the UNION to the
Company.”
- Petitioners contend that their acts do not constitute disloyalty as
these are in the exercise of their constitutional right to self-
organization.
- The PAFLU President then rendered a decision finding them guilty
of the charges and expelling them from the Union and as a
consequence the Management of the employer is hereby requested
to terminate them from their employment in conformity with the
security clause.
ISSUE/S
1. WON PAFLU had the authority to investigate the petitioners and,
thereafter, expel them from the roll of membership of the Amigo
Employees Union-PAFLU
2. WON the petitioners were entitled to disaffiliate from the Union
HELD
1.YES
Ratio That PAFLU had the authority to investigate petitioners on the
charges filed by their co-employees in the local union and after
finding them guilty as charged, to expel them from the roll of
membership of the Amigo Employees Union-PAFLU is clear under
the constitution of the PAFLU to which the local union was affiliated.
And pursuant to the security clause of the new CBA, reiterating the
same clause in the old CBA, PAFLU was justified in applying said
security clause.
UNION-MEMBER RELATIONS: Discipline Issues
Inherent in every labor union, or any organization for that matter, is
the right of self-preservation. When members of a labor union,
therefore, sow the seeds of dissension and strife within the union;
when they seek the disintegration and destruction of the very union
to which they belong, they thereby forfeit their rights to remain as
members of the union which they seek to destroy. Prudence and
equity, as well as the dictates of law and justice, therefore,
compelling mandate the adoption by the labor union of such
corrective and remedial measures in keeping with its laws and
regulations, for its preservation and continued existence; lest by its
folly and inaction, the labor union crumble and fall.
2. YES
Ratio Although they are entitled to disaffiliate from their union and
 Labor Law 2 A2010
form a new organization of their own, they must, however, suffer the
consequences of their separation from the union under the security clause
of the CBA.
Reasoning Disaffiliation from a labor union is not open to legal objection.
It is implicit in the freedom of association ordained by the Constitution. But
this Court has laid down the ruling that a closed shop is a valid form of
union security, and such provision in a collective bargaining agreement is
not a restriction of the right of freedom of association guaranteed by the
Constitution.
Local Union Disaffiliation: Rule - Legality act - Disaffiliation
There are two hundred thirty four (234) union members in the Amigo
Employees Union-PAFLU, and only 96 signed the "Sama-Samang
Kapasiyahan." They constituted a small minority for which reason they
could not have successfully disaffiliated the local union from PAFLU. It
can be inferred that the majority wanted the union to remain an affiliate of
PAFLU. The action of the majority must, therefore, prevail over that of the
minority members.
Disposition The Order appealed from affirming the joint decision of the
OIC granting clearance to terminate petitioners as well as dismissing their
complaint with application for preliminary injunction, is hereby AFFIRMED.
RODRIGUEZ V DIRECTOR, BUREAU OF LABOR
RELATIONS
265 SCRA 239
NARVASA; August 31, 1988
NATURE
Special civil action of certiorari (consolidated).
FACTS
- The disputes concern the validity of the general elections for union
officers and increase in union dues.
- In PLDT, the fees to submit candidacy drastically increases. although
some still paid the frees, complaints were filed with the Bureau of Labor
Relations for its invalidation as excessive, prohibitive and arbitrary.
- Elections for provinces of Visayas and Mindanao were held on dates
different from those specified by the Legislative Council. The validity of
the elections were challenged on the grounds of lack of due notice and
adequate ground rules.
- Med-Arbiter abdullah heard the cases and rendered judgment denying
petitions to nullify the elections as well as the motion for contempt, but
invalidated the increaseof filing fees for for certificates of candidacies. the
OIC of Labor Relations overturned the judgment. The elections were
nullifies for lack of notice to candidates and voters, failure to disseminate
the election ground rules and disregard of the temporary restraining order
of the Med-Arbiter.
- Due to the proceedings assailing the validity of the elections pending
before the Bureau of Labor Relations, the old officers continued to
exercise the functions of their respective offices. the legislative council
increased the union dues from P21-P50 a month.
- Dir of Labor Relations rendered a decision revering that of the med-
arbiter by ordering te cessation of the collection of the P29 increase aned
return the amounts already collected.
ISSUE/S
1. WON the general elections for union officers is valid
2. WON the increase of the union dues is valid
HELD
1. YES
Reasoning The decision is sustained for failure of the record to disclose
any grave abuse of discretion on the part of the Director in finding that the
elections was tainted with irregularities and therefore invalid. Undue
haste, lack of adequate safeguards to ensure integrity of the voting and
absence of the dates of balloting attended the elections.
2. NO
Reasoning The resolutiion does not bear the signature of at leasT 2/3 of
the members of the council, contrary to the requirements of the union
constitution and by-laws. the resolution increasing union dues is they're
struck down as illegal and void, arbitrary and oppressive.
Disposition Petition is dimissed.
- 72 - Disini
VERCELES VS BLR
451 SCRA 338
CHICO-NAZARIO; Feb. 15, 2005
NATURE
Petition for review on certiorari
FACTS
- Private respondents Rodel E. Dalupan, Efren J. De Ocampo,
Proceso Totto, Jr., Elizabeth Alarca, and Elvira S. Manalo are
members of the University of the East Employees Association
(UEEA).
- They each received a Memorandum from the UEEA charging them
with spreading false rumors and creating disinformation among the
members of the said association. The acts of the respondents
allegedly fall under General Assembly Resolution No. 4, Series of
1979
- they denied the allegations. They stated that any sanction that will
be imposed by the committee would be violative of their right to due
process.
- Ernesto Verceles, in his capacity as president of the association,
through a Memorandum, informed Rodel Dalupan, et al., that their
membership in the association has been suspended and shall take
effect immediately upon receipt thereof. Verceles said he was acting
upon the disciplinary committee’s finding of a prima facie case
against them. Respondent Uy also received a similar memorandum.
- a complaint for illegal suspension, willful and unlawful violation of
UEEA constitution and by-laws, refusal to render financial and other
reports, deliberate refusal to call general and special meetings, illegal
holdover of terms and damages was filed by the respondents against
herein before DOLE-NCR
- a decision was rendered by Regional Director Lim, adverse to
petitioners
- The petitioners appealed to the Bureau of Labor Relations of the
DOLE. During the pendency of this appeal an election of officers was
held by the UEEA. The appeal, however, was dismissed for lack of
merit.
- the petitioners filed a petition for review on certiorari before this
Court.
ISSUES
1. WON the CA committed an error in upholding the DOLE-NCR and
BLR-DOLE decisions based only on the complaint and answer.
2. WON the CA committed an error in holding the election as invalid
and a nullity.
3. WON it was erroneous to uphold the BLR-DOLE’s finding that the
suspension was illegal
4. WON the alleged non-holding of meetings and alleged non-
submission of reports are moot and academic, and whether the
decision to hold meetings and submit reports contradict and override
the sovereign will of the majority.
HELD
1. NO
Ratio The Court of Appeals was justified in upholding the DOLE-
NCR and BLR-DOLE decisions based on the complaint and answer.
The petitioners’ line of reasoning that since no position papers were
submitted, no decision may be made by the adjudicating body
cannot be accepted. As ruled by Regional Director Lim in his
decision, the complaint and the answer thereto were adopted as the
parties’ position papers. Thereafter, the case shall be deemed
submitted for resolution. Labor laws mandate the speedy disposition
of cases, with the least attention to technicalities but without
sacrificing the fundamental requisites of due process. The essence
of due process is simply an opportunity to be heard. In this case, it
cannot be said that there was a denial of due process on the part of
the petitioners because they were given all the chances to refute the
allegations of the private respondents, and the delay in the
proceedings before the DOLE-NCR was clearly attributable to them.
The argument that there was failure to exhaust administrative
remedies cannot be sustained. One of the instances when the rule of
 Labor Law 2 A2010
exhaustion of administrative remedies may be disregarded is when there
is a violation of due process. In this case, the respondents have
chronicled from the very beginning that they were indefinitely suspended
without the benefit of a formal charge sufficient in form and substance.
Therefore, the rule on exhaustion of administrative remedies cannot
squarely apply to them.
2. NO
Ratio The election of UEEA officers cannot acquire a semblance of
legality. First, it was conducted pursuant to the aforesaid (erroneous)
order of the Regional Director as manifested by the petitioners. Second, it
was purposely done to pre-empt the resolution of the case by the BLR
and to deprive private respondents their substantial right to participate in
the election. Third, petitioners cannot be allowed to take an inconsistent
position to later on claim that the election was held because it was already
due while previously declaring that it was made in line with the order of
the Regional Director, for this would go against the principle of fair play.
Thus, while the BLR was wrong in affirming the order of the Regional
Director for the immediate holding of election, it was right in nullifying the
election of officers. It was simply improper for the petitioners to implement
the said order which was then one of the subjects of their appeal in the
BLR. To hold otherwise would be to dispossess the BLR of its inherent
power to control the conduct of the proceedings of cases pending before it
for resolution.
3. NO
Ratio Petitioners have failed to show that the findings of facts and
conclusions of law of both the DOLE-NCR and BLR-DOLE were arrived at
with grave abuse of discretion or without substantial evidence. A careful
review of the pleadings reveals that the decision and resolutions of the
concerned agencies were correctly anchored in law and on substantial
evidence.
4. NO
Ratio The passage of General Assembly Resolution No. 10 and
Resolution No. 8, Series of 2000, which supposedly cured the lapses
committed by the association’s officers and reiterated the approval of the
general membership of the acts and collateral actions of the association’s
officers cannot redeem the petitioners from their predicament. The
obligation to hold meetings and render financial reports is mandated by
UEEA’s constitution and by-laws. Prompt compliance in rendering
financial reports together with the holding of regular meetings with the
submission of the minutes thereon with the BLR-DOLE and DOLE-NCR
shall negate any suspicion of dishonesty on the part of UEEA’s officers.
This is not only true with UEEA, but likewise with other
unions/associations, as this matter is imbued with public interest.
Undeniably, transparency in the official undertakings of union officers will
bolster genuine trade unionism in the country.
DISPOSITION The Decision and Resolution of the CA affirmed.
DIAMONON v DOLE (LAGUESMA)
327 SCRA 282
De Leon; March 7, 2000
NATURE
Petition for certiorari
FACTS
- petitioner Diamonon filed 2 complaints before the DOLE after being
removed from his capacity as vice president of the unions NACUSIP and
PACIWU. In his first complaint, he questioned the validity of his removal
from office and in the second, he accused both the national treasurer and
national president of NACUSIP and PACIWU (private respondents) for
wanton violation of the Constitution and By-Laws of both orgs,
unauthorized and illegal disbursement of union funds and also, abuse of
authority.
- the 1st complaint was decided in his favor, his removal was declared null
and void. The 2nd complaint was dismissed for lack of personality in view
of his removal from the offices he held. Diamonon appealed but public
respondent Laguesma, as undersecretary of DOLE, held that petitioner’s
failure to show, in his complaint, that the administrative remedies provided
for in the constitution and by-laws of both unions have been exhausted or
- 73 - Disini
such remedies are not available, was fatal. With his MFR denied,
Diamonon filed this case.
ISSUE
WON respondent Laguesma acted with grave abuse of discretion in
dismissing the appeal for non-exhaustion of administrative remedies.
HELD
No.
Ratio When the Constitution and By-Laws of Unions dictate the
remedy for internal dispute, they should be resorted to before
recourse can be made to the appropriate administrative or judicial
body.
- A party with an administrative remedy must not merely initiate the
prescribed administrative procedure to obtain relief, but also pursue it
to its appropriate conclusion before seeking judicial intervention.
Reasoning Not only did petitioner fail to comply with Section 2, Rule
VIII, Book V of the Implementing Rules of the Labor Code but also
the record reveals that neither did he exhaust the remedies set forth
by the Constitution and by-laws of both unions. In the National
Convention of PACIWU and NACUSIP, nothing was heard of
petitioner’s complaint against private respondents on the latter’s
alleged unauthorized and illegal disbursement of union funds. His
failure to seek recourse before the National convention on his
complaint against private respondents taints his action with
prematurity.
Disposition Petition DISMISSED.
Remedy
KAPISANAN NG MANGGAGAWANG PINAGYAKAP
(KMP) vs. TRAJANO
134 SCRA 236
RELOVA; Jan 21 1985
NATURE
Petition to review
FACTS
- A petition was filed for the expulsion of the union officers of KMP
on the ground of alleged falsification and misrepresentation.
- Public respondent Director Trajano of the Bureau of Labor
Relations directed the said Union to hold and conduct, pursuant to its
constitution and by-laws and under the supervision of the Bureau of
Labor Relations, a general membership meeting, to vote for or
against the expulsion or suspension of the herein petitioner union
officers.
ISSUE
WON the proper remedy against erring union officers is not
referendum but union expulsion
HELD
YES.
Ratio The remedy against erring union officers is not referendum but
union expulsion.
Reasoning If herein union officers (also petitioners) were guilty of
the alleged acts imputed against them, said public respondent
pursuant to Article 242 of the New Labor Code and in the light of Our
ruling in Duyag vs. Inciong, should have meted out the appropriate
penalty on them, i.e., to expel them from the Union, as prayed for,
and not call for a referendum to decide the issue.
However, the alleged falsification and misrepresentation of herein
union officers were not supported by substantial evidence. The fact
that they disbursed the amount of P1,278.00 from Union funds and
later on was disallowed for failure to attach supporting papers
thereon did not of itself constitute falsification and/or
misrepresentation. The expenditures appeared to have been made
in good faith and the amount spent for the purpose mentioned in the
report, if concurred in or accepted by the members, are reasonable.
 Labor Law 2 A2010
DISPOSITION
Resolution SET ASIDE and the petition for expulsion of herein union
officers is DISMISSED for having been rendered moot and academic by
the election of herein union officers in the general membership
meeting/election.
3.7 UNION AFFILIATION LOCAL AND
PARENT UNION RELATIONS—ILO
Convention No. 87, Art. 5
1. Affiliation: Purpose of Nature of
Relations
Purpose
PHIL SKYLANDERS INC V NLRC (PAFLU)
375 SCRA 369
BELLOSILLO; Jan 31, 2002
NATURE
Petition for certiorari
FACTS
375 Nov 1993, the Philippine Skylanders Employees Association
(PSEA), a local labor union affiliated with the Philippine Association of
Free Labor Unions (PAFLU) September (PAFLU), won in the
certification election conducted among the rank and file employees of
Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately protested
the result of the election before the Secretary of Labor.
376 Several months later, pending settlement of the controversy,
PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU's
supposed deliberate and habitual dereliction of duty toward its
members.
377 PSEA subsequently affiliated itself with the National Congress
of Workers (NCW), changed its name to Philippine Skylanders
Employees Association - National Congress of Workers (PSEA-NCW),
and allowed the former officers of PSEA-PAFLU to continue occupying
their positions as elected officers PSEA-NCW.
378 On 17 March 1994 PSEA-NCW entered into a collective
bargaining agreement with PSI which was immediately registered with
DOLE.
379 PAFLU Secretary General Serafin Ayroso wrote Mariles C.
Romulo requesting a copy of PSI's audited financial statement. Ayroso
explained that with the dismissal of PSEA-WATU's election protest the
time was ripe for the parties to enter into a collective bargaining
agreement. PSI through its personnel manager Francisco Dakila
denied the request citing as reason PSEA's disaffiliation from PAFLU
and its subsequent affiliation with NCW.
380 PAFLU through Serafin Ayroso filed a complaint for unfair labor
practice against PSI, its president Mariles Romulo and personnel
manager Francisco Dakila. PAFLU amended its complaint by including
the elected officers of PSEA-PAFLU as additional party respondents.
381 Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid
and held PSI, PSEA-PAFLU and their respective officers guilty of unfair
labor practice.
382 NLRC upheld the Decision of the Labor Arbiter and conjectured
that since an election protest questioning PSEA-PAFLU's certification
as the sole and exclusive bargaining agent was pending resolution
before the Secretary of Labor, PSEA could not validly separate from
PAFLU, join another national federation and subsequently enter into a
collective bargaining agreement with its employer-company
ISSUE/S
WON PSEA, which is an independent and separate local union, may
validly disaffiliate from PAFLU pending the settlement of an election
protest questioning its status as the sole and exclusive bargaining agent
of PSI's rank and file employees
- 74 - Disini
HELD
YES. The pendency of an election protest involving both the mother
federation and the local union did not constitute a bar to a valid
disaffiliation.
Reasoning In Liberty Cotton Mills Workers Union vs. Liberty Cotton
Mills, Inc. the SC upheld the right of local unions to separate from
their mother federation on the ground that as separate and voluntary
associations, local unions do not owe their creation and existence to
the national federation to which they are affiliated but, instead, to the
will of their members. The sole essence of affiliation is to increase,
by collective action, the common bargaining power of local unions for
the effective enhancement and protection of their interests.
Yet the local unions remain the basic units of association, free to
serve their own interests subject to the restraints imposed by the
constitution and by-laws of the national federation, and free also to
renounce the affiliation upon the terms laid down in the agreement
which brought such affiliation into existence.
Policy considerations dictate that in weighing the claims of a local
union as against those of a national federation, those of the former
must be preferred. Parenthetically though, the desires of the mother
federation to protect its locals are not altogether to be shunned. It will
however be to err greatly against the Constitution if the desires of the
federation would be favored over those of its members. If it were
otherwise, instead of protection, there would be disregard and
neglect of the lowly workingmen.
Disposition Petition is granted.
Nature Relationship
FILIPINO PIPE AND FOUNDRY CORP V NLRC,
NLU-TUCP, LERUM
00 SCRA 00
PURISIMA; NOV 16, 1999
NATURE
Petition for certiorari
FACTS
- National Labor Union-Trade Union Congress of the Philippines
(NLU-TUCP) filed w/ the Ministry of Labor and Employment, in behalf
of its local chapter, the Filipino Pipe Workers Union-National Labor
Union (FPWU-NLU), a notice of strike signed by its national
president, Atty. Lerum, against Filipino Pipe and Foundry
Corporation (Fil Pipe), alleging union busting and non-
implementation of the Collective Bargaining Agreement.
- A conciliation conference was set, but before the conciliation was
done, the FPWU-NLU staged a strike.
-Fil Pipe filed petition to declare the strike illegal and for damages
against FPWU-NLU, NLU-TUCP and Lerum. Later, Fil Pipe moved to
dismiss the complaint against FPWU-NLU.
-Labor Arbiter declared the strike illegal, and ordered NLU-TUCP to
pay damages. Lerum was absolved. Appeals were filed.
-NLRC set aside decision for lack of merit in so far as NLU-TUCP
and Lerum is concerned.
-Filipino Pipe: NLRC erred in declaring that NLU-TUCP and Lerum
are not primarily responsible, and that the company has lost its
cause of action. They argued that the responsibility for the damages
allegedly sustained by petitioner company on account of the illegal
strike, should be borne by NLU-TUCP and Lerum, for having directly
participated in aiding and abetting the illegal strike. Also, that FPWU-
NLU is a mere agent of respondent NLU-TUCP, because FPWU-
NLU, a local union, cannot act as the principal of respondent NLU-
TUCP, a mother federation, because it is not a legitimate labor
organization.
ISSUES
1. WON the strike was illegal
2. WON NLU-TUCP and Lerum are primarily responsible
HELD
 Labor Law 2 A2010
1. YES
-1st, the strike staged by FPWU-NLU was baseless. 2nd, the union failed to
serve the company a copy of the notice of strike (see Sec 3 Rule XXII,
Book V, Implementing Rules). 3rd, the strike blatantly disregarded the
prohibition on the doing of any act which may impede or disrupt the
conciliation proceedings (see Sec 6)
2. NO
Ratio The mother union, acting for and in behalf of its affiliate, had the
status of an agent while the local union remained the basic unit of the
association, free to serve the common interest of all its members subject
only to the restraints imposed by the constitution and by-laws of the
association. The same is true even if the local union is not a legitimate
labor organization
Reasoning The direct and primary responsibility for the damages fall on
the local union FPWU, being the principal, and not on respondent NLU-
TUCP, a mere agent of FPWU-NLU which assisted the latter in filing the
notice of strike. Being just an agent, the notice of strike filed by Lerum is
deemed to have been filed by its principal, the FPWU-NLU. Having thus
dismissed the claim for damages against the principal, FPWU-NLU, the
action for damages against its agent, respondent NLU-TUCP, and Atty.
Lerum, has no more leg to stand on and should also be dismissed.
Disposition Petition is dismissed.
Effect-Legal Personality
ADAMSON & ADAMSON V CIR (ADAMSON &
ADAMSON SUPERVISORY UNION)
127 SCRA 268
GUTIERREZ; January 31, 1984
FACTS
- The Adamson & Adamson Inc. Supervisory Union (FFW) informed
the petitioner Adamson & Adamson about its having organized on
the same date that another union, the Adamson and Adamson Inc.
Salesmen Association (FFW), also advised Adamson & Adamson
that the rank and file salesmen had also formed their own union.
- The CIR held that the Adamson and Adamson, Inc. Supervisory
Union (FFW) can legally represent supervisors of the petitioner
corporation notwithstanding the affiliation of the rank and file union
of the same company with the same labor federation, the
Federation of Free Workers.
- Subsequently and during the pendency of the present petition, the
rank and file employees formed their own union, naming it
Adamson and Adamson Independent Workers (FFW).
- The Adamson company argues that the affiliation of the
respondent union of supervisors, the salesmen's association and
the Adamson and Adamson Independent Worker's Union with the
same national federation (FFW) violates Section 3 of the Industrial
Peace Act because:
1) it results in the indirect affiliation of supervisors and
rank-and-file employees with one labor organization,
2) since respondent union and the unions of
nonsupervisors in the same company are governed by
the same constitution and by-laws of the national
federation, in practical effect, there is but one union,
3) it would result in the respondent union's losing its
independence because it becomes the alter ego of the
federation. Should affiliation be allowed, this would
violate the requirement of separateness of bargaining
units under Section 12 of the Act because only one union
will in fact represent both supervisors and rank-and-file
employees of the petitioner.
- The respondents on the other hand argue that the supervisory
employees of an employer may validly join an organization of the
rank-and-file employees so long as the said rank and file
employees are not under their supervision.
- 75 - Disini
ISSUE
1. WON Adamson and Adamson, Inc. Supervisory Union (FFW) has
the legal personality to supervisors of the petitioner corporation
notwithstanding the affiliation of the rank and file union of the same
company with the same labor federation
2. WON a supervisor's union may affiliate with a federation with
which unions of rank-and-file employees of the same employer are
also affiliated)
HELD
1. YES
Ratio According to Elisco Elirol Labor Union vs. Nortel and Liberty
Colton Mills Workers Union v. Liberty Cotton Mills. Inc, the local
unions are separate and distinct units primarily designed to secure
and maintain an equality of bargaining power between the employer
and their employee-members in the economic struggle for the fruits
of joint productive effort of labor and capital; and the association of
the locals into the national union was in furtherance of the same end.
Reasoning
- There is nothing in the provisions of the Industrial Peace Act which
provides that a duly registered local union affiliating with a national
union or federation loses its legal personality, or its independence.
- Notwithstanding affiliation, the local union remained the basic unit
free to serve the common interest of all its members.
2. YES
Ratio The supervisory employees of an employer cannot join any
labor organization of employees under their supervision but may
validly form a separate organization of their own.
Reasoning
- The right of supervisors employees to organize under the Industrial
Peace Act carries certain restrictions but the right itself may not be
denied or unduly abridged.
- In the case of Elisco Labot Union vs. Nortel: notwithstanding
affiliation, the local union remained the basic unit free to serve the
common interest of all its members.
- The confusion seems to have stemmed from the prefix of FFW after
the name of the local unions in the registration of both.
- The inclusion of FFW in the registration is merely to stress that they
are its affiliates at the time of registrations. It does not mean that said
local unions cannot stand on their own. Neither can it be construed
that their personalities arc so merged with the mother federation that
for one difference or another they cannot pursue their own ways
ways.
Disposition Petition is dismissed.
2. Supervisor—Rank and File Union
Affiliation
Rule-Affiliation
ADAMSON & ADAMSON V CIR (ADAMSON &
ADAMSON SUPERVISORY UNION)
127 SCRA 268
GUTIERREZ; January 31, 1984
FACTS
- The Adamson & Adamson Inc. Supervisory Union (FFW)
informed the petitioner Adamson & Adamson about its having
organized on the same date that another union, the Adamson
and Adamson Inc. Salesmen Association (FFW), also advised
Adamson & Adamson that the rank and file salesmen had also
formed their own union.
 Labor Law 2 A2010
- The CIR held that the Adamson and Adamson, Inc. Supervisory
Union (FFW) can legally represent supervisors of the petitioner
corporation notwithstanding the affiliation of the rank and file union
of the same company with the same labor federation, the
Federation of Free Workers.
- Subsequently and during the pendency of the present petition, the
rank and file employees formed their own union, naming it
Adamson and Adamson Independent Workers (FFW).
- The Adamson company argues that the affiliation of the
respondent union of supervisors, the salesmen's association and
the Adamson and Adamson Independent Worker's Union with the
same national federation (FFW) violates Section 3 of the Industrial
Peace Act because:
1) it results in the indirect affiliation of supervisors and
rank-and-file employees with one labor organization,
2) since respondent union and the unions of
nonsupervisors in the same company are governed by
the same constitution and by-laws of the national
federation, in practical effect, there is but one union,
3) it would result in the respondent union's losing its
independence because it becomes the alter ego of the
federation. Should affiliation be allowed, this would
violate the requirement of separateness of bargaining
units under Section 12 of the Act because only one union
will in fact represent both supervisors and rank-and-file
employees of the petitioner.
- The respondents on the other hand argue that the supervisory
employees of an employer may validly join an organization of the
rank-and-file employees so long as the said rank and file
employees are not under their supervision.
ISSUE
1. WON Adamson and Adamson, Inc. Supervisory Union (FFW) has the
legal personality to supervisors of the petitioner corporation
notwithstanding the affiliation of the rank and file union of the same
company with the same labor federation
2. WON a supervisor's union may affiliate with a federation with which
unions of rank-and-file employees of the same employer are also
affiliated)
HELD
1. YES
Ratio According to Elisco Elirol Labor Union vs. Nortel and Liberty Colton
Mills Workers Union v. Liberty Cotton Mills. Inc, the local unions are
separate and distinct units primarily designed to secure and maintain an
equality of bargaining power between the employer and their employee-
members in the economic struggle for the fruits of joint productive effort of
labor and capital; and the association of the locals into the national union
was in furtherance of the same end.
Reasoning
- There is nothing in the provisions of the Industrial Peace Act which
provides that a duly registered local union affiliating with a national union
or federation loses its legal personality, or its independence.
- Notwithstanding affiliation, the local union remained the basic unit free to
serve the common interest of all its members.
2. YES
Ratio The supervisory employees of an employer cannot join any labor
organization of employees under their supervision but may validly form a
separate organization of their own.
Reasoning
- The right of supervisors employees to organize under the Industrial
Peace Act carries certain restrictions but the right itself may not be denied
or unduly abridged.
- In the case of Elisco Labot Union vs. Nortel: notwithstanding affiliation,
the local union remained the basic unit free to serve the common interest
of all its members.
- The confusion seems to have stemmed from the prefix of FFW after the
name of the local unions in the registration of both.
- The inclusion of FFW in the registration is merely to stress that they are
its affiliates at the time of registrations. It does not mean that said local
unions cannot stand on their own. Neither can it be construed that their
personalities arc so merged with the mother federation that for one
- 76 - Disini
difference or another they cannot pursue their own ways ways.
Disposition Petition is dismissed.
ATLAS LITHOGRAPHIC SERVICES, INC. V
LAGUESMA
205 SCRA 12
GUTIERREZ; January 6, 1992
NATURE
Petition for certiorari
FACTS
- The supervisory, administrative personnel, production, accounting
and confidential employees of the petitioner Atlas Lithographic
Services, Inc. (ALSI) affiliated with private respondent Kaisahan ng
Manggagawang Pilipino, a national labor organization.
- The local union adopted the name Atlas Lithographic Services, Inc.
Supervisory, Administrative, Personnel, Production, Accounting and
Confidential Employees Association or ALSI-SAPPACEA-KAMPIL
- Respondent Kampil-Katipunan filed on behalf of the "supervisors"
union a petition for certification election so that it could be the sole
and exclusive bargaining agent of the supervisory employees.
- The petitioners opposed the private respondent's petition claiming
that under Article 245 of the Labor Code the respondent cannot
represent the supervisory employees for collective bargaining
purposeless because the private respondent also represents the
rank-and-file employees' union.
- The Med-Arbiter issued an order in favor of the private respondent
- The petitioners appealed for the reversal of the order. The public
respondent, however, issued a resolution affirming the Med-Arbiter's
order.
- The petitioners, in turn, filed a motion for reconsideration but the
same was denied.
- Hence, this petition for certiorari.
ISSUE
WON under Article 245 of the Labor Code, a local union of
supervisory employees may be allowed to affiliate with a national
federation of labor organizations of rank-and-file employees and
which national federation actively represents its affiliates in collective
bargaining negotiations with the same employer of the supervisors
and in the implementation of resulting collective bargaining
agreements.
HELD
NO.
- The interests of supervisors on the one hand, and the rank-and-file
employees on the other, are separate and distinct. The functions of
supervisors, being recommendatory in nature, are more identified
with the interests of the employer. The performance of those
functions may, thus, run counter to the interests of the rank-and-file.
- The peculiar role of supervisors is such that while they are not
managers, when they recommend action implementing management
policy or ask for the discipline or dismissal of subordinates, they
identify with the interests of the employer and may act contrary to the
interests of the rank-and-file.
- The Court agreed with the petitioner's contention that a conflict of
interest may arise in the areas of discipline, collective bargaining and
strikes.
- Members of the supervisory union might refuse to carry out
disciplinary measures against their co-member rank-and-file
employees. In the area of bargaining, their interests cannot be
considered identical. The needs of one are different from those of the
other. Moreover, in the event of a strike, the national federation might
influence the supervisors' union to conduct a sympathy strike on the
sole basis of affiliation.
- The factual issues in the Adamson case are different from the
present case. First, the rank-and-file employees in the Adamson
case are not directly under the supervisors who comprise the
supervisors' union. In the case at bar, the rank-and file employees
are directly under the supervisors organized by one and the same
federation. Second, the national union in the Adamson case did not
 Labor Law 2 A2010
actively represent its local chapters. In the present case, the local union is
actively represented by the national federation. In fact, it was the national
federation, the KAMPIL-KATIPUNAN, which initially filed a petition for
certification in behalf of the respondent union.
- If the intent of the law is to avoid a situation where supervisors would
merge with the rank and-file or where the supervisors' labor organization
would represent conflicting interests, then a local supervisors' union
should not be allowed to affiliate with the national federation of union of
rank-and-file employees where that federation actively participates in
union activity in the company.
- The prohibition against a supervisors' union joining a local union of rank-
and-file is replete with jurisprudence. The Court emphasizes that the
limitation is not confined to a case of supervisors wanting to join a rank-
and-file local 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. The intent of the law is
clear especially where, as in the case at bar, the supervisors will be co-
mingling with those employees whom they directly supervise in their own
bargaining unit.
- Supervisors are not prohibited from forming their own union. What the
law prohibits is their membership in a labor organization of rank-and-file
employees or their joining a national federation of rank-and-file employees
that includes the very local union which they are not allowed to directly
join.
Disposition Petition GRANTED.
COLLEGE OF MEDICINE V LAGUESMA
249 SCRA
MENDOZA; August 12, 1998
NATURE
Petition for certiorari
FACTS
-DLSUMCCM is a hospital and medical school at Dasmariñas, Cavite.
-Private respondent Federation of Free Workers-DLSUMCCM
Supervisory Union Chapter, on the other hand, is a labor organization
composed of the supervisory employees of petitioner DLSUMCCM. FFW-
DLSUMCCMSUC is a recognized local chapter of FFW. The latter filed on
behalf of the former a petition for certification election among the
supervisory employees of DLSUMCCM.
-This petition was opposed by DLSUMCCM on the grounds that several
employees who signed the petition for certification election were
managerial employees and that the FFW-DLSUMCCMSUC was
composed of both supervisory and rank-and-file employees in the
company.
-DOLE Regioin IV med-arbiter issued an order granting union's petition for
certification election. DOLE USec Laguesma affirmed and denied MFR.
Hence, this petition for certiorari.
ISSUE
WON unions formed independently by supervisory and rank-and-file
employees of a company may validly affiliate with the same national
federation.
HELD
YES.
-Supervisory employees have the right to self-organization as do other
classes of employees save only managerial ones. The framers of the
Constitution intended to restore the right of supervisory employees to self-
organization which had been withdrawn from them during the period of
martial law. Thus:
-Conformably with the constitutional mandate, Art. 245 of the Labor Code
now provides for the right of supervisory employees to self-organization,
subject to the limitation that they cannot join an organization of rank-and-
file employees. The reason for the segregation of supervisory and rank-
and-file employees of a company with respect to the exercise of the right
to self-organization is the difference in their interests. Supervisory
employees are more closely identified with the employer than with the
rank-and-file employees. If supervisory and rank-and-file employees in a
- 77 - Disini
company are allowed to form a single union, the conflicting interests
of these groups impair their relationship and adversely affect
discipline, collective bargaining and strikes. These consequences
can obtain not only in cases where supervisory and rank-and-file
employees in the same company belong to a single union but also
where unions formed independently by supervisory and rank-and-file
employees of a company are allowed to affiliate with the same
national federation.
-Atlas Lithographic Services Inc. v. Laguesma: To avoid a situation
where supervisors would merge with the rank-and-file or where the
supervisors' labor organization would represent conflicting interests,
then a local supervisors' union should not be allowed to affiliate with
a national federation of unions of rank-and-file employees where that
federation actively participates in union activities in the company.
Such a situation would obtain only where two conditions concur:
First, the rank-and-file employees are directly under the authority of
supervisory employees. Second, the national federation is actively
involved in union activities in the company.
-The affiliation of two local unions in a company with the same
national federation is not by itself a negation of their independence
since in relation to the employer, the local unions are considered as
the principals, while the federation is deemed to be merely their
agent. This conclusion is in accord with the policy that any limitation
on the exercise by employees of the right to self-organization
guaranteed in the Constitution must be construed strictly. Workers
should be allowed the practice of this freedom to the extent
recognized in the fundamental law.
Q: WON the rank-and-file employees of petitioner DLSUMCCM who
compose a labor union are directly under the supervisory employees
whose own union is affiliated with the same national federation
(Federation of Free Workers) and whether such national federation is
actively involved in union activities in the company so as to make the
two unions in the same company, in reality, just one union.
Ans: NO. Although FFW-DLSUMCCMSUC and another union
composed of rank-and-file employees of petitioner DLSUMCCM are
indeed affiliated with the same national federation, the FFW,
petitioner DLSUMCCM has not presented any evidence showing that
the rank-and-file employees composing the other union are directly
under the authority of the supervisory employees.
-Adamson & Adamson, Inc. v. CIR: the fact that the two groups of
workers are employed by the same company and the fact that they
are affiliated with a common national federation are not sufficient to
justify the conclusion that their organizations are actually just one.
Their immediate professional relationship must be established.
Disposition Petition dismissed
3. Local Union Disaffiliation
Nature Right Disaffiliation
VOLKSHCEL LABOR UNION V BUREAU OF LABOR
RELATIONS
137 SCRA 42
PHIL. LABOR ALLIANCE COUNCIL V BLR
75 SCRA 162
MALAYANG SAMAHAN NG MGA MANGGAGAWA
SA GREENFIELD V RAMOS
326 SCRA 428
Rule-Legality Act-Disaffiliation
 Labor Law 2 A2010
VILLAR V INCIONG
121 SCRA 44
GUERRERO; April 20, 1983
NATURE
Petition for review by certiorari
FACTS
- Petitioners were members of the Amigo Employees Union-PAFLU, a
duly registered labor organization which was the existing bargaining agent
of the employees in private respondent Amigo Manufacturing, Inc. They
then signed a joint resolution which stated that they were disaffiliating
themselves as members of the PAFLU, and were not further authorizing
PAFLU to represent them in any CBA.
- During a special meeting of the Union, a Resolution was approved which
called for the investigation of all the petitioners for "continuously
maligning, libelling and slandering not only the incumbent officers but
even the union itself and the federation" and for causing divisiveness.
- The union security clause was reincorporated in the new CBA: “any
members who shall resign, be expelled, or shall in any manner cease
to be a member of the UNION, shall be dismissed from his
employment upon written request of the UNION to the Company.”
- Petitioners contend that their acts do not constitute disloyalty as these
are in the exercise of their constitutional right to self-organization.
- The PAFLU President then rendered a decision finding them guilty of the
charges and expelling them from the Union and as a consequence the
Management of the employer is hereby requested to terminate them from
their employment in conformity with the security clause.
ISSUE/S
1. WON PAFLU had the authority to investigate the petitioners and,
thereafter, expel them from the roll of membership of the Amigo
Employees Union-PAFLU
2. WON the petitioners were entitled to disaffiliate from the Union
HELD
1.YES
Ratio That PAFLU had the authority to investigate petitioners on the
charges filed by their co-employees in the local union and after finding
them guilty as charged, to expel them from the roll of membership of the
Amigo Employees Union-PAFLU is clear under the constitution of the
PAFLU to which the local union was affiliated. And pursuant to the
security clause of the new CBA, reiterating the same clause in the old
CBA, PAFLU was justified in applying said security clause.
UNION-MEMBER RELATIONS: Discipline Issues
Inherent in every labor union, or any organization for that matter, is the
right of self-preservation. When members of a labor union, therefore, sow
the seeds of dissension and strife within the union; when they seek the
disintegration and destruction of the very union to which they belong, they
thereby forfeit their rights to remain as members of the union which they
seek to destroy. Prudence and equity, as well as the dictates of law and
justice, therefore, compelling mandate the adoption by the labor union of
such corrective and remedial measures in keeping with its laws and
regulations, for its preservation and continued existence; lest by its folly
and inaction, the labor union crumble and fall.
2. YES
Ratio Although they are entitled to disaffiliate from their union and form a
new organization of their own, they must, however, suffer the
consequences of their separation from the union under the security clause
of the CBA.
Reasoning Disaffiliation from a labor union is not open to legal objection.
It is implicit in the freedom of association ordained by the Constitution. But
this Court has laid down the ruling that a closed shop is a valid form of
union security, and such provision in a collective bargaining agreement is
not a restriction of the right of freedom of association guaranteed by the
Constitution.
Local Union Disaffiliation: Rule - Legality act - Disaffiliation
There are two hundred thirty four (234) union members in the Amigo
Employees Union-PAFLU, and only 96 signed the "Sama-Samang
Kapasiyahan." They constituted a small minority for which reason they
could not have successfully disaffiliated the local union from PAFLU. It
- 78 - Disini
can be inferred that the majority wanted the union to remain an
affiliate of PAFLU. The action of the majority must, therefore, prevail
over that of the minority members.
Disposition The Order appealed from affirming the joint decision of
the OIC granting clearance to terminate petitioners as well as
dismissing their complaint with application for preliminary injunction,
is hereby AFFIRMED.
TROPICAL HUT EMPLOYEES UNION V TROPICAL
HUT FOOD MARKET, INC
181 SCRA 173
ALEX FERRER V NLRC
224 SCRA 410
PHIL SKYLANDERS INC V NLRC (PAFLU)
375 SCRA 369
BELLOSILLO; Jan 31, 2002
NATURE
Petition for certiorari
FACTS
383 Nov 1993, the Philippine Skylanders Employees
Association (PSEA), a local labor union affiliated with the
Philippine Association of Free Labor Unions (PAFLU) September
(PAFLU), won in the certification election conducted among the
rank and file employees of Philippine Skylanders, Inc. (PSI). Its
rival union, Philippine Skylanders Employees Association-WATU
(PSEA-WATU) immediately protested the result of the election
before the Secretary of Labor.
384 Several months later, pending settlement of the
controversy, PSEA sent PAFLU a notice of disaffiliation citing as
reason PAFLU's supposed deliberate and habitual dereliction of
duty toward its members.
385 PSEA subsequently affiliated itself with the National
Congress of Workers (NCW), changed its name to Philippine
Skylanders Employees Association - National Congress of
Workers (PSEA-NCW), and allowed the former officers of PSEA-
PAFLU to continue occupying their positions as elected officers
PSEA-NCW.
386 On 17 March 1994 PSEA-NCW entered into a collective
bargaining agreement with PSI which was immediately registered
with DOLE.
387 PAFLU Secretary General Serafin Ayroso wrote Mariles C.
Romulo requesting a copy of PSI's audited financial statement.
Ayroso explained that with the dismissal of PSEA-WATU's election
protest the time was ripe for the parties to enter into a collective
bargaining agreement. PSI through its personnel manager
Francisco Dakila denied the request citing as reason PSEA's
disaffiliation from PAFLU and its subsequent affiliation with NCW.
388 PAFLU through Serafin Ayroso filed a complaint for unfair
labor practice against PSI, its president Mariles Romulo and
personnel manager Francisco Dakila. PAFLU amended its
complaint by including the elected officers of PSEA-PAFLU as
additional party respondents.
389 Labor Arbiter declared PSEA's disaffiliation from PAFLU
invalid and held PSI, PSEA-PAFLU and their respective officers
guilty of unfair labor practice.
390 NLRC upheld the Decision of the Labor Arbiter and
conjectured that since an election protest questioning PSEA-
PAFLU's certification as the sole and exclusive bargaining agent
was pending resolution before the Secretary of Labor, PSEA could
not validly separate from PAFLU, join another national federation
and subsequently enter into a collective bargaining agreement
with its employer-company
ISSUE/S
WON PSEA, which is an independent and separate local union, may
validly disaffiliate from PAFLU pending the settlement of an election
 Labor Law 2 A2010 - 79 - Disini
protest questioning its status as the sole and exclusive bargaining agent
of PSI's rank and file employees

HELD
YES. The pendency of an election protest involving both the mother
federation and the local union did not constitute a bar to a valid
disaffiliation.
Reasoning In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills,
Inc. the SC upheld the right of local unions to separate from their mother
federation on the ground that as separate and voluntary associations,
local unions do not owe their creation and existence to the national
federation to which they are affiliated but, instead, to the will of their
members. The sole essence of affiliation is to increase, by collective
action, the common bargaining power of local unions for the effective
enhancement and protection of their interests.
Yet the local unions remain the basic units of association, free to serve
their own interests subject to the restraints imposed by the constitution
and by-laws of the national federation, and free also to renounce the
affiliation upon the terms laid down in the agreement which brought such
affiliation into existence.
Policy considerations dictate that in weighing the claims of a local union
as against those of a national federation, those of the former must be
preferred. Parenthetically though, the desires of the mother federation to
protect its locals are not altogether to be shunned. It will however be to err
greatly against the Constitution if the desires of the federation would be
favored over those of its members. If it were otherwise, instead of
protection, there would be disregard and neglect of the lowly workingmen.

Disposition Petition is granted.