Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 177024 October 30, 2009

THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA HOTEL
CORPORATION)Petitioner,
vs.
PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA HERITAGE MANILA (PIGLAS-
HERITAGE),Respondent.

DECISION

ABAD, J.:

This case is about a companys objections to the registration of its rank and file union for non-
compliance with the requirements of its registration.

The Facts and the Case

Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila (petitioner
company) formed the "Heritage Hotel Employees Union" (the HHE union). The Department of Labor
and Employment-National Capital Region (DOLE-NCR) later issued a certificate of registration 1 to
this union.

Subsequently, the HHE union filed a petition for certification election 2 that petitioner company
opposed. The company alleged that the HHE union misrepresented itself to be an independent
union, when it was, in truth, a local chapter of the National Union of Workers in Hotel and Restaurant
and Allied Industries (NUWHRAIN). The company claimed that the HHE union intentionally omitted
disclosure of its affiliation with NUWHRAIN because the companys supervisors union was already
affiliated with it.3 Thus, the company also filed a petition for the cancellation of the HHE unions
registration certificate.4

Meanwhile, the Med-Arbiter granted the HHE unions petition for certification election. 5 Petitioner
company appealed the decision to the Secretary of Labor but the latter denied the appeal. 6 The
Secretary also denied petitioners motion for reconsideration, prompting the company to file a
petition for certiorari7 with the Court of Appeals.

On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding of the HHE
unions certification election, effective until the petition for cancellation of that unions registration
shall have been resolved with finality.8 The decision of the Court of Appeals became final when the
HHE union withdrew the petition for review that it filed with this Court. 9

On December 10, 2003 certain rank and file employees of petitioner company held a meeting and
formed another union, the respondent Pinag-Isang Galing at Lakas ng mga Manggagawa sa
Heritage Manila (the PIGLAS union). This union applied for registration with the DOLE-NCR 10 and
got its registration certificate on February 9, 2004. Two months later, the members of the first union,
the HHE union, adopted a resolution for its dissolution. The HHE union then filed a petition for
cancellation of its union registration.11

On September 4, 2004 respondent PIGLAS union filed a petition for certification election 12 that
petitioner company also opposed, alleging that the new unions officers and members were also
those who comprised the old union. According to the company, the employees involved formed the
PIGLAS union to circumvent the Court of Appeals injunction against the holding of the certification
election sought by the former union. Despite the companys opposition, however, the Med-Arbiter
granted the petition for certification election.13

On December 6, 2004 petitioner company filed a petition to cancel the union registration of
respondent PIGLAS union.14 The company claimed that the documents submitted with the unions
application for registration bore the following false information:

(a) The List of Members showed that the PIGLAS union had 100 union members; 15

(b) The Organizational Minutes said that 90 employees attended the meeting on December
10, 2003;16

(c) The Attendance Sheet of the meeting of December 10, 2003 bore the signature of 127
members who ratified the unions Constitution and By-Laws; 17 and

(d) The Signature Sheet bore 128 signatures of those who attended that meeting. 18

Petitioner company alleged that the misrepresentation was evidenced by the discrepancy in the
number of union members appearing in the application and the list as well as in the number of
signatories to the attendance and signature sheets. The minutes reported that only 90 employees
attended the meeting. The company further alleged that 33 members of respondent PIGLAS union
were members of the defunct HHE union. This, according to the company, violated the policy against
dual unionism and showed that the new union was merely an alter ego of the old.

On February 22, 2005 the DOLE-NCR denied the companys petition to cancel respondent PIGLAS
unions registration for the reason that the discrepancies in the number of members stated in the
applications supporting documents were not material and did not constitute misrepresentation. As
for the charge of dual unionism, the same is not a ground for canceling registration. It merely
exposed a union member to a possible charge of disloyalty, an internal matter. Here, the members of
the former union simply exercised their right to self-organization and to the freedom of association
when they subsequently joined the PIGLAS union. 19

On appeal, the Bureau of Labor Relation (BLR) affirmed the ruling of the DOLE-NCR. It reasoned
that respondent PIGLAS unions organization meeting lasted for 12 hours. It was possible for the
number of attendees to have increased from 90 to 128 as the meeting progressed. Besides, with a
total of 250 employees in the bargaining unit, the union needed only 50 members to comply with the
20 percent membership requirement. Thus, the union could not be accused of misrepresentation
since it did not pad its membership to secure registration.

As for the issue of dual unionism, it has become moot and academic, said the BLR, because of the
dissolution of the old union and the cancellation of its certificate of registration. 20
Petitioner company filed a petition for certiorari with the Court of Appeals, 21 assailing the order of the
BLR. But the latter court dismissed the petition, not being accompanied by material documents and
portions of the record.22 The company filed a motion for reconsideration, attaching parts of the record
that were deemed indispensable but the court denied it for lack of merit. 23 Hence, the company filed
this petition for review under Rule 45.

Issues Presented

The petition presents the following issues:

1. Whether or not the Court of Appeals erred in dismissing the petition for certiorari before it
for failure of petitioner company to attach certain material portions of the record;

2. Whether or not the union made fatal misrepresentation in its application for union
registration; and

3. Whether or not "dual unionism" is a ground for canceling a unions registration.

The Rulings of the Court

First. While the Court of Appeals correctly dismissed the companys petition initially for failure to
attach material portions of the record, the court should have bended back a little when petitioner
company subsequently attached those missing materials to its motion for reconsideration. As a
general rule, petitions for certiorari that lack copies of essential pleadings and portions of the record
may be dismissed but this rule has not been regarded as absolute. The omission may be cured. 24

The Court of Appeals has three courses of action when the annexes to the petition are insufficient. It
may dismiss the petition,25 require the submission of the relevant documents, or order the filing of an
amended petition with the required pleadings or documents. A petition lacking in essential pleadings
or portions of the record may still be given due course, or reinstated if earlier dismissed, upon
subsequent submission of the necessary documents or to serve the higher interest of justice. 26

Second. Since a remand of the case to the Court of Appeals for a determination of the substantive
issues will only result in more delays and since these issues have been amply argued by the
opposing sides in the various pleadings and documents they submitted to this Court, the case may
now be resolved on the merits.

Did respondent PIGLAS union commit fraud and misrepresentation in its application for union
registration? We agree with the DOLE-NCR and the BLR that it did not. Except for the evident
discrepancies as to the number of union members involved as these appeared on the documents
that supported the unions application for registration, petitioner company has no other evidence of
the alleged misrepresentation. But those discrepancies alone cannot be taken as an indication that
respondent misrepresented the information contained in these documents.

The charge that a labor organization committed fraud and misrepresentation in securing its
registration is a serious charge and deserves close scrutiny. It is serious because once such charge
is proved, the labor union acquires none of the rights accorded to registered organizations.
Consequently, charges of this nature should be clearly established by evidence and the surrounding
circumstances.27
Here, the discrepancies in the number of union members or employees stated in the various
supporting documents that respondent PIGLAS union submitted to labor authorities can be
explained. While it appears in the minutes of the December 10, 2003 organizational meeting that
only 90 employees responded to the roll call at the beginning, it cannot be assumed that such
number could not grow to 128 as reflected on the signature sheet for attendance. The meeting
lasted 12 hours from 11:00 a.m. to 11:00 p.m. There is no evidence that the meeting hall was locked
up to exclude late attendees.1 a vv p h i 1

There is also nothing essentially mysterious or irregular about the fact that only 127 members ratified
the unions constitution and by-laws when 128 signed the attendance sheet. It cannot be assumed
that all those who attended approved of the constitution and by-laws. Any member had the right to
hold out and refrain from ratifying those documents or to simply ignore the process.

At any rate, the Labor Code28 and its implementing rules29 do not require that the number of
members appearing on the documents in question should completely dovetail. For as long as the
documents and signatures are shown to be genuine and regular and the constitution and by-laws
democratically ratified, the union is deemed to have complied with registration requirements.

Petitioner company claims that respondent PIGLAS union was required to submit the names
of all its members comprising at least 20 percent of the employees in the bargaining unit. Yet the list
it submitted named only 100 members notwithstanding that the signature and attendance sheets
reflected a membership of 127 or 128 employees. This omission, said the company, amounted to
material misrepresentation that warranted the cancellation of the unions registration.

But, as the labor authorities held, this discrepancy is immaterial. A comparison of the documents
shows that, except for six members, the names found in the subject list are also in the attendance
and signature sheets. Notably, the bargaining unit that respondent PIGLAS union sought to
represent consisted of 250 employees. Only 20 percent of this number or 50 employees were
required to unionize. Here, the union more than complied with such requirement.

Labor laws are liberally construed in favor of labor especially if doing so would affirm its
constitutionally guaranteed right to self-organization.30 Here, the PIGLAS unions supporting
documents reveal the unmistakable yearning of petitioner companys rank and file employees to
organize. This yearning should not be frustrated by inconsequential technicalities.

Third. The fact that some of respondent PIGLAS unions members were also members of the old
rank and file union, the HHE union, is not a ground for canceling the new unions registration. The
right of any person to join an organization also includes the right to leave that organization and join
another one. Besides, HHE union is dead. It had ceased to exist and its certificate of registration had
already been cancelled. Thus, petitioners arguments on this point may also be now regarded as
moot and academic.

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Bureau of Labor
Relations in BLR-A-26-3-05 dated May 26, 2006.

SO ORDERED.

FIRST DIVISION
STA. LUCIA EAST COMMERCIAL G.R. No. 162355
CORPORATION,
Petitioner,
Present:
- versus -
PUNO, C.J., Chairperson,
CARPIO,
HON. SECRETARY OF LABOR CORONA,
AND EMPLOYMENT and CHICO-NAZARIO,*and
STA. LUCIA EAST COMMERCIAL LEONARDO-DE CASTRO, JJ.
CORPORATION WORKERS
ASSOCIATION (CLUP LOCAL
CHAPTER), Promulgated:
Respondents.
August 14, 2009
x--------------------------------------------------x

DECISION

CARPIO, J.:

The Case

This is a petition for review[1]assailing the Decision[2]promulgated on 14 August

2003 as well as the Resolution[3]promulgated on 24 February 2004 of the Court of
Appeals (appellate court) in CA-G.R. SP No. 77015.The appellate court denied
Sta. Lucia East Commercial Corporations (SLECC) petition for certiorari with
prayer for writ of preliminary injunction and temporary restraining order. The
appellate court further ruled that the Secretary of Labor and Employment
(Secretary) was correct when she held that the subsequent negotiations and
registration of a collective bargaining agreement (CBA) executed by SLECC with
Samahang Manggagawa sa Sta. Lucia East Commercial (SMSLEC) could not bar
Sta. Lucia East Commercial Corporation Workers Associations (SLECCWA)
petition for direct certification.

The Facts
The Secretary narrated the facts as follows:
On 27 February 2001, Confederated Labor Union of the Philippines
(CLUP), in behalf of its chartered local, instituted a petition for
certification election among the regular rank-and-file employees of Sta.
Lucia East Commercial Corporation and its Affiliates, docketed as Case
No. RO400-0202-RU-007. The affiliate companies included in the
petition were SLE Commercial, SLE Department Store, SLE Cinema,
Robsan East Trading, Bowling Center, Planet Toys, Home Gallery and
Essentials.

On 21 August 2001, Med-Arbiter Bactin ordered the dismissal of the

petition due to inappropriateness of the bargaining unit. CLUP-Sta.
Lucia East Commercial Corporation and its Affiliates Workers Union
appealed the order of dismissal to this Office on 14 September 2001. On
20 November 2001, CLUP-Sta. Lucia East Commercial Corporation and
its Affiliates Workers Union [CLUP-SLECC and its Affiliates Workers
Union] moved for the withdrawal of the appeal. On 31 January 2002,
this Office granted the motion and affirmed the dismissal of the petition.

In the meantime, on 10 October 2001, [CLUP-SLECC and its Affiliates

Workers Union] reorganized itself and re-registered as CLUP-Sta. Lucia
East Commercial Corporation Workers Association (herein appellant
CLUP-SLECCWA), limiting its membership to the rank-and-file
employees of Sta. Lucia East Commercial Corporation. It was issued
Certificate of Creation of a Local Chapter No. RO400-0110-CC-004.

On the same date, [CLUP-SLECCWA] filed the instant petition. It

alleged that [SLECC] employs about 115 employees and that more than
20% of employees belonging to the rank-and-file category are its
members. [CLUP-SLECCWA] claimed that no certification election has
been held among them within the last 12 months prior to the filing of the
petition, and while there is another union registered with DOLE-
Regional Office No. IV on 22 June 2001 covering the same employees,
namely [SMSLEC], it has not been recognized as the exclusive
bargaining agent of [SLECCs] employees.

On 22 November 2001, SLECC filed a motion to dismiss the petition. It

averred that it has voluntarily recognized [SMSLEC] on 20 July 2001 as
the exclusive bargaining agent of its regular rank-and-file employees,
and that collective bargaining negotiations already commenced between
them. SLECC argued that the petition should be dismissed for violating
the one year and negotiation bar rules under pars. (c) and (d), Section 11,
Rule XI, Book V of the Omnibus Rules Implementing the Labor Code.

On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was

ratified by its rank-and-file employees and registered with DOLE-
Regional Office No. IV on 9 January 2002.

In the meantime, on 19 December 2001, [CLUP-SLECCWA] filed its

Opposition and Comment to [SLECCS] Motion to Dismiss. It assailed
the validity of the voluntary recognition of [SMSLEC] by [SLECC] and
their consequent negotiations and execution of a CBA. According to
[CLUP-SLECCWA], the same were tainted with malice, collusion and
conspiracy involving some officials of the Regional Office. Appellant
contended that Chief LEO Raymundo Agravante, DOLE Regional
Office No. IV, Labor Relations Division should have not approved and
recorded the voluntary recognition of [SMSLEC] by [SLECC] because it
violated one of the major requirements for voluntary recognition, i.e.,
non-existence of another labor organization in the same bargaining unit.
It pointed out that the time of the voluntary recognition on 20 July 2001,
appellants registration as [CLUP-SLECC and its Affiliates Workers
Union], which covers the same group of employees covered by
Samahang Manggagawa sa Sta. Lucia East Commercial, was existing
and has neither been cancelled or abandoned. [CLUP-SLECCWA] also
accused Med-Arbiter Bactin of malice, collusion and conspiracy with
appellee company when he dismissed the petition for certification
election filed by [SMSLEC] for being moot and academic because of its
voluntary recognition, when he was fully aware of the pendency of
[CLUP-SLECCWAs] earlier petition for certification election.

Subsequent pleadings filed by [CLUP-SLECCWA] and [SLECC]

reiterated their respective positions on the validity and invalidity of the
voluntary recognition. On 29 July 2002, Med-Arbiter Bactin issued the
assailed Order.[4]

The Med-Arbiters Ruling

In his Order dated 29 July 2002, Med-Arbiter Anastacio L. Bactin dismissed
CLUP-SLECCWAs petition for direct certification on the ground of contract bar
rule. The prior voluntary recognition of SMSLEC and the CBA between SLECC
and SMSLEC bars the filing of CLUP-SLECCWAs petition for direct
certification. SMSLEC is entitled to enjoy the rights, privileges, and obligations of
an exclusive bargaining representative from the time of the recording of the
voluntary recognition. Moreover, the duly registered CBA bars the filing of the
petition for direct certification.
CLUP-SLECCWA filed a Memorandum of Appeal of the Med-Arbiters Order before the Secretary.

The Ruling of the Secretary of Labor and Employment

In her Decision promulgated on 27 December 2002, the Secretary found merit in

CLUP-SLECCWAs appeal. The Secretary held that the subsequent negotiations
and registration of a CBA executed by SLECC with SMSLEC could not bar
CLUP-SLECCWAs petition. CLUP-SLECC and its Affiliates Workers Union
constituted a registered labor organization at the time of SLECCs voluntary
recognition of SMSLEC. The dispositive portion of the Secretarys Decision reads:

WHEREFORE, the appeal is hereby GRANTED and the Order of the

Med-Arbiter dated 29 July 2002 is REVERSED and SET ASIDE.
Accordingly, let the entire records of the case be remanded to the
Regional Office of origin for the immediate conduct of a certification
election, subject to the usual pre-election conference, among the regular
rank-and-file employees of [SLECC], with the following choices:

1. Sta. Lucia East Commercial Corporation Workers Association CLUP

Local Chapter;
2. Samahang Manggagawa sa Sta. Lucia East Commercial; and
3. No Union.
 Pursuant to Rule XI, Section II.1 of Department Order No. 9, appellee
corporation is hereby directed to submit to the office of origin, within ten
(10) days from receipt hereof, the certified list of its employees in the
bargaining unit or when necessary a copy of its payroll covering the
same employees for the last three (3) months preceding the issuance of
this Decision.

Let a copy of this Decision be furnished the Bureau of Labor Relations

and Labor Relations Division of Regional Office No. IV for the
cancellation of the recording of voluntary recognition in favor of
Samahang Manggagawa sa Sta. Lucia East Commercial and the
appropriate annotation of re-registration of CLUP-Sta. Lucia East
Commercial Corporation and its Affiliates Workers Union to Sta. Lucia
East Commercial Corporation Workers Association-CLUP Local
Chapter.

SO DECIDED.[5]

SLECC filed a motion for reconsideration which the Secretary denied for
lack of merit in a Resolution dated 27 March 2003. SLECC then filed a petition for
certiorari before the appellate court.

The Ruling of the Appellate Court

The appellate court affirmed the ruling of the Secretary and quoted extensively
from the Secretarys decision. The appellate court agreed with the Secretarys
finding that the workers sought to be represented by CLUP-SLECC and its
Affiliates Workers Union included the same workers in the bargaining unit
represented by SMSLEC. SMSLEC was not the only legitimate labor organization
operating in the subject bargaining unit at the time of SMSLECs voluntary
recognition on 20 July 2001. Thus, SMSLECs voluntary recognition was void and
could not bar CLUP-SLECCWAs petition for certification election.

The Issue

SLECC raised only one issue in its petition. SLECC asserted that the appellate
court commited a reversible error when it affirmed the Secretarys finding that
SLECCs voluntary recognition of SMSLEC was done while a legitimate labor
organization was in existence in the bargaining unit.

The Ruling of the Court

The petition has no merit. We see no reason to overturn the rulings of the Secretary
and of the appellate court.

Legitimate Labor Organization

Article 212(g) of the Labor Code defines a labor organization as any union or
association of employees which exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms and conditions of
employment.Upon compliance with all the documentary requirements, the Regional
Office or Bureau shall issue in favor of the applicant labor organization a certificate
indicating that it is included in the roster of legitimate labor organizations. [6] Any
applicant labor organization shall acquire legal personality and shall be entitled to the
rights and privileges granted by law to legitimate labor organizations upon issuance of
the certificate of registration.[7]
Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but
related to, the concept of a bargaining unit. We explained the concept of a bargaining
unit in San Miguel Corporation v. Laguesma,[8]where we stated that:

A bargaining unit is a group of employees of a given employer,

comprised of all or less than all of the entire body of employees,
consistent with equity to the employer, indicated to be the best suited to
serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.

The fundamental factors in determining the appropriate collective

bargaining unit are: (1) the will of the employees (Globe Doctrine); (2)
affinity and unity of the employees interest, such as substantial similarity
of work and duties, or similarity of compensation and working
conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status.
Contrary to petitioners assertion, this Court has categorically ruled that
the existence of a prior collective bargaining history is neither decisive
nor conclusive in the determination of what constitutes an appropriate
bargaining unit.
However, employees in two corporations cannot be treated as a single bargaining unit
even if the businesses of the two corporations are related. [9]

A Legitimate Labor Organization Representing

An Inappropriate Bargaining Unit

CLUP-SLECC and its Affiliates Workers Unions initial problem was that they
constituted a legitimate labor organization representing a non-appropriate bargaining
unit. However, CLUP-SLECC and its Affiliates Workers Union subsequently re-
registered as CLUP-SLECCWA, limiting its members to the rank-and-file of
SLECC. SLECC cannot ignore that CLUP-SLECC and its Affiliates Workers Union
was a legitimate labor organization at the time of SLECCs voluntary recognition of
SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether CLUP-
SLECC and its Affiliates Workers Union represented an appropriate bargaining unit.

The inclusion in the union of disqualified employees is not among the grounds for
cancellation of registration, unless such inclusion is due to misrepresentation, false
statement or fraud under the circumstances enumerated in Sections (a) to (c) of Article
239 of the Labor Code.[10] THUS, CLUP-SLECC AND ITS AFFILIATES WORKERS
UNION, HAVING BEEN VALIDLY ISSUED A CERTIFICATE OF REGISTRATION,
SHOULD BE CONSIDERED AS HAVING ACQUIRED JURIDICAL PERSONALITY
WHICH MAY NOT BE ATTACKED COLLATERALLY. THE PROPER PROCEDURE
FOR SLECC IS TO FILE A PETITION FOR CANCELLATION OF CERTIFICATE
OF REGISTRATION[11]OF CLUP-SLECC AND ITS AFFILIATES WORKERS
UNION AND NOT TO IMMEDIATELY COMMENCE VOLUNTARY RECOGNITION
PROCEEDINGS WITH SMSLEC.

SLECCs Voluntary Recognition of SMSLEC

The employer may voluntarily recognize the representation status of a union

in unorganized establishments.[12] SLECC WAS NOT AN UNORGANIZED
ESTABLISHMENT WHEN IT VOLUNTARILY RECOGNIZED SMSLEC AS ITS
EXCLUSIVE BARGAINING REPRESENTATIVE ON 20 JULY 2001. CLUP-SLECC
AND ITS AFFILIATES WORKERS UNION FILED A PETITION FOR
CERTIFICATION ELECTION ON 27 FEBRUARY 2001 AND THIS PETITION
REMAINED PENDING AS OF 20 JULY 2001. THUS, SLECCS VOLUNTARY
RECOGNITION OF SMSLEC ON 20 JULY 2001, THE SUBSEQUENT
NEGOTIATIONS AND RESULTING REGISTRATION OF A CBA EXECUTED BY
SLECC AND SMSLEC ARE VOID AND CANNOT BAR CLUP-SLECCWAS
PRESENT PETITION FOR CERTIFICATION ELECTION.
EMPLOYERS PARTICIPATION IN A PETITION FOR CERTIFICATION
ELECTION

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

WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated

on 14 August 2003 as well as the Resolution promulgated on 24 February 2004 of
the Court of Appeals in CA-G.R. SP No. 77015.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

SAN MIGUEL FOODS, G.R. No. 146206

INCORPORATED,
Petitioner, Present:

CARPIO,* J.,
VELASCO, J., Chairperson,
PERALTA,
-versus- ABAD, and
SERENO,**JJ.

SAN MIGUEL CORPORATION Promulgated:

SUPERVISORS and EXEMPT
UNION,
Respondent. August 1, 2011
x---------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

The issues in the present case, relating to the inclusion of employees in supervisor
levels 3 and 4 and the exempt employees in the proposed bargaining unit, thereby
allowing their participation in the certification election; the application of the
community or mutuality of interests test; and the determination of the employees
who belong to the category of confidential employees, are not novel.
In G.R. No. 110399, entitled San Miguel Corporation Supervisors and
Exempt Union v. Laguesma,[1] the Court held that even if they handle confidential
data regarding technical and internal business operations, supervisory employees 3
and 4 and the exempt employees of petitioner San Miguel Foods, Inc. (SMFI) are
not to be considered confidential employees, because the same do not pertain to
labor relations, particularly, negotiation and settlement of
grievances. Consequently, they were allowed to form an appropriate bargaining
unit for the purpose of collective bargaining. The Court also declared that the
employees belonging to the three different plants of San Miguel Corporation
Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis, having
community or mutuality of interests, constitute a single bargaining unit. They
perform work of the same nature, receive the same wages and compensation, and
most importantly, share a common stake in concerted activities. It was immaterial
that the three plants have different locations as they did not impede the operations
of a single bargaining representative.[2]
Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and
Employment National Capital Region (DOLE-NCR) conducted pre-election
conferences.[3] However, there was a discrepancy in the list of eligible voters, i.e.,
petitioner submitted a list of 23 employees for the San Fernando plant and 33 for
the Cabuyao plant, while respondent listed 60 and 82, respectively.[4]

On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an

[5]
Order directing Election Officer Cynthia Tolentino to proceed with the conduct of
certification election in accordance with Section 2, Rule XII of Department Order
No. 9.
On September 30, 1998, a certification election was conducted and it yielded the
following results,[6] thus:

Cabuyao San Fernando Total

Plant Plant
Yes 23 23 46
No 0 0 0
Spoiled 2 0 2
Segregated 41 35 76
Total Votes
Cast 66 58 124

On the date of the election, September 30, 1998, petitioner filed the Omnibus
Objections and Challenge to Voters,[7] questioning the eligibility to vote by some of
its employees on the grounds that some employees do not belong to the bargaining
unit which respondent seeks to represent or that there is no existence of employer-
employee relationship with petitioner. Specifically, it argued that certain employees
should not be allowed to vote as they are: (1) confidential employees; (2)
employees assigned to the live chicken operations, which are not covered by the
bargaining unit; (3) employees whose job grade is level 4, but are performing
managerial work and scheduled to be promoted; (4) employees who belong to the
Barrio Ugong plant; (5) non-SMFI employees; and (6) employees who are
members of other unions.
On October 21, 1998, the Med-Arbiter issued an Order directing respondent
to submit proof showing that the employees in the submitted list are covered by the
original petition for certification election and belong to the bargaining unit it seeks
to represent and, likewise, directing petitioner to substantiate the allegations
contained in its Omnibus Objections and Challenge to Voters.[8]

In compliance thereto, respondent averred that (1) the bargaining unit

contemplated in the original petition is the Poultry Division of San Miguel
Corporation, now known as San Miguel Foods, Inc.; (2) it covered the operations
in Calamba, Laguna, Cavite, and Batangas and its home base is either in Cabuyao,
Laguna or San Fernando, Pampanga; and (3) it submitted individual and separate
declarations of the employees whose votes were challenged in the election.[9]
Adding the results to the number of votes canvassed during the September 30,
1998 certification election, the final tally showed that: number of eligible voters
149; number of valid votes cast 121; number of spoiled ballots - 3; total number of
votes cast 124, with 118 (i.e., 46 + 72 = 118 ) Yes votes and 3 No votes.[10]
 The Med-Arbiter issued the Resolution[11] dated February 17, 1999 directing
the parties to appear before the Election Officer of the Labor Relations Division on
March 9, 1999, 10:00 a.m., for the opening of the segregated ballots. Thereafter, on
April 12, 1999, the segregated ballots were opened, showing that out of the 76
segregated
votes, 72 were cast for Yes and 3 for No, with one spoiled ballot.[12]

Based on the results, the Med-Arbiter issued the Order[13] dated April 13, 1999,
stating that since the Yes vote received 97% of the valid votes cast, respondent is
certified to be the exclusive bargaining agent of the supervisors and exempt
employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San
Fernando, and Otis.

On appeal, the then Acting DOLE Undersecretary, in the Resolution [14] dated July
30, 1999, in OS-A-2-70-91 (NCR-OD-M-9010-017), affirmed the Order dated
April 13, 1999, with modification that George C. Matias, Alma Maria M. Lozano,
Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from the
bargaining unit which respondent seeks to represent. She opined that the
challenged voters should be excluded from the bargaining unit, because Matias and
Lozano are members of Magnolia Poultry Processing Plants Monthly Employees
Union, while Delos Reyes and Pajaron are employees of San Miguel Corporation,
which is a separate and distinct entity from petitioner.

Petitioners Partial Motion for Reconsideration[15] dated August 14, 1999 was
denied by the then Acting DOLE Undersecretary in the Order [16] dated August 27,
1999.

In the Decision[17] dated April 28, 2000, in CA-G.R. SP No.

55510, entitled San Miguel Foods, Inc. v. The Honorable Office of the Secretary of
Labor, Bureau of Labor Relations, and San Miguel Corporation Supervisors and
Exempt Union, the Court of Appeals (CA) affirmed with modification the
Resolution dated July 30, 1999 of the DOLE Undersecretary, stating that
those holding the positions of Human Resource Assistant and Personnel Assistant
are excluded from the bargaining unit.
Petitioners Motion for Partial Reconsideration [18] dated May 23, 2000 was
denied by the CA in the Resolution[19] dated November 28, 2000.

Hence, petitioner filed this present petition raising the following issues:
 I.
WHETHER THE COURT OF APPEALS DEPARTED FROM
JURISPRUDENCE WHEN IT EXPANDED THE SCOPE OF THE
BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R. NO.
110399.

II.
WHETHER THE COURT OF APPEALS DEPARTED FROM
JURISPRUDENCE - SPECIFICALLY, THIS COURT'S DEFINITION OF A
CONFIDENTIAL EMPLOYEE - WHEN IT RULED FOR THE INCLUSION
OF THE PAYROLL MASTER POSITION IN THE BARGAINING UNIT.

III.
WHETHER THIS PETITION IS A REHASH OR A RESURRECTION OF THE
ISSUES RAISED IN G.R. NO. 110399, AS ARGUED BY PRIVATE
RESPONDENT.

Petitioner contends that with the Court's ruling in G.R. No.

110399[20] identifying the specific employees who can participate in the
certification election, i.e., the supervisors (levels 1 to 4) and exempt employees of
San Miguel Poultry Products Plants in Cabuyao, San Fernando, and Otis, the CA
erred in expanding the scope of the bargaining unit so as to include employees who
do not belong to or who are not based in its Cabuyao or San Fernando plants. It
also alleges that the employees of the Cabuyao, San Fernando, and Otis plants of
petitioners predecessor, San Miguel Corporation, as stated in G.R. No. 110399,
were engaged in dressed chicken processing, i.e., handling and packaging of
chicken meat, while the new bargaining unit, as defined by the CA in the present
case, includes employees engaged in live chicken operations, i.e., those who breed
chicks and grow chickens.

Respondent counters that petitioners proposed exclusion of certain

employees from the bargaining unit was a rehashed issue which was already settled
in G.R. No. 110399. It maintains that the issue of union membership coverage
should no longer be raised as a certification election already took place on
September 30, 1998, wherein respondent won with 97% votes.

Petitioners contentions are erroneous. In G.R. No. 110399, the Court

explained that the employees of San Miguel Corporation Magnolia Poultry
Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining
unit, which is not contrary to the one-company, one-union policy. An appropriate
bargaining unit is defined as a group of employees of a given employer, comprised
of all or less than all of the entire body of employees, which the collective interest
of all the employees, consistent with equity to the employer, indicate to be best
suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.[21]

In National Association of Free Trade Unions v. Mainit Lumber

Development Company Workers Union United Lumber and General Workers of the
Phils,[22] the Court, taking into account the community or mutuality of interests
test, ordered the formation of a single bargaining unit consisting of the Sawmill
Division in Butuan City and the Logging Division in Zapanta Valley, Kitcharao,
Agusan [Del] Norte of the Mainit Lumber Development Company. It held that
while the existence of a bargaining history is a factor that may be reckoned with in
determining the appropriate bargaining unit, the same is not decisive or
conclusive. Other factors must be considered. The test of grouping is community
or mutuality of interest. This is so because the basic test of an asserted bargaining
units acceptability is whether or not it is fundamentally the combination which will
best assure to all employees the exercise of their collective bargaining rights.
[23]
Certainly, there is a mutuality of interest among the employees of the Sawmill
Division and the Logging Division. Their functions mesh with one another. One
group needs the other in the same way that the company needs them both. There
may be differences as to the nature of their individual assignments, but the
distinctions are not enough to warrant the formation of a separate bargaining unit.
[24]

Thus, applying the ruling to the present case, the Court affirms the finding of
the CA that there should be only one bargaining unit for
the employees in Cabuyao, San Fernando, and Otis[25] of Magnolia Poultry
Products Plant involved in dressed chicken processing and Magnolia Poultry
Farms engaged in live chicken operations. Certain factors, such as specific line of
work, working conditions, location of work, mode of compensation, and other
relevant conditions do not affect or impede their commonality of interest. Although
they seem separate and distinct from each other, the specific tasks of each division
are actually interrelated and there exists mutuality of interests which warrants the
formation of a single bargaining unit.

Petitioner asserts that the CA erred in not excluding the position of Payroll
Master in the definition of a confidential employee and, thus, prays that the said
position and all other positions with access to salary and compensation data be
excluded from the bargaining unit.

This argument must fail. Confidential employees are defined as those who
(1) assist or act in a confidential capacity, in regard (2) to persons who formulate,
determine, and effectuate management policies in the field of labor relations.
[26]
The two criteria are cumulative, and both must be met if an employee is to be
considered a confidential employee - that is, the confidential relationship must
exist between the employee and his supervisor, and the supervisor must handle the
prescribed responsibilities relating to labor relations. The exclusion from
bargaining units of employees who, in the normal course of their duties, become
aware of management policies relating to labor relations is a principal objective
sought to be accomplished by the confidential employee rule.[27]

A confidential employee is one entrusted with confidence on delicate, or

with the custody, handling or care and protection of the employers property.
[28]
Confidential employees, such as accounting personnel, should be excluded from
the bargaining unit, as their access to confidential information may become the
source of undue advantage.[29] However, such fact does not apply to the position of
Payroll Master and the whole gamut of employees who, as perceived by petitioner,
has access to salary and compensation data. The CA correctly held that the position
of Payroll Master does not involve dealing with confidential labor relations
information in the course of the performance of his functions. Since the nature of
his work does not pertain to company rules and regulations and confidential labor
relations, it follows that he cannot be excluded from the subject bargaining unit.

Corollarily, although Article 245[30] of the Labor Code limits the ineligibility
to join, form and assist any labor organization to managerial employees,
jurisprudence has extended this prohibition to
confidential employees or those who by reason of their positions or nature of work
are required to assist or act in a fiduciary manner to managerial employees and,
hence, are likewise privy to sensitive and highly confidential records.
[31]
Confidential employees are thus excluded from the rank-and-file bargaining
unit. The rationale for their separate category and disqualification to join any labor
organization is similar to the inhibition for managerial employees, because if
allowed to be affiliated with a union, the latter might not be assured of their loyalty
in view of evident conflict of interests and the union can also become company-
denominated with the presence of managerial employees in the union membership.
[32]
Having access to confidential information, confidential employees may also
become the source of undue advantage. Said employees may act as a spy or spies
of either party to a collective bargaining agreement.[33]

In this regard, the CA correctly ruled that the positions of Human Resource
Assistant and Personnel Assistant belong to the category of confidential employees
and, hence, are excluded from the bargaining unit, considering their respective
positions and job descriptions. As Human Resource Assistant,[34] the scope of ones
work necessarily involves labor relations, recruitment and selection of employees,
access to employees' personal files and compensation package, and human
resource management. As regards a Personnel Assistant,[35] one's work includes the
recording of minutes for management during collective bargaining negotiations,
assistance to management during grievance meetings and administrative
investigations, and securing legal advice for labor issues from the petitioners team
of lawyers, and implementation of company programs.Therefore, in the discharge
of their functions, both gain access to vital labor relations information which
outrightly disqualifies them from union membership.
The proceedings for certification election are quasi-judicial in nature and,
therefore, decisions rendered in such proceedings can attain finality.[36] Applying
the doctrine of res judicata, the issue in the

present case pertaining to the coverage of the employees who would constitute the
bargaining unit is now a foregone conclusion.

It bears stressing that a certification election is the sole concern of the

workers; hence, an employer lacks the personality to dispute the same. The general
rule is that an employer has no standing to question the process of certification
election, since this is the sole concern of the workers. [37] Law and policy demand
that employers take a strict, hands-off stance in certification elections. The
bargaining representative of employees should be chosen free from any extraneous
influence of management. A labor bargaining representative, to be effective, must
owe its loyalty to the employees alone and to no other.[38] The only exception is
where the employer itself has to file the petition pursuant to Article 258 [39] of the
Labor Code because of a request to bargain collectively.[40]

With the foregoing disquisition, the Court writes finis to the issues raised so
as to forestall future suits of similar nature.

WHEREFORE, the petition is DENIED. The Decision dated April 28, 2000 and
Resolution dated November 28, 2000 of the Court of Appeals, in CA-G.R. SP No.
55510, which affirmed with modification the Resolutions dated July 30, 1999 and
August 27, 1999 of the Secretary of Labor, are AFFIRMED.

SO ORDERED.

THIRD DIVISION

CIRTEK EMPLOYEES G.R. No. 190515

LABOR UNION-
FEDERATION OF FREE Present:
WORKERS
Petitioner, CARPIO MORALES, J., Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
VILLARAMA, JR., and
- versus - SERENO, JJ.

Promulgated:
CIRTEK ELECTRONICS, June 6, 2011
INC.,
Respondent.

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

R E S O LUTIO N

CARPIO MORALES, J.:

This resolves the motion for reconsideration and supplemental motion for
reconsideration filed by respondent, Cirtek Electronics, Inc., of the Courts
Decision dated November 15, 2010.

Respondent-movant avers that petitioner, in filing the petition for certiorari

under Rule 65, availed of the wrong remedy, hence, the Court should have
dismissed the petition outright. It goes on to aver that the Court erred in resolving a
factual issue whether the August 24, 2005 Memorandum of Agreement (MOA)
was validly entered into , which is not the office of a petition for certiorari.

Respondent-movant further avers that the MOA[1] signed by the remaining

officers of petitioner Union and allegedly ratified by its members should have been
given credence by the Court.

Furthermore, respondent-movant maintains that the Secretary of Labor

cannot insist on a ruling beyond the compromise agreement entered into by the
parties; and that, as early as February 5, 2010, petitioner Union had already filed
with the Department of Labor and Employment (DOLE) a resolution of
disaffiliation from the Federation of Free Workers resulting in the latters lack of
personality to represent the workers in the present case.

The motion is bereft of merit.

Respondent indeed availed of the wrong remedy of certiorari under Rule

65. Due, however, to the nature of the case, one involving workers wages and
benefits, and the fact that whether the petition was filed under Rule 65 or appeal by
certiorari under Rule 45 it was filed within 15 days (the reglementary period under
Rule 45) from petitioners receipt of the resolution of the Court of Appeals
Resolution denying its motion for reconsideration, the Court resolved to give it due
course. As Almelor v. RTC of Las Pias, et al. [2] restates:

Generally, an appeal taken either to the Supreme Court or the

CA by the wrong or inappropriate mode shall be dismissed. This is to
prevent the party from benefiting from ones neglect and
mistakes. However, like most rules, it carries certain exceptions. After
all, the ultimate purpose of all rules of procedures is to achieve
substantial justice as expeditiously as possible. (emphasis and
underscoring supplied)
Respecting the attribution of error to the Court in ruling on a question of
fact, it bears recalling that a QUESTION OF FACT arises when the doubt or
difference arises as to the truth or falsehood of alleged facts, [3]while a QUESTION
OF LAW exists when the doubt or difference arises as to what the law is on a
certain set of facts.
 The present case presents the primordial issue of whether the Secretary of
Labor is empowered to give arbitral awards in the exercise of his authority to
assume jurisdiction over labor disputes.

Ineluctably, the issue involves a determination and application of existing

law, the provisions of the Labor Code, and prevailing jurisprudence. Intertwined
with the issue, however, is the question of validity of the MOA and its ratification
which, as movant correctly points out, is a question of fact and one which is not
appropriate for a petition for review on certiorari under Rule 45. The rule,
however, is not without exceptions, viz:

This rule provides that the parties may raise only questions of law,
because the Supreme Court is not a trier of facts. Generally, we are not
duty-bound to analyze again and weigh the evidence introduced in and
considered by the tribunals below. When supported by substantial
evidence, the findings of fact of the CA are conclusive and binding
on the parties and are not reviewable by this Court, unless the case
falls under any of the following recognized exceptions:

(1) When the conclusion is a finding grounded entirely on speculation,

surmises and conjectures;

(2) When the inference made is manifestly mistaken, absurd or

impossible;

(3) Where there is a grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When the findings of fact are conflicting;

(6) When the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both
appellant and appellee;

(7) When the findings are contrary to those of the trial court;

(8) When the findings of fact are conclusions without citation of

specific evidence on which they are based;

(9) When the facts set forth in the petition as well as in the petitioners'
main and reply briefs are not disputed by the respondents; and
 (10) When the findings of fact of the Court of Appeals are premised on
the supposed absence of evidence and contradicted by the evidence on
record. (emphasis and underscoring supplied)

In the present case, the findings of the Secretary of Labor and the appellate court
on whether the MOA is valid and binding are conflicting, the former giving scant
consideration thereon, and the latter affording it more weight.

As found by the Secretary of Labor, the MOA came about as a result of the
constitution, at respondents behest, of the Labor-Management Council (LMC)
which, he reminded the parties, should not be used as an avenue for bargaining but
for the purpose of affording workers to participate in policy and decision-
making. Hence, the agreements embodied in the MOA were not the proper subject
of the LMC deliberation or procedure but of CBA negotiations and, therefore,
deserving little weight.

The appellate court, held, however, that the Secretary did not have the
authority to give an arbitral award higher than what was stated in the MOA. The
conflicting views drew the Court to re-evaluate the facts as borne by the records,
an exception to the rule that only questions of law may be dealt with in an appeal
by certiorari under Rule 45.

As discussed in the Decision under reconsideration, the then Acting

Secretary of Labor Manuel G. Imson acted well within his jurisdiction in ruling
that the wage increases to be given are P10 per day effective January 1, 2004
and P15 per day effective January 1, 2005, pursuant to his power to assume
jurisdiction under Art. 263 (g)[4] of the Labor Code.

While an arbitral award cannot per se be categorized as an agreement

voluntarily entered into by the parties because it requires the interference and
imposing power of the State thru the Secretary of Labor when he assumes
jurisdiction, the award can be considered as an approximation of a collective
bargaining agreement which would otherwise have been entered into by the
parties. Hence, it has the force and effect of a valid contract obligation between
the parties.[5]
 In determining arbitral awards then, aside from the MOA, courts considered
other factors and documents including, as in this case, the financial
documents[6] submitted by respondent as well as its previous bargaining history and
financial outlook and improvements as stated in its own website.[7]

The appellate courts ruling that giving credence to the Pahayag and the minutes of
the meeting which were not verified and notarized would violate the rule on parol
evidence is erroneous. The parol evidence rule, like other rules on evidence, should
not be strictly applied in labor cases. Interphil Laboratories Employees Union-
FFW v. Interphil Laboratories, Inc. [8] teaches:
[R]eliance on the parol evidence rule is misplaced. In labor
cases pending before the Commission or the Labor Arbiter, the rules of
evidence prevailing in courts of law or equity are not controlling.
Rules of procedure and evidence are not applied in a very rigid and
technical sense in labor cases. Hence, the Labor Arbiter is not precluded
from accepting and evaluating evidence other than, and even contrary
to, what is stated in the CBA. (emphasis and underscoring supplied)

On the contention that the MOA should have been given credence because it
was validly entered into by the parties, the Court notes that even those who signed
it expressed reservations thereto. A CBA (assuming in this case that the MOA can
be treated as one) is a contract imbued with public interest. It must thus be given a
liberal, practical and realistic, rather than a narrow and technical construction, with
due consideration to the context in which it is negotiated and the purpose for which
it is intended.[9]

As for the contention that the alleged disaffiliation of the Union from the
FFW during the pendency of the case resulted in the FFW losing its personality to
represent the Union, the same does not affect the Courts upholding of the authority
of the Secretary of Labor to impose arbitral awards higher than what was
supposedly agreed upon in the MOA. Contrary to respondents assertion, the
unavoidable issue of disaffiliation bears no significant legal repercussions to
warrant the reversal of the Courts Decision.

En passant, whether there was a valid disaffiliation is a factual

issue. Besides, the alleged disaffiliation of the Union from the FFW was by virtue
of a Resolution signed on February 23, 2010 and submitted to the DOLE Laguna
Field Office on March 5, 2010 two months after the present petition was filed on
December 22, 2009, hence, it did not affect FFW and its Legal Centers standing to
file the petition nor this Courts jurisdiction to resolve the same.
At all events, the issue of disaffiliation is an intra-union dispute which must
be resolved in a different forum in an action at the instance of either or both the
FFW and the Union or a rival labor organization, not theemployer.

An intra-union dispute refers to any conflict between and among

union members, including grievances arising from any violation of
the rights and conditions of membership, violation of or
disagreement over any provision of the unions constitution and by-
laws, or disputes arising from chartering or disaffiliation of the
union. Sections 1 and 2, Rule XI of Department Order No. 40-03, Series
of 2003 of the DOLE enumerate the following circumstances as
inter/intra-union disputes, viz:
RULE XI
INTER/INTRA-UNION DISPUTES AND
OTHER RELATED LABOR RELATIONS DISPUTES

SECTION 1. Coverage. - Inter/intra-union disputes shall include:

(a) cancellation of registration of a labor organization filed by its members
or by another labor organization;
(b) conduct of election of union and workers association
officers/nullification of election of union and workers association
officers;
(c) audit/accounts examination of union or workers association funds;
(d) deregistration of collective bargaining agreements;
(e) validity/invalidity of union affiliation or disaffiliation;
(f) validity/invalidity of acceptance/non-acceptance for union membership;
(g) validity/invalidity of impeachment/expulsion of union and workers
association officers and members;
(h) validity/invalidity of voluntary recognition;
(i) opposition to application for union and CBA registration;
(j) violations of or disagreements over any provision in a union or workers
association constitution and by-laws;
(k) disagreements over chartering or registration of labor organizations and
collective bargaining agreements;
 (l) violations of the rights and conditions of union or workers association
membership;
(m) violations of the rights of legitimate labor organizations, except
interpretation of collective bargaining agreements;
(n) such other disputes or conflicts involving the rights to self-organization,
union membership and collective bargaining
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers association.

SECTION 2. Coverage. Other related labor relations disputes shall include any
conflict between a labor union and the employer or any individual, entity or group that is
not a labor organization or workers association. This includes: (1) cancellation of
registration of unions and workers associations; and (2) a petition for interpleader.
[10]
(emphasis supplied)

Indeed, as respondent-movant itself argues, a local union may disaffiliate

at any time from its mother federation, absent any showing that the same is
prohibited under its constitution or rule. Such, however, does not result in it
losing its legal personality altogether. Verily, Anglo-KMU v. Samahan Ng Mga
Manggagawang Nagkakaisa Sa Manila Bay Spinning Mills At J.P.
Coats[11] enlightens:

A local labor union is a separate and distinct unit primarily designed

to secure and maintain an equality of bargaining power between the
employer and their employee-members. 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. The mere act of 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. (emphasis and underscoring supplied)

Whether then, as respondent claims, FFW went against the will and wishes of its
principal (the member-employees) by pursuing the case despite the signing of the
MOA, is not for the Court, nor for respondent to determine, but for the Union and
FFW to resolve on their own pursuant to their principal-agent relationship.
 WHEREFORE, the motion for reconsideration of this Courts Decision of
November 15, 2010 is DENIED.

SO ORDERED.

epublic of the Philippines

Supreme Court
Manila

FIRST DIVISION

LEGEND INTERNATIONAL G.R. No. 169754

RESORTS LIMITED,
Petitioner,
Present:

- versus - CORONA, C.J., Chairperson,

VELASCO, JR.,
NACHURA,
DEL CASTILLO, and
KILUSANG PEREZ, JJ.
MANGGAGAWA
NG LEGENDA (KML-
INDEPENDENT), Promulgated:
Respondent. February 23, 2011
x-----------------------------------------------------------------
--x

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari assails the September 18, 2003 Decision of the
Court of Appeals in CA-G.R. SP No. 72848 which found no grave abuse of discretion on
the part of the Office of the Secretary of the Department of Labor and Employment
(DOLE) which ruled in favor of Kilusang Manggagawa ng Legenda (KML). Also
assailed is the September 14, 2005 Resolution denying petitioners motion for
reconsideration.

Factual Antecedents

On June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando,
Pampanga, a Petition for Certification Election[1] docketed as Case No. RO300-0106-
RU-001. KML alleged that it is a legitimate labor organization of the rank and file
employees of Legend International Resorts Limited (LEGEND). KML claimed that it
was issued its Certificate of Registration No. RO300-0105-UR-002 by the DOLE on
May 18, 2001.

LEGEND moved to dismiss[2] the petition alleging that KML is not a legitimate labor
organization because its membership is a mixture of rank and file and supervisory
employees in violation of Article 245 of the Labor Code.LEGEND also claimed that
KML committed acts of fraud and misrepresentation when it made it appear that certain
employees attended its general membership meeting on April 5, 2001 when in reality
some of them were either at work; have already resigned as of March 2001; or were
abroad.

In its Comment,[3] KML argued that even if 41 of its members are indeed supervisory
employees and therefore excluded from its membership, the certification election could
still proceed because the required number of the total rank and file employees necessary
for certification purposes is still sustained. KML also claimed that its legitimacy as a
labor union could not be collaterally attacked in the certification election proceedings but
only through a separate and independent action for cancellation of union registration.
Finally, as to the alleged acts of misrepresentation, KML asserted that LEGEND failed to
substantiate its claim.

Ruling of the Med-Arbiter

On September 20, 2001, the Med-Arbiter[4] rendered judgment[5] dismissing for lack of
merit the petition for certification election. The Med-Arbiter found that indeed there were
several supervisory employees in KMLs membership.Since Article 245 of the Labor
Code expressly prohibits supervisory employees from joining the union of rank and file
employees, the Med-Arbiter concluded that KML is not a legitimate labor
organization. KML was also found to have fraudulently procured its registration
certificate by misrepresenting that 70 employees were among those who attended its
organizational meeting on April 5, 2001 when in fact they were either at work or
elsewhere.

KML thus appealed to the Office of the Secretary of the DOLE.

Ruling of the Office of the Secretary of DOLE

On May 22, 2002, the Office of the Secretary of DOLE rendered its Decision[6] granting
KMLs appeal thereby reversing and setting aside the Med-Arbiters Decision. The Office
of the Secretary of DOLE held that KMLs legitimacy as a union could not be collaterally
attacked, citing Section 5,[7] Rule V of Department Order No. 9, series of 1997.

The Office of the Secretary of DOLE also opined that Article 245 of the Labor Code
merely provides for the prohibition on managerial employees to form or join a union and
the ineligibility of supervisors to join the union of the rank and file employees and vice
versa. It declared that any violation of the provision of Article 245 does not ipso
facto render the existence of the labor organization illegal. Moreover, it held that Section
11, paragraph II of Rule XI which provides for the grounds for dismissal of a petition for
certification election does not include mixed membership in one union.

The dispositive portion of the Office of the Secretary of DOLEs Decision reads:
WHEREFORE, the appeal is hereby GRANTED and the order of the Med-
Arbiter dated 20 September 2001 is REVERSED and SET ASIDE.

Accordingly, let the entire record of the case be remanded to the regional
office of origin for the immediate conduct of the certification election, subject
to the usual pre-election conference, among the rank and file employees of
LEGEND INTERNATIONAL RESORTS LIMITED with the following
choices:

1. KILUSANG MANGGAGAWA NG LEGENDA (KML-

INDEPENDENT); and
 2. NO UNION.

Pursuant to Rule XI, Section II.1 of D.O. No. 9, the employer is hereby
directed to submit to the office of origin, within ten days from receipt of the
decision, the certified list of employees in the bargaining unit for the last three
(3) months prior to the issuance of this decision.

SO DECIDED.[8]

LEGEND filed its Motion for Reconsideration[9] reiterating its earlier

arguments. It also alleged that on August 24, 2001, it filed a Petition [10] for Cancellation
of Union Registration of KML docketed as Case No. RO300-0108-CP-001 which was
granted[11] by the DOLE Regional Office No. III of San Fernando, Pampanga in its
Decision[12] dated November 7, 2001.

In a Resolution[13] dated August 20, 2002, the Office of the Secretary of DOLE
denied LEGENDs motion for reconsideration. It opined that Section 11, paragraph II(a),
Rule XI of Department Order No. 9 requires a final order of cancellation before a petition
for certification election may be dismissed on the ground of lack of legal
personality. Besides, it noted that the November 7, 2001 Decision of DOLE Regional
Office No. III of San Fernando, Pampanga in Case No. RO300-0108-CP-001 was
reversed by the Bureau of Labor Relations in a Decision dated March 26, 2002.

Ruling of the Court of Appeals

Undeterred, LEGEND filed a Petition for Certiorari[14] with the Court of Appeals
docketed as CA-G.R. SP No. 72848. LEGEND alleged that the Office of the Secretary of
DOLE gravely abused its discretion in reversing and setting aside the Decision of the
Med-Arbiter despite substantial and overwhelming evidence against KML.

For its part, KML alleged that the Decision dated March 26, 2002 of the Bureau of
Labor Relations in Case No. RO300-0108-CP-001 denying LEGENDs petition for
cancellation and upholding KMLs legitimacy as a labor organization has already become
final and executory, entry of judgment having been made on August 21, 2002.[15]
The Office of the Secretary of DOLE also filed its Comment [16] asserting that KMLs
legitimacy cannot be attacked collaterally. Finally, the Office of the Secretary of DOLE
stressed that LEGEND has no legal personality to participate in the certification election
proceedings.

On September 18, 2003, the Court of Appeals rendered its Decision [17] finding no grave
abuse of discretion on the part of the Office of the Secretary of DOLE. The appellate
court held that the issue on the legitimacy of KML as a labor organization has already
been settled with finality in Case No. RO300-0108-CP-001. The March 26, 2002
Decision of the Bureau of Labor Relations upholding the legitimacy of KML as a labor
organization had long become final and executory for failure of LEGEND to appeal the
same. Thus, having already been settled that KML is a legitimate labor organization, the
latter could properly file a petition for certification election. There was nothing left for the
Office of the Secretary of DOLE to do but to order the holding of such certification
election.

The dispositive portion of the Decision reads:

WHEREFORE, in view of the foregoing, and finding that no grave

abuse of discretion amounting to lack or excess of jurisdiction has been
committed by the Department of Labor and Employment, the assailed May
22, 2002 Decision and August 20, 2002 Resolution in Case No. RO300-106-
RU-001 are UPHELD and AFFIRMED. The instant petition is DENIED due
course and, accordingly, DISMISSED for lack of merit.[18]

LEGEND filed a Motion for Reconsideration[19] alleging, among others, that it has
appealed to the Court of Appeals the March 26, 2002 Decision in Case No. RO300-0108-
CP-001 denying its petition for cancellation and that it is still pending resolution.

On September 14, 2005, the appellate court denied LEGENDs motion for
reconsideration.

Hence, this Petition for Review on Certiorari raising the lone assignment of error, viz:
 WHETHER X X X THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS ERRORS IN THE APPLICATION OF LAW IN
DENYING THE PETITIONERS PETITION FOR CERTIORARI.[20]

Petitioners Arguments

LEGEND submits that the Court of Appeals grievously erred in ruling that the March 26,
2002 Decision denying its Petition for Cancellation of KMLs registration has already
become final and executory. It asserts that it has seasonably filed a Petition
for Certiorari[21] before the CA docketed as CA-G.R. SP No. 72659 assailing said
Decision. In fact, on June 30, 2005, the Court of Appeals granted the petition, reversed
the March 26, 2002 Decision of the Bureau of Labor Relations and reinstated the
November 7, 2001 Decision of the DOLE Regional Office III ordering the cancellation
of KMLs registration.

Finally, LEGEND posits that the cancellation of KMLs certificate of registration should
retroact to the time of its issuance.[22] It thus claims that the petition for certification
election and all of KMLs activities should be nullified because it has no legal personality
to file the same, much less demand collective bargaining with LEGEND.[23]

LEGEND thus prays that the September 20, 2001 Decision of the Med-Arbiter
dismissing KMLs petition for certification election be reinstated.[24]

Respondents Arguments

In its Comment filed before this Court dated March 21, 2006, KML insists that the
Decision of the Bureau of Labor Relations upholding its legitimacy as a labor
organization has already attained finality[25] hence there was no more hindrance to the
holding of a certification election. Moreover, it claims that the instant petition has
become moot because the certification election sought to be prevented had already been
conducted.

Our Ruling

The petition is partly meritorious.

LEGEND has timely appealed the March 26,
2002 Decision of the Bureau of Labor
Relations to the Court of Appeals.

We cannot understand why the Court of Appeals totally disregarded LEGENDs

allegation in its Motion for Reconsideration that the March 26, 2002 Decision of the
Bureau of Labor Relations has not yet attained finality considering that it has timely
appealed the same to the Court of Appeals and which at that time is still pending
resolution. The Court of Appeals never bothered to look into this allegation and instead
dismissed outright LEGENDs motion for reconsideration. By doing so, the Court of
Appeals in effect maintained its earlier ruling that the March 26, 2002 Decision of the
Bureau of Labor Relations upholding the legitimacy of KML as a labor organization has
long become final and executory for failure of LEGEND to appeal the same.

This is inaccurate. Records show that (in the cancellation of registration case)
LEGEND has timely filed on September 6, 2002 a petition for certiorari[26] before the
Court of Appeals which was docketed as CA-G.R. SP No. 72659 assailing the March 26,
2002 Decision of the Bureau of Labor Relations. In fact, KML received a copy of said
petition on September 10, 2002[27] and has filed its Comment thereto on December 2,
2002.[28] Thus, we find it quite interesting for KML to claim in its Comment (in the
certification petition case) before this Court dated March 21, 2006 [29] that the Bureau of
Labor Relations Decision in the petition for cancellation case has already attained
finality. Even in its Memorandum[30] dated March 13, 2007 filed before us, KML is still
insisting that the Bureau of Labor Relations Decision has become final and executory.

Our perusal of the records shows that on June 30, 2005, the Court of Appeals
rendered its Decision[31] in CA-G.R. SP No. 72659 reversing the March 26, 2002
Decision of the Bureau of Labor Relations and reinstating the November 7, 2001
Decision of the Med-Arbiter which canceled the certificate of registration of KML. [32] On
September 30, 2005, KMLs motion for reconsideration was denied for lack of merit.
[33]
On November 25, 2005, KML filed its Petition for Review on Certiorari[34] before
this Court which was docketed as G.R. No. 169972. However, the same was denied in a
Resolution[35] dated February 13, 2006 for having been filed out of time. KML moved for
reconsideration but it was denied with finality in a Resolution [36] dated June 7,
2006. Thereafter, the said Decision canceling the certificate of registration of KML as a
labor organization became final and executory and entry of judgment was made on July
18, 2006.[37]

The cancellation of KMLs certificate of

registration should not retroact to the time of
its issuance.

Notwithstanding the finality of the Decision canceling the certificate of

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

This issue is not new or novel. In Pepsi-Cola Products Philippines, Inc. v.

Secretary of Labor,[38] we already ruled that:

Anent the issue of whether or not the Petition to cancel/revoke

registration is a prejudicial question to the petition for certification election, the
following ruling in the case of Association of the Court of Appeals Employees
(ACAE) v. Hon. Pura Ferrer-Calleja, x x x is in point, to wit:

x x x It is well-settled rule that a certification proceedings

is not a litigation in the sense that the term is ordinarily
understood, but an investigation of a non-adversarial and fact
finding character. (Associated Labor Unions (ALU) v. Ferrer-
Calleja, 179 SCRA 127 [1989]; Philippine Telegraph and
Telephone Corporation v. NLRC, 183 SCRA 451 [1990]. Thus,
the technical rules of evidence do not apply if the decision to
grant it proceeds from an examination of the sufficiency of the
petition as well as a careful look into the arguments contained in
the position papers and other documents.

At any rate, the Court applies the established rule

correctly followed by the public respondent that an order to
hold a certification election is proper despite the pendency
of the petition for cancellation of the registration certificate
of the respondent union. The rationale for this is that at the
 time the respondent union filed its petition, it still had the
legal personality to perform such act absent an order
directing the cancellation.[39] (Emphasis supplied.)

In Capitol Medical Center, Inc. v. Hon. Trajano,[40] we also held that the pendency
of a petition for cancellation of union registration does not preclude collective bargaining.
[41]
Citing the Secretary of Labor, we held viz:

That there is a pending cancellation proceedings against the

respondent Union is not a bar to set in motion the mechanics of collective
bargaining. If a certification election may still be ordered despite the
pendency of a petition to cancel the unions registration certificate x x x
more so should the collective bargaining process continue despite its
pendency. [42] (Emphasis supplied.)

In Association of Court of Appeals Employees v. Ferrer-Calleja,[43] this Court was

tasked to resolve the issue of whether the certification proceedings should be suspended
pending [the petitioners] petition for the cancellation of union registration of the
UCECA[44].[45] The Court resolved the issue in the negative holding that an order to hold
a certification election is proper despite the pendency of the petition for cancellation
of the registration certificate of the respondent union. The rationale for this is that at
the time the respondent union filed its petition, it still had the legal personality to perform
such act absent an order directing a cancellation. [46] We reiterated this view in Samahan
ng Manggagawa sa Pacific Plastic v. Hon. Laguesma[47] where we declared that a
certification election can be conducted despite pendency of a petition to cancel the
union registration certificate. For the fact is that at the time the respondent union filed
its petition for certification, it still had the legal personality to perform such act absent an
order directing its cancellation.[48]

Based on the foregoing jurisprudence, it is clear that a certification election may be

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

The legitimacy of the legal personality of

KML cannot be collaterally attacked in a
petition for certification election.

We agree with the ruling of the Office of the Secretary of DOLE that the
legitimacy of the legal personality of KML cannot be collaterally attacked in a petition
for certification election proceeding. This is in consonance with our ruling in Laguna
Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor
and Employment[49] that such legal personality may not be subject to a collateral attack
but only through a separate action instituted particularly for the purpose of assailing it.
[50]
We further held therein that:

This is categorically prescribed by Section 5, Rule V of the Implementing

Rules of Book V, which states as follows:

SEC. 5.[51] 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.

Hence, to raise the issue of the respondent unions legal personality is

not proper in this case. The pronouncement of the Labor Relations Division
Chief, that the respondent union acquired a legal personality x x x cannot be
challenged in a petition for certification election.

The discussion of the Secretary of Labor and Employment on this point

is also enlightening, thus:

. . . Section 5, Rule V of D.O. 9 is instructive on the

matter. It provides that the legal personality of a union cannot be
the subject of collateral attack in a petition for certification
election, but may be questioned only in an independent petition
 for cancellation of union registration. This has been the rule
since NUBE v. Minister of Labor, 110 SCRA 274 (1981). What
applies in this case is the principle that once a union acquires a
legitimate status as a labor organization, it continues as such
until its certificate of registration is cancelled or revoked in an
independent action for cancellation.

Equally important is Section 11, Paragraph II, Rule IX of

D.O. 9, which provides for the dismissal of a petition for
certification election based on the lack of legal personality of a
labor organization only in the following instances: (1) appellant
is not listed by the Regional Office or the BLR in its registry of
legitimate labor organizations; or (2) appellants legal personality
has been revoked or cancelled with finality. Since appellant is
listed in the registry of legitimate labor organizations, and its
legitimacy has not been revoked or cancelled with finality, the
granting of its petition for certification election is proper.[52]

[T]he legal personality of a legitimate labor organization x x x cannot be subject to

a collateral attack. The law is very clear on this matter. x x x The Implementing Rules
stipulate that a labor organization shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration. Once a certificate of
registration is issued to a union, its legal personality cannot be subject to a collateral
attack. In may be questioned only in an independent petition for cancellation in
accordance with Section 5 of Rule V, Book V of the Implementing Rules.[53]

WHEREFORE, in view of the foregoing, the petition is PARTLY

GRANTED. The Decision of the Court of Appeals dated September 18, 2003 in CA-
G.R. SP No. 72848 insofar as it affirms the May 22, 2002 Decision and August 20, 2002
Resolution of the Office of the Secretary of Department of Labor and Employment
is AFFIRMED. The Decision of the Court of Appeals insofar as it declares that the
March 26, 2002 Decision of the Bureau of Labor Relations in Case No. RO300-0108-
CP-001 upholding that the legitimacy of KML as a labor organization has long become
final and executory for failure of LEGEND to appeal the same,
is REVERSED and SET ASIDE.

SO ORDERED.