G.R. No. 171153, September 12, 2007
[5] In compliance with registration
SAN MIGUEL CORPORATION EMPLOYEES UNIONPHILIPPINE
TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU
PTGWO), PETITIONER,
VS.
SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION
PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP),
RESPONDENT.[1]
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule 45 of the Revised
Rules of Court, petitioner SAN MIGUEL CORPORATION EMPLOYEES
UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS
ORGANIZATION (SMCEU-PTGWO) prays that this Court reverse and set
aside the (a) Decision[2] dated 9 March 2005 of the Court of Appeals
in CA-G.R. SP No. 66200, affirming the Decision[3] dated 19 February
2001 of the Bureau of Labor Relations (BLR) of the Department of
Labor and Employment (DOLE) which upheld the Certificate of
Registration of respondent SAN MIGUEL PACKAGING PRODUCTS
EMPLOYEES UNIONPAMBANSANG DIWA NG MANGGAGAWANG
PILIPINO (SMPPEUPDMP); and (b) the Resolution[4] dated 16 January
2006 of the Court of Appeals in the same case, denying petitioner's
Motion for Reconsideration of the aforementioned Decision.
The following are the antecedent facts:
Petitioner is the incumbent bargaining agent for the bargaining unit
comprised of the regular monthly-paid rank and file employees of the
three divisions of San Miguel Corporation (SMC), namely, the San
Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines
(SMBP), and the San Miguel Packaging Products (SMPP), in all offices
and plants of SMC, including the Metal Closure and Lithography Plant
in Laguna. It had been the certified bargaining agent for 20 years
from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng
Manggagawang Pilipino (PDMP). PDMP issued Charter Certificate No.
1
112 to respondent on 15 June 1999.
requirements, respondent submitted the requisite documents to the
BLR for the purpose of acquiring legal personality.[6] Upon submission
of its charter certificate and other documents, respondent was issued
Certificate of Creation of Local or Chapter PDMP-01 by the BLR on 6
July 1999.[7] Thereafter, respondent filed with the Med-Arbiter of the
DOLE Regional Officer in the National Capital Region (DOLE-NCR),
three separate petitions for certification election to represent SMPP,
SMCSU, and SMBP.[8] All three petitions were dismissed, on the ground
that the separate petitions fragmented a single bargaining unit.[9]
On 17 August 1999, petitioner filed with the DOLE-NCR a petition
seeking the cancellation of respondent's registration and its dropping
from the rolls of legitimate labor organizations. In its petition,
petitioner accused respondent of committing fraud and falsification,
and non-compliance with registration requirements in obtaining its
certificate of registration. It raised allegations that respondent violated
Articles 239(a), (b) and (c)[10] and 234(c)[11] of the Labor Code.
Moreover, petitioner claimed that PDMP is not a legitimate labor
organization, but a trade union center, hence, it cannot directly create
a local or chapter. The petition was docketed as Case No. NCR-OD-
9908-007-IRD.[12]
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an
Order dismissing the allegations of fraud and misrepresentation, and
irregularity in the submission of documents by respondent. Regional
Director Lim further ruled that respondent is allowed to directly create
a local or chapter. However, he found that respondent did not comply
with the 20% membership requirement and, thus, ordered the
cancellation of its certificate of registration and removal from the rolls
of legitimate labor organizations.[13] Respondent appealed to the
BLR. In a Decision dated 19 February 2001, it declared:
As a chartered local union, appellant is not required to submit the
number of employees and names of all its members comprising at
least 20% of the employees in the bargaining unit where it seeks to
operate. Thus, the revocation of its registration based on non-
compliance with the 20% membership requirement does not have any
basis in the rules.
Further, although PDMP is considered as a trade union center, it is a
holder of Registration Certificate No. FED-11558-LC issued by the BLR
on 14 February 1991, which bestowed upon it the status of a
legitimate labor organization with all the rights and privileges to act as
representative of its members for purposes of collective bargaining
agreement. On this basis, PDMP can charter or create a local, in
accordance with the provisions of Department Order No. 9.
WHEREFORE, the appeal is hereby GRANTED. Accordingly, the
decision of the Regional Director dated July 14, 2000, canceling the
registration of appellant San Miguel Packaging Products Employees
Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is
REVERSED and SET ASIDE. Appellant shall hereby remain in the roster
of legitimate labor organizations.[14]
While the BLR agreed with the findings of the DOLE Regional Director
dismissing the allegations of fraud and misrepresentation, and in
upholding that PDMP can directly create a local or a chapter, it
reversed the Regional Director's ruling that the 20% membership is a
requirement for respondent to attain legal personality as a labor
organization. Petitioner thereafter filed a Motion for Reconsideration
with the BLR. In a Resolution rendered on 19 June 2001 in BLR-A-C-64-
05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for
Reconsideration and affirmed its Decision dated 19 February 2001.[15]
Invoking the power of the appellate court to review decisions of quasi-
judicial agencies, petitioner filed with the Court of Appeals a Petition
for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure
docketed as CA-G.R. SP No. 66200. The Court of Appeals, in a
Decision dated 9 March 2005, dismissed the petition and affirmed the
Decision of the BLR, ruling as follows:
In Department Order No. 9, a registered federation or national union
may directly create a local by submitting to the BLR copies of the
charter certificate, the local's constitution and by-laws, the principal
office address of the local, and the names of its officers and their
addresses. Upon complying with the documentary requirements, the
local shall be issued a certificate and included in the roster of
legitimate labor organizations. The [herein respondent] is an affiliate
of a registered federation PDMP, having been issued a charter
2
certificate. Under the rules we have reviewed, there is no need for
SMPPEU to show a membership of 20% of the employees of the
bargaining unit in order to be recognized as a legitimate labor union.
xxxx
In view of the foregoing, the assailed decision and resolution of the
BLR are AFFIRMED, and the petition is DISMISSED.[16]
Subsequently, in a Resolution dated 16 January 2006, the Court of
Appeals denied petitioner's Motion for Reconsideration of the
aforementioned Decision.
Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of
Court where petitioner raises the sole issue of:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN RULING THAT PRIVATE RESPONDENT IS NOT
REQUIRED TO SUBMIT THE NUMBER OF EMPLOYEES AND NAMES OF
ALL ITS MEMBERS COMPRISING AT LEAST 20% OF THE EMPLOYEES IN
THE BARGAINING UNIT WHERE IT SEEKS TO OPERATE.
The present petition questions the legal personality of respondent as a
legitimate labor organization.
Petitioner posits that respondent is required to submit a list of
members comprising at least 20% of the employees in the bargaining
unit before it may acquire legitimacy, citing Article 234(c) of the Labor
Code which stipulates that 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:
Fifty pesos (P50.00) registration fee;
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;
The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate;
If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
Four (4) copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification and the list of the members who
participated in it.[17]
Petitioner also insists that the 20% requirement for registration of
respondent must be based not on the number of employees of a single
division, but in all three divisions of the company in all the offices and
plants of SMC since they are all part of one bargaining unit. Petitioner
refers to Section 1, Article 1 of the Collective Bargaining Agreement
(CBA),[18] quoted hereunder:
ARTICLE 1
SCOPE
Section 1. Appropriate Bargaining Unit. The appropriate bargaining
unit covered by this Agreement consists of all regular rank and file
employees paid on the basis of fixed salary per month and employed
by the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing
Products (SMBP) and San Miguel Packaging Products (SMPP) and in
different operations existing in the City of Manila and suburbs,
including Metal Closure and Lithography Plant located at Canlubang,
Laguna subject to the provisions of Article XV of this Agreement
provided however, that if during the term of this Agreement, a plant
within the territory covered by this Agreement is transferred outside
but within a radius of fifty (50) kilometers from the Rizal Monument,
Rizal Park, Metro Manila, the employees in the transferred plant shall
remain in the bargaining unit covered by this Agreement. (Emphasis
supplied.)
Petitioner thus maintains that respondent, in any case, failed to meet
this 20% membership requirement since it based its membership on
the number of employees of a single division only, namely, the SMPP.
There is merit in petitioner's contentions.
3
A legitimate labor organization[19] is defined as "any labor
organization duly registered with the Department of Labor and
Employment, and includes any branch or local thereof."[20] The
mandate of the Labor Code is to ensure strict compliance with the
requirements on registration because a legitimate labor organization is
entitled to specific rights under the Labor Code,[21] and are involved
in activities directly affecting matters of public interest. Registration
requirements are intended to 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.[22] Legitimate labor
organizations have exclusive rights under the law which cannot be
exercised by non-legitimate unions, one of which is the right to be
certified as the exclusive representative[23] of all the employees in an
appropriate collective bargaining unit for purposes of collective
bargaining.[24] 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.
[25]
A perusal of the records reveals that respondent is registered with the
BLR as a "local" or "chapter" of PDMP and was issued Charter
Certificate No. 112 on 15 June 1999. Hence, respondent was directly
chartered by PDMP.
The procedure for registration of a local or chapter of a labor
organization is provided in Book V of the Implementing Rules of the
Labor Code, as amended by Department Order No. 9 which took effect
on 21 June 1997, and again by Department Order No. 40 dated 17
February 2003. The Implementing Rules as amended by D.O. No. 9
should govern the resolution of the petition at bar since respondent's
petition for certification election was filed with the BLR in 1999; and
that of petitioner on 17 August 1999.[26]
The applicable Implementing Rules enunciates a two-fold procedure
for the creation of a chapter or a local. The first involves the affiliation
of an independent union with a federation or national union or industry
union. The second, finding application in the instant petition, involves
the direct creation of a local or a chapter through the process of
chartering.[27]
A duly registered federation or national union may directly create a
local or chapter by submitting to the DOLE Regional Office or to the
BLR two copies of 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; and
(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.
All the foregoing supporting requirements shall be certified under oath
by the Secretary or the Treasurer of the local/chapter and attested to
by its President.[28]
The Implementing Rules stipulate that a local or chapter may be
directly created by a federation or national union. A duly constituted
local or chapter created in accordance with the foregoing shall acquire
legal personality from the date of filing of the complete documents
with the BLR.[29] The issuance of the certificate of registration by the
BLR or the DOLE Regional Office is not the operative act that vests
legal personality upon a local or a 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.[30]
Petitioner insists that Section 3 of the Implementing Rules, as
amended by Department Order No. 9, violated Article 234 of the Labor
Code when it provided for less stringent requirements for the creation
of a chapter or local. This Court disagrees.
Article 234 of the Labor Code provides that an independent labor
organization acquires legitimacy only upon its registration with the
BLR:
4
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 percent
(20%) of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the
members who participated in it. (Italics supplied.)
It is emphasized that the foregoing pertains to the registration of an
independent labor organization, association or group of unions or
workers.
However, the creation of a branch, local or chapter is treated
differently. This Court, in the landmark case of Progressive
Development Corporation v. Secretary, Department of Labor and
Employment,[31] declared that when an unregistered union becomes
a branch, local or chapter, some of the aforementioned requirements
for registration are no longer necessary or compulsory. Whereas an
applicant for registration of an independent union is mandated to
submit, among other things, the number of employees and names of
all its members comprising at least 20% of the employees in the
bargaining unit where it seeks to operate, as provided under Article
234 of the Labor Code and Section 2 of Rule III, Book V of the
Implementing Rules, the same is no longer required of a branch, local
or chapter.[32] The intent of the law in imposing less 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.[33]
Subsequently, in Pagpalain Haulers, Inc. v. Trajano[34] where the
validity of Department Order No. 9 was directly put in issue, this Court
was unequivocal in finding that there is no inconsistency between the
Labor Code and Department Order No. 9.
As to petitioner's claims that respondent obtained its Certificate of
Registration through fraud and misrepresentation, this Court finds that
the imputations are not impressed with merit. In the instant case,
proof to declare that respondent committed fraud and
misrepresentation remains wanting. This Court had, indeed, on
several occasions, pronounced that registration based on false and
fraudulent statements and documents confer no legitimacy upon a
labor organization irregularly recognized, which, at best, holds on to a
mere scrap of paper. Under such circumstances, the labor
organization, not being a legitimate labor organization, acquires no
rights.[35]
This Court emphasizes, however, that a direct challenge to the
legitimacy of a labor organization based on fraud and
misrepresentation in securing its certificate of registration is a serious
allegation which deserves careful scrutiny. Allegations thereof should
be compounded with supporting circumstances and evidence. The
records of the case are devoid of such evidence. Furthermore, this
Court is not a trier of facts, and this doctrine applies with greater force
in labor cases. Findings of fact of administrative agencies and quasi-
judicial bodies, such as the BLR, which have acquired expertise
because their jurisdiction is confined to specific matters, are generally
accorded not only great respect but even finality.[36]
Still, petitioner postulates that respondent was not validly and
legitimately created, for PDMP cannot create a local or chapter as it is
not a legitimate labor organization, it being a trade union center.
5
Petitioner's argument creates a predicament as it hinges on the
legitimacy of PDMP as a labor organization. Firstly, this line of
reasoning attempts to predicate that a trade union center is not a
legitimate labor organization. In the process, the legitimacy of PDMP is
being impugned, albeit indirectly. Secondly, the same contention
premises that a trade union center cannot directly create a local or
chapter through the process of chartering.
Anent the foregoing, as has been held in a long line of cases, the legal
personality of a legitimate labor organization, such as PDMP, cannot
be subject to a collateral attack. The law is very clear on this matter.
Article 212 (h) of the Labor Code, as amended, defines a legitimate
labor organization[37] as "any labor organization duly registered with
the DOLE, and includes any branch or local thereof."[38] On the other
hand, a trade union center is any group of registered national unions
or federations organized for the mutual aid and protection of its
members; for assisting such members in collective bargaining; or for
participating in the formulation of social and employment policies,
standards, and programs, and is duly registered with the DOLE in
accordance with Rule III, Section 2 of the Implementing Rules.[39]
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 collateral attack.[40] It may be questioned only in an independent
petition for cancellation in accordance with Section 5 of Rule V, Book V
of the Implementing Rules. The aforementioned provision is
enunciated in the following:
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.
PDMP was registered as a trade union center and issued Registration
Certificate No. FED-11558-LC by the BLR on 14 February 1991. Until
the certificate of registration of PDMP is cancelled, its legal personality
as a legitimate labor organization subsists. Once a union acquires
legitimate status as a labor organization, it continues to be recognized
as such until its certificate of registration is cancelled or revoked in an
independent action for cancellation.[41] It bears to emphasize that
what is being directly challenged is the personality of respondent as a
legitimate labor organization and not that of PDMP. This being a
collateral attack, this Court is without jurisdiction to entertain
questions indirectly impugning the legitimacy of PDMP.
Corollarily, PDMP is granted all the rights and privileges appurtenant
to a legitimate labor organization,[42] and continues to be recognized
as such until its certificate of registration is successfully impugned and
thereafter cancelled or revoked in an independent action for
cancellation.
We now proceed to the contention that PDMP cannot directly create a
local or a chapter, it being a trade union center.
This Court reverses the finding of the appellate court and BLR on this
ground, and rules that PDMP cannot directly create a local or chapter.
After an exhaustive study of the governing labor law provisions, both
statutory and regulatory,[43] we find no legal justification to support
the conclusion that a trade union center is allowed to directly create a
local or chapter through chartering. Apropos, we take this occasion to
reiterate the first and fundamental duty of this Court, which is to apply
the law. The solemn power and duty of the Court to interpret and
apply the law does not include the power to correct by reading into the
law what is not written therein.[44]
Presidential Decree No. 442, better known as the Labor Code, was
enacted in 1972. Being a legislation on social justice,[45] the
provisions of the Labor Code and the Implementing Rules have been
subject to several amendments, and they continue to evolve,
considering that labor plays a major role as a socio-economic force.
The Labor Code was first amended by Republic Act No. 6715, and
recently, by Republic Act No. 9481. Incidentally, the term trade union
center was never mentioned under Presidential Decree No. 442, even
as it was amended by Republic Act No. 6715. The term trade union
6
center was first adopted in the Implementing Rules, under Department
Order No. 9.
Culling from its definition as provided by Department Order No. 9, a
trade union center is any group of registered national unions or
federations organized for the mutual aid and protection of its
members; for assisting such members in collective bargaining; or for
participating in the formulation of social and employment policies,
standards, and programs, and is duly registered with the DOLE in
accordance with Rule III, Section 2 of the Implementing Rules.[46] The
same rule provides that the application for registration of an industry
or trade union center shall be supported by the following:
(a) The list of its member organizations and their respective presidents
and, in the case of an industry union, the industry where the union
seeks to operate;
(b) The resolution of membership of each member organization,
approved by the Board of Directors of such union;
(c) The name and principal address of the applicant, the names of its
officers and their addresses, the minutes of its organizational
meeting/s, and the list of member organizations and their
representatives who attended such meeting/s; and
(d) A copy of its constitution and by-laws and minutes of its ratification
by a majority of the presidents of the member organizations, provided
that where the ratification was done simultaneously with the
organizational meeting, it shall be sufficient that the fact of ratification
be included in the minutes of the organizational meeting.[47]
Evidently, while a "national union" or "federation" is a labor
organization with at least ten locals or chapters or affiliates, each of
which must be a duly certified or recognized collective bargaining
agent;[48] a trade union center, on the other hand, is composed of a
group of registered national unions or federations.[49]
The Implementing Rules, as amended by Department Order No. 9,
provide that "a duly registered federation or national union" may
directly create a local or chapter. The provision reads:

Section 1. Chartering and creation of a local/chapter. A duly
registered federation or national union may directly create a
local/chapter by submitting to the Regional Office or to the Bureau two
(2) copies of 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; and
(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.
All the foregoing supporting requirements shall be certified under oath
by the Secretary or the Treasurer of the local/chapter and attested to
by its President.[50]
Department Order No. 9 mentions two labor organizations either of
which is allowed to directly create a local or chapter through
chartering a duly registered federation or a national union.
Department Order No. 9 defines a "chartered local" as a labor
organization in the private sector operating at the enterprise level that
acquired legal personality through a charter certificate, issued by a
duly registered federation or national union and reported to the
Regional Office in accordance with Rule III, Section 2-E of these Rules.
[51]
Republic Act No. 9481 or "An Act Strengthening the Workers"
Constitutional Right to Self-Organization, Amending for the Purpose
Presidential Decree No. 442, As Amended, Otherwise Known as the
Labor Code of the Philippines' lapsed[52] into law on 25 May 2007
and became effective on 14 June 2007.[53] This law further amends
the Labor Code provisions on Labor Relations.
Pertinent amendments read as follows:
7
SECTION 1. Article 234 of Presidential Decree No. 442, as amended,
otherwise known as the Labor Code of the Philippines, is hereby
further amended to read as follows:
ART. 234. Requirements of Registration. A federation, national union
or industry or trade union center or an independent union 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) In case the applicant is an independent union, the names of all its
members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate;
(d) If the applicant union 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,
minutes of its adoption or ratification, and the list of the members who
participated in it.
SECTION 2. A new provision is hereby inserted into the Labor Code as
Article 234-A to read as follows:
ART. 234-A. Chartering and Creation of a Local Chapter. A duly
registered federation or national union may directly create a local
chapter by issuing a charter certificate indicating the establishment of
the local chapter. The chapter shall acquire legal personality only for
purposes of filing a petition for certification election from the date it
was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a
legitimate labor organization only upon the submission of the following
documents in addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and the
principal office of the chapter; and
(b) The chapter's constitution and by-laws: Provided, That where the
chapter's constitution and by-laws are the same as that of the
federation or the national union, this fact shall be indicated
accordingly.
The additional supporting requirements shall be certified under oath
by the secretary or treasurer of the chapter and attested by its
president. (Emphasis ours.)
Article 234 now includes the term trade union center, but
interestingly, the provision indicating the procedure for chartering or
creating a local or chapter, namely Article 234-A, still makes no
mention of a "trade union center."
Also worth emphasizing is that even in the most recent amendment of
the implementing rules,[54] there was no mention of a trade union
center as being among the labor organizations allowed to charter.
This Court deems it proper to apply the Latin maxim expressio unius
est exclusio alterius. Under this maxim of statutory interpretation, the
expression of one thing is the exclusion of another. When certain
persons or things are specified in a law, contract, or will, an intention
to exclude all others from its operation may be inferred. If a statute
specifies one exception to a general rule or assumes to specify the
effects of a certain provision, other exceptions or effects are excluded.
[55] Where the terms are expressly limited to certain matters, it may
not, by interpretation or construction, be extended to other matters.
[56] Such is the case here. If its intent were otherwise, the law could
have so easily and conveniently included "trade union centers" in
identifying the labor organizations allowed to charter a chapter or
local. Anything that is not included in the enumeration is excluded
therefrom, and a meaning that does not appear nor is intended or
reflected in the very language of the statute cannot be placed therein.
8
[57] The rule is restrictive in the sense that it proceeds from the
premise that the legislating body would not have made specific
enumerations in a statute if it had the intention not to restrict its
meaning and confine its terms to those expressly mentioned.[58]
Expressium facit cessare tacitum.[59] What is expressed puts an end
to what is implied. Casus omissus pro omisso habendus est. A
person, object or thing omitted must have been omitted intentionally.
Therefore, since under the pertinent status and applicable
implementing rules, the power granted to labor organizations to
directly create a chapter or local through chartering is given to a
federation or national union, then a trade union center is without
authority to charter directly.
The ruling of this Court in the instant case is not a departure from the
policy of the law to foster the free and voluntary organization of a
strong and united labor movement,[60] and thus assure the rights of
workers to self-organization.[61] The mandate of the Labor Code in
ensuring strict compliance with the procedural requirements for
registration is not without reason. It has been observed that the
formation of a local or chapter becomes a handy tool for the
circumvention of union registration requirements. Absent the
institution of safeguards, it becomes a convenient device for a small
group of employees to foist a not-so-desirable federation or union on
unsuspecting co-workers and pare the need for wholehearted
voluntariness, which is basic to free unionism.[62] As a legitimate
labor organization is entitled to specific rights under the Labor Code
and involved in activities directly affecting public interest, it is
necessary that the law afford utmost protection to the parties
affected.[63] However, as this Court has enunciated in Progressive
Development Corporation v. Secretary of Department of Labor and
Employment, it is not this Court's function to augment the
requirements prescribed by law. Our only recourse, as previously
discussed, is to exact strict compliance with what the law provides as
requisites for local or chapter formation.[64]
In sum, although PDMP as a trade union center is a legitimate labor
organization, it has no power to directly create a local or chapter.
Thus, SMPPEU-PDMP cannot be created under the more lenient
requirements for chartering, but must have complied with the more
stringent rules for creation and registration of an independent union,
including the 20% membership requirement.

WHEREFORE, the instant Petition is GRANTED. The Decision dated 09

March 2005 of the Court of Appeals in CA-GR SP No. 66200 is
REVERSED and SET ASIDE. The Certificate of Registration of San
Miguel Packaging Products Employees UnionPambansang Diwa ng
Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-PDMP
DROPPED from the rolls of legitimate labor organizations.

Costs against petitioner.

SO ORDERED.

Ynares-Santiago, (Chairperson), Austria-Martinez, Nachura, and Reyes,

JJ., concur.

9
G.R. No. 115077, April 18, 1997
PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT, PETITIONER,
VS.
HON. BIENVENIDO LAGUESMA, IN HIS CAPACITY AS UNDERSECRETARY
OF LABOR, AND NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-
KATIPUNAN, RESPONDENTS.
DECISION
KAPUNAN, J.:
On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-
Katipunan (respondent Union) filed a petition for certification election
with the Department of Labor (National Capital Region) in behalf of the
rank and file employees of the Progressive Development Corporation
(Pizza Hut) docketed as NCR Case No. NCR-OD-M-9307-020.[1]
Petitioner filed on August 20, 1993, a verified Motion to Dismiss the
petition alleging fraud, falsification and misrepresentation in the
respondent Union's registration making it void and invalid. The motion
specifically alleged that: a) respondent Union's registration was
tainted with false, forged, double or multiple signatures of those who
allegedly took part in the ratification of the respondent Union's
constitution and by-laws and in the election of its officers that there
were two sets of supposed attendees to the alleged organizational
meeting that was alleged to have taken place on June 26, 1993; that
the alleged chapter is claimed to have been supported by 318
members when in fact the persons who actually signed their names
were much less; and b) 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, thus, there were serious falsities in the
dates of the issuance of the charter certification and the organization
meeting of the alleged chapter.
Citing other instances of misrepresentation and fraud, petitioner, on
August 29, 1993, filed a Supplement to its Motion to Dismiss,[2]
claiming that:
10
1) Respondent Union alleged that the election of its officers was held
on June 27, 1993; however, it appears from the documents submitted
by respondent union to the BIR-DOLE that the Union's constitution and
by-laws were adopted only on July 7, 1993, hence, there was no bases
for the supposed election of officers on June 27, 1993 because as of
this date, there existed no positions to which the officers could be
validly elected;
2) Voting was not conducted by secret ballot in violation of Article
241, section (c) of the Labor Code;
3) The Constitution and by Laws submitted in support of its petition
were not properly acknowledged and notarized.[3]
On August 30, 1993, petitioner filed a Petition[4] seeking the
cancellation of the Union's registration on the grounds of fraud and
falsification, docketed as BIR Case No. 8-21-83.[5]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.
However, in an Order dated September 29, 1993,[6] Med-Arbiter
Rasidali C. Abdullah directed the holding of a certification election
among petitioner's rank and file employees. The Order explained:
x x x Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labor
organization in contemplation of law and shall remain as such until its
very charter certificate is canceled or otherwise revoked by competent
authority. The alleged misrepresentation, fraud and false statement in
connection with the issuance of the charter certificate are collateral
issues which could be properly ventilated in the cancellation
proceedings.[7]
On appeal to the office of the Secretary of Labor, Labor
Undersecretary Bienvenido E. Laguesma in a Resolution dated
December 29, 1993[8] denied the same.
A motion for reconsideration of the public respondent's resolution was
denied in his Order[9] dated January 27, 1994, hence, this special civil
action for certiorari under Rule 65 of the Revised Rules of Court where
the principal issue raised is whether or not the public respondent
committed grave abuse of discretion in affirming the Med-Arbiter's
order to conduct a certification election among petitioner's rank and
file employees, considering that: (1) respondent Union's legal
personality was squarely put in issue; (2) allegations of fraud and
falsification, supported by documentary evidence were made; and (3)
a petition to cancel respondent Union's registration is pending with the
regional office of the Department of Labor and Employment.[10]
We grant the petition.
In the public respondent's assailed Resolution dated December 29,
1993, the suggestion is made that once a labor organization has filed
the necessary documents and papers and the same have been
certified under oath and attested to, said organization necessarily
becomes clothed with the character of a legitimate labor organization.
The resolution declares:
Records show that at the time of the filing of the subject petition on 9
July 1993 by the petitioner NLM-KATIPUNAN, for and in behalf of its
local affiliate Sumasaklaw sa Manggagawa ng Pizza Hut, the latter has
been clothed with the status and/or character of a legitimate labor
organization. This is so, because on 8 July 1993, petitioner submitted
to the Bureau of Labor Relations (BLR), this Department, the following
documents: Charter Certificate, Minutes of the Organizational Meeting,
List of Officers, and their respective addresses, financial statement,
Constitution and By-Laws (CBL, and the minutes of the ratification of
the CBL). Said documents (except the charter certificate) are certified
under oath and attested to by the local union's Secretary/Treasurer
and President, respectively.
As to the contention that the certification election proceedings should
be suspended in view of the pending case for the cancellation of the
petitioner's certificate of registration, let it be stressed that the
pendency of a cancellation case is not a ground for the dismissal or
suspension of a representation proceedings considering that a
registered labor organization continues to be a legitimate one entitled
11
to all the rights appurtenant thereto until a final valid order is issued
canceling such registration.[11]
In essence, therefore, the real controversy in this case centers on the
question of whether or not, 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.
We do not agree.
In the first place, the public respondent's views as expressed in his
December 29, 1993 Resolution miss the entire point behind the nature
and purpose of proceedings leading to the recognition of unions as
legitimate labor organizations. Article 234 of the Labor Code provides:
Art. 234. Requirements of registration. - Any applicant labor
organization, association or group of unions or workers shall acquire
legal personality and shall be entitled to the rights and privileges
granted by law to legitimate labor organizations upon issuance of the
certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of
the labor organization, the minutes of the organizational meetings and
the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the
members who participated in it.
A more than cursory reading of the aforecited provisions clearly
indicates that the requirements embodied therein 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. If its application for registration is vitiated by
falsification and serious irregularities, especially those appearing on
the face of the application and the supporting documents, a labor
organization should be denied recognition as a legitimate labor
organization. And if a certificate of recognition has been issued, the
propriety of the labor organization's registration could be assailed
directly through cancellation of registration proceedings in accordance
with Articles 238 and 239 of the Labor Code, or indirectly, by
challenging its petition for the issuance of an order for certification
election.
These measures are necessary - and may be undertaken
simultaneously - if the spirit behind the Labor Code's requirements for
registration are to be given flesh and blood. 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.[12] 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.[13]
Thus, in Progressive Development Corporation vs. Secretary of Labor
and Employment,[14] we held:
The controversy in this case centers on the requirements before a
local or chapter of a federation may file a petition for certification
election and be certified as the sole and exclusive bargaining agent of
the petitioner's employees.
xxx
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. xxx
12
xxx
xxx. The employer naturally needs assurance that the union it is
dealing with is a bona-fide organization, one which has not submitted
false statements or misrepresentations to the Bureau. The inclusion of
the certification and attestation requirements will in a marked degree
allay these apprehensions of management. Not only is the issuance of
any false statement and misrepresentation or ground for cancellation
of registration (see Article 239 (a), (c) and (d)); it is also a ground for a
criminal charge of perjury.
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.
xxx
xxx. It is not this Court's function to augment the requirements
prescribed by law in order to make them wiser or to allow greater
protection to the workers and even their employer. Our only recourse
is, as earlier discussed, to exact strict compliance with what the law
provides as requisites for local or chapter formation.
xxx
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. We are merely saying that the local
union must first comply with the statutory requirements in order to
exercise this right. Big federations and national unions of workers
should take the lead in requiring their locals and chapters to faithfully
comply with the law and the rules instead of merely snapping union
after union into their folds in a furious bid with rival federations to get
the most number of members.
Furthermore, the Labor Code itself grants the Bureau of Labor
Relations a period of thirty (30) days within which to review all
applications for registration. Article 235 provides:
"Art. 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."
The thirty-day period in the aforecited provision ensures that 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. Since, obviously, recognition of a labor
union or labor organization is not merely a ministerial function, the
question now arises as to whether or not the public respondent
committed grave abuse of discretion in affirming the Med-Arbiter's
order in spite of the fact that the question of the Union's legitimacy
was squarely put in issue and that the allegations of fraud and
falsification were adequately supported by documentary evidence.
The Labor Code requires that in organized and unorganized[15]
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 labor
organization."[16] Glossing over the transcendental issue of fraud and
misrepresentation raised by herein petitioner, Med-Arbiter Rasidali
Abdullah held that:
13
The alleged misrepresentation, fraud and false statement in
connection with the issuance of the charter certificate are collateral
issues which could be ventilated in the cancellation proceedings.[17]
It cannot be denied that the grounds invoked by petitioner for the
cancellation of respondent Union's registration fall under paragraph
(a) and (c) of Article 239 of the Labor Code. to wit:
(a) 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, the list of members
who took part in the ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, the list of members
who took part in the ratification;
xxx
(c) Misrepresentation, false statements or fraud in connection with
the election of officers, minutes of the election of officers, the list of
voters, or failure to submit these documents together with the list of
the newly elected-appointed officers and their postal addresses within
thirty (30) days from election
xxx
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. Registration
based on false and fraudulent statements and documents confer no
legitimacy upon a labor organization irregularly recognized, which, at
best, holds on to a mere scrap of paper. 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.
As we laid emphasis in Progressive Development Corporation Labor,
[18] "[t]he employer needs the assurance that the union it is dealing
with is a bona fide organization, one which has not submitted false
statements or misrepresentations to the Bureau." Clearly, fraud,
falsification and misrepresentation in obtaining recognition as a
legitimate labor organization are contrary to the Med-Arbiter's
conclusion not merely collateral issues. The invalidity of respondent
Union's registration would negate its legal personality to participate in
certification election.

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. As such rights and privileges
ultimately affect areas which are constitutionally protected, the
activities in which labor organizations, associations and unions are
engaged directly affect the public interest and should be zealously
protected. A strict enforcement of the Labor Code's requirements for
the acquisition of the status of a legitimate labor organization is in
order.

Inasmuch as the legal personality of respondent Union had been

seriously challenged, 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.

WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED

and the Resolution and Order of the public respondent dated
December 29, 1993 and January 24, 1994, respectively, are hereby
SET ASIDE.

The case is REMANDED to the Med-Arbiter to resolve with reasonable

dispatch petitioner's petition for cancellation of respondent Union's
registration
SO ORDERED.

Padilla, (Chairman), Bellosillo, and Vitug, JJ., concur.

Hermosisima, Jr., J., on leave.

14
G.R. Nos. L-43495-99, January 20, 1990
TROPICAL HUT EMPLOYEES UNION-CGW, JOSE ENCINAS, JOSE LUIS
TRIBINO, FELIPE DURAN, MANUEL MANGYAO, MAMERTO CAHUCOM,
NEMESIO BARRO, TEODULFO CAPAGNGAN, VICTORINO ABORRO, VIDAL
MANTOS, DALMACIO DALDE, LUCIO PIASAN, CANUTO LABADAN,
TERESO ROMERDE, CONRADO ENGALAN, SALVADOR NERVA,
BERNARDO ENGALAN, BONIFACIO CAGATIN, BENEDICTO VALDEZ,
EUSEBIO SUPILANAS, ALFREDO HAMAYAN, ASUERO BONITO, GAVINO
DEL CAMPO, ZACARIAS DAMING, PRUDENCIO LADION, FULGENCIO
BERSALUNA, ALBERTO PERALES, ROMEO MAGRAMO, GODOFREDO
CAMINOS, GILDARDO DUMAS, JORGE SALDIVAR, GENARO MADRIO,
SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR JAPAY, ROGELIO
CUIZON, RENATO ANTIPADO, GREGORIO CUEVO, MARTIN BALAZUELA,
CONSTANCIO CHU, CRISPIN TUBLE, FLORENCIO CHIU, FABIAN
CAHUCOM, EMILIANO VILLAMOR, RESTITUTO HANDAYAN, VICTORINO
ESPEDILLA, NOEL CHUA, ARMANDO ALCORANO, ELEUTERIO TAGUIK,
SAMSON CRUDA, DANILO CASTRO, CENON VALLENAS, DANILO
CAWALING, SIMPLICIO GALLEROS, PERFECTO CUIZON, PROCESO
LAUROS, ANICETO BAYLON, EDISON ANDRES, REYNALDO BAGOHIN,
IRENEO SUPANGAN, RODRIGO CAGATIN, TEODORO ORENCIO,
ARMANDO LUAYON, JAIME NERVA, NARCISO CUIZON, ALFREDO DEL
ROSARIO, EDUARDO LORENZO, PEDRO ARANGO, VICENTE SUPANGAN,
JACINTO BANAL AND BONIFACIO PUERTO, PETITIONERS,
VS.
TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE, ARTURO DILAG,
MARCELINO LONTOK, JR., NATIONAL ASSOCIATION OF TRADE UNIONS
(NATU), NATIONAL LABOR RELATIONS COMMISSION (NLRC), HON.
DIEGO P. ATIENZA, GERONIMO Q. QUADRA, FEDERICO C. BORROMEO,
AND HON. BLAS F. OPLE, RESPONDENTS.
DECISION
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 seeking to set aside the
decisions of the public respondents Secretary of Labor and National
Labor Relations Commission which reversed the Arbitrators' rulings in
favor of petitioners herein.
The following factual background of this case appears from the record:
15
On January 2, 1968, the rank and file workers of the Tropical Hut Food
Market, Incorporated, referred to herein as respondent company,
organized a local union called the Tropical Hut Employees Union,
known for short as the THEU, elected their officers, adopted their
constitution and by-laws and immediately sought affiliation with the
National Association of Trade Unions (NATU). On January 3, 1968, the
NATU accepted the THEU application for affiliation. Following such
affiliation with NATU, Registration Certificate No. 5544-IP was issued
by the Department of Labor in the name of the Tropical Hut Employees
Union - NATU. It appears, however, that NATU itself as a labor
federation, was not registered with the Department of Labor.
After several negotiations were conducted between THEU-NATU,
represented by its local president and the national officers of the
NATU, particularly Ignacio Lacsina, President, Pacifico Rosal, Executive
Vice-President and Marcelina Lontok, Jr., Vice President, and
respondent Tropical Hut Food Market, Incorporated, thru its President
and General Manager, Cezar Azcona, Sr., a Collective Bargaining
Agreement was concluded between the parties on April 1, 1968, the
term of which expired on March 31, 1971. Said agreement contained
these clear and unequivocal terms:
"This Agreement made and entered into this___ day
of__________________, 1968, by and between:
The Tropical Hut Food Market, Inc., a corporation duly organized and
existing under and by virtue of the laws of the Republic of the
Philippines, with principal office at Quezon City, represented in this Act
by its President, Cesar B. Azcona (hereinafter referred to as the
Company)
- and -
The Tropical Hut Employees Union - NATU, a legitimate labor
organization duly organized and existing in accordance with the laws
of the Republic of the Philippines, and affiliated with the National
Association of Trade Unions, with offices at San Luis Terraces, Ermita,
Manila, and represented in this Act by its undersigned officers
(hereinafter referred to as the UNION)
Witnesseth:
xxx
"Article I
"Coverage and Effectivity
"Section 1. The COMPANY recognizes the UNION as the sole and
exclusive collective bargaining agent for all its workers and employees
in all matters concerning wages, hours of work, and other terms and
conditions of employment.
xxx
"Article III
"Union Membership and Union Checkoff
Section 1 - x x x Employees who are already members of the UNION
at the time of the signing of this Agreement or who become so
thereafter shall be required to maintain their membership therein as a
condition of continued employment.
xxx
Section 3 - Any employee who is expelled from the UNION for joining
another federation or forming another union, or who fails or refuses to
maintain his membership therein as required, x x x shall, upon written
request of the UNION, be discharged by the COMPANY." (Rollo, pp. 667-
670)
And attached to the Agreement as Appendix "A" is a check-off
Authorization Form, the terms of which are as follows:
"We, the undersigned, hereby designate the NATIONAL Association of
Trade Unions, of which the TROPICAL HUT EMPLOYEES UNION is an
affiliate as sole collective bargaining agent in all matters relating to
salary rates, hours of work and other terms and conditions of
employment in the Tropical Hut Food Market, Inc. and we hereby
authorize the said company to deduct the amount of Four (P4.00)
Pesos each every month as our monthly dues and to deliver the
amount to the Treasurer of the Union or his duly authorized
representatives." (Rollo, pp. 680-684)
On May 21, 1971, respondent company and THEU-NATU entered into a
new Collective Bargaining Agreement which ended on March 31, 1974.
This new CBA incorporated the previous union-shop security clause
and the attached check-off authorization form.
Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-
NATU, was appointed by the respondent company as Assistant Unit
Manager. On July 24, 1973, he wrote the general membership of his
union that for reason of his present position, he was resigning as
President of the THEU-NATU effective that date. As a consequence
theref, his Vice-President, Jose Encinas, assumed and discharged the
duties of the presidency of the THEU-NATU.
On December 19, 1973, NATU received a letter dated December 15,
1973, jointly signed by the incumbent officers of the local union
informing the NATU that THEU was disaffiliating from the NATU
16
federation. On December 20, 1973, the Secretary of the THEU,
Nemesio Barro, made an announcement in an open letter to the
general membership of the THEU, concerning the latter's disaffiliation
from the NATU and its affiliation with the Confederation of General
Workers (CGW). The letter was passed around among the members of
the THEU-NATU, to which around one hundred and thirty-seven (137)
signatures appeared as having given their consent to and
acknowledgment of the decision to disaffiliate the THEU from the
NATU.
On January 1, 1974, the general membership of the so-called THEU-
CGW held its annual election of officers, with Jose Encinas elected as
President. On January 3, 1974, Encinas, in his capacity as THEU-CGW
President, informed the respondent company of the result of the
elections. On January 9, 1974, Pacifico Rosal, President of the
Confederation of General Workers (CGW), wrote a letter in behalf of
complainant THEU-CGW to the respondent company demanding the
remittance of the union dues collected by the Tropical Hut Food Mart,
Incorporated to the THEU-CGW, but this was refused by the
respondent company.
On January 11, 1974, the NATU thru its Vice-President Marcelino
Lontok, Jr., wrote Vidal Mantos, requiring the latter to assume
immediately the position of President of the THEU-NATU in place of
Jose Encinas, but the position was declined by Mantos. On the same
day, Lontok, Jr., informed Encinas in a letter, concerning the request
made by the NATU federation to the respondent company to dismiss
him (Encinas) in view of his violation of Section 3 of Article III of the
Collective Bargaining Agreement. Encinas was also advised in the
letter that NATU was returning the letter of disaffiliation on the ground
that:
"1. Under the restructuring program NOT of the Bureau of Labor but of
the Philippine National Trade Union Center in conjunction with the
NATU and other established national labor centers, retail clerks and
employees such as our members in the Tropical Hut pertain to Industry
II which by consensus, has been assigned already to the jurisdiction of
the NATU;
"2. The right to disaffiliate belongs to the union membership who-on
the basis of verified reports received by -- have not even been
consulted by you regarding the matter;
3. Assuming that the disaffiliation decision was properly reached;
your letter nevertheless is unacceptable in view of Article V, Section 1,
of the NATU Constitution which provides that withdrawal from the
organization shall be valid provided three (3 months notice of intention
to withdraw is served upon the National Executive Council.'" (p. 281,
Rollo)
In view of NATU's request, the respondent company, on the same day,
which was January 11, 1974, suspended Encinas pending the
application for clearance with the Department of Labor to dismiss him.
On January 12, 1974, members of the THEU-CGW passed a resolution
protesting the suspension of Encinas and reiterated their ratification
and approval of their union's disaffiliation from NATU and their
affiliation with the Confederation of General Workers (CGW). It was
Encinas' suspension that caused the filing of NLRC Case No. LR-2511
on January 11, 1974 against private respondents herein, charging
them of unfair labor practice.
On January 15, 1974, upon the request of NATU, respondent company
applied for clearance with the Secretary of Labor to dismiss the other
officers and members of THEU-CGW. The company also suspended
them effective that day. NLRC Case No. LR-2521 was filed by THEU-
CGW and individual complainants against private respondents for
unfair labor practices.
On January 19, 1974, Lontok, acting as temporary chairman, presided
over the election of officers of the remaining THEU-NATU in an
emergency meeting pending the holding of a special election to be
called at a later date. In the alleged election, Arturo Dilag was elected
acting THEU-NATU President together with the other union officers. On
February 14, 1974, these temporary officers were considered as
having been elected as regular officers for the year 1974.
On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan
Ponce Enrile, Secretary of National Defense, complaining of the unfair
labor practices committed by respondent company against its
members and requesting assistance on the matter. The
aforementioned letter contained the signatures of one hundred forty-
three (143) members.
On February 24, 1974, the secretary of THEU-NATU, notified the entire
rank and file employees of the company that they will be given forty-
eight (48) hours upon receipt of the notice within which to answer and
affirm their membership with THEU-NATU. When the petitioner
employees failed to reply, Arturo Dilag advised them thru letters dated
February 26, March 2 and 5, 1974, that the THEU-NATU shall enforce
17
the union security clause set forth in the CBA, and that he had
requested respondent company to dismiss them.
Respondent company, thereafter, wrote the petitioner employees
demanding the latter's comment on Dilag's charges before action was
taken thereon. However, no comment or reply was received from
petitioners. In view of this, Estelita Que, President/General Manager of
respondent company, upon Dilag's request, suspended twenty four
(24) workers on March 5, 1974, another thirty seven (37) on March 8,
1974 and two (2) more on March 11, 1974, pending approval by the
Secretary of Labor of the application for their dismissal.
As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an
unnumbered case were filed by petitioners against Tropical Hut Food
Market, Incorporated, Estelita Que, Hernando Sarmiento and Arturo
Dilag.
It is significant to note that a joint letter petition signed by sixty-seven
(67) employees was filed with the Secretary of Labor, the NLRC
Chairman and Director of Labor Relations to cancel the words NATU
after the name of Tropical Hut Employees Union under Registration
Certificate No. 5544 IP. Another letter signed by one hundred forty six
(146) members of THEU-CGW was sent to the President of the
Philippines informing him of the unfair labor practices committed by
private respondents against THEU-CGW members.
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly
filed with the Labor Arbiter, Arbitrator Daniel Lucas issued an order
dated March 21, 1974, holding that the issues raised by the parties
became moot and academic with the issuance of NLRC Order dated
February 25, 1974 in NLRC Case No. LR-2670, which directed the
holding of a certification election among the rank-and-file workers of
the respondent company between the THEU-NATU and THEU-CGW. He
also ordered: a) the reinstatement of all complainants; b) for the
respondent company to cease and desist from committing further acts
of dismissals without previous order from the NLRC and for the
complainant Tropical Hut Employees Union-CGW to file representation
cases on a case to case basis during the freedom period provided for
by the existing CBA between the parties (pp. 91-93, Rollo).
With regard to NLRC Case Nos. LR-2971, LR-3015, and the
unnumbered case, Arbitrator Cleto T. Villatuya rendered a decision
dated October 14, 1974, the dispositive portion of which states:
"Premises considered, a DECISION is hereby rendered ordering
respondent company to reinstate immediately the sixty three (63)
complainants to their former positions with back wages from the time
they were illegally suspended up to their actual reinstatement without
loss of seniority and other employment rights and privileges, and
ordering the respondents to desist from further committing acts of
unfair labor practice. The respondent company's application for
clearance filed with the Secretary of Labor to terminate the subject
complainants services effective March 20 and 23, 1974, should be
denied.
SO ORDERED." (pp. 147-148, Rollo)
From the orders rendered above by Arbitrator Daniel Lucas in NLRC
Cases Nos. LR-2511 and LR-2521 and by Arbitrator Cleto Villatuya in
NLRC Cases Nos. LR-2971, LR-3015, and the unnumbered case, all
parties thereto, namely, petitioners herein, respondents company,
NATU and Dilag appealed to the National Labor Relations Commission.
In a decision rendered on August 1, 1975, the National Labor Relations
Commission found the private respondents appeals meritorious, and
stated, inter alia:
"WHEREFORE, in view of the foregoing premises, the Order of
Arbitrator Lucas in NLRC CASE NOS. LR-2511, 2521 and the decision of
Arbitrator Villatuya in NLRC CASE NOS. LR-2971, 3015 and the
unnumbered Case are hereby REVERSED. Accordingly, the individual
complainants are deemed to have lost their status as employees of
the respondent company. However, considering that the individual
complainants are not presumed to be familiar with nor to have
anticipated the legal mesh they would find themselves in, after their
'disaffiliation' from National Association of Trade Unions and the THEU-
NATU, much less the legal consequences of the said action which we
presume they have taken in all good faith; considering, further, that
the thrust of the new orientation in labor relations is not towards the
punishment of acts violative of contractual relations but rather
towards fair adjustments of the resulting complications; and
considering, finally, the consequent economic hardships that would be
visited on the individual complainants, if the law were to be strictly
enforced against them, this Commission is constrained to be
magnanimous in this instant, notwithstanding its obligation to give full
force and effect to the majesty of the law, and hereby orders the
respondent company, under pain of being cited for contempt for
failure to do so, to give the individual complainants a second chance
by reemploying them upon their voluntary reaffirmation of
membership and loyalty to the Tropical Hut Employees Union-NATU
18
and the National Association of Trade Unions in the event it hires
additional personnel.
"SO ORDERED." (pp. 312-313, Rollo)
The petitioner employees appealed the decision of the respondent
National Labor Relations Commission to the Secretary of Labor. On
February 23, 1976, the Secretary of Labor rendered a decision
affirming the findings of the Commission, which provided, inter alia:
"We find, after a careful review of the record, no sufficient justification
to alter the decision appealed from except that portion of the
dispositive part which states:
x x x this Commission x x x hereby orders respondent company under
pain of being cited for contempt for failure to do so, to give the
individual complainants a second chance by reemploying them upon
their voluntary reaffirmation of membership and loyalty to the Tropical
Hut Employees Union-NATU and the National Association of Trade
Union in the event it hires additional personnel.'
"Compliance by respondent of the above undertaking is not
immediately feasible considering that the same is based on an
uncertain event, i.e., reemployment of individual complainants 'in the
event that management hires additional personnel,' after they shall
have reaffirmed their loyalty to THEU-NATU, which is unlikely.
"In lieu of the foregoing, and to give complainants positive relief
pursuant to Section 9, Implementing Instruction No. 1, dated
November 9, 1972, respondent is hereby ordered to grant to all the
individual complainants financial assistance equivalent to one (1)
month salary for every year of service.
"WHEREFORE, with the modification as above indicated, the Decision
of the National Labor Relations Commission is hereby affirmed.
"SO ORDERED." (pp. 317-318, Rollo)
From the various pleadings filed and arguments adduced by
petitioners and respondents, the following issues appear to be those
presented for resolution in this petition to wit: 1) whether or not the
petitioners failed to exhaust administrative remedies when they
immediately elevated the case to this Court without an appeal having
been made to the Office of the President; 2) whether or not the
disaffiliation of the local union from the national federation was valid;
and 3) whether or not the dismissal of petitioner employees resulting
from their union's disaffialition from the mother federation was illegal
and constituted unfair labor practice on the part of respondent
company and federation.
We find the petition highly meritorious.
The applicable law then is the Labor Code, PD 442, as amended by PD
643 on January 21, 1975, which states:
"Art. 222. Appeal - x x x.
x x x.
Decisions of the Secretary of Labor may be appealed to the President
of the Philippines subject to such conditions or limitations as the
President may direct." (Emphasis ours)
The remedy of appeal from the Secretary of Labor to the Office of the
President is not a mandatory requirement before resort to courts can
be had, but an optional relief provided by law to parties seeking
expeditious disposition of their labor disputes. Failure to avail of such
relief shall not in any way serve as an impediment to judicial
intervention. And where the issue is lack of power or arbitrary or
improvident exercise thereof, decisions of the Secretary of Labor may
be questioned in a certiorari proceeding without prior appeal to the
President (Arrastre Security Association - TUPAS v. Ople, No. L-45344,
February 20, 1984, 127 SCRA 580). Since the instant petition raises
the same issue of grave abuse of discretion of the Secretary of Labor
amounting to lack of or in excess of jurisdiction in deciding the
controversy, this Court can properly take cognizance of and resolve
the issues raised herein.
This brings Us to the question of the legality of the dismissal meted to
petitioner employees. In the celebrated case of Liberty Cotton Mills
Workers Union v. Liberty Cotton Mills, L-33187, September 4, 1975, 66
SCRA 512, We held that the validity of the dismissals pursuant to the
union security clause in the collective bargaining agreement hinges on
the validity of the disaffiliation of the local union from the federation.
The right of a local union to disaffiliate from its mother federation is
well-settled. A local union, being a separate and voluntary association,
is free to serve the interest of all its members including the freedom to
disaffiliate when circumstances warrant. This right is consistent with
the constitutional guarantee of freedom of association (Volkschel
Labor Union v. Bureau of Labor Relations, No. L-45824, June 19,1985,
137 SCRA 42).
All employees enjoy the right to self organization and to form and join
labor organizations of their own choosing for the purpose of collective
bargaining and to engage in concerted activities for their mutual aid or
protection. This is a fundamental right of labor that derives its
existence from the Constitution. In interpreting the protection to labor
19
and social justice provisions of the Constitution and the labor laws or
rules or regulations, We have always adopted the liberal approach
which favors the exercise of labor rights.
Relevant on this point is the basic principle We have repeatedly
affirmed in many rulings:
"x x x The locals 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 the joint productive effort of labor and capital; and the
association of the locals into the national union (PAFLU) was in
furtherance of the same end. These associations are consensual
entities capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the local unions
into a common enterprise to increase by collective action the common
bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association, free to serve their
own and the common interest of all, subject to the restraints imposed
by the Constitution and By-Laws of the Association, and free also to
renounce the affiliation for mutual welfare upon the terms laid down in
the agreement which brought it into existence.'" (Adamson &
Adamson, Inc. v. CIR, No. L-35120, January 31, 1984, 127 SCRA 268;
Elisco-Elirol Labor Union (NAFLU) v. Noriel, No. L-41955, December 29,
1977, 80 SCRA 681; Liberty Cotton Mills Workers Union v. Liberty
Cotton Mills, Inc., supra).
The inclusion of the word NATU after the name of the local union THEU
in the registration with the Department of Labor is merely to stress
that the THEU is NATU's affiliate at the time of the registration. It does
not mean that the said local union cannot stand on its own. Neither
can it be interpreted to mean that it cannot pursue its own interests
independently of the federation. A local union owes its creation and
continued existence to the will of its members and not to the
federation to which it belongs.
When the local union withdrew from the old federation to join a new
federation, it was merely exercising its primary right to labor
organization for the effective enhancement and protection of common
interests. In the absence of enforceable provisions in the federation's
constitution preventing disaffiliation of a local union, a local may sever
its relationship with its parent (People's Industrial and Commercial
Employees and Workers Organization (FFW) v. People's Industrial and
Commercial Corporation, No-37687, March 15, 1982, 112 SCRA 440).
There is nothing in the constitution of the NATU or in the constitution
of the THEU-NATU that the THEU was expressly forbidden to disaffiliate
from the federation (pp. 62, 281, Rollo). The alleged non-compliance of
the local union with the provision in the NATU Constitution requiring
the service of three months notice of intention to withdraw did not
produce the effect of nullifying the disaffiliation for the following
grounds: firstly, NATU was not even a legitimate labor organization, it
appearing that it was not registered at that time with the Department
of Labor, and therefore did not possess and acquire, in the first place,
the legal personality to enforce its constitution and laws, much less
the right and privilege under the Labor Code to organize and affiliate
chapters or locals within its group, and secondly, the act of non-
compliance with the procedure on withdrawal is premised on purely
technical grounds which cannot rise above the fundamental right of
self-organization.
Respondent Secretary of Labor, in affirming the decision of the
respondent Commission, concluded that the supposed decision to
disaffiliate was not the subject of a free and open discussion and
decision on the part f the THEU-NATU general membership (p. 305,
Rollo). This, however, is contradicted by the evidence on record.
Moreover, We are inclined to believe Arbitrator Villatuya's findings to
the contrary, as follows:
"x x x. However, the complainants refute this allegation by submitting
the following: a) Letter dated December 20, 1973 signed by 142
members (Exhs. 'B to B-5'); b) resolution dated January 12, 1974,
signed by 140 members (Exhs. 'H to H-6'); c) letter dated February 26,
1974 to the Department of Labor signed by 165 members (Exhs. 'I to
1-10'); d) letter dated January 30, 1974 to the Secretary of the
National Defense signed by 144 members (Exhs. '0 to 0-5') and; e)
letter dated March 6,1974 signed by 146 members addressed to the
President of the Philippines (Exhs. 'HH to HH-5'), to show that in
several instances, the members of the THEU-NATU have acknowledged
their disaffiliation from NATU. The letters of the complainants also
indicate that an overwhelming majority have freely and voluntarily
signed their union's disaffiliation from NATU, otherwise, if there was
really deception employed in securing their signatures as claimed by
NATU/Dilag, it could not be possible to get their signatures in five
different documents." (p. 144, Rollo)
We are aware of the time-honored doctrine that the findings of the
NLRC and the Secretary of Labor are binding on this Court if supported
20
by substantial evidence. However, in the same way that the findings of
facts unsupported by sustantial and credible evidence do not bind this
Court, neither will We uphold erroneous conclusions of the NLRC and
the Secretary of Labor when We find that the latter committed grave
abuse of discretion in reversing the decision of the labor arbiter (San
Miguel Corporation v. NLRC, L-50321, March 13, 1984, 128 SCRA 180).
In the instant case, the factual findings of the arbitrator were correct
against that of public respondents.
Further, there is no merit in the contention of the respondents that the
act of disaffiliation violated the union security clause of the CBA and
that their dismissal as a consequence thereof is valid. A perusal of the
collective bargaining agreements shows that the THEU-NATU, and not
the NATU federation, was recognized as the sole and exclusive
collective bargaining agent for all its workers and employees in all
matters concerning wages, hours of work and other terms and
conditions of employment (pp. 667-706, Rollo). Although NATU was
designated as the sole bargaining agent in the check-off authorization
form attached to the CBA, this simply means it was acting only for and
in behalf of its affiliate. The NATU possessed the status of an agent
while the local union remained the basic principal union which entered
into contract with the respondent company. When the THEU
disaffiliated from its mother federation, the former did not lose its
legal personality as the bargaining union under the CBA. Moreover, the
union security clause embodied in the agreements cannot be used to
justify the dismissals meted to petitioners since it is not applicable to
the circumstances obtaining in this case. The CBA imposes dismissal
only in case an employee is expelled from the union for joining
another federation or for forming another union or who fails or refuses
to maintain membership therein. The case at bar does not involve the
withdrawal of merely some employees from the union but of the whole
THEU itself from its federation. Clearly, since there is no violation of
the union security provision in the CBA, there was no sufficient ground
to terminate the employment of petitioners.
Public respondents considered the existence of Arturo Dilag's group as
the remaining true and valid union. We, however, are inclined to agree
instead with the Arbitrator's findings when he declared:
"x x x. Much more, the so called THEU-NATU under Dilag's group which
assumes to be the original THEU-NATU has a very doubtful and
questionable existence not to mention that the alleged president is
performing supervisory functions and not qualified to be a bona fide
member of the rank and file union." (p. 146, Rollo)
Records show that Arturo Dilag had resigned in the past as President
of THEU-NATU because of his promotion to a managerial or
supervisory position as Assistant Unit Manager of respondent
Company. Petitioner Jose Encinas replaced Dilag as President and
continued to hold such position at the time of the disaffiliation of the
union from the federation. It is therefore improper and contrary to law
for Dilag to reassume the leadership of the remaining group which was
alleged to be the true union since he belonged to the managerial
personnel who could not be expected to work for the betterment of
the rank and file employees. Besides, managers and supervisors are
prohibited from joining a rank and file union (Binalbagan Isabela Sugar
Co., Inc. (BISCOM) v. Philippine Association of Free Labor Unions
(PAFLU), et al., L-18782, August 29, 1963, 8 SCRA 700).
Correspondingly, if a manager or supervisor organizes or joins a rank
and file union, he will be required to resign therefrom (Magalit, et al. v.
Court of Industrial Relations, et al., L-20448, May 25, 1965, 14 SCRA
72).
Public respondents further submit that several employees who
disaffiliated their union from the NATU subsequently retracted and
reaffirmed their membership with the THEU-NATU. In the decision
which was affirmed by respondent Secretary of Labor, the respondent
Commission stated that:
"x x x out of the alleged one hundred and seventy-one (171) members
of the THEU-CGW whose signatures appeared in the Analysis of
Various Documents Signed by Majority Members of the THEU-CGW,
(Annex 'T', Complainants), which incidentally was relied upon by
Arbitrator Villatuya in holding that complainant THEU-CGW
commanded the majority of employees in respondent company,
ninety?three (93) of the alleged signatories reaffirmed their
membership with the THEU-NATU and reanounced whatever
connection they may have had with other labor unions, (meaning the
complainant THEU-CGW) either through resolution or membership
application forms they have unwittingly signed. (p. 306, Rollo)
Granting arguendo, that the fact of retraction is true, the evidence on
record shows that the letters of retraction were executed on various
dates beginning January 11, 1974 to March 8, 1974 (pp. 278-280,
Rollo). This shows that the retractions were made more or less after
the suspension pending dismissal on January 11, 1974 of Jose Encinas,
21
formerly THEU-NATU President, who became THEU-CGW President, and
the suspension pending their dismissal of the other elected officers
and members of the THEU-CGW on January 15, 1974. It is also clear
that some of the retractions occurred after the suspension of the first
set of workers numbering about twenty-four (24) on March 5, 1974.
There is no use in saying that the retractions obliterated the act of
disaffiliation as there are doubts that they were freely and voluntarily
done especially during such time when their own union officers and
co-workers were already suspended pending their dismissal.
Finally, with regard to the process by which the workers were
suspended or dismissed, this Court finds that it was hastily and
summarily done without the necessary due process. The respondent
company sent a letter to petitioners herein, advising them of
NATU/Dilag's recommendation of their dismissal and at the same time
giving them forty-eight (48) hours within which to comment (p. 637,
Rollo). When petitioners failed to do so, respondent company
immediately suspended them and thereafter effected their dismissal.
This is certainly not in fulfillment of the mandate of due process, which
is to afford the employee to be dismissed an opportunity to be heard.
The prerogative of the employer to dismiss or lay-off an employee
should be done without abuse of discretion or arbitrariness, for what is
at stake is not only the employee's name or position but also his
means of livelihood. Thus, the discharge of an employee from his
employment is null and void where the employee was not formally
investigated and given the opportunity to refute the alleged findings
made by the company (De Leon v. NLRC, L-52056, October 30, 1980,
100 SCRA 691). Likewise, an employer can be adjudged guilty of unfair
labor practice for having dismissed its employees in line with a closed
shop provision if they were not given a proper hearing (Binalbagan-
Isabela Sugar Co., Inc., (BISCOM) v. Philippines Association of Free
Labor Unions (PAFLU) et al., L-18782, August 29, 1963, 8 SCRA 700).
In view of the fact that the dispute revolved around the mother
federation and its local, with the company suspending and dismissing
the workers at the instance of the mother federation, then, the
company's liability should be limited to the immediate reinstatement
of the workers. And since their dismissals were effected without
previous hearing and at the instance of NATU, this federation should
be held liable to the petitioners for the payment of their back wages,
as what We have ruled in the Liberty Cotton Mills Case (supra).
ACCORDINGLY, the petition is hereby GRANTED and the assailed
decision of respondent Secretary of Labor is REVERSED and SET
ASIDE, and the respondent company is hereby ordered to immediately
reinstate all the petitioner employees within thirty (30) days from
notice of this decision. If reinstatement is no longer feasible, the
respondent company is ordered to pay petitioners separation pay
equivalent to one (1) month pay for every year of service. The
respondent NATU federation is directed to pay petitioners the amount
of three (3) years backwages without deduction or qualification. This
decision shall be immediately executory upon promulgation and notice
to the parties.
SO ORDERED.
Narvasa, (Chairman), Cruz, Gancayco, and Grio-Aquino, JJ., concur.

22
G.R. No. 50283-84, April 20, 1983
DOLORES VILLAR, ROMEO PEQUITO, DIONISIO RAMOS, BENIGNO
MAMARALDO, ORLANDO ACOSTA, RECITACION BERNUS, ANSELMA
ANDAN, ROLANDO DE GUZMAN AND RITA LLAGAS, PETITIONERS,
VS.
THE HON. AMADO G. INCIONG, AS DEPUTY MINISTER OF THE MINISTRY
OF LABOR, AMIGO MANUFACTURING INCORPORATED AND PHILIPPINE
ASSOCIATION OF FREE LABOR UNIONS (PAFLU), RESPONDENTS.
DECISION
GUERRERO, J.:
Petition for review by certiorari to set aside the Order dated February
15, 1979 of respondent Deputy Minister Amado G. Inciong affirming
the Decision of the OIC of Regional Office No. 4 dated October 14,
1978 which jointly resolved R04-Case No. T-IV-3549-T and R04-Case
No. RD-4-4088-77-T.
The facts are as follows:
Petitioners were members of the Amigo Employees Union-PAFLU, a
duly registered labor organization which, at the time of the present
dispute, was the existing bargaining agent of the employees in private
respondent Amigo Manufacturing, Inc. (hereinafter referred to as
Company). The Company and the Amigo Employees Union-PAFLU had
a collective bargaining agreement governing their labor relations,
which agreement was then about to expire on February 28, 1977.
Within the last sixty (60) days of the CBA, events transpired giving rise
to the present dispute.
On January 5, 1977, upon written authority of at least 30% of the
employees in the company, including the petitioners, the Federation of
Unions of Rizal (hereinafter referred to as FUR) filed a petition for
certification election with the Med-Arbiters's Office, Regional Office No.
4 of the Ministry of Labor and Employment. The petition was, however,
opposed by the Philippine Association of Free Labor Unions
(hereinafter referred to as PAFLU) with whom, as stated earlier, the
Amigo Employees Union was at that time affiliated. PAFLU's opposition
cited the "Code of Ethics" governing inter-federation disputes among
and between members of the Trade Unions Congress of the Philippines
(hereinafter referred to as TUCP). Consequently, the Med-Arbiter
indorsed the case to TUCP for appropriate action but before any such
23
action could be taken thereon, the petitioners disauthorized FUR from
continuing the petition for certification election for which reason FUR
withdrew the petition.
On February 7, 1977, the same employees who had signed the
petition filed by FUR signed a joint resolution reading in toto as
follows:
"Sama-Samang Kapasiyahan
1. TUMIWALAG bilang kasaping Unyon ng Philippine Association of Free
Labor Unions (PAFLU) at kaalinsabay nito, inaalisan namin ang PAFLU
ng kapangyarihan na katawanin kami sa anumang pakikipagkasundo
(CBA) sa Pangasiwaan ng aming pinapasukan at kung sila man ay
nagkasundo o magkakasundo sa kabila ng pagtitiwalag na ito, ang
nasabing kasunduan ay hindi namin pinagtitibay at tahasang aming
itinatakwil/tinatanggihan;
2. BINABAWI namin ang aming pahintulot sa Federation of Unions of
Rizal (FUR) na katawanin kami sa Petition for Certification Election
(R04-MED Case No. 743-77) at/o sa sama-samang pakikipagkasundo
sa aming patrono;
3. PANATILIHIN na nagsasarili (independent) ang aming samahan,
AMIGO EMPLOYEES UNION, alinsunod sa Artikulo 240 ng Labor Code;
4. MAGHAIN KAAGAD ang aming Unyong nagsasarili, sa pamumuno ng
aming pangsamantalang Opisyal na kinatawan, si Ginang DOLORES
VILLAR, ng Petition for Certification Election sa Department of Labor,
para kilalanin ang aming Unyong nagsasarili bilang tanging kinatawan
ng mga manggagawa sa sama-samang pakikipagkasundo (CBA);
5. BIGYAN ng kopya nito ang bawa't kinauukulan at ang mga
kapasiyahang ito ay magkakabisa sa oras na matanggap ng mga
kinauukulan and kani-kanilang sipi nito."[1]
Immediately thereafter or on February 9, 1977, petitioner Dolores
Villar, representing herself to be the authorized representative of the
Amigo Employees Union, filed a petition for certification election in the
Company before Regional Office No. 4, with the Amigo Employees
Union as the petitioner. The Amigo Employees Union-PAFLU intervened
and moved for the dismissal of the petition for certification election
filed by Dolores Villar, citing as grounds therefor, viz: (1) the petition
lacked the mandatory requisite of at least 30% of the employees in
the bargaining unit; (2) Dolores Villar had no legal personality to sign
the petition since she was not an officer of the union nor is there
factual or legal basis for her claim that she was the authorized
representative of the local union; (3) there was a pending case for the
same subject matter filed by the same individuals; (4) the petition was
barred by the new CBA concluded on February 15, 1977; (5) there was
no valid disaffiliation from PAFLU; and (6) the supporting signatures
were procured through false pretenses.
Finding that the petition involved the same parties and causes of
action as the case previously indorsed to the TUCP, the Med-Arbiter
dismissed the petition filed by herein petitioner Villar, which dismissal
is still pending appeal before the Bureau of Labor Relations.
In the meantime, February 14, 1977, the Amigo Employees Union-
PAFLU called a special meeting of its general membership. A
Resolution was thereby unanimously approved which called for the
investigation by the PAFLU national president, pursuant to the
constitution and by-laws of the Federation, of all of the petitioners and
one Felipe Manlapao, for "continuously maligning, libelling and
slandering not only the incumbent officers but even the union itself
and the federation;" spreading 'false propaganda that the union
officers were merely appointees of the management'; and for causing
divisiveness in the union.
Pursuant to the Resolution approved by the Amigo Employees Union-
PAFLU, the PAFLU, through its national President, formed a Trial
Committee to investigate the local union's charges against the
petitioners for acts of disloyalty inimical to the interest of the local
union, as well as directing the Trial Committee to Subpoena the
complainants (Amigo Employees Union-PAFLU) and the respondents
(herein petitioners) for investigation, to conduct the said investigation
and to submit its findings and recommendations for appropriate
action.
And on the same date of February 15, 1977, the Amigo Employees
Union-PAFLU and the Company concluded a new CBA which, besides
granting additional benefits to the workers, also reincorporated the
same provisions of the existing CBA, including the union security
clause reading, to wit:
"ARTICLE III
UNION SECURITY WITH RESPECT TO PRESENT MEMBERS
All members of the UNION as of the signing of this Agreement shall
remain members thereof in good standing. Therefore, 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."[2]
24
Subsequently, petitioners were summoned to appear before the PAFLU
Trial Committee for the aforestated investigation of the charges filed
against them by the Amigo Employees Union-PAFLU. Petitioners,
however, did not attend but requested for a "Bill of Particulars" of the
charges, which charges were stated by the Chairman of the committee
as follows:
"1. Disaffiliating from PAFLU and affiliating with the Federation of
Unions of Rizal (FUR).
"2. Filing petition for certification election with the Bureau of Labor
Relations and docketed as Case No. R04-MED-830-77 and authorizing
a certain Dolores Villar as your authorized representative without the
official sanction of the mother Federation-PAFLU.
"3. Maligning, libelling and slandering the incumbent officers of the
union as well as of the PAFLU Federation.
"4. By spreading false propaganda among members of the Amigo
Employees Union-PAFLU that the incumbent union officers are 'merely
appointees' of the management.
"5. By sowing divisiveness instead of togetherness among members of
the Amigo Employees Union-PAFLU.
"6. By conduct unbecoming as members of the Amigo Employees
Union-PAFLU which is highly prejudicial to the union as well as to the
PAFLU Federation.
"All these charges were formalized in a resolution of the incumbent
officers of the Amigo Employees Union-PAFLU dated February 14,
1977."[3]
Not recognizing PAFLU's jurisdiction over their case, petitioners again
refused to participate in the investigation rescheduled and conducted
on March 9, 1979. Instead, petitioners merely appeared to file their
Anwser to the charges and moved for a dismissal.
Petitioners contend in their Answer that neither the disaffiliation of the
Amigo Employees Union from PAFLU nor the act of filing the petition
for certification election constitute disloyalty as these are in the
exercise of their constitutional right to self-organization. They further
contended that PAFLU was without jurisdiction to investigate their case
since the charges, being intra-union problems within the Amigo
Employees Union-PAFLU, should be conducted pursuant to the
provision of Article XI, Sections 2, 3, 4 and 5 of the local union's
constitution and by-laws.
The complainants, all of whom were the then incumbent officers of the
Amigo Employees Union-PAFLU, however, appeared and adduced their
evidence supporting the charges against herein petitioners.
Based on the findings and recommendations of the PAFLU trial
committee, the PAFLU President, on March 15, 1977, rendered a
decision finding the petitioners guilty of the charges and disposing in
the last paragraph thereof, to wit,
"Excepting Felipe Manlapao, the expulsion from the AMIGO EMPLOYEES
UNION of all the other nine (9) respondents, Dionisio Ramos,
Recitation Bernus, Dolores Villar, Romeo Dequito, Rolando de Guzman,
Anselma Andan, Rita Llagas, Benigno Mamaradlo and Orlando Acosta
is hereby ordered, and as a consequence the Management of the
employer, AMIGO MANUFACTURING, INC. is hereby requested to
terminate them from their employment in conformity with the security
clause in the collective bargaining agreement. Further the Trial
Committee is directed to investigate Felipe Manlapao when he shall
have reported back for duty."[4]
Petitioners, appealed the Decision to the PAFLU, citing the same
grounds as before, and in addition thereto, argued that the PAFLU
decision cannot legally invoke a CBA which was unratified, not
certified, and entered into without authority from the union general
membership, in asking the Company to terminate them from their
employment. The appeal was, likewise, denied by PAFLU in a
Resolution dated March 28, 1977.
After denying petitioner's appeal, PAFLU on March 28, 1977 sent a
letter to the Company stating, to wit,
"We are furnishing you a copy of our Resolution on the Appeal of the
respondent in Administrative Case No. 2, Series of 1977, Amigo
Employees Union-PAFLU vs. Dionisio Ramos, et al.
"In view of the denial of their appeal and the Decision of March 15,
1977 having become final and executory we would appreciate full
cooperation on your part by implementing the provision of our CBA on
security clause by terminating the respondents concerned from their
employment."[5]
This was followed by another letter from PAFLU to the Company dated
April 25, 1977, reiterating the demand to terminate the employment
of the petitioners pursuant to the security clause of the CBA, with a
statement absolving the Company from any liability or damage that
may arise from petitioner's termination.
25
Acting on PAFLU's demand, the Company informed PAFLU that it will
first secure the necessary clearances to terminate petitioners. By
letter dated April 28, 1977, PAFLU requested the Company to put
petitioners under preventive suspension pending the application for
said clearances to terminate the petitioners, upon a declaration that
petitioners' continued stay within the work premises will "result in the
threat to the life and limb of the other employees of the company."[6]
Hence, on April 29, 1977, the Company filed the request for clearance
to terminate the petitioners before the Department of Labor, Regional
Office No. 4. The application, docketed as R04-Case No. 7-IV-3549-T,
stated as cause therefor, "Demand by the Union Pursuant to the Union
Security Clause"; and further, as effectivity date, "Terminationupon
issuance of clearance; Suspensionupon receipt of notice of workers
concerned."[7] Petitioners were then informed by memorandum dated
April 29, 1977 that the Company has applied for clearance to
terminate them upon demand of PAFLU, and that each of them were
placed under preventive suspension pending the resolution of the said
applications. The security guard was, likewise, notified to refuse
petitioners entry into the work premises.[8]
In an earlier development, on April 25, 1977, or five days before
petitioners were placed under preventive suspension, they filed a
complaint with application for preliminary injunction before the same
Regional Office No. 4, docketed as R04-Case No. RD-4-4088-77-T,
praying that after due notice and hearing, "(1) A preliminary injunction
be issued forthwith to restrain the respondents from doing the act
herein complained of, namely: the dismissal of the individual
complainants from their employment; (2) After due hearing on the
merits of the case, an Order be entered denying and/or setting aside
the Decision dated March 15, 1977 and the Resolution dated March
28, 1977, issued by respondent Onofre P. Guevara, National President
of respondent PAFLU; (3) The Appeal of the individual complainants to
the General Membership of the complainant AMIGO EMPLOYEES
UNION, dated March 22, 1977, pursuant to Sections 2, 3, 4 & 5, Article
XI in relation of Section 1, Article XII of the Union Constitution and By-
Laws, be given due course; and (4) Thereafter, the said preliminary
injunction be made permanent, with costs, and with such further
orders/reliefs that are just and equitable in the premises."[9]
In these two cases filed before the Regional Office No. 4, the parties
adopted their previous positions when they were still arguing before
the PAFLU trial committee.
On October 14, 1977, Vicente Leogardo, Jr., Officer-in-charge of
Regional Office No. 4, rendered a decision jointly resolving said two
cases, the dispositive portion of which states, to wit,
"IN VIEW OF THE FOREGOING, judgment is hereby rendered granting
the application of the Amigo Manufacturing, Inc., for clearance to
terminate the employment of Dolores D. Villar, Dionisio Ramos,
Benigno Mamaraldo, Orlando Acosta, Recitacion Bernus, Anselma
Andan, Rolando de Guzman, and Rita Llagas. The application of
oppositors, under R04-Case No. RD-4-4088-77, for a preliminary
injunction to restrain the Amigo Manufacturing, Inc. from terminating
their employment and from placing them under preventive
suspension, is hereby DISMISSED."[10]
Not satisfied with the decision, petitioners appealed to the Office of
the Secretary of Labor. By Order dated February 15, 1979, the
respondent Amado G. Inciong, Deputy Minister of Labor, dismissed
their appeal for lack of merit.[11]
Hence, the instant petition for review, raising the following issues:
"A. Is it not error in both constitutional and statutory law by the
respondent Minister when he affirmed the decision of the R04-Officer-
in-Charge allowing the preventive suspension and subsequent
dismissal of petitioners by reason of the exercise of their right to
freedom of association?
B. Is it not error in law by the respondent Minister when he upheld the
decision of the R04 OIC which sustained the availment of the
respondent PAFLU's constitution over that of the local union
constitution in the settlement of intra-union dispute?
C. Is it not error in law amounting to grave abuse of discretion by the
Minister in affirming the conclusion made by the R04 OIC, upholding
the legal applicability of the security clause of a CBA over alleged
offenses committed earlier than its conclusion, and within the 60-day
freedom period of an old CBA?"[12]
The main thrust of the petition is the alleged illegality of the dismissal
of the petitioners by private respondent Company upon demand of
PAFLU which invoked the security clause of the collective bargaining
agreement between the Company and the local union, Amigo
Employees Union-PAFLU. Petitioners contend that the respondent
Deputy Minister acted in grave abuse of discretion when he affirmed
the decision granting the clearance to terminate the petitioners and
dismissed petitioners' complaint, and in support thereof, allege that
26
their constitutional right to self-organization had been impaired.
Petitioners' contention lacks merit.
It is true that disaffiliation from a labor union is not open to legal
objection. It is implicit in the freedom of association ordained by the
Constitution.[13] 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.[14]
In the case at bar, it appears as an undisputed fact that on February
15, 1977, the Company and the Amigo Employees Union-PAFLU
entered into a Collective Bargaining Agreement with a union security
clause provided for in Article XII thereof which is a reiteration of the
same clause in the old CBA. The quoted stipulation for closed-shop is
clear and unequivocal and it leaves no room for doubt that the
employer is bound, under the collective bargaining agreement, to
dismiss the employees, herein petitioners, for non-union membership.
Petitioners became non-union members upon their expulsion from the
general membership of the Amigo Employees Union-PAFLU on March
15, 1977 pursuant to the Decision of the PAFLU national president.
We reject petitioners' theory that their expulsion was not valid upon
the grounds adverted to earlier in this Decision. 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. We find no abuse of
discretion on the part of the OIC of Regional Office No. 4 in upholding
the validity of the expulsion and on the part of the respondent Deputy
Minister of Labor in sustaining the same. We agree with the OIC's
decision, pertinent portion of which reads:
"Stripped of non-essentials, the basic and fundamental issue in this
case tapers down to the determination of WHETHER OR NOT PAFLU
HAD THE AUTHORITY TO INVESTIGATE OPPOSITORS AND,
THEREAFTER, EXPEL THEM FROM THE ROLL OF MEMBERSHIP OF THE
AMIGO EMPLOYEES UNION-PAFLU.
Recognized and salutary is the principle that when a labor union
affiliates with a mother union, it becomes bound by the laws and
regulations of the parent organization. Thus, the Honorable Secretary
of Labor, in the case of Amador Bolivar, et al. vs. PAFLU, et al., NLRC
Case NO. LR-133 & MC-476, promulgated on December 3, 1973,
declared
'When a labor union affiliates with a parent organization or mother
union, or accepts a charter from a superior body, it becomes subject
to the laws of the superior body under whose authority the local union
functions. The constitution, by-laws and rules of the parent body,
together with the charter it issues pursuant thereto to the subordinate
union, constitute an enforceable contract between the parent body
and the subordinate union, and between the members of the
subordinate union inter se.' (Citing Labor Unions, Dangel and Shriber,
pp. 279-280).
It is undisputable that oppositors were members of the Amigo
Employees Union at the time that said union affiliated with PAFLU;
hence, under the afore-quoted principle, oppositors are bound by the
laws and regulations of PAFLU.
Likewise, it is undeniable that in the investigation of the charges
against them, oppositors were accorded 'due process', because in this
jurisdiction, the doctrine is deeply entrenched that the term 'due
process' simply means that the parties were given the opportunity to
be heard. In the instant case, ample and unmistakable evidence exists
to show that the oppositors were afforded the opportunity to present
their evidence, but they themselves disclaimed or spurned the said
opportunity given to them.
PAFLU, therefore, correctly and legally acted when, pursuant to its
Constitution and By-Laws, it conducted and proceeded with the
investigation of the charges against the oppositors and found them
guilty of acts prejudicial and inimical to the interests of the Amigo
Employees Union-PAFLU, to wit: that of falsely and maliciously
slandering the officers of the union; spreading false propaganda
among the members of the Amigo Employees Union-PAFLU; calling the
incumbent officers as mere appointees and robots of management;
calling the union company-dominated or assisted union; committing
acts unbecoming of the members of the union and destructive of the
union and its members.
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
27
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.
Correctly and legally, therefore, the PAFLU acted when after proper
investigation and finding of guilt, it decided to remove the oppositors
from the list of members of the Amigo Employees Union-PAFLU, and
thereafter, recommended to the Amigo Manufacturing, Inc.; the
termination of the employment of the oppositors."[15]
We see no reason to disturb the same.
The contention of petitioners that the charges against them being
intra-union problems, should have been investigated in accordance
with the constitution and by-laws of the Amigo Employees Union-
PAFLU and not of the PAFLU, is not impressed with merit. It is true that
under the Implementing Rules and Regulations of the Labor Code, in
case of intra-union disputes, redress must first be sought within the
organization itself in accordance with its constitution and by-laws.
However, it has been held that this requirement is not absolute but
yields to exception under varying circumstances. Thus, in Kapisanan
ng mga Manggagawa sa MRR vs. Hernandez, 20 SCRA 109, We held:
"In the case at bar, noteworthy is the fact that the complaint was filed
against the union and its incumbent officers, some of whom were
members of the board of directors. The constitution and by-laws of the
union provide that charges for any violations thereof shall be filed
before the said board. But as explained by the lower court, if the
complainants had done so the board of directors would in effect be
acting as respondent investigator and judge at the same time. To
follow the procedure indicated would be a farce under the
circumstances, where exhaustion of remedies within the union itself
would practically amount to a denial of justice or would be illusory or
vain, it will not be insisted upon, particularly where property rights of
the members are involved, as a condition to the right to invoke the aid
of a court."
The facts of the instant petition stand on all fours with the aforecited
case that the principle therein enunciated applies here as well. In the
case at bar, the petitioners were charged by the officers of the Amigo
Employees Union-PAFLU themselves who were also members of the
Board of Directors of the Amigo Employees Union-PAFLU. Thus, were
the petitioners to be charged and investigated according to the local
union's constitution, they would have been tried by a trial committee
of three (3) elected from among the members of the Board who are
themselves the accusers. (Section 2, Article 11, Constitution of the
Local Union). Petitioners would be in a far worse position had this
procedure been followed. Nonetheless, petitioners admit in their
petition that two (2) of the six (6) charges, i.e. disaffiliation and filing a
petition for certification election, are not intra-union matters and,
therefore, are cognizable by PAFLU.
Petitioners insist that their disaffiliation from PAFLU and filing a petition
for certification election are not acts of disloyalty but an exercise of
their right to self-organization. They contend that these acts were
done within the 60-day freedom period when questions of
representation may freely be raised. Under the peculiar facts of the
case, We find petitioners' insistence untenable.
In the first place, had petitioners merely disaffiliated from the Amigo
Employees Union-PAFLU, there could be no legal objections thereto for
it was their right to do so. But what petitioners did by the very clear
terms of their "Sama-Samang Kapasiyahan" was to disaffiliate the
Amigo Employees Union-PAFLU from PAFLU, an act which they could
not have done with any effective consequence because they
constituted the minority in the Amigo Employees Union-PAFLU.
Extant from the records is the fact that petitioners numbering ten (10),
were among the ninety-six (96) who signed the "Sama-Samang
Kapasiyahan" whereas there are two hundred thirty four (234) union
members in the Amigo Employees Union-PAFLU. Hence, petitioners
constituted a small minority for which reason they could not have
successfully disaffiliated the local union from PAFLU. Since only 96
wanted disaffiliation, it can be inferred that the majority wanted the
union to remain an affiliate of PAFLU and this is not denied or disputed
by petitioners. The action of the majority must, therefore, prevail over
that of the minority members.[16]
Neither is there merit to petitioners' contention that they had the right
to present representation issues within the 60-day freedom period. It
is true, as contended by petitioners, that under Article 257 of the
Labor Code and Section 3, Rule 2, Book 2 of its Implementing Rules,
questions of exclusive bargaining representation are entertainable
within the sixty (60) days prior to the expiry date of an existing CBA,
and that they did file a petition for certification election within that
period. But the petition was filed in the name of the Amigo Employees
28
Union which had not disaffiliated from PAFLU, the mother union.
Petitioners being a mere minority of the local union may not bind the
majority members of the local union.
Moreover, the Amigo Employees Union, as an independent union, is
not duly registered as such with the Bureau of Labor Relations. The
appealed decision of OIC Leogardo of Regional Office No. 4 states as a
fact that there is no record in the Bureau of Labor Relations that the
Amigo Employees Union (Independent) is registered, and this is not
disputed by petitioners, notwithstanding their allegation that the
Amigo Employees Union is a duly registered labor organization bearing
Ministry of Labor Registration Certificate No. 5290-IP dated March 27,
1967. But the independent union organized after the "Sama-Samang
Kapasiyahan" executed February 7, 1977 could not have been
registered earlier, much less March 27, 1967 under Registration
Certificate No. 5290-IP. As such unregistered union, it acquires no legal
personality and is not entitled to the rights and privileges granted by
law to legitimate labor organizations upon issuance of the certificate
of registration. Article 234 of the New Labor Code specifically provides:
"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.."
In Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40,
We had occasion to interpret Section 23 of R.A. No. 875 (Industrial
Peace Act) requiring of labor unions registration by the Department of
Labor in order to qualify as "legitimate labor organization." and We
said:
"The theory to the effect that Section 23 of Republic Act No. 875
unduly curtails the freedom of assembly and association guaranteed in
the Bill of Rights is devoid of factual basis. The registration prescribed
in paragraph (b) of said section[17] 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 they purport to represent. Such
requirement is a valid exercise of the police power, because the
activities in which labor organizations, associations and union or
workers are engaged affect public interest, which should be
protected."
Simply put, the Amigo Employees Union (Independent) which
petitioners claim to represent, not being a legitimate labor
organization, may not validly present representation issues. Therefore,
the act of petitioners cannot be considered a legitimate exercise of
their right to self-organization. Hence, We affirm and reiterate the
rationale explained in Phil. Association of Free Labor Unions vs. Sec. of
Labor case, supra, in order to protect legitimate labor and at the same
time maintain discipline and responsibility within its ranks.
The contention of petitioners that the new CBA concluded between
Amigo Employees Union-PAFLU and the Company on February 15,
1977 containing the union security clause cannot be invoked as
against the petitioners for offenses committed earlier than its
conclusion, deserves scant consideration. We find it to be the fact that
the union security clause provided in the new CBA merely reproduced
the union security clause provided in the old CBA about to expire. And
since petitioners were expelled from Amigo Employees Union-PAFLU on
March 28, 1982 upon denial of their Motion for Reconsideration of the
decision expelling them, the CBA of February 15, 1977 was already
applicable to their case. The "closed-shop provision" in the CBA
provides:
"All members of the UNION as of the signing of this Agreement shall
remain members thereof in good standing. Therefore, 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." (Art. III)
A closed-shop is a valid form of union security, and a provision
therefor in a collective bargaining agreement is not a restriction of the
right of freedom of association guaranteed by the Constitution.
(Manalang, et al. vs. Artex Development Co., Inc., et al., L-20432,
October 30, 1967, 21 SCRA 561). Where in closed-shop agreement it is
stipulated that union members who cease to be in good standing shall
immediately be dismissed, such dismissal does not constitute an
unfair labor practice exclusively cognizable by the Court of Industrial
Relations. (Seno vs. Mendoza, 21 SCRA 1124).
29
Finally, We reject petitioners' contention that respondent Minister
committed error in law amounting to grave abuse of discretion when
he affirmed the conclusion made by the R04 OIC, upholding the legal
applicability of the security clause of a CBA over alleged offenses
committed earlier than its conclusion and within the 60-day freedom
period of an old CBA. In the first place, as We stated earlier, the
security clause of the new CBA is a reproduction or reiteration of the
same clause in the old CBA. While petitioners were charged for alleged
commission of acts of disloyalty inimical to the interests of the Amigo
Employees Union-PAFLU in the Resolution of February 14, 1977 of the
Amigo Employees Union-PAFLU and on February 15, 1977 PAFLU and
the Company entered into and concluded a new collective bargaining
agreement, petitioners may not escape the effects of the security
clause under either the old CBA or the new CBA by claiming that the
old CBA had expired and that the new CBA cannot be given retroactive
enforcement. To do so would be to create a gap during which no
agreement would govern, from the time the old contract expired to the
time a new agreement shall have been entered into with the union. As
this Court said in Seno vs. Mendoza, 21 SCRA 1124, "without any
agreement to govern the relations between labor and management in
the interim, the situation would well be productive of confusion and
result in breaches of the law by either party."
The case of Seno vs. Mendoza, 21 SCRA 1124 mentioned previously
needs further citation of the facts and the opinion of the Court,
speaking through Justice Makalintal who later became Chief Justice,
and We quote:
"It appears that petitioners other than Januario T. Seno, who is their
counsel, were members of the United Seamen's Union of the
Philippines. Pursuant to a letter-request of the Union stating that they
'had ceased to be members in good standing' and citing a closed shop
clause in its bargaining agreement with respondent Carlos A. Go
Thong & Co., the latter dismissed said petitioners. Through counsel,
petitioners requested that they be reinstated to their former positions
and paid their backwages, otherwise they would picket respondents'
offices and vessels. The request was denied on the ground that the
dismissal was unavoidable under the terms of the collective
bargaining agreement. . . .
"We agree with respondent company that the pendency of the
petitions for certification election did not bar or preclude the renewal
of the collective bargaining agreement with the United Seamen's
Union of the Philippines. Otherwise there would be a gap or
interregnum during which no agreement would govern, that is, from
the time the old collective bargaining contract expired to the time the
petition for certification election is decided and a new agreement
entered into with the Union that may be duly certified as the proper
bargaining unit. Without any agreement to govern the relations
between labor and management in the interim, the situation would
well be productive of confusion and result in breaches of the law by
either party. . . ."
We, therefore, hold and rule that petitioners, although entitled to
disaffiliate from their union and form a new organization of their own,
must, however, suffer the consequences of their separation from the
union under the security clause of the CBA.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed
from affirming the joint decision of the OIC of Regional Office No. 4 in
R04-Case No. T-IV-3549-T and R04 Case No. RD-4-4088-77-T granting
clearance to terminate petitioners as well as dismissing their
complaint with application for preliminary injunction, is hereby
AFFIRMED. No costs.
SO ORDERED.
Makasiar (Chairman), Concepcion Jr., De Castro and Escolin, JJ., concur.
Abad Santos, J., my vote is to dismiss the petition of minute resolution
by lack of merit.
Aquino, J., is on leave.

30
G.R. No. 100898, July 05, 1993
ALEX FERRER, RAFAEL FERRER, HENRY DIAZ, DOMINGO BANCOLITA,
GIL DE GUZMAN, AND FEDERATION OF DEMOCRATIC LABOR UNIONS,
(FEDLU), PETITIONERS,
VS.
NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HUI
KAM CHANG (IN HIS CAPACITY AS GENERAL MANAGER OF OCCIDENTAL
FOUNDRY CORPORATION), OCCIDENTAL FOUNDRY CORPORATION,
MACEDONIO S. VELASCO (IN HIS CAPACITY AS REPRESENTATIVE OF
THE FEDERATION OF FREE WORKERS), GENARO CAPITLE, JESUS
TUMAGAN, ERNESTO BARROGA, PEDRO LLENA, GODOFREDO
PACHECO, MARCELINO CASTILLO, GEORGE IGNAS, PIO DOMINGO, AND
JAIME BAYNADO, RESPONDENTS.
DECISION
MELO, J.:
The petition for certiorari before us seeks to annul and set aside: (a)
the decision dated June 20, 1991 of the Second Division of the
National Labor Relations Commission (NLRC) (Penned by
Commissioner Rustico L. Diokno and concurred in by Presiding
Commissioner Edna Bonto-Perez and Commissioner Domingo H.
Zapanta) which affirmed in toto the decision of April 5, 1990 of Labor
Arbiter Eduardo J. Carpio dismissing the complaint for illegal dismissal
and unfair labor practice on the ground that both the company, and
the union merely complied with the collective bargaining agreement
provision sanctioning the termination of any employee who fails to
retain membership in good standing with the union; and (b) the NLRC
resolution denying the motion for the reconsideration of said decision
(NLRC NCR Case No. 00-10-04855-89).
Petitioners were regular and permanent employees of the Occidental
Foundry Corporation (OFC) in Malanday, Valenzuela, Metro Manila
which was under the management of Hui Kam Chang. As piece
workers, petitioners earnings ranged from P110 to P140 a day. They
had been in the employ of OFC for about ten years at the time of their
dismissal in 1989 (p. 38, Rollo).
On January 5, 1989, the Samahang Manggagawa ng Occidental
Foundry Corporation-FFW (SAMAHAN) and the OFC entered into a
collective bargaining agreement (CBA) which would be effective for
31
the three-year period between October 1, 1988 and September 30,
1991 (Memorandum for OFC and Hui Kam Chang, p. 6, Rollo; p. 551).
Article II thereof provides for a union security clause thus:
Section 1 - The company agrees that all permanent and regular
factory workers in the company who are members in good standing of
the union or who thereafter may become members, shall as a
condition of continued employment, maintain their membership in the
union in good standing for the duration of the agreement.
xxx xxx xxx
Section 3 - The parties agree that failure to retain membership in good
standing with the UNION shall be ground for the operation of
paragraph 1 hereof and the dismissal by the company of the aforesaid
employee upon written request by the union. The aforesaid request
shall be accompanied by a verified carbon original of the Board of (sic)
Resolution by the UNION signed by at least a majority of its
officers/directors. (p. 562, Rollo.)
On May 6, 1989, petitioner Alex Ferrer and the SAMAHAN, filed in the
Department of Labor and Employment (DOLE), a complaint for the
expulsion from SAMAHAN of the following officers: Genaro Capitle
(president), Jesus Tumagan (vice-president), Godofredo Pacheco
(auditor), and Marcelino Pacheco (board member) (Case No. NCR-00-
M-89-11-01). The complaint was founded on said officers alleged
inattentiveness to the economic demands of the workers. However, on
September 4, 1989, petitioners Diaz and Alex Ferrer withdrew the
petition (p. 590, Rollo).
On September 10, 1989, petitioners conducted a special election of
officers of the SAMAHAN (pp. 205 & 583, Rollo). Said election was,
however, later questioned by the FFW. Nonetheless, the elected set of
officers tried to dissuade the OFC from remitting union dues to the
officers led by Capitle who were allied with the FFW. Later, however,
Romulo Erlano, one of the officers elected at the special election,
manifested to the DOLE that he was no longer objecting to the
remittance of union dues to the officers led by Capitle. Petitioners
move to stage a strike based on economic demands was also later
disowned by members of the SAMAHAN.
The intraunion squabble came to a head when, on September 11,
1989, a resolution expelling petitioners from the SAMAHAN was issued
by the aforesaid union officials headed by Capitle, together with board
members George Ignas, Pio Domingo, and Jaime Baynado (pp. 286 &
599, Rollo). The following day, Capitle sent OFC the following letter:
12 September 1989
Mr. Hui Kam Chang
General Manager
Malanday, Valenzuela
Metro Manila
Dear Mr. Chang:
In compliance with Article II, Sec. 3 of the Union Security Clause as
enunciated in our Collective Bargaining Agreement, I would like you to
dismiss the following employees on the ground of failure to retain
membership in good standing:
1. Alex Ferrer
2. Gil de Guzman
3. Henry Diaz
4. Domingo Bancolita
5. Rafael Ferrer, Jr.
Attached herewith is the verified carbon original of the Board
Resolution of the union signed by the majority of its officers/directors.
Thank you very much.
Very truly yours,
(Sgd.)
GENARO CAPITLE
President
(p. 66, Rollo.)
Although petitioners received this letter weeks after its date, it
appears that on that same date, they had learned about their
dismissal from employment as shown by the letter also dated
September 13, 1989 which they sent the Federation of Democratic
Labor Unions (FEDLU). They volunteered therein to be admitted as
members of the FEDLU and requested that they be represented
(katawanin) by said federation before the DOLE in the complaint
which they intended to file against the union (SAMAHAN), the FFW and
the company for illegal dismissal, reinstatement, and other benefits in
accordance with law (p. 74, Rollo).
Thereafter, on various dates, petitioners sent individual letters to Hui
Kam Chang professing innocence of the charges levelled against them
by the SAMAHAN and the FFW and pleading that they be reinstated
(pp. 69-73, Rollo). Their letters appear to have elicited no response.
Thus, contending that their dismissal was without cause and in utter
disregard of their right to due process of law, petitioners, through the
FEDLU, filed a complaint for illegal dismissal and unfair labor practice
32
before the NLRC against Hui Kam Chang, OFC, Macedonio S. Velasco
(as representative of the FFW), the FFW, and the SAMAHAN officers
headed by Capitle (p. 75, Rollo).
In due course, after the case was ventilated through position papers
and other documents, the labor arbiter rendered a decision dismissing
petitioners complaint (pp. 79-89, Rollo). He found that in dismissing
petitioners, OFC was merely complying with the mandatory
provisions of the CBA - the law between it and the union. He added:
To register compliance with the said covenant, all that is necessary is a
written request of the union requesting dismissal of the employees
who have failed to retain membership in good standing with the union.
The matter or question, therefore, of determining why and how did
complainants fail to retain membership in good standing is not for the
company to inquire via formal investigation. By having the request of
the union, a legal presumption that the request was born out of a
formal inquiry by the union that subject employees failed to retain
membership in good standing, failed to exist. This means generally
that where a valid closed shop or similar agreement is in force with
respect to a particular bargaining unit as in the case a quo, the
employer shall refuse to employ any person unless he is a member of
the majority union and the employer shall dismiss employees who fail
to retain their membership in the majority union. This must be
deemed a just cause recognized by law and jurisprudence. The effect
is discrimination to encourage membership in other unions. (pp. 86-
87, Rollo.)
Hence, the labor arbiter concluded, the dismissal of petitioners was an
exercise of legitimate management prerogative which cannot be
considered as an unfair labor practice. On whether the SAMAHAN and
the FFW could be held liable for illegal dismissal and unfair labor
practice, the arbiter opined that since there was no employer-
employee relationship between petitioners and respondent unions, the
complaint against the latter has no factual and legal bases, because
petitioners should not have confused expulsion from membership in
the union as one and the same incident to their subsequent
employment termination.
Consequently, petitioners appealed to the NLRC on the grounds that
there was prima facie evidence of abuse of discretion on the part of
the labor arbiter and that he committed serious errors in his findings
of facts.
On June 20, 1991, the NLRC rendered the herein questioned decision
affirming in toto the decision of the labor arbiter. Petitioners motion
for the reconsideration of the NLRC decision having been denied, they
resorted to the instant petition for certiorari which presents the issue
of whether or not respondent Commission gravely abused its
discretion in affirming the decision of the labor arbiter which is
allegedly in defiance of the elementary principles of procedural due
process as the petitioners were summarily dismissed from
employment without an investigation having been conducted by the
OFC on the veracity of the allegation of the SAMAHAN-FFW that they
violated the CBA.
A CBA is the law between the company and the union and compliance
therewith is mandated by the express policy to give protection to
labor. Said policy should be given paramount consideration unless
otherwise provided for by law (Meycauayan College vs. Drilon, 185
SCRA 50 [1990]). A CBA provision for a closed shop is a valid form of
union security and it is not a restriction on the right or freedom of
association guaranteed by the Constitution (Lirag Textile Mills, Inc. vs.
Blanco, 109 SCRA 87 [1981]). However, in the implementation of the
provisions of the CBA, both parties thereto should see to it that no
right is violated or impaired. In the case at bar, while it is true that the
CBA between OFC and the SAMAHAN provided for the dismissal of
employees who have not maintained their membership in the union,
the manner in which the dismissal was enforced left much to be
desired in terms of respect for the right of petitioners to procedural
due process.
In the first place, the union has a specific provision for the permanent
or temporary expulsion of its erring members in its constitution and
by-laws (saligang batas at alituntunin). Under the heading
membership and removal (pag-aanib at pagtitiwalag), it states:
Sec. 4. Ang sinumang kasapi ay maaring itwalag (sic) ng Samahan
pangsamantala o tuluyan sa pamamgitan (sic) ng tatlot ikaapat (3/4)
na bahagi ng dami ng bilang ng Pamunuang Tagapagpaganap.
Pagkaraan lamang sa pandinig sa kanyang kaso. Batay sa sumusunod:
(a) Sinumang gumawa ng mga bagay bagay na labag at lihis sa
patakaran ng Samahan.
(b) Sinumang gumawa ng mga bagay na maaaring ikabuwag ng
Samahan.
(c) Hindi paghuhulog ng butaw sa loob ng tatlong buwan na walang
sakit o Doctors Certificate.
33
(d) Hindi pagbibigay ng abuloy na itinatadhana ng Samahan.
(e) Sinumang kasapi na natanggal sa kapisanan at gustong sumapi uli
ay magpapanibago ng bilang, mula sa taon ng kanyang pagsapi uli sa
Samahan. (Underscoring supplied; Ibid., p. 177).
No hearing (pandinig) was ever conducted by the SAMAHAN to look
into petitioners explanation of their moves to oust the union
leadership under Capitle, or their subsequent affiliation with FEDLU.
While it is true that petitioners actions might have precipitated
divisiveness and, later, showed disloyalty to the union, still, the
SAMAHAN should have observed its own constitution and by-laws by
giving petitioners an opportunity to air their side and explain their
moves. If, after an investigation the petitioners were found to have
violated union rules, then and only then should they be subjected to
proper disciplinary measures.
Here lies the distinction between the facts of this case and that of
Cario vs. NLRC (185 SCRA 177 [1990]) upon which the Solicitor
General heavily relies in supporting the stand of petitioners. In Cario,
the erring union official was given the chance to answer the
complaints against him before an investigating committee created for
that purpose. On the other hand, herein petitioners were not given
even one opportunity to explain their side in the controversy. This
procedural lapse should not have been overlooked considering the
union security provision of the CBA.
What aggravated the situation in this case is the fact that OFC itself
took for granted that the SAMAHAN had actually conducted an inquiry
and considered the CBA provision for the closed shop as self-operating
that, upon receipt of a notice that some members of the SAMAHAN
had failed to maintain their membership in good standing in
accordance with the CBA, it summarily dismissed petitioners. To make
matters worse, the labor arbiter and the NLRC shared the same view
in holding that (t)he matter or question, therefore, of determining
why and how did complainants fail to retain membership in good
standing is not for the company to inquire via formal investigation
(pp. 87 & 135, Rollo). In this regard, the following words of my learned
brother, Mr. Justice Feliciano, in the Resolution in Cario are apt:
4. Turning now to the involvement of the Company in the dismissal
of petitioner Cario, we note that the Company upon being formally
advised in writing of the expulsion of petitioner Cario from the Union,
in turn simply issued a termination letter to Cario, the termination
being made effective the very next day. We believe that the Company
should have given petitioner Cario an opportunity to explain his side
of the controversy with the Union. Notwithstanding the Unions
Security Clause in the CBA, the Company should have reasonably
satisfied itself by its own inquiry that the Union had not been merely
acting arbitrarily and capriciously in impeaching and expelling
petitioner Cario
x x x gives rise to an actionable wrong (Callanta vs. Carnation Philippines,
x x x Inc., 145 SCRA 268 [1986]). Verily, a mans right to his labor is
x x x property within the meaning of constitutional guarantees which he
5. We conclude that the Company had failed to accord to petitioner
Cario the latters right to procedural due process. The right of an
employee to be informed of the charges against him and to
reasonable opportunity to present his side in a controversy with either
the Company or his own Union, is not wiped away by a Union Security
Clause or a Union Shop Clause in a CBA. An employee is entitled to be
protected not only from a company which disregards his rights but
also from his own Union the leadership of which could yield to the
temptation of swift and arbitrary expulsion from membership and
hence dismissal from his job. (pp. 186 & 189.)
The need for a company investigation is founded on the consistent
ruling of this Court that the twin requirements of notice and hearing
which are essential elements of due process must be met in
employment-termination cases. The employee concerned must be
notified of the employers intent to dismiss him and of the reason or
reasons for the proposed dismissal. The hearing affords the employee
an opportunity to answer the charge or charges against him and to
defend himself therefrom before dismissal is effected (Kwikway
Engineering Works vs. NLRC, 195 SCRA 526 [1991]; Salaw vs. NLRC,
202 SCRA 7 [1991]). Observance to the letter of company rules on
investigation of an employee about to be dismissed is not mandatory.
It is enough that there is due notice and hearing before a decision to
dismiss is made (Mendoza vs. NLRC, 195 SCRA 606 [1991]). But even
if no hearing is conducted, the requirement of due process would have
been met where a chance to explain a partys side of the controversy
had been accorded him (Philippine Airlines, Inc. vs. NLRC, 198 SCRA
748 [1991]).
If an employee may be considered illegally dismissed because he was
not accorded fair investigation (Hellenic Philippine Shipping vs. Siete,
195 SCRA 179 [1991]), the more reason there is to strike down as an
inexcusable and disdainful rejection of due process a situation where
34
there is no investigation at all (See: Colegio del Sto. Nio vs. NLRC,
197 SCRA 611 [1991]; Artex Development Co., Inc. vs. NLRC, 187
SCRA 611 [1990]). The need for the observance of an employees right
to procedural due process in termination cases cannot be
overemphasized. After all, ones employment, profession, trade, or
calling is a property right and the wrongful interference therewith
cannot be deprived of without due process (Batangas Laguna Tayabas
Bus Co. vs. Court of Appeals, 71 SCRA 470 [1976]).
While the law recognizes the right of an employer to dismiss
employees in warranted cases, it frowns upon arbitrariness as when
employees are not accorded due process (Tan, Jr. vs. NLRC, 183 SCRA
651 [1990]). Thus, the prerogatives of the OFC to dismiss petitioners
should not have been whimsically done for it unduly exposed itself to
a charge of unfair labor practice for dismissing petitioners in line with
the closed shop provision of the CBA, without a proper hearing
(Tropical Hut Employees Union-CGW vs. Tropical Hut Food Market, Inc.,
181 SCRA 173 [1990]; citing Binalbagan-Isabela Sugar Co., Inc.
(BISCOM) vs. Philippine Association of Free Labor Unions (PAFLU), 8
SCRA 700 [1983]). Neither can the manner of dismissal be considered
within the ambit of managerial prerogatives, for while termination of
employment is traditionally considered a management prerogative, it
is not an absolute prerogative subject as it is to limitations founded in
law, the CBA, or general principles of fair play and justice (University
of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]).
Under Rule XIV, Sections 2, 5, and 6 of the rules implementing Batas
Pambansa Blg. 130, the OFC and the SAMAHAN should solidarily
indemnify petitioners for the violation of their right to procedural due
process (Great Pacific Life Assurance Corporation vs. NLRC, 187 SCRA
694 [1990], citing Wenphil vs. NLRC, 170 SCRA 69 [1989], Cario vs.
NLRC, supra). However, such penalty may be imposed only where the
termination of employment is justified and not when the dismissal is
illegal as in this case where the damages are in the form of back
wages.
As earlier discussed, petitioners alleged act of sowing disunity among
the members of the SAMAHAN could have been ventilated and
threshed out through a grievance procedure within the union itself. But
resort to such procedure was not pursued. What actually happened in
this case was that some members, including petitioners, tried to
unseat the SAMAHAN leadership headed by Capitle due to the latters
alleged inattention to petitioners demands for the implementation of
the P25-wage increase which took effect on July 1, 1989. The
intraunion controversy was such that petitioners even requested the
FFW to intervene to facilitate the enforcement of the said wage
increase (Petition, p. 54; p. 55, Rollo).
Petitioners sought the help of the FEDLU only after they had learned of
the termination of their employment upon the recommendation of
Capitle. Their alleged application with federations other than the FFW
(Labor Arbiters Decision, pp. 4-5; pp. 82-83, Rollo) can hardly be
considered as disloyalty to the SAMAHAN, nor may the filing of such
applications denote that petitioners failed to maintain in good
standing their membership in the SAMAHAN. The SAMAHAN is a
different entity from FFW, the federation to which it belonged. Neither
may it be inferred that petitioners sought disaffiliation from the FFW
for petitioners had not formed a union distinct from that of the
SAMAHAN. Parenthetically, the right of a local union to disaffiliate from
a federation in the absence of any provision in the federations
constitution preventing disaffiliation of a local union is legal (Peoples
Industrial and Commercial Employees and Workers Org. (FFW) vs.
Peoples Industrial and Commercial Corp., 112 SCRA 440 [1982]). Such
right is consistent with the constitutional guarantee of freedom of
association (Tropical Hut Employees Union-CGW vs. Tropical Hut Food
Market, Inc., 181 SCRA 173 [1990]).
Hence, while petitioners act of holding a special ejection to oust
Capitle, et al. may be considered as an act of sowing disunity among
the SAMAHAN members, and, perhaps, disloyalty to the union officials,
which could have been dealt with by the union as a disciplinary
matter, it certainly cannot be considered as constituting disloyalty to
the union. Faced with a SAMAHAN leadership which they had tried to
remove as officials, it was but a natural act of self-preservation that
petitioners fled to the arms of the FEDLU after the union and the OFC
had tried to terminate their employment. Petitioners should not be
made accountable for such an act.
With the passage of Republic Act No. 6715 which took effect on March
21, 1989, Article 279 of the Labor Code was amended to read as
follows:
Security of Tenure. -- In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause
35
or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.
and as implemented by Section 3, Rule 8 of the 1990 New Rules of
Procedure of the National Labor Relations Commission, it would seem
that the Mercury Drug Rule (Mercury Drug Co., Inc. vs. Court of
Industrial Relations, 56 SCRA 694 [1974]) which limited the award of
back wages of illegally dismissed workers to three (3) years without
deduction or qualification to obviate the need for further proceedings
in the course of execution, is no longer applicable.
A legally dismissed employee may now be paid his back wages,
allowances, and other benefits for the entire period he was out of work
subject to the rule enunciated before the Mercury Drug Rule, which is
that the employer may, however, deduct any amount which the
employee may have earned during the period of his illegal termination
(East Asiatic Company, Ltd. vs. Court of Industrial Relations, 40 SCRA
521 [1971]). Computation of full back wages and presentation of proof
as to income earned elsewhere by the illegally dismissed employee
after his termination and before actual reinstatement should be
ventilated in the execution proceedings before the Labor Arbiter
concordant with Section 3, Rule 8 of the 1990 new Rules of Procedure
of the National Labor Relations Commission.
Inasmuch as we have ascertained in the text of this discourse that the
OFC whimsically dismissed petitioners without proper hearing and has
thus opened OFC to a charge of unfair labor practice, it ineluctably
follows that petitioners can receive their back wages computed from
the moment their compensation was withheld after their dismissal in
1989 up to the date of actual reinstatement. In such a scenario, the
award of back wages can extend beyond the 3-year period fixed by
the Mercury Drug Rule depending, of course, on when the employer
will reinstate the employees.
It may appear that Article 279 of the Labor Code, as amended by
Republic Act No. 6715, has made the employer bear a heavier burden
than that pronounced in the Mercury Drug Rule, but perhaps Republic
Act No. 6715 was enacted precisely for the employer to realize that
the employee must be immediately restored to his former position,
and to impress the idea that immediate reinstatement is tantamount
to a cost-saving measure in terms of overhead expense plus
incremental productivity to the company which lies in the hands of the
employer.
WHEREFORE, the decision appealed from is hereby SET ASIDE and
private respondents are hereby ordered to reinstate petitioners to
their former or equivalent positions without loss of seniority rights and
with full back wages, inclusive of allowances and other benefits or
their monetary equivalent, pursuant to Article 279 of the Labor Code,
as amended by Republic Act. No. 6715.
SO ORDERED.

Feliciano, (Chairman), Bidin, Davide, Jr., and Romero, JJ., concur.

36
G.R. Nos. 76579-82, August 31, 1988
BENEDICTO RODRIGUEZ, ETC., PETITIONER,
VS.
HON. DIRECTOR, BUREAU OF LABOR RELATIONS, CARLOS
GALVADORES AND LIVI MARQUEZ, RESPONDENTS.
[G.R. NO. 80504. AUGUST 31, 1988]
REY C. SUMANGIL, VIRGILIO V. HERNANDEZ, ET AL., PETITIONERS,
VS.
MANOLITO PARAN, ROSALINDA DE GUZMAN, FREE TELEPHONE
WORKERS UNION, PHILIPPINE LONG DISTANCE TELEPHONE, CO., AND
HON. PURA FERRER-CALLEJA, RESPONDENTS.
DECISION
NARVASA, J.:
The above entitled special civil actions of certiorari were separately
instituted but have been consolidated because they involve disputes
among employees of the Philippine Long Distance Telephone Company
(PLDT), who are members of the same union, the Free Telephone
Workers Union (FTWU). The disputes concern the validity of the
general elections for union officers in 1986, and the increase of union
dues adopted and put into effect by the incumbent officers
subsequent to said elections.
G.R. Nos. 76579-82: Controversy
Respecting Elections of Officers
Assailed by the petitioners' in G.R. No. 76579-82 are (1) the decision
dated October 10, 1986 of the Director of Labor Relations (BLR)
annulling the elections of officers of the labor union above mentioned,
FTWU, and (2) the resolution dated October 30, 1986, denying their
motion for reconsideration of the decision.
The union's by-laws provide for the election of officers every three (3)
years, in the month of July. Pursuant, thereto, the union's Legislative
Council set the provincial elections for its officers on July 14 to 18,
1986, and those for Metro Manila on July 25, 1986.
37
The same Council also quite drastically raised the fees for the filing of
certificates of candidacies which had theretofore ranged from P75.00
to P100.00. The filing fee for each candidate for president of the labor
organization was increased to P3,000; that for each candidate for vice-
president, secretary-general, treasurer and auditor, to P2,000.00; and
that for assistant secretary, assistant treasurer and assistant auditor,
to P1,000.00 each.
Bureau of Labor Relations Cases: Nos.
LRD-M-7-503-86 & LRD-M-7-504-86
Although the increased fees were paid in due course by the
candidates, no less than two complaints were filed with the Bureau of
Labor Relations for their invalidation as excessive, prohibitive and
arbitrary. One, docketed as Case No. LRD-M-7-503-86, was presented
by Rey Sumangil, a candidate for president, and the members of his
slate. The other, Case No. LRD-M-7-504-86, was filed by Carlos
Galvadores, also a presidential candidate, and his group. lmpleaded as
respondents in both complaints were Benedicto Rodriguez, the
Chairman of the Commission on Elections of the union, and the
incumbent union officers, headed by the president, Manolito Paran.
Acting on the complaints, the Med-Arbiter issued on July 8, 1986 a
restraining order against the enforcement of the new rates of fees.
Other BLR Cases: Nos. LRD-M-7-
557-86, and LRD-M-7-559-86
It appears that notwithstanding the cases questioning the candidates'
fees, the elections for the provinces of Visayas and Mindanao and
certain areas of Luzon were nevertheless held on July 21 and 22, 1986,
which are dates different from those specified by the Legislative
Council (i.e., July 14 to 18, 1986). The validity of the elections was
very shortly challenged on the ground of lack of (1) due notice and (2)
adequate ground rules. Carlos Galvadores and his fellow candidates
filed on July 22, 1986 a petition with the BLR, docketed as Case No.
LRD-M-7-557-86, praying that the Union's COMELEC be directed to
promulgate ground rules for the conduct of the provincial elections. On
the day following, Livi Marquez, a candidate for vice-president,
together with other candidates in his ticket, filed another petition
against the same Union COMELEC and Manolito Paran, the union which fact, in the Med-Arbiter's view, was a clear manifestation of the
president -- docketed as Case No. LRD-M-7-559-86 -- seeking to union members' desire to go ahead with, the elections and express
restrain the holding of the elections scheduled on July 25, 1986 in the their will therein.
Metro Manila area until (1) ground rules therefor had been formulated
and made known to all members of the labor organization, and (2) the This judgment was however overturned by the Officer-in-Charge of
issue of the filing fees had been finally decided. In connection with Labor Relations, on appeal seasonably taken. The OIC's decision,
these complaints, a temporary restraining order was issued on July 23, dated October 10, 1986 nullified the general elections in the provinces
1986 prohibiting the holding of elections on July 25, 1986. and Metro Manila on the ground of (1) lack of notice to the candidates
and voters, (2) failure to disseminate the election ground rules to all
The restraining order notwithstanding, the Union COMELEC proceeded parties concerned, and (3) disregard of the temporary restraining
with the general elections in all the PLDT branches in Metro Manila on order of the Med-Arbiter. The decision stressed the following points:[1]
July 25, 1986. It then reported that as of July 15, 1986 the number of
qualified voters was 9,429 of which 6,903 actually voted, the "The undue haste with which the questioned general elections were
percentage of turn-out being 73%, and that those who obtained the held raises doubts as to its validity. In its desire to conduct the
highest number of votes for the various elective positions were: elections as scheduled, the respondents unwittingly disregarded
mandatory procedural requirements. The respondents' pretensions
Manolito Paran President 3,030 votes that the appellants were duly furnished with the ground rules/guide-
Eduardo de Leon 1st Vice-President 2,185 votes lines of the general elections and that the same were properly
Efren de Lima 2nd Vice-President 2,806 votes disseminated to the qualified voters of the union are not supported by
Roger Rubio Secretary General 2,462 votes the records.
Virgilio Tulay Asst. Sec. General 2,924 votes
Rosalinda de Guzman Treasurer 2,659 votes ***.
Filmore Dalisay Asst. Treasurer 2,525 votes
Damiana Yalung Auditor 2,942 votes "Moreover, the Union's Comelec did not follow the schedule of election
Jaime Pineda Asst. Auditor 3,082 votes outlined in the guidelines. Specifically, the guidelines fixed the
elections in Visayas-Mindanao on July 14, 16 and 18, 1986, in Northern
Livi Marquez and Carlos Galvadores, and their respective groups, Luzon, on July 16, 17, 18 and 21, 1986 and in Southern Luzon on July
forthwith filed separate motions praying that the COMELEC be 16, 17 and 18, 1986 (records, pp. 67-70). Surprisingly, however, the
declared guilty of contempt for defying the temporary restraining Union's Comelec conducted the elections in Northern and Southern
order, and for the nullification not only of the Metro Manila elections of Luzon on July 21, and 22, 1986 and in Visayas-Mindanao on July 25,
July 25, 1986 but also the provincial elections of July 21 and 22, 1986. 1986 without proper notice to the appellants.

The four (4) cases were jointly decided by Med-Arbiter Rasidali
Abdullah on August 28, 1986. His judgment denied the petitions to
nullify the elections, as well as the motions for contempt, but
invalidated the increase in rates of filing fees for certificates of
candidacies. The judgment accorded credence to the Union
COMELEC's averment that it had not received the restraining order on
time. It took account, too, of the fact that the turn-out of voters was
73%, much higher than the turn-out of 62% to 63% in prior elections,
38
"Accordingly, the unwarranted failure of the Union's Comelec to duly
furnish the appellants the guidelines and properly disseminate the
same to the voters, and the holding of the elections not in accordance
with the schedule set by the guidelines and in open defiance of the
July 23, 1986 Restraiing Order, precipitated an uncalled for confusion
among the appellants' supporters and unduly prevented them from
adopting the appropriate electoral safeguards to protect their
interests. Under the circumstances, this Office is contrained to
invalidate the general elections held on July 21, 22 and 25, 1986 and
declare the results thereof null and void.
'Furthermore, only 6,903 out of the 9,426 qualified voters trooped to
the polls during the July 21, 22 and 25, 1986 general elections.
Considering the closeness of the result of the elections, the 2,058
qualified voters, if they were able to cast their votes, could have
drastically altered the results of the elections. But more important, the
disenfranchisement of the remaining 27% qualified voters is a
curtailment of Trade Unionism implicitly ordained in the worker's right
to self-organization explicitly protected by the Constitution.
***.
"The submission of the respondents that they did not receive a copy of
the injunctive order is completely rebuffed by the records. It appears
that the same was received and signed by a certain Cenidoza for
respondent Manolito Paran at 4:30 P.M. of July 23, 1986 and by
respondent Benedicto Rodriguez himself, also on July 23, 1986 at 4:30
P.M. In the case of Manolito Paran, the restraining order in question
was served at his office/postal address at Rm. 310 Regina Bldg.,
Escolta, Manila."
It is this decision of the BLR Officer-in-Charge which is the subject of
the certiorari actions filed in this Court by Benedicto Rodriguez, the
chairman of the Union COMELEC, and docketed as G.R. Nos. 76579-82.
He claims the decision was rendered with grave abuse of discretion
considering that (a) the Med-Arbiter had found no fraud or irregularity
in the elections; (b) the election was participated in by more than 73%
of the entire union membership; and (c) the petition for nullity was not
supported by 30% of the general membership.
G.R. No. 80504: Controversy
Respecting Labor Union Dues
The terms of office of the old officers (Manolito Paran, et al.) ended in
August, 1986. However, the new set of officers (headed by the same
Manolito Paran) apparently could not assume office under a new term
because of the proceedings assailing the validity of the elections
pending before the Bureau of Labor Relations. What happened was
39
that the old officers continued to exercise the functions of their
respective offices under the leadership of Manolito Paran.
On January 17, 1987, the Legislative Council of the union passed a
resolution which generated another controversy. That resolution
increased the amount of the union dues from P21.00 to P50.00 a
month. It was then presented to the general membership for
ratification at a referendum called for the purpose. Rey Sumangil and
his followers objected to the holding of the referendum. When their
objection went unheeded, they and their supporters, all together
numbering 829 or so, boycotted the referendum and formally
reiterated their protest against it. Subsequently the union officers
announced that the referendum had resulted in a ratification of the
increased union dues.
On March 1, 1987 Manolito Paran requested the PLDT to deduct the
union dues at the new, increased rates, from the salaries of all union
members and dispense with their individual written authorizations
therefor. PLDT acceded to the request and effected the check-off of
the increased dues for the payroll period from March 1 to March 15,
1987.
BLR Case No. NCR-OD-M-7-3-206-87
Once again Rey Sumangil and his followers h???ed themselves off to
the Bureau of Labor Relations. They filed a petition on March 26, 1987
challenging the resolution for the increase in union dues, docketed as
BLR Case No. NCR-OD-M-7-3-206-87. They contended that since the
terms of the members of the Legislative Council who approved the
resolution had already expired in August, 1986, and their reelection
had been nullified by the Bureau, they had no authority to act as
members of the council; consequently, it could not be said that the
resolution for the increase of union dues had been approved by 2/3
vote of the Council members, as provided by the union constitution
and by-laws; hence, the resolution was void. They further contended
that there had been no valid ratification of the resolution because the
plebiscite had been "rigged."
Once again Rey Sumangil and his group were unsuccessful in
proceedings at the level of the Med-Arbiter. The latter denied their
petition on the ground of lack of support of at least 30% of all
members of the union, citing Article 242 of the Labor Code which
reads as follows:
"ART. 242. - Rights and conditions of membership in a labor
organization. - * * Any violation of the above rights and conditions of
membership shall be a ground for cancellation of union registration
and 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.
The Bureau shall have the power to hear and decide any reported
violation to mete the appropriate penalty."
Again Sumangil and his group went up on appeal to the Director of
Labor Relations, before whom they raised the issue of whether or not
the petition in fact had the support of at least 30% of the members,
and said 30%-support was indeed a condition sine qua non for
acquisition by the Med-Arbiters (in the Labor Relations Division in a
Regional Office of the MOLE) of jurisdiction over the case. Again
Sumangil and his followers were successful in their appeal.
On July 1, 1987 the Director of Labor Relations rendered a decision
reversing that of the Med-Arbiter. The Director ordered the cessation of
the collection of the twenty-nine-peso increase and the return of the
amounts already collected. In the first place, according to her, the
petition was supported by 6,022 signatures, a number comprising
more than 30% of the total membership of the union (10,413). In the
second place, the Director ruled, even assuming the contrary, the lack
of 30%-support will not preclude the BLR from taking cognizance of
the petition where there is a clear violation of the rights and conditions
of union membership because Article 226 of the Labor Code expressly
confers on it the authority to act on all intra-union and inter-union
conflicts and grievances affecting labor and management relations, at
the instance of either or both parties. The provision cited reads as
follows:
"ART. 226. - Bureau of Labor Relations. - The Bureau of Labor Relations
and the Labor Relations division in the Regional Offices of the
Department of Labor shall have original and exclusive authority to act,
at their own initiative or upon request of either or both parties, on all
40
inter-union and intra-union conflicts, and all disputes, grievances or
problems arising from or affecting labor management relations ** ."
As regards Article 242 of the Labor Code, relied upon by the Med-
Arbiter, the Director expressed the view that the 30%-support therein
provided is not mandatory, and is not a condition precedent to the
valid presentation of a grievance before the Bureau of Labor Relations.
The Director ruled, finally, that Sumangil and the other union
members had a valid grievance calling for redress, since the record
disclosed no compliance with the requirement that the resolution for
the increase of union dues be passed by at least 2/3 vote of the
members of the Legislative Council and be ratified by a majority of the
entire membership at a plebiscite.
But not long afterwards, the Director reversed herself. The
Manggagawa sa Komunikasyon sa Pilipinas (MKP) -- with which Paran's
Union, the FTWU, is affiliated -- intervened in the case and moved for
reconsideration of her decision. By resolution dated October 1, 1987,
the Director set aside her decision of July 1, 1987 and entered a new
one dismissing the petition of Sumangil and company, in effect
affirming the Med-Arbiter's order. The Director opined that the
intervenor (MKP) was correct in its contention that there was no 30%-
membership-support for the petition, since only 829 members had
signified their support therefor, as correctly found by the Med-Arbiter,
and because of this, the BLR never acquired jurisdiction over the case.
According to her:[2]
"The rationale for such requirement is not difficult to discern. It is to
make certain that there is a prima facie case against prospective
respondents whether it be the union or its officers and thus forestall
nuisance or harassment petitions/complaints. The requirement was
intended to shield the union from destabilization and paralyzation
coming from adventurous and ambitious members or non-members
engaged in union politics under the guise of working for the union
welfare.
* * As found out by the Med-Arbiter in the Office of origin all
signatures except that of 829 were obtained without the knowledge of
the signatories. At this point we cannot permit 829 members to 'rook
the boat,' so to speak, of a union which has at present ten thousand
four hundred and thirteen (10,413) passengers."
In an effort to set aside this reversing resolution of the Labor Relations
Director, Rey Sumangil and his group have come to this Court via the
instant special civil action of certiorari. In their petition they insist that
the support of 30% of the union membership is not a jurisdictional
requirement for the ventilation of their grievance before the BLR; and
assuming the contrary, they have proven that 3,501 workers had in
fact joined in the petition, constituting 33% of the total membership.
They also emphasize the validity of their grievance, drawing attention
to the absence of the requisite 2/3 vote essential for validity of any
resolution increasing the rates of union dues, and the doubtful result
of the referendum at which the resolution had allegedly been ratified.
Three issues are thus presented to the Court in these cases. The first
involves the validity of the 1986 general elections for union officers;
the second, whether or not 30%-membership support is indispensable
for acquisition of jurisdiction by the Bureau of Labor Relations of a
complaint for alleged violation of rights and conditions of union
members; and third, the validity of the increase in union dues.
The General Elections of 1986
A review of the record fails to disclose any grave abuse of discretion
tainting the adjudgment of respondent Director of Labor Relations that
the general elections for union officers held in 1986 were attended by
grave irregularities, rendering the elections invalid. That finding must
thus be sustained.
The dates for provincial elections were set for July 14 to 18, 1986. But
they were in fact held on July 21 and 22, 1986, without prior notice to
all voting members, and without ground rules duly prescribed therefor.
The elections in Metro Manila were conducted under no better
circumstances. It was held on July 25, 1986 in disregard and in
defiance of the temporary restraining order properly issued by the
Med-Arbiter on July 23, 1986, notice of which restraining order had
been regularly served on the same date, as the proofs adequately
show, on both the Union President, Manolito Paran, and the Chairman
of the Union COMELEC, Benedicto Rodriguez. Moreover, as in the case
41
of the provincial elections, there were no ground rules or guidelines
set for the Metro Manila elections. Undue haste, lack of adequate
safeguards to ensure integrity of the voting, and absence of notice of
the dates of balloting, thus attended the elections in the provinces and
in Metro Manila. They cannot but render the proceedings void.
The claim that there had been a record-breaking voter turn-out of
73%, even if true, cannot purge the elections of their grave infirmities.
The elections were closely contested. For example, in the presidential
contest, Manolito Paran appeared to have won over Rey Sumangil by
only 803 votes, and in the vice-presidential race, Eduardo de Leon won
over Dominador Munar by only 204 votes. These results would
obviously have been affected by the ballots of the 2,056 voters who
had been unable to cast their votes because of lack of notice of the
actual dates of the elections.
It goes without saying that free and honest elections are indispensable
to the enjoyment by employees and workers of their constitutionally
protected right to self-organization. That right "would be diluted if in
the choice of the officials to govern ** (union) affairs, the election is
not fairly and honestly conducted," and the labor officers concerned
and the courts have the duty "to see to it that no abuse is committed
by any official of a labor organization in the conduct of its affairs."[3]
The Matter of 30%-Support for Complaints
for Violations of Union Membership Rights
The respondent Director's ruling, however, that the assent of 30% of
the union membership, mentioned in Article 242 of the Labor Code,
was mandatory and essential to the filing of a complaint for any
violation of rights and conditions of membership in a labor
organization (such as the arbitrary and oppressive increase of union
dues here complained of), cannot be affirmed and will be reversed.
The very article relied upon militates against the proposition. It states
that a report of a violation of rights and conditions of membership in a
labor organization may be made by "(a)t least thirty percent (30%) of
all the members of a union or any member or members specially
concerned."[4] The use of the permissive "may" in the provision at
once negates the notion that the assent of 30% of all the members is
mandatory. More decisive is the fact that the provision expressly
declares that the report may be made, alternatively by "any member
or members specially concerned." And further confirmation that the
assent of 30% of the union members is not a factor in the acquisition
of jurisdiction by the Bureau of Labor Relations is furnished by Article
226 of the same Labor Code, which grants original and exclusive
jurisdiction to the Bureau, and the Labor Relations Division in the
Regional Offices of the Department of Labor, over "all inter-union and
intra-union conflicts, and all disputes, grievances or problems arising
from or affecting labor management relations," making no reference
whatsoever to any such 30%-support requirement. Indeed, the officials
mentioned are given the power to act "on all inter-union and intra-
union conflicts (1) "upon request of either or both parties" as well as
(2) "at their own initiative." There can thus be no question about the
capacity of Rey Sumangil and his group of more than eight hundred, to
report and seek redress in an intra-union conflict involving a matter in
which they are specially concerned, i.e., the rates of union dues being
imposed on them.
These considerations apply equally well to controversies over
elections. In the cases at bar, the petition to nullify the 1986 union
elections could not be deemed defective because it did not have the
assent of 30% of the union membership. The petition clearly involved
an intra-union conflict -- one directly affecting the right of suffrage of
more than 800 union members and the integrity of the union elections
-- over which, as the law explicitly provides, jurisdiction could be
assumed by the Labor Relations Director or the Med-Arbiters "at their
own initiative" or "upon request of either or both parties."
The assumption of jurisdiction by the Med-Arbiter and the Labor
Relations Director over the cases at bar was entirely proper. It was in
fact their duty to do so, given the facts presented to them. So this
Court has had occasion to rule:[5]
"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
42
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."
As regards the final issue concerning the increase of union dues, the
respondent Director found that the resolution of the union's Legislative
Council to this effect[6] does not bear the signature of at least two-
thirds (2/3) of the members of the Council, contrary to the
requirement of the union constitution and by-laws; and that proof is
wanting of proper ratification of the resolution by a majority of the
general union membership at a plebiscite called and conducted for
that purpose, again in violation of the constitution and by-laws. The
resolution increasing the union dues must therefore be struck down,
as illegal and void, arbitrary and oppressive. The collection of union
dues at the increased rates must be discontinued; and the dues thus
far improperly collected must be refunded to the union members or
held in trust for disposition by them in accordance with their charter
and rules, in line with this Court's ruling in a parallel situation,[7] viz:
" . . . All amounts already collected must be credited accordingly in
favor of the respective members either for their future legal dues or
other assessments or even delinquencies, if any. And if this
arrangement regarding the actual refund of what might be excessive
dues is not acceptable to the majority of the members, the matter
may be decided in a general meeting called for the purpose."
WHEREFORE, in G.R. Nos. 76579-82, the petition for certiorari is
DISMISSED, no grave abuse of discretion or other serious error having
been shown in the decision of the respondent Director of Labor
Relations, said decision - ordering the holding of new elections for
officers of the Free Telephone Workers Union -- being on the contrary
in accord with the facts and the law; but in G.R. No. 80504, the
petition for certiorari is granted, the challenged order dated October 1,
1987 is set aside, and the decision of July 1, 1987 of the Labor
Relations Director reinstated, modified only as to the treatment of the
excess collections which shall be disposed of in the manner herein
indicated. Costs against petitioner in G.R. Nos. 76579-82 and private
respondents (except the PLDT) in G.R. No. 80504.

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

43
G.R. No. 85333, February 26, 1990
CARMELITO L. PALACUL, ET AL., PETITIONERS,
VS.
PURA FERRER-CALLEJA, DIRECTOR OF THE BUREAU OF LABOR
RELATIONS, MANILA CCBPI SALES FORCE UNION, AND COCA-COLA
BOTTLERS (PHILIPPINES), INC., RESPONDENTS.
DECISION
GANCAYCO, J.:
Can a special assessment 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? This
is the main issue for resolution in the instant petition for certiorari.
As gleaned from the records of the case, the pertinent facts are as
follows:
On October 12, 1987, the respondent Manila CCBPI Sales Force Union
(hereinafter referred to as the Union), as the collective bargaining
agent of all regular salesmen, regular helpers, and relief helpers at the
Manila Plant and Metro Manila Sales Office of the respondent Coca-
Cola Bottlers (Philippines), Inc. (hereinafter referred to as the
Company) concluded a new collective bargaining agreement with the
latter.[1] Among the compensation benefits granted to the employees
was a general salary increase to be given in lump-sum including
recomputation of actual commissions earned based on the new rates
of increase.
On the same day, the president of the Union 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. The last one among the aforementioned is the subject
of the instant petition.
As embodied in the Board Resolution of the Union dated September
29, 1987, the purpose of the special assessment sought to be levied is
"to put 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
44
officers, consultants and others."[2] There was also an additional
proviso stating that the "matter of allocation x x x 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.[3] 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.[4]
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.[5]
On account of the above-mentioned disauthorization, the Company,
being in a quandary as to whom to remit the payment of the
questioned amount, filed an action for interpleader with the Bureau of
Labor Relations in order to resolve the conflicting claims of the parties
concerned. Petitioners, who are regular rank-and-file employees of the
Company and bona fide members of the Union, filed a
motion/complaint for intervention therein in two groups of 161 and 94,
respectively. They claimed to be among those union members who
either did not sign any individual written authorization, or having
signed one, subsequently withdrew or retracted their signatures
therefrom.
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) provide as follows:
"ART. 222. Appearances and Fees.
xxx xxx xxx
(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:
As authority for their contention, petitioners cited Galvadores vs.
Trajano,[6] wherein it was ruled that no check-offs from any amount
due employees may be effected without individual written
authorization duly signed by the employees specifically stating the
amount, purpose, and beneficiary of the deduction.
In its answer, the Union countered that the deductions not only have
the popular indorsement and approval of the general membership, but
likewise complied wit the legal requirements of Article 241(n) and (o)
of the Labor Code in that the board resolution of the Union imposing
the questioned special assessment had been duly approved in a
general membership meeting and that the collection of a special fund
for labor education and research is mandated.
Article 241 (n) of the Labor Code states that
"ART. 241. Rights and conditions of membership in a labor
organization. -
xxx xxx xxx
(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 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;"
Med-Arbiter Manases T. Cruz ruled in favor of the petitioners in an
order dated February 15, 1988 whereby he directed the Company to
remit the amount it had kept in trust directly to the rank-and-file
personnel without delay.
On appeal to the Bureau of Labor Relations, however, the order of the
Med-Arbiter was reversed and set aside by the respondent-Director in
45
a resolution dated August 19, 1988 upholding the claim of the Union
that the special assessment is authorized under Article 241 (n) of the
Labor Code, and that the Union has complied with the requirements
therein.
Hence, the instant petition.
Petitioners allege that the respondent-Director committed a grave
abuse of discretion amounting to lack or excess of jurisdiction when
she held Article 241(n) of the Labor Code to be the applicable
provision instead of Article 222 (b) in relation to Article 241(o) of the
same law.
According to petitioners, a cursory examination and comparison of the
two provisions of Article 241 reveals that paragraph (n) cannot prevail
over paragraph (o). The reason advanced is that a special assessment
is not a matter of major policy affecting the entire union membership
but is one which concerns the individual rights of union members.
Petitioners further assert that assuming arguendo that Article 241(n)
should prevail over paragraph (o), the Union has nevertheless failed to
comply with the procedure to legitimize the questioned special
assessment by: (1) presenting mere minutes of local membership
meetings instead of a written resolution; (2) failing to call a general
membership meeting; (3) having the minutes of three (3) local
membership meetings recorded by a union director, and not by the
union secretary as required; (4) failing to have the list of members
present included in the minutes of the meetings; and (5) failing to
present a record of the votes cast.[7] Petitioners concluded their
argument by citing Galvadores.
After a careful review of the records of this case, we are convinced
that the deduction of the 10% special assessment by the Union was
not made in accordance with the requirements provided by law.
Petitioners are correct in citing the ruling of this Court in Galvadores
which is applicable to the instant case. The principle "that employees
are protected by law from unwarranted practices that diminish their
compensation without their knowledge and consent"[8] is in accord
with the constitutional principle of the State affording full protection to
labor.[9]
The respondent-Union brushed aside the defects pointed out by
petitioners in the manner of compliance with the legal requirements as
"insignificant technicalities." On the contrary, 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.
The applicable provisions are clear. The Union itself admits that both
paragraphs (n) and (o) of Article 241 apply. Paragraph (n) refers to
"levy" while paragraph (o) refers to "check-off" of a special
assessment. Both provisions must be complied with. Under paragraph
(n), the Union must submit to the Company a written resolution of a
majority of all the members at a general membership meeting duly
called for the purpose. In addition, the secretary of the organization
must record the minutes of the meeting which, in turn, must include,
among others, the list of all the members present as well as the votes
cast.
As earlier outlined by petitioners, the Union obviously failed to comply
with the requirements of paragraph (n). It held local membership
meetings on separate occasions, on different dates and at various
venues, contrary to the express requirement that there must be a
general membership meeting. The contention of the Union that "the
local membership meetings are precisely the very general meetings
required by law"[10] is untenable because the law would not have
specified a general membership meeting had the legislative intent
been to allow local meetings in lieu of the latter.
It submitted only minutes of the local membership meetings when
what is required is a written resolution adopted at the general
meeting. Worse still, the minutes of three of those local meetings held
were recorded by a union director and not by the union secretary. The
minutes submitted to the Company contained no list of the members
present and no record of the votes cast. Since it is quite evident that
the Union did not comply with the law at every turn, the only
conclusion that may be made therefrom is that there was no valid levy
of the special assessment pursuant to paragraph (n) of Article 241 of
the Labor Code.
Paragraph (o) on the other hand requires an individual written
authorization duly signed by every employee in order that a special
assessment may be validly checked-off. Even assuming that the
special assessment was validly levied pursuant to paragraph (n), and
granting that individual written authorizations were obtained by the
Union, nevertheless there can be no valid check-off considering that
46
the majority of the union members had already withdrawn their
individual authorizations. A withdrawal of individual authorizations is
equivalent to no authorization at all. Hence, the ruling in Galvadores
that "no check-offs from any amounts due employees may be effected
without an individual written authorization signed by the employees x
x x" is applicable.
The Union points out, however, that said disauthorizations are not
valid for being collective in form, as they are "mere bunches of
randomly procured signatures, under loose sheets of paper."[11] The
contention deserves no merit for the simple reason that the
documents containing the disauthorizations have the signatures of the
union members. The Court finds these retractions to be valid. There is
nothing in the law which requires that the disauthorizations must be
individual form.
Moreover, it is well-settled that "all doubts in the implementation and
interpretation of the provisions of the Labor Code xxx shall be resolved
in favor of labor."[12] And as previously stated, labor in this case
refers to the union members, as employees of the Company. Their
mere desire to establish a separate bargaining unit, albeit unproven,
cannot be construed against them in relation to the legality of the
questioned special assessment. On the contrary, the same may even
be taken to reflect their dissatisfaction with their bargaining
representative, the respondent-Union, as shown by the circumstances
of the instant petition, and with good reason.
The Med-Arbiter correctly ruled in his Order that:
"The mandate of the majority rank and file have (sic) to be respected
considering they are the ones directly affected and the realities of the
high standards of survival nowadays. To ignore the mandate of rank
and file would enure to destabilizing industrial peace and harmony
within the rank and file and the employer's fold, which we cannot
countenance.
Moreover, it will be recalled that precisely union dues are collected
from the union members to be spent for the purposes alluded to by
respondent. There is no reason shown that the regular union dues
being now implemented is not sufficient for the alleged expenses.
Furthermore, the rank and file have spoken in withdrawing their
consent to the special assessment, believing that their regular union
dues are adequate for the purpose stated by the respondent. Thus,
the rank and file having spoken and, as we have earlier mentioned,
their sentiments should be respected."
Of the stated purposes of the special assessment, as embodied in the SO ORDERED.
board resolution of the Union, only the collection of a special fund for Narvasa, Grio-Aquino, and Medialdea, JJ., concur.
labor and education research is mandated, as correctly pointed out by Cruz, J., no part. Related to one of the counsel.
the Union. The two other purposes, namely, the purchase of vehicles
and other items for the benefit of the union officers and the general
membership, and the payment of services rendered by union officers,
consultants and others, should be supported by the regular union
dues, there being no showing that the latter are not sufficient to cover
the same.
The last stated purpose is contended by petitioners to fall under the
coverage of Article 222 (b) of the Labor Code. The contention is
impressed with merit. Article 222 (b) prohibits attorney's fees,
negotiation fees and similar charges arising out of the conclusion of a
collective bargaining agreement from being imposed on any individual
union member. The collection of the special assessment partly for the
payment for services rendered by union officers, consultants and
others may not be in the category of "attorney's fees or negotiation
fees." But there is no question that it is an exaction which falls within
the category of a "similar charge," and, therefore, within the coverage
of the prohibition in the aforementioned article. There is an additional
proviso giving the Union President unlimited discretion to allocate the
proceeds of the special assessment. Such a proviso may open the door
to abuse by the officers of the Union considering that the total amount
of the special assessment is quite considerable P1,027,694.33
collected from those union members who originally authorized the
deduction, and P1,267,863.39 from those who did not authorize the
same, or subsequently retracted their authorizations.[13] The former
amount had already been remitted to the Union, while the latter is
being held in trust by the Company.
The Court, therefore, strikes down the questioned special assessment
for being a violation of Article 241, paragraphs (n) and (o), and Article
222 (b) of the Labor Code.
WHEREFORE, the instant petition is hereby GRANTED. The Order of
the Director of the Bureau of Labor Relations dated August 19, 1988 is
hereby REVERSED and SET ASIDE, while the order of the Med-Arbiter
dated February 17, 1988 is reinstated; and the respondent 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. No pronouncement as to costs. This
decision is immediately executory.
47
G.R. No. L-25246, September 12, 1974
BENJAMIN VICTORIANO, PLAINTIFF AND APPELLEE,
VS.
ELIZALDE ROPE WORKERS' UNION AND ELIZALDE ROPE FACTORY, INC.,
DEFENDANTS, ELIZALDE ROPE WORKERS' UNION, DEFENDANT AND
APPELLANT.
DECISION
ZALDIVAR, J.:
Appeal to this Court on purely questions of law from the decision of
the Court of First Instance of Manila in its Civil Case No. 58894.
The undisputed facts that spawned the instant case follow:
Benjamin Victoriano (hereinafter referred to as Appellee), a member of
the religious sect known as the "Iglesia ni Cristo", had been in the
employ of the Elizalde Rope Factory Inc. (hereinafter referred to as
Company) since 1958. As such employee, he was a member of the
Elizalde Rope Workers' Union (hereinafter referred to as Union) which
had with the Company a collective bargaining agreement containing a
closed shop provision which reads as follows:
"Membership in the Union shall be required as a condition of
employment for all permanent employees workers covered by this
Agreement."
The collective bargaining agreement expired on March 3, 1964 but
was renewed the following day, March 4, 1964.
Under Section 4 (a), paragraph 4, of Republic Act No. 875, prior to its
amendment by Republic Act No. 3350, the employer was not
precluded "from making an agreement with a labor organization to
require as a condition of employment membership therein, if such
labor organization is the representative of the employees." On June 18,
1961, however, Republic Act No. 3350 was enacted, introducing an
amendment to paragraph (4) subsection (a) of section 4 of Republic
Act No. 875, as follows: . . "but such agreement shall not cover
48
members of any religious sects which prohibit affiliation of their
members in any such labor organization".
Being a member of a religious sect that prohibits the affiliation of its
members with any labor organization, Appellee presented his
resignation to appellant Union in 1962, and when no action was taken
thereon, he reiterated his resignation on September 3, 1974.
Thereupon, the Union wrote a formal letter to the Company asking the
latter to separate Appellee from the service in view of the fact that he
was resigning from the Union as a member. The management of the
Company in turn notified Appellee and his counsel that unless the
Appellee could achieve a satisfactory arrangement with the Union, the
Company would be constrained to dismiss him from the service. This
prompted Appellee to file an action for injunction, docketed as Civil
Case No. 58894 in the Court of First Instance of Manila to enjoin the
Company and the Union from dismissing Appellee.[1] In its answer,
the Union invoked the "union security clause" of the collective
bargaining agreement; assailed the constitutionality of Republic Act
No. 3350; and contended that the Court had no jurisdiction over the
case, pursuant to Republic Act No. 875, Sections 24 and 9 (d) and (e).
[2] Upon the facts agreed upon by the parties during the pre-trial
conference, the Court a quo rendered its decision on August 26, 1965,
the dispositive portion of which reads:
"IN VIEW OF THE FOREGOING, judgment is rendered enjoining the
defendant Elizalde Rope Factory, Inc. from dismissing the plaintiff from
his present employment and sentencing the defendant Elizalde Rope
Workers' Union to pay the plaintiff P500 for attorney's fees and the
costs of this action."[3]
From this decision, the Union appealed directly to this Court on purely
questions of law, assigning the following errors:
"I. That the lower court erred when it did not rule that Republic Act
No. 3350 is unconstitutional.
"II. That the lower court erred when it sentenced appellant herein
to pay plaintiff the sum of P500 as attorney's fees and the cost
thereof."
In support of the alleged unconstitutionality of Republic Act No. 3350,
the Union contended, firstly, that the Act infringes on the fundamental
right to form lawful associations; that "the very phraseology of said
Republic Act 3350, that 'membership in a labor organization is banned
to all those belonging to such religious sect prohibiting affiliation with
any labor organization'",[4] "prohibits all the members of a given
religious sect from joining any labor union if such sect prohibits
affiliations of their members thereto";[5] and, consequently, deprives
said members of their constitutional right to form or join lawful
associations or organizations guaranteed by the Bill of Rights, and
thus becomes obnoxious to Article III, Section 1 (6) of the 1935
Constitution.[6]
Secondly, the Union contended that Republic Act No. 3350 is
unconstitutional for impairing the obligation of contracts in that, while
the Union is obliged to comply with its collective bargaining
agreement containing a "closed shop provision," the Act relieves the
employer from its reciprocal obligation of cooperating in the
maintenance of union membership as a condition of employment; and
that said Act, furthermore, impairs the Union's rights as it deprives the
union of dues from members who, under the Act, are relieved from the
obligation to continue as such members.[7]
Thirdly, the Union contended that Republic Act No. 3350
discriminatorily favors those religious sects which ban their members
from joining labor unions, in violation of Article III, Section 1 (7) of the
1935 Constitution; and while said Act unduly protects certain religious
sects, it leaves no rights or protection to labor organizations.[8]
Fourthly, Republic Act No. 3350, asserted the Union violates the
constitutional provision that "no religious test shall be required for the
exercise of a civil right," in that the laborer's exercise of his civil right
to join associations for purposes not contrary to law has to be
determined under the Act by his affiliation with a religious sect; that
conversely, if a worker has to sever his religious connection with a
sect that prohibits membership in a labor organization in order to be
able to join a labor organization, said Act would violate religious
freedom.[9]
49
Fifthly, the Union contended that Republic Act No. 3350, violates the
"equal protection of laws" clause of the Constitution, it being a
discriminatory legislation, inasmuch as by exempting from the
operation of closed shop agreement the members of the "Iglesia ni
Cristo", it has granted said members undue advantages over their
fellow workers, for while the Act exempts them from union obligation
and liability, it nevertheless entitles them at the same time to the
enjoyment of all concessions, benefits and other emoluments that the
union might secure from the employer.[10]
Sixthly, the Union contended that Republic Act No. 3350 violates the
constitutional provision regarding the promotion of social justice.[11]
Appellant Union, furthermore, asserted that a "closed shop provision"
in a collective bargaining agreement cannot be considered violative of
religious freedom, as to call for the amendment introduced by
Republic Act No. 3350;[12] and that unless Republic Act No. 3350 is
declared unconstitutional, trade unionism in this country would be
wiped out as employers would prefer to hire or employ members of
the Iglesia ni Cristo in order to do away with labor organizations.[13]
Appellee, assailing appellant's arguments, contended that Republic Act
No. 3350 does not violate the right to form lawful associations, for the
right to join associations includes the right not to join or to resign from
a labor organization, if one's conscience does not allow his
membership therein, and the Act has given substance to such right by
prohibiting the compulsion of workers to join a labor organization;[14]
that said Act does not impair the obligation of contracts for said law
formed part of, and was incorporated into, the terms of the closed
shop agreement;[15] that the Act does not violate the establishment
of religion clause or separation of Church and State, for Congress, in
enacting said law, merely accommodated the religious needs of those
workers whose religion prohibits its members from joining labor
unions, and balanced the collective rights of organized labor with the
constitutional right of an individual to freely exercise his chosen
religion; that the constitutional right to the free exercise of one's
religion has primacy and preference over union security measures
which are merely contractual;[16] that said Act does not violate the
constitutional provision of equal protection, for the classification of
workers under the Act depending on their religious tenets is based on
substantial distinction, is germane to the purpose of the law, and
applies to all the members of a given class;[17] that said Act, finally,
does not violate the social justice policy of the Constitution, for said
Act was enacted precisely to equalize employment opportunities for all
citizens in the midst of the diversities of their religious beliefs.[18]
I. Before We proceed to the discussion of the first assigned error,
it is necessary to premise that there are some thoroughly established
principles which must be followed in all cases where questions of
constitutionality as obtains in the instant case are involved. All
presumptions are indulged in favor of constitutionality; one who
attacks a statute, alleging unconstitutionality, must prove its invalidity
beyond a reasonable doubt; that a law may work hardship does not
render it unconstitutional; that if any reasonable basis may be
conceived which supports the statute, it will be upheld, and the
challenger must negate all possible bases; that the courts are not
concerned with the wisdom, justice, policy, or expediency of a statute;
and that a liberal interpretation of the constitution in favor of the
constitutionality of legislation should be adopted.[19]
1. Appellant Union's contention that Republic Act No. 3350
prohibits and bans the members of such religious sects that forbid
affiliation of their members with labor unions from joining labor unions
appears nowhere in the wording of Republic Act No. 3350; neither can
the same be deduced by necessary implication therefrom. It is not
surprising, therefore, that appellant, having thus misread the Act,
committed the error of contending that said Act is obnoxious to the
constitutional provision on freedom of association.
Both the Constitution and Republic Act No. 875 recognize freedom of
association. Section 1 (6) of Article III of the Constitution of 1935, as
well as Section 7 of Article IV of the Constitution of 1973, provide that
the right to form associations or societies for purposes not contrary to
law shall not be abridged. Section 3 of Republic Act No. 875 provides
that employees shall have the right to self-organization and to form,
join or assist labor organizations of their own choosing for the purpose
of collective bargaining and to engage in concerted activities for the
purpose of collective bargaining and other mutual aid or protection.
What the Constitution and the Industrial Peace Act recognize and
guarantee is the "right" to form or join associations. Notwithstanding
50
the different theories propounded by the different schools of
jurisprudence regarding the nature and contents of a "right", it can be
safely said that whatever theory one subscribes to, a right
comprehends at least two broad notions, namely: first, liberty or
freedom, i.e., the absence of legal restraint, whereby an employee
may act for himself without being prevented by law; and second,
power, whereby an employee may, as he pleases, join or refrain from
joining an association. It is, therefore, the employee who should
decide for himself whether he should join or not an association; and
should he choose to join, he himself makes up his mind as to which
association he would join; and every after he has joined, he still retains
the liberty and the power to leave and cancel his membership with
said organization at any time.[20] It is clear, therefore, that the right
to join a union includes the right to abstain from joining any union.[21]
Inasmuch as what both the Constitution and the Industrial Peace Act
have recognized, and guaranteed to the employee, is the "right" to
join associations of his choice, it would be absurd to say that the law
also imposes, in the same breath, upon the employee the duty to join
associations. The law does not enjoin an employee to sign up with any
association.
The right to refrain from joining labor organizations recognized by
Section 3 of the Industrial Peace Act is, however, limited. The legal
protection granted to such right to refrain from joining is withdrawn by
operation of law, where a labor union and an employer have agreed on
a closed shop, by virtue of which the employer may employ only
members of the collective bargaining union, and the employees must
continue to be members of the union for the duration of the contract
in order to keep their jobs. Thus Section 4 (a) (4) of the Industrial
Peace Act, before its amendment by Republic Act No. 3350, provides
that although it would be an unfair labor practice for an employer "to
discriminate in regard to hire or tenure of employment or any term or
condition of employment to encourage or discourage membership in
any labor organization" the employer is, however, not precluded "from
making an agreement with a labor organization to require as a
condition of employment membership therein, if such labor
organization is the representative of the employees". By virtue,
therefore, of a closed shop agreement, before the enactment of
Republic Act No. 3350, 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. Hence, the right of said
employee not to join the labor union is curtailed and withdrawn.
To that all embracing coverage of the closed shop arrangement,
Republic Act No. 3350 introduced an exception, when it added to
Section 4 (a) (4) of the Industrial Peace Act the following proviso: "but
such agreement shall not cover members of any religious sects which
prohibit affiliation of their members in any such labor organization".
Republic Act No. 3350 merely excludes 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, therefore, 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.
2. Appellant Union also contends that the Act is unconstitutional
for impairing the obligation of its contract, specifically, the "union
security clause" embodied in its Collective Bargaining Agreement with
the Company, by virtue of which "membership in the union was
required as a condition for employment for all permanent employees
workers". This agreement was already in existence at the time
Republic Act No. 3350 was enacted on June 18, 1961, and it cannot,
therefore, be deemed to have been incorporated into the agreement.
But by reason of this amendment, Appellee, as well as others similarly
51
situated, could no longer be dismissed from his job even if he should
cease to be a member, or disaffiliate from the Union, and the
Company could continue employing him notwithstanding his
disaffiliation from the Union. The Act, therefore, introduced a change
into the express terms of the union security clause; the Company was
partly absolved by law from the contractual obligation it had with the
Union of employing only Union members in permanent positions. It
cannot be denied, therefore, that there was indeed an impairment of
said union security clause.
According to Black, any statute which introduces a change into the
express terms of the contract, or its legal construction, or its validity,
or its discharge, or the remedy for its enforcement, impairs the
contract. The extent of the change is not material. It is not a question
of degree or manner or cause, but of encroaching in any respect on its
obligation or dispensing with any part of its force. There is an
impairment of the contract if either party is absolved by law from its
performance.[22] Impairment has also been predicated on laws which,
without destroying contracts, derogate from substantial contractual
rights.[23]
It should not be overlooked, however, that the prohibition to impair
the obligation of contracts is not absolute and unqualified. The
prohibition is general, affording a broad outline and requiring
construction to fill in the details. The prohibition is not to be read with
literal exactness like a mathematical formula, for it prohibits
unreasonable impairment only.[24] In spite of the constitutional
prohibition, the State continues to possess authority to safeguard the
vital interests of its people. Legislation appropriate to safeguarding
said interests may modify or abrogate contracts already in effect.[25]
For not only are existing laws read into contracts in order to fix the
obligations as between the parties, but the reservation of essential
attributes of sovereign power is also read into contracts as a postulate
of the legal order. All contracts made with reference to any matter
that is subject to regulation under the police power must be
understood as made in reference to the possible exercise of that
power.[26] Otherwise, important and valuable reforms may be
precluded by the simple device of entering into contracts for the
purpose of doing that which otherwise may be prohibited. The policy
of protecting contracts against impairment presupposes the
maintenance of a government by virtue of which contractual relations
are worthwhile a government which retains adequate authority to
secure the peace and good order of society. The contract clause of the
Constitution must, therefore, be not only in harmony with, but also in
subordination to, in appropriate instances, the reserved power of the
state to safeguard the vital interests of the people. It follows that not
all legislations, which have the effect of impairing a contract, are
obnoxious to the constitutional prohibition as to impairment, and a
statute passed in the legitimate exercise of police power, although it
incidentally destroys existing contract rights, must be upheld by the
courts. This has special application to contracts regulating relations
between capital and labor are not merely contractual, and said labor
contracts, for being impressed with public interest, must yield to the
common good.[27]
In several occasions this Court declared that the prohibition against
impairing the obligations of contracts has no application to statutes
relating to public subjects within the domain of the general legislative
powers of the state involving public welfare.[28] Thus, this Court also
held that the Blue Sunday Law was not an infringement of the
obligation of a contract that required the employer to furnish work on
Sundays to his employees, the law having been enacted to secure the
well-being and happiness of the laboring class, and being,
furthermore, a legitimate exercise of the police power.[29]
In order to determine whether legislation unconstitutionally impairs
contract obligations, no unchanging yardstick, applicable at all times
and under all circumstances, by which the validity of each statute may
be measured or determined, has been fashioned, but every case must
be determined upon its own circumstances. Legislation impairing the
obligation of contracts can be sustained when it is enacted for the
promotion of the general good of the people, and when the means
adopted to secure that end are reasonable. Both the end sought and
the means adopted must be legitimate, i.e., within the scope of the
reserved power of the state construed in harmony with the
constitutional limitation of that power.[30]
What then was the purpose sought to be achieved by Republic Act No.
3350? Its purpose was to insure freedom of belief and religion, and to
promote the general welfare by preventing discrimination against
52
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 questioned Act also provides protection to members of said
religious sects against two aggregates of group strength from which
the individual needs protection. The individual employee, at various
times in his working life, is confronted by two aggregates of power
collective labor, directed by a union, and collective capital, directed by
management. The union, an institution developed to organize labor
into a collective force and thus protect the individual employee from
the power of collective capital, is, paradoxically, both the champion of
employee rights, and a new source of their frustration. Moreover,
when the Union interacts with management, it produces yet a third
aggregate of group strength from which the individual also needs
protection the collective bargaining relationship.[31]
The aforementioned purpose of the amendatory law is clearly seen in
the Explanatory Note to House Bill No. 5859, which later became
Republic Act No. 3350, as follows:
"It would be unthinkable indeed to refuse employing a person who, on
account of his religious beliefs and convictions, cannot accept
membership in a labor organization although he possesses all the
qualifications for the job. This is tantamount to punishing such person
for believing in a doctrine he has a right under the law to believe in.
The law would not allow discrimination to flourish to the detriment of
those whose religion discards membership in any labor organization.
Likewise, the law would not commend the deprivation of their right to
work and pursue a modest means of livelihood, without in any manner
violating their religious faith and/or belief."[32]
It cannot be denied, furthermore, that the means adopted by the Act
to achieve that purpose exempting the members of said religious
sects from coverage of union security agreements is reasonable.
It may not be amiss to point out here that the free exercise of religious
profession or belief is superior to contract rights. In case of conflict,
the latter must, therefore, yield to the former. The Supreme Court of
the United States has also declared on several occasions that the
rights in the First Amendment, which include freedom of religion, enjoy
a preferred position in the constitutional system.[33] Religious
freedom, although not unlimited, is a fundamental personal right and
liberty,[34] and has a preferred position in the hierarchy of values.
Contractual rights, therefore, must yield to freedom of religion. It is
only where unavoidably necessary to prevent an immediate and grave
danger to the security and welfare of the community that infringement
of religious freedom may be justified, and only to the smallest extent
necessary to avoid the danger.
3. In further support of its contention that Republic Act No. 3350 is
unconstitutional, appellant Union averred that said Act discriminates in
favor of members of said religious sects in violation of Section 1 (7) of
Article III of the 1935 Constitution, and which is now Section 8 of
Article IV of the 1973 Constitution, which provides:
"No law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof, and the free exercise and
enjoyment of religious profession and worship without discrimination
and preference, shall forever be allowed. No religious test shall be
required for the exercise of civil or political rights."
The constitutional provision not only prohibits legislation for the
support of any religious tenets or the modes of worship of any sect,
thus forestalling compulsion by law of the acceptance of any creed or
the practice of any form of worship,[35] but also assures the free
exercise of one's chosen form of religion within limits of utmost
amplitude. It has been said that the religion clauses of the
Constitution are all designed to protect the broadest possible liberty of
conscience, to allow each man to believe as his conscience directs, to
profess his beliefs, and to live as he believes he ought to live,
consistent with the liberty of others and with the common good.[36]
Any legislation whose effect or purpose is to impede the observance of
one or all religions, or to discriminate invidiously between the
religions, is invalid, even though the burden may be characterized as
being only indirect.[37] But if the state regulates conduct by enacting,
within its power, a general law which has for its purpose and effect to
advance the state's secular goals the statute is valid despite its
53
indirect burden on religious observance, unless the state can
accomplish its purpose without imposing such burden.[38]
In Aglipay vs. Ruiz,[39] this Court had occasion to state that the
government should not be precluded from pursuing valid objectives
secular in character even if the incidental result would be favorable to
a religion or sect. It has likewise been held that the statute, in order to
withstand the strictures of constitutional prohibition, must have a
secular legislative purpose and a primary effect that neither advances
nor inhibits religion.[40] Assessed by these criteria, Republic Act No.
3350 cannot be said to violate the constitutional inhibition of the "no-
establishment" (or religion) clause of the Constitution.
The purpose of Republic Act No. 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. In fact,
the state is enjoined, in the 1935 Constitution, to afford protection to
labor, and regulate the relations between labor and capital and
industry.[41] More so now in the 1973 Constitution where it is
mandated that "the State shall afford protection to labor, promote full
employment and equality in employment, ensure equal work
opportunities regardless of sex, race or creed and regulate the relation
between workers and employers."[42]
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 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.[43] The free exercise clause of the Constitution has been
interpreted to require that religious exercise be preferentially aided.
[44]
We believe that in enacting Republic Act No. 3350, Congress acted
consistently with the spirit of the constitutional provision. It acted
merely to relieve the exercise of religion, by certain persons, of a
burden that is imposed by union security agreements. It was
Congress itself that imposed that burden when it enacted the
Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it
so deems advisable, could take away the same burden. It is certain
that not every conscience can be accommodated by all the laws of the
land; but when general law conflict with scruples of conscience,
exemptions ought to be granted unless some "compelling state
interest" intervenes.[45] In the instant case, We see no such
compelling state interest to withhold the exemption.
Appellant bewails that while Republic Act No. 3350 protects members
of certain religious sects, it leaves no right to, and is silent as to the
protection of, labor organizations. The purpose of Republic Act No.
3350 was not to grant rights to labor unions. The rights of labor
unions are amply provided for in Republic Act No. 875 and the new
Labor Code. As to the lamented silence of the Act regarding the rights
and protection of labor unions, suffice it to say, first, that the validity
of a statute is determined by its provisions, not by its silence;[46] and,
second, the fact that the law may work hardship does not render it
unconstitutional.[47]
It would not be amiss to state, regarding this matter, that to compel
persons to join and remain members of a union to keep their jobs in
violation of their religious scruples, 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
54
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.[48] A
desirable end cannot be promoted by prohibited means.
4. Appellant's fourth contention, that Republic Act. No. 3350
violates the constitutional prohibition against requiring a religious test
for the exercise of a civil right or a political right, is not well taken.
The Act does not require as a qualification, or condition, for joining any
lawful association membership in any particular religion or in any
religious sect; neither does the Act require affiliation with a religious
sect that prohibits its members from joining a labor union as a
condition or qualification for withdrawing from a labor union. Joining
or withdrawing from a labor union requires a positive act. Republic Act
No. 3350 only exempts members with such religious affiliation from
the coverage of closed shop agreements. So, under this Act, a
religious objector is not required to do a positive act to exercise the
right to join or to resign from the union. He is exempted ipso jure
without need of any positive act on his part. A conscientious religious
objector need not perform a positive act or exercise the right of
resigning from the labor union he is exempted from the coverage of
any closed shop agreement that a labor union may have entered into.
How then can there be a religious test required for the exercise of a
right when no right need be exercised?
We have said that it was within the police power of the State to enact
Republic Act No. 3350, and that its purpose was legal and in
consonance with the Constitution. It is never an illegal evasion of a
constitutional provision or prohibition to accomplish a desired result,
which is lawful in itself, by discovering or following a legal way to do it.
[49]
5. Appellant avers as its fifth ground that Republic Act No. 3350 is
a discriminatory legislation, inasmuch as it grants to the members of
certain religious sects undue advantages over other workers, thus
violating Section 1 of Article III of the 1935 Constitution which forbids
the denial to any person of the equal protection of the laws.[50]
The guaranty of equal protection of the laws is not a guaranty of
equality in the application of the laws upon all citizens of the state. It
is not, therefore, a requirement, in order to avoid the constitutional
prohibition against inequality, that every man, woman and child
should be affected alike by a statute. Equality of operation of statutes
does not mean indiscriminate operation on persons merely as such,
but on persons according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The Constitution does not
require that things which are different in fact be treated in law as
though they were the same. The equal protection clause does not
forbid discrimination as to things that are different.[51] It does not
prohibit legislation which is limited either in the object to which it is
directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows
classification. Classification in law, as in the other departments of
knowledge or practice, is the grouping of things in speculation or
practice because they agree with one another in certain particulars. A
law is not invalid because of simple inequality.[52] The very idea of
classification is that of inequality, so that it goes without saying that
the mere fact of inequality in no manner determines the matter of
constitutionality.[53] All that is required of a valid classification is that
it be reasonable, which means that the classification should be based
on substantial distinctions which make for real differences; that it must
be germane to the purpose of the law; that it must not be limited to
existing conditions only; and that it must apply equally to each
member of the class.[54] This Court has held that the standard is
satisfied if the classification or distinction is based on a reasonable
foundation or rational basis and is not palpably arbitrary.[55]
In the exercise of its power to make classifications for the purpose of
enacting laws over matters within its jurisdiction, the state is
recognized as enjoying a wide range of discretion.[56] It is not
necessary that the classification be based on scientific or marked
differences of things or in their relation.[57] Neither is it necessary
that the classification be made with mathematical nicety.[58] Hence
legislative classification may in many cases properly rest on narrow
55
distinctions,[59] for the equal protection guaranty does not preclude
the legislature from recognizing degrees of evil or harm, and
legislation is addressed to evils as they may appear.
We believe that Republic Act No. 3350 satisfies the aforementioned
requirements. The Act classifies employees and workers, as to the
effect and coverage of union shop security agreements, into those
who by reason of their religious beliefs and convictions cannot sign up
with a labor union, and those whose religion does not prohibit
membership in labor unions. The classification rests on real or
substantial, not merely imaginary or whimsical, distinctions. There is
such real distinction in the beliefs, feelings and sentiments of
employees. Employees do not believe in the same religious faith and
different religions differ in their dogmas and canons. Religious beliefs,
manifestations and practices, though they are found in all places, and
in all times, take so many varied forms as to be almost beyond
imagination. There are many views that comprise the broad spectrum
of religious beliefs among the people. There are diverse manners in
which beliefs, equally paramount in the lives of their possessors, may
be articulated. Today the country is far more heterogenous in religion
than before, differences in religion do exist, and these differences are
important and should not be ignored.
Even from the psychological point of view, the classification is based
on real and important differences. Religious beliefs are not mere
beliefs, mere ideas existing only in the mind, for they carry with them
practical consequences and are the motives of certain rules of human
conduct and the justification of certain acts.[60] Religious sentiment
makes a man view things and events in their relation to his God. It
gives to human life its distinctive character, its tone, its happiness, or
unhappiness, its enjoyment or irksomeness. Usually, a strong and
passionate desire is involved in a religious belief. To certain persons,
no single factor of their experience is more important to them than
their religion or their not having any religion. Because of differences
in religious belief and sentiments, a very poor person may consider
himself better than the rich, and the man who even lacks the
necessities of life may be more cheerful than the one who has all
possible luxuries. Due to their religious belief people, like the martyrs,
became resigned to the inevitable and accepted cheerfully, even the
most painful and excruciating pains. Because of differences in
religious beliefs, the world has witnessed turmoil, civil strife,
persecution, hatred, bloodshed and war, generated to a large extent
by members of sects who were intolerant, of other religious beliefs.
The classification, introduced by Republic Act No. 3350, therefore,
rests on substantial distinctions.
The classification introduced by said Act is also germane to its
purpose. The purpose of the law is precisely to avoid those who
cannot, because of their religious belief, join labor unions, from being
deprived of their right to work and from being dismissed from their
work because of union shop security agreements.
Republic Act No. 3350, furthermore, is not limited in its application to
conditions existing at the time of its enactment. The law does not
provide that it is to be effective for a certain period of time only. It is
intended to apply for all times as long as the conditions to which the
law is applicable exist. As long as there are closed shop agreements
between an employer and a labor union, and there are employees who
are prohibited by their religion from affiliating with labor unions, their
exemption from the coverage of said agreements continues.
Finally, the Act applies equally to all members of said religious sects;
this is evident from its provision.
The fact that the law grants a privilege to members of said religious
sects cannot by itself render the Act unconstitutional, for as We have
adverted to, the Act only restores to them their freedom of association
which closed shop agreements have taken away, and puts them in the
same plane as the other workers who are not prohibited by their
religion from joining labor unions. The circumstance, that the other
employees, because they are differently situated, are not granted the
same privilege, does not render the law unconstitutional, for every
classification allowed by the Constitution by its nature involves
inequality.
The mere fact that the legislative classification may result in actual
inequality is not violative of the right to equal protection, for every
classification of persons or things for regulation by law produces
inequality in some degree, but the law is not thereby rendered invalid.
A classification otherwise reasonable does not offend the constitution
56
simply because in practice it results in some inequality.[61] Anent this
matter, it has been said that whenever it is apparent from the scope of
the law that its object is for the benefit of the public and the means by
which the benefit is to be obtained are of public character, the law will
be upheld even though incidental advantage may occur to individuals
beyond those enjoyed by the general public.[62]
6. Appellant's further contention that Republic Act No. 3350
violates the constitutional provision on social justice is also baseless.
Social justice is intended to promote the welfare of all the people.[63]
Republic Act No. 3350 promotes that welfare insofar as it looks after
the welfare of those who, because of their religious belief, cannot join
labor union; the Act prevents their being deprived of work and of the
means of livelihood. In determining whether any particular measure is
for public advantage, it is not necessary that the entire state be
directly benefited it is sufficient that a portion of the state be
benefited thereby.
Social justice also means the adoption by the Government of
measures calculated to insure economic stability of all component
elements of society, through the maintenance of a proper economic
and social equilibrium in the inter-relations of the members of the
community.[64] Republic Act No. 3350 insures economic stability to
the members of a religious sect, like the Iglesia ni Cristo, who are also
component elements of society, for it insures security in their
employment, notwithstanding their failure to join a labor union having
a closed shop agreement with the employer. The Act also advances
the proper economic and social equilibrium between labor unions and
employees who cannot join labor unions, for it exempts the latter from
the compelling necessity of joining labor unions that have closed shop
agreements, and equalizes, in so far as opportunity to work is
concerned, those whose religion prohibits membership in labor unions
with those whose religion does not prohibit said membership. Social
justice does not imply social equality, because social inequality will
always exist as long as social relations depend on personal or
subjective proclivities. Social justice does not require legal equality
because legal equality, being a relative term, is necessarily premised
on differentiations based on personal or natural conditions. [65] Social
justice guarantees equality of opportunity,[66] and this is precisely
what Republic Act No. 3350 proposes to accomplish it gives laborers,
irrespective of their religious scruples, equal opportunity for work.
7. As its last ground, appellant contends that the amendment
introduced by Republic. Act No. 3350 is not called for in other words,
the Act is not proper, necessary or desirable. Anent this matter, it has
been held that a statute which is not necessary is not, for that reason,
unconstitutional; that in determining the constitutional validity of
legislation, the courts are unconcerned with issues as to the necessity
for the enactment of the, legislation in question.[67] Courts do inquire
into the wisdom of laws.[68] Moreover, legislatures, being chosen by
the people, are presumed to understand and correctly appreciate the
needs of the people, and it may change the laws accordingly.[69] The
fear is entertained by appellant that unless the Act is declared
unconstitutional, employers will prefer employing members of
religious sects that prohibit their members from joining labor unions,
and thus be a fatal blow to unionism. We do not agree. The threat to
unionism will depend on the number of employees who are members
of the religious sects that control the demands of the labor market.
But there is really no occasion now to go further and anticipate
problems We cannot judge with the material now before Us. At any
rate, the validity of a statute is to be determined from its general
purpose and its efficacy to accomplish the end desired, not from its
effects on a particular case.[70] The essential basis for the exercise of
power, and not a mere incidental result arising from its exertion, is the
criterion by which the validity of a statute is to be measured.[71]
II. We now pass on the second assignment of error, in support of
which the Union argued that the decision of the trial court ordering the
Union to pay P500 for attorney's fees directly contravenes Section 24
of Republic Act No. 875, for the instant action involves an industrial
dispute wherein the Union was a party, and said Union merely acted in
the exercise of its rights under the union shop provision of its existing
collective bargaining contract with the Company; that said order also
contravenes Article 2208 of the Civil Code; that, furthermore, Appellee
was never actually dismissed by the defendant Company and did not
therefore suffer any damage at all.[72]
In refuting appellant Union's arguments, Appellee claimed that in the
instant case there was really no industrial dispute involved in the
57
attempt to compel Appellee to maintain its membership in the union
under pain of dismissal, and that the Union, by its act, inflicted
intentional harm on Appellee; that since Appellee was compelled to
institute an action to protect his right to work, appellant could legally
be ordered to pay attorney's fees under Articles 1704 and 2208 of the
Civil Code.[73]
The second paragraph of Section 24 of Republic Act No. 875 which is
relied upon by appellant provides that:
"No suit, action or other proceeding shall be maintainable in any court
against a labor organization or any officer or member thereof for any
act done by or on behalf of such organization in furtherance of an
industrial dispute to which it is a party, on the ground only that such
act induces some other person to break a contract of employment or
that it is in restraint of trade or interferes with the trade, business or
employment of some other person or with the right of some other
person to dispose of his capital or labor." (Italics supplied)
That there was a labor dispute in the instant case cannot be disputed,
for appellant sought the discharge of respondent by virtue of the
closed shop agreement and under Section 2 (j) of Republic Act No. 875
a question involving tenure of employment is included in the term
"labor dispute".[74] The discharge or the act of seeking it is the labor
dispute itself. It being the labor dispute itself, that very same act of
the Union in asking the employer to dismiss Appellee cannot be "an
act done x x x in furtherance of an industrial dispute". The mere fact
that appellant is a labor union does not necessarily mean that all its
acts are in furtherance of an industrial dispute.[75] Appellant Union,
therefore, cannot invoke in its favor Section 24 of Republic Act No.
875. This case is not intertwined with any unfair labor practice case
existing at the time when Appellee filed his complaint before the lower
court.
Neither does Article 2208 of the Civil Code, invoked by the Union,
serve as its shield. The article provides that attorney's fees and
expenses of litigation may be awarded "when the defendant's act or
omission has compelled the plaintiff x x x to incur expenses to protect
his interest"; and "in any other case where the court seems it just and
equitable that attorney's fees and expenses of litigation should be
recovered". In the instant case, it cannot be gainsaid that appellant
Union's act in demanding Appellee's dismissal caused Appellee to
incur expenses to prevent his being dismissed from his job. Costs
according to Section 1, Rule 142, of the Rules of Court, shall be
allowed as a matter of course to the prevailing party.

WHEREFORE, the instant appeal is dismissed, and the decision, dated

August 26, 1965, of the Court of First Instance of Manila, in its Civil
Case No. 58894, appealed from is affirmed, with costs against
appellant Union.

IT IS SO ORDERED.

Makalintal, C.J., Castro, Teehankee, Barredo, Makasiar, Antonio,

Esguerra, Munoz Palma, and Aquino, JJ., concur.
Fernando, J., see separate concurring opinion.
Fernandez, J., took no part because he was co-author, when he was
Senator, of Republic Act No. 3350.

58
G-R. No. 82914, June 20, 1988
KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS LOCAL CHAPTER
NO. 1027), PETITIONER,
VS.
THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA, MEAT AND
CANNING DIVISION UNIVERSAL ROBINA CORPORATION AND MEAT AND
CANNING DIVISION NEW EMPLOYEES AND WORKERS UNITED LABOR
ORGANIZATION, RESPONDENTS.
RESOLUTION
GRIO-AQUINO. J.
The petitioner, Kapatiran sa Meat and Canning Division (TUPAS Local
Chapter No. 1027) hereinafter referred to as "TUPAS," seeks a review
of the resolution dated January 27, 1988 (Annex D) of Public
respondent Pura Ferrer-Calleja, Director of the Bureau of Labor
Relations, dismissing its appeal from the Order dated November 17,
1987 (Annex C) of the Med-Arbiter Rasidali C. Abdullah ordering a
certification election to be conducted among the regular daily paid
rank and file employees/workers of Universal Robina Corporation-Meat
and Canning Division to determine which of the contending unions:
a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No.
1027 (or "TUPAS" for brevity);
2) Meat and Canning Division New Employees and Workers United
Labor Organization (or "NEW ULO" for brevity);
3) No Union.
shall be the bargaining unit of the daily wage rank and file employees
in the Meat and Canning Division of the company.
From 1984 to 1987 TUPAS was the sole and exclusive collective
bargaining representative of the workers in the Meat and Canning
Division of the Universal Robina Corporation, with a 3-year collective
bargaining agreement (CBA) which was to expire on November 15,
1987.
59
Within the freedom period of 60 days prior to the expiration of its CBA,
TUPAS filed an amended notice of strike on September 28, 1987 as a
means of pressuring the company to extend, renew, or negotiate a
new CBA with it.
On October 8, 1987, the NEW ULO, composed mostly of workers
belonging to the IGLESIA NIKRISTO sect, registered as a labor union.
On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an
injunction against the strike, resulting in an agreement to return to
work and for the parties to negotiate a new CBA.
The next day, October 13, 1987, NEW ULO, claiming that it has "the
majority of the daily wage rank and file employees numbering 191,"
filed a petition for a certification election at the Bureau of Labor
Relations (Annex A).
TUPAS moved to dismiss the petition for being defective in form and
that the members of the NEW ULO were mostly members of the Iglesia
ni Kristo sect which three (3) years previous refused to affiliate with
any labor union. It also accused the company of using the NEW ULO to
defeat TUPAS1 bargaining rights (Annex B).
On November 17, 1987, the Med-Arbiter ordered the holding of a
certification election within 20 days (Annex C).
TUPAS appealed to the Bureau of Labor Relations (BLR). In the
meantime, it was able to negotiate a new 3-year CBA with ROBINA,
which was signed on December 3, 1987 and to expire on November
15, 1990.
On January 27, 1988, respondent BLB Director Calleja dismissed the
appeal (Annex D).
TUPAS' motion for reconsideration (Annex E) was denied on March 17,
1988 (Annex F). On April 30, 1988, it filed this petition alleging that
the public respondent acted in excess of her jurisdiction and with
grave abuse of discretion in affirming the Med-Arbiter's order for a
certification election.
After deliberating on the petition and the documents annexed thereto,
We find no merit in the petition. The public respondent did not err in
dismissing the petitioner's appeal in BLR Case No. A-12-389-87. This
Court's decision in Victoriano vs. Elizalde Rope Workers' Union, 59
SCRA 54, upholding the right of members of the IGLESIA NI KRISTO
sect not to join a labor union for being contrary to their religious
beliefs, does not bar the members of that sect from forming their own
union. The public respondent correctly observed that the "recognition
of the tenets of the sect x x x should not infringe on the basic right of
self-organization granted by the constitution to workers, regardless of
religious affiliation."

The fact that TUPAS was able to negotiate a new CBA with ROBINA
within the 60-day freedom period of the existing CBA, does not
foreclose the right of the rival union, NEW ULO, to challenge TUPAS'
claim to majority status, by filing a timely petition for certification
election on October 13, 1987 before TUPAS' old CBA expired on
November 15, 1987 and before it signed a new CBA with the company
on December 3, 1987. As pointed out by Med-Arbiter Abdullah, a
"certification election is the best forum in ascertaining the majority
status of the contending unions wherein the workers themselves can
freely choose their bargaining representative thru secret ballot." Since
it has not been shown that this order is tainted with unfairness, this
Court will not thwart the holding of a certification election (Associated
Trade Unions [ATU] vs. Noriel, 88 SCRA 96).

WHEREFORE, the petition for certiorari is denied, with costs against

the petitioner.

SO ORDERED.

Narvasa (Chairman), Cruz, Gancayco, and Medialdea, JJ., concur.

60
G.R. Nos. L-43633-34, September 14, 1990
PABLO ARIZALA, SERGIO MARIBAO, LEONARDO JOVEN, AND FELINO
BULANDUS, PETITIONERS,
VS.
THE COURT OF APPEALS AND THE PEOPLE OF THE PHILIPPINES,
RESPONDENTS.
DECISION
NARVASA, J.:
Under the Industrial Peace Act,[1] government-owned or controlled
corporations had the duty to bargain collectively and were otherwise
subject to the obligations and duties of employers in the private
sector.[2] The Act also prohibited supervisors to become, or continue
to be, members of labor organizations composed of rank-and-file
employees,[3] and prescribed criminal sanctions for breach of the
prohibition.[4]
It was under the regime of said Industrial Peace Act that the
Government Service Insurance System (GSIS, for short) became bound
by a collective bargaining agreement executed between it and the
labor organization representing the majority of its employees, the GSIS
Employees Association. The agreement contained a "maintenance-of-
membership" clause,[5] i.e., that all employees who, at the time of the
execution of said agreement, were members of the union or became
members thereafter, were obliged to maintain their union membership
in good standing for the duration of the agreement as a condition for
their continued employment in the GSIS.
There appears to be no dispute that at that time, the petitioners
occupied supervisory positions in the GSIS. Pablo Arizala and Sergio
Maribao were, respectively, the Chief of the Accounting Division, and
the Chief of the Billing Section of said Division, in the Central Visayas
Regional Office of the GSIS. Leonardo Joven and Felino Bulandus were,
respectively, the Assistant Chief of the Accounting Division
(sometimes Acting Chief in the absence of the Chief) and the Assistant
Chief of the Field Service and Non-Life Insurance Division (and Acting
Division Chief in the absence of the Chief), of the same Central
Visayas Regional Office of the GSIS. Demands were made on all four
of them to resign from the GSIS Employees Association, in view of
their supervisory positions. They refused to do so. Consequently, two
61
(2) criminal cases for violation of the Industrial Peace Act were lodged
against them in the City Court of Cebu: one involving Arizala and
Maribao,[6] and the other, Joven and Bulandus.[7]
Both criminal actions resulted in the conviction of the accused in
separate decisions.[8] They were each sentenced "to pay a fine of
P500.00 or to suffer subsidiary imprisonment in case of insolvency."
They appealed to the Court of Appeals.[9] Arizala's and Maribao's
appeal was docketed as CA-G.R. No. 14724-CR; that of Joven and
Bulandus, as CA-G.R. No. 14856-CR.
The appeals were consolidated on motion of the appellants, and
eventuated in a judgment promulgated on January 29, 1976 affirming
the convictions of all four appellants. The appellants moved for
reconsideration. They argued that when the so called "1973
Constitution" took effect on January 17, 1973 pursuant to Proclamation
No. 1104, the case of Arizala and Maribao was still pending in the
Court of Appeals and that of Joven and Bulandus, pending decision in
the City Court of Cebu; that since the provisions of that constitution --
and of the Labor Code subsequently promulgated (eff., November 1,
1974), repealing the Industrial Peace Act -- placed employees of all
categories in government-owned or controlled corporations without
distinction within the Civil Service, and provided that the terms and
conditions of their employment were to be "governed by the Civil
Service Law, rules and regulations" and hence, no longer subject of
collective bargaining, the appellants ceased to fall within the coverage
of the Industrial Peace Act and should thus no longer continue to be
prosecuted and exposed to punishment for a violation thereof. They
pointed out further that the criminal sanction in the Industrial Peace
Act no longer appeared in the Labor Code. The Appellate Court denied
their plea for reconsideration.
Hence, the present petition for review on certiorari.
The crucial issue obviously is whether or not the petitioners' criminal
liability for a violation of the Industrial Peace Act may be deemed to
have been obliterated in virtue of subsequent legislation and the
provisions of the 1973 and 1987 Constitutions.
The petitioners' contention that their liability had been erased is made
to rest upon the following premises:
1. Section 1, Article XII-B of the 1973 Constitution does indeed provide
that the "Civil Service embraces every branch, agency, subdivision
and instrumentality of the government, including government-owned
or controlled corporations, ** administered by an independent Civil
Service Commission."
2. Article 292 of the Labor Code repealed such parts and provisions of
the Industrial Peace Act as were "not adopted as part" of said Code
"either directly or by reference." The Code did not adopt the provision
of the Industrial Peace Act conferring on employees of government-
owned or controlled corporations the right of self-organization and
collective bargaining; in fact it made known that the "terms and
conditions of employment of all government employees, including
employees of government-owned and controlled corporations," would
thenceforth no longer be fixed by collective bargaining but "be
governed by the Civil Service Law, rules and regulations."[10]
3. The specific penalty for violation of the prohibition on supervisors
being members in a labor organization of employees under their
supervision has disappeared.
4. The Code also modified the concept of unfair labor practice,
decreeing that thenceforth, "it shall be considered merely as an
administrative offense rather than a criminal offense (and that)
(u)nfair labor practice complaints shall ** be processed like any
ordinary labor disputes.[11]
On the other hand, in justification of the Appellate Tribunal's
affirmance of the petitioners' convictions of violations of the Industrial
Peace Act, the People -?
1. advert to the fact that said Labor Code also states that "all actions
or claims accruing prior to ** (its) effectivity ** shall be determined in
accordance with the laws in force at the time of their accrual;" and
2. argue that the legislature cannot generally intervene and vacate
the judgment of the courts, either directly or indirectly, by the repeal
of the statute under which said judgment has been rendered.
The legal principles governing the rights of self-organization and
collective bargaining of rank-and-file employees in the government --
particularly as regards supervisory, and high level or managerial
employees -- have undergone alterations through the years.
Republic Act No. 875
As already intimated, under RA 875 (the Industrial Peace Act),[12]
persons "employed in proprietary functions of the Government,
including but not limited to governmental corporations," had the right
of self-organization and collective bargaining, including the right to
engage in concerted activities to attain their objectives, e.g., strikes.
62
But those "employed in governmental functions" were forbidden to
"strike for the purpose of securing changes or modification in their
terms and conditions of employment" or join labor organizations which
imposed on their members the duty to strike. The reason obviously
was that the terms and conditions of their employment were
"governed by law" and hence could not be fixed, altered or otherwise
modified by collective bargaining.
Supervisory employees were forbidden to join labor organizations
composed of employees under them, but could form their own unions.
Considered "supervisors" were those "having authority in the interest
of an employer to hire, transfer, suspend, lay-off, recall, discharge,
assign, recommend, or discipline other employees, or responsibly to
direct them, and to adjust their grievance or effectively to recommend
such acts if, in connection with the foregoing, the exercise of such
authority is not merely routinary or clerical in nature but requires the
use of independent judgment."[13]
Republic Act No. 2260
Similar provisions were found in R.A. No. 2260, the Civil Service Act of
1959. This Act declared that the "Philippine Civil Service **
(embraced) all branches, subdivisions and instrumentalities of the
government including government-owned and controlled corporations.
"[14]
It prohibited such civil service employees who were "employed in
governmental functions" to belong to any labor organization which
imposed on their members "the obligation to strike or to join strikes."
And one of the first issuances of the President after the proclamation
of martial law in September, 1972, was General Orders No. 5 which
inter alia banned "strikes in vital industries," as well as "all rallies,
demonstrations and other forms of group actions."[15]
Not so prohibited, however, were those "employed in proprietary
functions of the Government including, but not limited to,
governmental corporations."[16] The Act also penalized any person
who "violates, refuses or neglects to comply with any ** provisions (of
the Act) or rules (thereunder promulgated) ** by a fine not exceeding
one thousand pesos or by imprisonment not exceeding six months or
both such fine and imprisonment in the discretion of the court."[17]
The 1973 Constitution
The 1973 Constitution laid down the broad principle that "(t)he State
shall assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of
work,"[18] and directed that the "National Assembly shall provide for
the standardization of compensation of government officials and
employees, including those in government-owned or controlled
corporations, taking into account the nature of the responsibilities
pertaining to, and the qualifications required for, the positions
concerned."[19]
PD 442, The Labor Code
The Labor Code of the Philippines, Presidential Decree No. 442,
enacted within a year from effectivity of the 1973 Constitution,[20]
incorporated the proposition that the "terms and conditions of
employment of all government employees, including employees of
government-owned and controlled corporations ** (are) governed by
the Civil Service Law, rules and regulations."[21] It incorporated, too,
the constitutional mandate that the salaries of said employees "shall
be standardized by the National Assembly."
The Labor Code,[22] however "exempted" government employees
from the right to self-organization for purposes of collective
bargaining. While the Code contained provisions acknowledging the
right of "all persons employed in commercial, industrial and
agricultural enterprises, including religious, medical or educational
institutions operating for profit" to "self-organization and to form, join
or assist labor organizations for purposes of collective bargaining,"
they "exempted from the foregoing provisions:
a) security guards;
b) government employees, including employees of government-owned
and/or controlled corporations;
c) managerial employees; and
d) employees of religious, charitable, medical and educational
institutions not operating for profit, provided the latter do not have
existing collective agreements or recognized unions at the time of the
effectivity of the code or have voluntarily waived their exemption."[23]
The reason for denying to government employees the right to "self-
organization and to form, join or assist labor organizations for
purposes of collective bargaining" is presumably the same as that
under the Industrial Peace Act, i.e., that the terms and conditions of
government employment are fixed by law and not by collective
bargaining.
Some inconsistency appears to have arisen between the Labor Code
and the Civil Service Act of 1959. Under the Civil Service Act, persons
"employed in proprietary functions of the government including, but
63
not limited to, governmental corporations" -- not being within "the
policy of the Government that the employees therein shall not strike
for the purpose of securing changes in their terms and conditions of
employment" -- could legitimately bargain with their respective
employers through their labor organizations, and corollarily engage in
strikes and other concerted activities in an attempt to bring about
changes in the conditions of their work. They could not however do so
under the Labor Code and its Implementing Rules and Regulations;
these provided that "government employees, including employees of
government-owned and/or controlled corporations," without distinction
as to function, were "exempted" (excluded is the better term) from
"the right to self-organization and to form, join or assist labor
organizations for purposes of collective bargaining," and by
implication, excluded as well from the right to engage in concerted
activities, such as strikes, as coercive measures against their
employers.
Members of supervisory unions who were not managerial employees,
were declared by the Labor Code to be ''eligible to join or assist the
rank and file labor organization, and if none exists, to form or assist in
the forming of such rank and file organization."[24] Managerial
employees, on the other hand, were pronounced as "not eligible to
join, assist or form any labor organization."[25] A "managerial
employee" was defined as one vested with power or prerogatives to
lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees, or
to effectively recommend such managerial actions."[26]
Presidential Decree No. 807
Clarification of the matter seems to have been very shortly attempted
by the Civil Service Decree of the Philippines, Presidential Decree No.
807 (eff., Oct. 6, 1975) which superseded the Civil Service Law of 1959
(RA 2260)[27] and repealed or modified "all laws, rules and regulations
or parts thereof inconsistent with the provisions" thereof. The Decree
categorically described the scope and coverage of the "Civil Service"
as embracing "every branch, agency, subdivision, and instrumentality
of the government, including every government owned or controlled
corporation whether performing governmental or proprietary
function."[28] The effect was seemingly to prohibit government
employees (including those "employed in proprietary functions of the
Government") to "strike for the purpose of securing changes of their
terms and conditions of employment,"[29] something which, as
aforestated, they were allowed to do under the Civil Service Act of
1959.[30]
Be this as it may, it seems clear that PD 807 (the Civil Service Decree)
did not modify the declared ineligibility of "managerial employees"
from joining, assisting or forming any labor organization.
Executive Order No. III
Executive Order No. 111, issued by President Corazon C. Aquino on
December 24, 1986 in the exercise of legislative powers under the
Freedom Constitution, modified the general disqualification above
mentioned of "government employees, including employees of
government-owned and/or controlled corporations" from ''the right to
self-organization and to form, join or assist labor organizations for
purposes of collective bargaining." It granted to employees "of
government corporations established under the Corporation Code **
the right to organize and to bargain collectively with their respective
employers."[31] To all "other employees in the civil service, ** (it
granted merely) the right to form associations for purposes not
contrary to law,"[32] not for "purposes of collective bargaining."
The 1987 Constitution
The provisions of the present Constitution on the matter appear to be
somewhat more extensive. They declare that the "right to self
organization shall not be denied to government employees;"[33] that
the State "shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law; and
that said workers "shall be entitled to security of tenure, humane
conditions of work, and a living wage, ** (and) also participate in
policy and decision-making processes affecting their rights and
benefits as may be provided by law."[34]
CSC Memoramdum Circular No. 6
Memorandum Circular No. 6, of the Civil Service Commission, issued
on April 21, 1987 enjoined strikes by government officials and
employees, to wit :[35]
" * * prior to the enactment by Congress of applicable laws concerning
strike by government employees, and considering that there are
existing laws which prohibit government officials and employees from
resorting to strike, the Commission enjoins, under pain of
administrative sanctions, all government officers and employees from
staging strikes, demonstrations, mass leaves, walk-outs and other
forms of mass action which will result in temporary stoppage or
64
disruption of public services. To allow otherwise is to undermine or
prejudice the government system."
Executive Order No. 180
The scope of the constitutional right to self-organization of
"government employees" above mentioned, was defined and
delineated in Executive Order No. 180 (eff. June 1, 1987). According to
this Executive Order, the right of self-organization does indeed pertain
to all "employees of all branches, subdivisions, instrumentalities and
agencies of the Government, including government-owned or
controlled corporations with original charters;"[36] such employees
"shall not be discriminated against in respect of their employment by
reason of their membership in employees' organizations or
participation in the normal activities of their organization ** (and their)
employment shall not be subject to the condition that they shall not
join or shall relinquish their membership in the employees'
organizations."[37]
However, the concept of the government employees' right of self-
organization differs significantly from that of employees in the private
sector. The latter's right of self-organization, i.e., "to form, join or
assist labor organizations for purposes of collective bargaining,"
admittedly includes the right to deal and negotiate with their
respective employers in order to fix the terms and conditions of
employment and also, to engage in concerted activities for the
attainment of their objectives, such as strikes, picketing, boycotts. But
the right of government employees to "form, join or assist employees
organizations of their own choosing" under Executive Order No. 180 is
not regarded as existing or available for "purposes of collective
bargaining," but simply "for the furtherance and protection of their
interests."[38]
In other words, the right of Government employees to deal and
negotiate with their respective employers is not quite as extensive as
that of private employees. Excluded from negotiation by government
employees are the "terms and conditions of employment ** that are
fixed by law," it being only those terms and conditions not otherwise
fixed by law that "may be subject of negotiation between the duly
recognized employees' organizations and appropriate government
authorities."[39] And while EO No. 180 concedes to government
employees, like their counterparts in the private sector, the right to
engage in concerted activities, including the right to strike, the
executive order is quick to add that those activities must be exercised
in accordance with law, i.e., are subject both to "Civil Service Law and
rules" and "any legislation that may be enacted by Congress,"[40] that
"the resolution of complaints, grievances and cases involving
government employees" is not ordinarily left to collective bargaining
or other related concerted activities, but to "Civil Service Law and
labor laws and procedures whenever applicable;" and that in case "any
dispute remains unresolved after exhausting all available remedies
under existing laws and procedures, the parties may jointly refer the
dispute to the (Public Sector Labor-Management) Council for
appropriate action."[41] What is more, the Rules and Regulations
implementing Executive Order No. 180 explicitly provide that since the
"terms and conditions of employment in the government, including
any political subdivision or instrumentality thereof and government-
owned and controlled corporations with original charters are governed
by law, the employees therein shall not strike for the purpose of
securing changes thereof."[42]
On the matter of limitations on membership in labor unions of
government employees, Executive Order No. 180 declares that "high
level employees whose functions are normally considered as policy
making or managerial, or whose duties are of a highly confidential
nature shall not be eligible to join the organization of rank-and-file
government employees.[43] A "high level employee" is one "whose
functions are normally considered policy determining, managerial or
one whose duties are highly confidential in nature. A managerial
function refers to the exercise of powers such as: 1. To effectively
recommend such managerial actions; 2. To formulate or execute
management policies and decisions; or 3. To hire, transfer, suspend,
lay off, recall, dismiss, assign or discipline employees."[44]
Republic Act No. 6715
The rule regarding membership in labor organizations of managerial
and supervisory employees just adverted to, was clarified and refined
by Republic Act No. 6715, effective on March 21, 1989, further
amending the Labor Code.
Under RA 6715 labor unions are regarded as organized either (a) "for
purposes of negotiation," or (b) "for furtherance and protection" of the
members' rights. Membership in unions organized "for purposes of
negotiation" is open only to rank-and-file employees. "Supervisory
employees" are ineligible "for membership in a labor organization of
the rank-and-file employees but may join, assist or form separate
labor organizations of their own," i.e., one organized "for furtherance
65
and protection" of their rights and interests. However, according to
the Rules implementing RA 6715, "supervisory employees who are
included in an existing rank-and-file bargaining unit, upon the
effectivity of Republic Act No. 6715 shall remain in that unit ** ."
Supervisory employees are "those who, in the interest of the
employer, effectively recommend such managerial actions[45] if the
exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment."[46]
Membership in employees' organizations formed for purposes of
negotiation are open to rank-and-file employees only, as above
mentioned, and not to high level employees.[47] Indeed, "managerial
employees" or "high level employees" are, to repeat, "not eligible to
join, assist or form any labor organization" at all."[48] A managerial
employee is defined as "one who is vested with powers or
prerogatives to lay down and execute, management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees."[49]
This is how the law now stands, particularly with respect to
supervisory employees vis a vis labor organizations of employees
under them.
Now, the GSIS performs proprietary functions. It is a non-stock
corporation, managed by a Board of Trustees exercising the "usual
corporate powers."[50] In other words, it exercises all the powers of a
corporation under the Corporation Law in so far as they are not
otherwise inconsistent with other applicable law.[51] It is engaged
essentially in insurance, a business that "is not inherently or
exclusively a governmental function, ** (but) is on the contrary, in
essence and practice, of a private nature and interest."[52]
1. The petitioners contend that the right of self-organization and
collective bargaining had been withdrawn by the Labor Code from
government employees -- including those in government?owned and
controlled corporations -- chiefly for the reason that the terms and
conditions of government employment, all embraced in civil service,
may not be modified by collective bargaining because set by law. It is
therefore immaterial, they say, whether supervisors are members of
rank-and-file unions or not; after all, the possibility of the employer's
control of the members of the union thru supervisors thus rendering
collective bargaining illusory, which is the main reason for the
prohibition, is no longer of any consequence.
This was true, for a time. As already discussed, both under the Labor
Code and PD 807, government employees, including those in
government-owned or controlled corporations, were indeed precluded
from bargaining as regards terms and conditions of employment
because these were set by law and hence could not possibly be
altered by negotiation.
But EO 111 restored the right to organize and to negotiate and bargain
of employees of "government corporations established under the
Corporation Code." And EO 180, and apparently RA 6715, too, granted
to all government employees the right of collective bargaining or
negotiation except as regards those terms of their employment which
were fixed by law; and as to said terms fixed by law, they were
prohibited to strike to obtain changes thereof.
2. The petitioners appear to be correct in their view of the
disappearance from the law of the prohibition on supervisors being
members of labor organizations composed of employees under their
supervision. The Labor Code (PD 442) allowed supervisors (if not
managerial) to join rank-and-file unions. And under the Implementing
Rules of RA 6715, supervisors who were members of existing labor
organizations on the effectivity of said RA 6715 were explicitly
authorized to "remain therein."
3. The correctness of the petitioners' theory that unfair labor practices
ceased to be crimes and were deemed merely administrative offenses
in virtue of the Labor Code, cannot be gainsaid. Article 250 of the
Labor Code did provide as follows:
"ART. 250. Concept of unfair labor practice. - The concept of unfair
labor practice is hereby modified. Henceforth, it shall be considered
merely as an administrative offense rather than a criminal offense.
Unfair labor practice complaints shall, therefore, be processed like any
ordinary labor disputes."
But unfair labor practices were declared to be crimes again by later
amendments of the Labor Code effected by Batas Pambansa Blg. 70,
approved on May 1, 1980. As thus amended, the Code now
pertinently reads as follows:
"ART. 248. Concept of unfair labor practice and procedure for
prosecution thereof. - Unfair labor practices violate the constitutional
right of workers and employees to self organization, are inimical to the
legitimate interests of both labor and management, including their
right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace
66
and hinder the promotion of healthy and stable labor-management
relations.
Consequently, unfair labor practices are not only violations of the civil
rights of both labor and management but are also criminal offenses
against the State which shall be subject to prosecution and
punishment as herein provided.
*** *** ***
Recovery of civil liability in the administrative proceedings shall bar
recovery under the Civil Code.
No criminal prosecution under this title may be instituted without a
final judgment, finding that an unfair labor practice was committed
having been first obtained in the preceding paragraph. * * * . "
The decisive consideration is that at present, supervisors who were
already members of a rank-and-file labor organization at the time of
the effectivity of R.A. No. 6715, are authorized to "remain therein." It
seems plain, in other words, that the maintenance by supervisors of
membership in a rank-and-file labor organization even after the
enactment of a statute imposing a prohibition on such membership, is
not only not a crime, but is explicitly allowed, under present law.
Now, in a case decided as early as 1935, People v. Tamayo,[53] where
the appellants had appealed from a judgment convicting them of a
violation of a municipal ordinance, and while their appeal was
pending, the ordinance was repealed such that the act complained of
ceased to be a criminal act but became legal, this Court dismissed the
criminal proceedings, pronouncing the effects of the repeal to be as
follows:
"In the leading case of the United States vs. Cuna (12 Phil. 241), and
Wing vs. United States (218 U.S. 272), the doctrine was clearly
established that in the Philippines repeal of a criminal act by its
reenactment, even without a saving clause would not destroy criminal
liability. But not a single sentence in either decision indicates that
there was any desire to hold that a person could be prosecuted,
convicted, and punished for acts no longer criminal.
There is no question that at common law and in America a much more
favorable attitude towards the accused exists relative to statutes that
have been repealed than has been adopted here. Our rule is more in
conformity with the Spanish doctrine, but even in Spain, where the
offense ceased to be criminal, prosecution cannot be had (1 Pacheco,
Commentaries, 296).
The repeal here was absolute, and not a reenactment and repeal by U.S. vs. Academia, 10 Phil. 431. See dissent in Lagrimas vs. Director
implication. Nor was there any saving clause. The legislative intent as of Prisons, 57 Phil. 247, 252, 254)."
shown by the action of the municipal council is that such conduct, The foregoing precedents dictate absolution of the appellants of the
formerly denounced, is no longer deemed criminal, and it would be offenses imputed to them.
illogical for this court to attempt to sentence appellant for the offense WHEREFORE, the judgments of conviction in CA-G.R. No. 14724-CR
that no longer exists. and CA-G.R. No. 14856-CR, subject of the appeal, as well as those in
We are therefore of the opinion that the proceedings against appellant Crim. Case No. 5275-R and Crim. Case No. 4130-R rendered by the
must be dismissed." Trial Court, are REVERSED and the accused-appellants ACQUITTED of
To the same effect and in even more unmistakable language is People the charges against them, with costs de officio.
v. Almuete,[54] where the defendants-appellees were charged SO ORDERED.
criminally under section 39 of Republic Act No. 1199, as amended (the Cruz, Gancayco, Grio-Aquino, and Medialdea, JJ., concur.
Agricultural Land Tenancy Law of 1954) which penalized pre-threshing
by either agricultural tenant or his landlord. They sought and secured
a dismissal on the ground, among others, that there was no law
punishing the act charged - a reference to the fact that Republic Act
No. 1199 had already been superseded by the Agricultural Land
Reform Code of 1963 which instituted the leasehold system and
abolished share tenancy subject to certain conditions. On appeal by
the Government, this Court upheld the dismissal, saying:
The legislative intent not to punish anymore the tenant's act of pre-
reaping and pre-threshing without notice to the landlord is inferable
from the fact that, as already noted, the Code of Agrarian Reforms did
not reenact section 39 of the Agricultural Tenancy Law and that it
abolished share tenancy which is the basis for penalizing clandestine
pre-reaping and pre-threshing.
***
"As held in the Adillo case,[55] the act of pre-reaping and pre-
threshing without notice to the landlord, which is an offense under the
Agricultural Tenancy Law, had ceased to be an offense under the
subsequent law, the Code of Agrarian Reforms. To prosecute it as an
offense when the Code of Agrarian Reforms is already in force would
be repugnant or abhorrent to the policy and spirit of that Code and
would subvert the manifest legislative intent not to punish anymore
pre-reaping and pre-threshing without notice to the landholder.
***
"The repeal of a penal law deprives the courts of jurisdiction to punish
persons charged with a violation of the old penal law prior to its repeal
(People vs. Tamayo, 61 Phil. 225; People vs. Sindiong and Pastor, 77
Phil. 1000; People vs. Binuya, 61 Phil. 208; U.S. vs. Reyes, 10 Phil. 423;

67
G.R. No. 88957, June 25, 1992
PHILIPS INDUSTRIAL DEVELOPMENT, INC., PETITIONER,
VS.
NATIONAL LABOR RELATIONS COMMISSION AND PHILIPS EMPLOYEES
ORGANIZATION (FFW), RESPONDENTS.
DECISION
DAVIDE, JR., J.:
In this petition for certiorari and prohibition under Rule 65 of the Rules
of Court with a prayer for a temporary restraining order and/or a writ
of preliminary injunction, petitioner Philips Industrial Development,
Inc. (PIDI) seeks to set aside the Decision and Resolution, dated 16
January 1989 and 17 March 1989, respectively, of the National Labor
Relations Commission (NLRC) in Case No. NLRC-NCR-00-11-03936-87
on the ground that it committed grave abuse of discretion amounting
to lack of jurisdiction in holding that service engineers, sales
representatives and confidential employees of PIDI are qualified to be
included in the existing bargaining unit.
PIDI is a domestic corporation engaged in the manufacturing and
marketing of electronic products. Since 1971, it had a total of six (6)
collective bargaining agreements (CBAs) with private respondent
Philips Employees Organization-FFW (PEO-FFW), a registered labor
union and the certified bargaining agent of all the rank and file
employees of PIDI. In the first CBA (1971-1974), the supervisors
referred to in R.A. No. 875, confidential employees, security guards,
temporary employees and sales representatives were excluded from
the bargaining unit. In the second to the fifth CBAs (1975-1977; 1978-
1980; 1981-1983; and 1984-1986), the sales force, confidential
employees and heads of small units, together with the managerial
employees, temporary employees and security personnel, were
specifically excluded from the bargaining unit.[1] The confidential
employees are the division secretaries of light/telecom/data and
consumer electronics, marketing managers, secretaries of the
corporate planning and business manager, fiscal and financial system
manager and audit and EDP manager, and the staff of both the
General Management and the Personnel Department.[2]
In the sixth CBA covering the years 1987 to 1989, it was agreed upon,
among others, that the subject of inclusion or exclusion of service
68
engineers, sales personnel and confidential employees in the
coverage of the bargaining unit would be submitted for arbitration.
Pursuant thereto, on June 1987, PEO-FFW filed a petition before the
Bureau of Labor Relations (BLR) praying for an order "directing the
parties to select a voluntary arbitrator in accordance with its rules and
regulations."
As the parties failed to agree on a voluntary arbitrator, the BLR
endorsed the petition to the Executive Labor Arbiter of the National
Capital Region for compulsory arbitration pursuant to Article 228 of
the Labor Code. Docketed as Case No. NLRC-NCR-00-11-03936-87, the
case was assigned to Executive Labor Arbiter Arthur Amansec.
On 17 March 1988, Labor Arbiter Amansec rendered a decision, the
dispositive portion of which states:
"In view of the foregoing, a decision is hereby rendered, ordering the
respondent to conduct a referendum to determine the will of the
service engineers, sales representatives as to their inclusion or
exclusion in the bargaining unit.
It is hereby declared that the Division Secretaries and all Staff of
general management, personnel and industrial relations department,
secretaries of audit, EDP, financial system are confidential employees
and as such are hereby deemed excluded in the bargaining unit.
SO ORDERED."
PEO-FFW appealed from the decision to the NLRC.
On 16 January 1989, the NLRC rendered the questioned decision, the
dispositive portion of which reads:
"WHEREFORE, the foregoing premises considered, the appealed
decision of the Executive Labor Arbiter is hereby SET ASIDE and a new
one entered declaring respondent company's Service Engineers, Sales
Force, division secretaries, all Staff of General Management, Personnel
and Industrial Relations Department, Secretaries of Audit, EDP and
Financial Systems are included within the rank and file bargaining unit.
SO ORDERED."
The reversal is anchored on the respondent NLRC's conclusion that
based on Section 1,[3] Rule II, Book V of the Omnibus Rules
Implementing the Labor Code, as amended by Section 3,
Implementing Rules of E.O. No. 111; paragraph (c), Section 2, Rule V of
the same Code, as amended by Section 6[4] of the Implementing
Rules of E.O. No. 111; and Article 245[5] of the Labor Code, as
amended:
"x x x all workers, except managerial employees and security
personnel, are qualified to join or be a part of the bargaining unit. x x
x"
It further ruled that:
"The Executive Labor Arbiter's directive that the service engineers and
sales representatives to (sic) conduct a referendum among
themselves is erroneous inasmuch as it arrogates unto said employees
the right to define what the law means. It would not be amiss to state
at this point that there would be no one more interested in excluding
the subject employees from the bargaining unit than management and
that it would not be improbable for the latter to lobby and/or exert
pressure on the employees concerned, thus agitating unrest among
the rank-and-file. Likewise, the Executive Labor Arbiter's declaration
that the Division Secretaries and all Staff of general management,
personnel and industrial relations department, secretaries of audit,
EDP and financial system are confidential employees and as such are
hereby deemed excluded in (sic) the bargaining unit is contrary to law
for the simple reason that the law, as earlier quoted, does not mention
them as among those to be excluded from the bargaining unit only
(sic) managerial employees and security guards. As a matter of fact,
supervisory unions have already been dissolved and their members
who do not fall within the definition of managerial employees have
become eligible to join or assist the rank-and-file organization.[6]
Its motion for the reconsideration of this decision having been denied
by the NLRC in its Resolution of 16 March 1989, a copy of which it
received on 8 June 1989, petitioner PIDI filed the instant petition on 20
July 1989, alleging that:
"I
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION IN HOLDING THAT SERVICE ENGINEERS, SALES
REPRESENTATIVES AND CONFIDENTIAL EMPLOYEES OF PETITIONER
ARE QUALIFIED TO BE PART OF THE EXISTING BARGAINING UNIT.
II
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION IN NOT APPLYING THE TIME HONORED GLOBE
DOCTRINE."[7]
On 31 July 1989, this Court required the respondents to comment on
the petition, which PEO-FFW complied with on 28 August 1989. Public
respondent NLRC, thru its counsel, the Solicitor General, moved for,
and was granted a 30-day extension to file its Comment.
69
On 18 September 1989, this Court required the parties to show cause
why the petition should not be dismissed in view of the finality of the
NLRC decision as provided for by the penultimate sentence of Article
223 of the Labor Code, as amended by R.A. No. 6715. R.A. No. 6715,
which amended Article 223 of the Labor Code, was enacted on 2
March 1989 and took effect on 21 March 1989. The parties
subsequently complied with the Resolution.
On 16 May 1990, this Court required the parties to submit Memoranda
explaining the effect in this case of Article 223 of the Labor Code, as
amended by Section 12 of R.A. No. 6715 with respect to the finality of
decisions of the NLRC. The parties complied separately with the same.
On 10 September 1990, this Court gave due course to the petition and
required the parties to submit their respective Memoranda. The
petitioner and the Office of the Solicitor General filed their separate
Memoranda. On the other hand, PEO-FFW moved that its motion and
manifestation dated 23 August 1989 be considered as its
Memorandum; this Court granted the same.
As stated earlier, the principal issue in this case is whether the NLRC
committed grave abuse of discretion in holding that service engineers,
sales representatives and confidential employees (division secretaries,
staff of general management, personnel and industrial relations
department, secretaries of audit, EDP and financial system) are
qualified to be included in the existing bargaining unit. Petitioner
maintains that it did, and in support of its stand that said employees
should not be absorbed by the existing bargaining unit, it urges this
Court to consider these points:
1) The inclusion of the group in the existing bargaining unit would run
counter to the history of the parties CBA. The parties five (5) previous
CBAs consistently excluded this group of employees from the scope of
the bargaining unit. The rationale for such exclusion is that these
employees hold positions which are highly sensitive, confidential and
of a highly fiduciary nature; to include them in the bargaining unit may
subject the company to breaches in security and the possible
revelation of highly sensitive and confidential matters. It would cripple
the company's bargaining position and would give undue advantage to
the union.
2) The absence of mutuality of interests between this group of
employees and the regular rank and file militates against such
inclusion. A table prepared by the petitioner shows the disparity of
interests between the said groups:
AREAS SERVICE SERVICE 100% 135%
OF ENGINEERS/ TECHNICIANS
Year End Merit Increase None
INTERES SALES (Bargaining
Performa System
T REPRESENTATIVE Unit Employees)
nce
S
Evaluati
( Non-Bargaining
on
Unit Employees)
Sales Yes None
Qualifica Professional High School/
Commiss
tions Employees Vocational Grads.
ion
Work With Night Shift None
Car Loan Yes None
Schedule Schedule
Precalcul Yes None
Night 10% of Basic None
ated
Shift Rate
Kilomete
Different
r
ial Pay
allowanc
Stand-by On Stand-by Call None e
Call and with: The Office of the Solicitor General supports the decision of the
Allowanc First Line: 15% Executive Labor Arbiter and refuses to uphold the position of the
e of NLRC. It holds the view that the division secretaries; the staff
basic rate members of General Management, Personnel and the Industrial
Second Line: 10% Relations Department; and the secretaries of Audit, EDP and Financial
of Systems, are disqualified from joining the PEO-FFW as they are
basic rate confidential employees. They cannot even form a union of their own
for, as held in Golden Farms, Inc. vs. Ferrer-Calleja,[8] the rationale for
Uniforms None 2 sets of polo
the disqualification of managerial employees from joining unions holds
& pants every
true also for confidential employees. As regards the sales
6 months
representatives and service engineers, however, there is no doubt that
Retireme 15 yrs. ser. 70% 15 yrs. ser. 50% they are entitled to join or form a union, as they are not disqualified by
nt 16 16 law from doing so. Considering that they have interests dissimilar to
Benefits 75% 85% those of the rank and file employees comprising the existing
17 17 bargaining unit, and following the Globe Doctrine enunciated in In Re:
80% 90% Globe Machine and Stamping Company[9] to the effect that in
18 18 determining the proper bargaining unit the express will or desire of the
85% 100% employees shall be considered, they should be allowed to determine
19 19 for themselves what union to join or form. The best way to determine
90% 115% their preference is through a referendum. As shown by the records,
20 20 such a referendum was decreed by the Executive Labor Arbiter.
70
The petition is impressed with merit.
At the outset, We express Our agreement with the petitioner's view
that respondent NLRC did not quite accurately comprehend the issue
raised before it. Indeed, the issue is not whether the subject
employees may join or form a union, but rather, whether or not they
may be part of the existing bargaining unit for the rank and file
employees of PIDI.
Even if the issue was, indeed, as perceived by the NLRC, still, a
palpable error was committed by it in ruling that under the law, all
workers, except managerial employees and security personnel, are
qualified to join a union, or form part of a bargaining unit. At the time
Case No. NLRC-NCR-00-11-03936-87 was filed in 1987, security
personnel were no longer disqualified from joining or forming a union.
Section 6 of E.O No. 111, enacted on 24 December 1986, repealed the
original provisions of Article 245 of the Labor Code, reading as follows:
"ARTICLE 245. Ineligibility of security personnel to join any labor
organization. -- Security guards and other personnel employed for the
protection and security of the person, properties and premises of the
employer shall not be eligible for membership in any labor
organization."
and substituted it with the following provision:
"ARTICLE 245. Right of employees in the public service. --"[10]
xxx
By virtue of such repeal and substitution, security guards became
eligible for membership in any labor organization.[11]
On the main issue raised before Us, it is quite obvious that respondent
NLRC committed grave abuse of discretion in reversing the decision of
the Executive Labor Arbiter and in decreeing that PIDI's "Service
Engineers, Sales Force, division secretaries, all Staff of General
Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems are included within
the rank and file bargaining unit."
In the first place, all these employees, with the exception of the
service engineers and the sales force personnel, are confidential
employees. Their classification as such is not seriously disputed by
PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW
explicitly considered them as confidential employees. By the very
nature of their functions, they assist and act in a confidential capacity
to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations.[12] As such, the
71
rationale behind the ineligibility of managerial employees to form,
assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez,[13] this
Court elaborated on this rationale, thus:
"x x x The rationale for this inhibition has been stated to be, because if
these managerial employees would belong to or be affiliated with a
Union, the latter might not be assured of their loyalty to the Union in
view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in
Union membership."
In Golden Farms, Inc. vs. Ferrer-Calleja,[14] this Court explicitly made
this rationale applicable to confidential employees:
"This rationale holds true also for confidential employees such as
accounting personnel, radio and telegraph operators, who having
access to confidential information, may become the source of undue
advantage. Said employee(s) may act as a spy or spies of either party
to a collective bargaining agreement. This is specially true in the
present case where the petitioning Union is already the bargaining
agent of the rank-and-file employees in the establishment. To allow
the confidential employees to join the existing Union of the rank-and-
file would be in violation of the terms of the Collective Bargaining
Agreement wherein this kind of employees by the nature of their
functions/ positions are expressly excluded."
As regards the service engineers and the sales representatives, two
(2) points which respondent NLRC likewise arbitrarily and erroneously
ruled upon, need to be discussed. Firstly, in holding that they are
included in the bargaining unit for the rank and file employees of PIDI,
the NLRC practically forced them to become members of PEO-FFW or
to be subject to its sphere of influence, it being the certified
bargaining agent for the subject bargaining unit. This violates,
obstructs, impairs and impedes the service engineers' and the sales
representatives' constitutional right to form unions or associations[15]
and to self-organization.[16] In Victoriano vs. Elizalde Rope Workers
Union,[17] this Court already ruled:
"x x x Notwithstanding the different theories propounded by the
different schools of jurisprudence regarding the nature and contents of
a 'right', it can be safely said that whatever theory one subscribes to,
a right comprehends at least two broad notions, namely: first, liberty
or freedom, i.e., the absence of legal restraint, whereby an employee
may act for himself without being prevented by law; and second,
power, whereby an employee may, as he pleases, join or refrain from right to be established as the bargaining unit,[21] which do not obtain
joining an association. It is, therefore, the employee who should in this case.
decide for himself whether he should join or not an association; and WHEREFORE, the petition is hereby GRANTED. The Decision of public
should he choose to join, he himself makes up his mind as to which respondent National Labor Relations Commission in Case No. NLRC-
association he would join; and even after he has joined, he still retains NCR-00-11-03936-87, promulgated on 16 January 1989, is hereby SET
the liberty and the power to leave and cancel his membership with ASIDE while the Decision of the Executive Labor Arbiter in said case
said organization at any time.[18] It is clear, therefore, that the right dated 17 March 1988 is hereby REINSTATED, subject to the
to join a union includes the right to abstain from joining any union.[19] modifications above indicated.
Inasmuch as what both the Constitution and the Industrial Peace Act Costs against private respondent.
have recognized, and guaranteed to the employee, is the right to join SO ORDERED.
associations of his choice, it would be absurd to say that the law also Gutierrez, Jr., (Chairman), Feliciano, Bidin, and Romero, JJ., concur.
imposes, in the same breath, upon the employee the duty to join
associations. The law does not enjoin an employee to sign up with any
association."
The decision then of the Executive Labor Arbiter in merely directing
the holding of a referendum "to determine the will of the service
engineers, sales representatives as to their inclusion or exclusion in
(sic) the bargaining unit is the most appropriate procedure that
conforms with their right to form, assist or join a labor union or
organization. However, since this decision was rendered before the
effectivity of R.A. No. 6715, it must now be stressed that its future
application to the private parties in this case should, insofar as service
engineers and sales representatives holding supervisory positions or
functions are concerned, take into account the present Article 245[20]
of the Labor Code which, as amended by R.A. No. 6715, now reads:
"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." (emphasis supplied)
The foregoing disquisitions render unnecessary a discussion on the
second ground on the alleged grave abuse of discretion on the part of
the NLRC in not applying the "Globe Doctrine". Suffice it to state here
that since the only issue is the subject employees' inclusion in or
exclusion from the bargaining unit in question, and PIDI never
questioned the decision of the Executive Labor Arbiter, the Globe
Doctrine finds no application. Besides, this doctrine applies only in
instances of evenly balanced claims by competitive groups for the

72
G.R. No. 102130, July 26, 1994
GOLDEN FARMS, INC., PETITIONER,
VS.
THE HONORABLE SECRETARY OF LABOR AND THE PROGRESSIVE
FEDERATION OF LABOR, RESPONDENTS.
DECISION
PUNO, J.:
The sole issue for resolution in this Petition for Certiorari with prayer
for the issuance of preliminary injunction and/or restraining order is
whether or not petitioner's monthly paid rank-and-file employees can
constitute a bargaining unit separate from the existing bargaining unit
of its daily paid rank-and-file employees.
Petitioner Golden Farms, Inc., is a corporation engaged in the
production and marketing of bananas for export. On February 27,
1992, private respondent Progressive Federation of Labor (PFL) filed a
petition before the Med-Arbiter praying for the holding of a
certification election among the monthly paid office and technical
rank-and-file employees of petitioner Golden Farms.
Petitioner moved to dismiss the petition on three (3) grounds. First,
respondent PFL failed to show that it was organized as a chapter
within petitioner's establishment. Second, there was already an
existing collective bargaining agreement between the rank-and-file
employees represented by the National Federation of Labor (NFL) and
petitioner. And third, the employees represented by PFL had allegedly
been disqualified by this Court from bargaining with management in
Golden Farms, Inc., vs. Honorable Director Pura Ferrer-Calleja, G.R. No.
78755, July 19, 1989.[1]
Respondent PFL opposed petitioner's Motion to Dismiss. It countered
that the monthly paid office and technical employees should be
allowed to form a separate bargaining unit because they were
expressly excluded from coverage in the Collecting Bargaining
Agreement (CBA) between petitioner and NFL. It also contended that
the case invoked by petitioner was inapplicable to the present case.
In its reply, petitioner argued that the monthly paid office and
technical employees should have joined the existing collective
bargaining unit of the rank-and-file employees if they are not
managerial employees.
On April 18, 1991, the Med-Arbiter granted the petition and ordered
that a certification election be conducted, viz:
73
"WHEREFORE, premises considered, the present petition filed by the
Progressive Federation of Labor, for certification election among the
office and technical employees of Golden Farms, Inc., is, as it is
hereby, GRANTED with the following choices:
1. Progressive Federation of Labor (PFL);
2. No union.
The designated representation officer is hereby directed to call the
parties to a pre-election conference to thresh out the mechanics of the
election and to conduct and supervise the same within twenty (20)
days from receipt by the parties of this Order. The "Masterlist of Office
and Technical Employees" shall be the basis in determining the
employees qualified to vote during the certification election.
SO ORDERED."[2]
Petitioner seasonably appealed to public respondent Secretary of
Labor. On August 6, 1991, respondent Secretary of Labor issued the
assailed Decision denying the appeal for lack of merit.[3] Petitioner
filed a Motion for Reconsideration but the same was also denied on
September 13, 1991.
Thus, this petition for certiorari interposing two (2) issues.
I
THE CREATION OF AN ADDITIONAL BARGAINING UNIT FOR CERTAIN
RANK AND FILE EMPLOYEES WILL NOT ONLY SPLIT THE EXISTING ONE
BUT WILL ALSO NEGATE THE PRINCIPLE OF RES JUDICATA.
II
THE PROGRESSIVE FEDERATION OF LABOR BEING THE EXCLUSIVE
BARGAINING AGENT OF THE SUPERVISORY EMPLOYEES IS
DISQUALIFIED FROM REPRESENTING THE OFFICE AND TECHNICAL
EMPLOYEES.
The petition is devoid of merit.
The monthly paid office and technical rank-and-file employees of
petitioner Golden Farms enjoy the constitutional right to self-
organization and collective bargaining.[4] A "bargaining unit" has been
defined as a group of employees of a given employer, comprised of all
or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer,
indicate to be the best suited to serve the reciprocal rights and duties
of the parties under the collective bargaining provisions of the law.[5]
The community or mutuality of interest is therefore the essential
criterion in the grouping. "And this is so because the basic test of an
asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees
the exercise of their collective bargaining rights."[6]
In the case at bench, the evidence established that the monthly paid
rank-and-file employees of petitioner primarily perform administrative
or clerical work. In contradistinction, the petitioner's daily paid rank-
and-file employees mainly work in the cultivation of bananas in the
fields. It is crystal clear the monthly paid rank-and-file employees of
petitioner have very little in common with its daily paid rank-and-file
employees in terms of duties and obligations, working conditions,
salary rates, and skills. To be sure, the said monthly paid rank-and?file
employees have even been excluded from the bargaining unit of the
daily paid rank-and-file employees. This dissimilarity of interests
warrants the formation of a separate and distinct bargaining unit for
the monthly paid rank-and-file employees of the petitioner. To rule
otherwise would deny this distinct class of employees the right to self-
organization for purposes of collective bargaining. Without the shield
of an organization, it will also expose them to the exploitations of
management. So we held in University of the Philippines vs. Ferrer-
Calleja,[7] where we sanctioned the formation of two (2) separate
bargaining units within the establishment, viz:
"[T]he dichotomy of interests, the dissimilarity in the nature of the
work and duties as well as in the compensation and working
conditions of the academic and non-academic personnel dictate the
separation of these two categories of employees for purposes of
collective bargaining. The formation of two separate bargaining units,
the first consisting of the rank-and-file non-academic employees, and
the second, of the rank-and-file academic employees, is the set-up
that will best assure to all the employees the exercise of their
collective bargaining rights."
Petitioner next contends that these monthly paid office and technical
employees are managerial employees. They allegedly include those in
the accounting and personnel department, cashier, and other
employees holding positions with access to classified information.
We are not persuaded. Article 212, paragraph (m) of the Labor Code,
as amended, defines a managerial employee as follows:
"Managerial employee is one who is vested with power or
prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial actions if the
74
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 this Book."
Given this definition, the monthly paid office and technical employees,
accountants, and cashiers of the petitioner are not managerial
employees for they do not participate in policy-making but are given
cut out policies to execute and standard practices to observe.[8] In the
main, the discharge of their duties does not involve the use of
independent judgment. As factually found by the Med-Arbiter, to wit:
"A perusal of the list of the office and technical employees sought to
be represented in the instant case, with their corresponding
designation does not show that said Office and Technical employees
exercises supervisory or managerial functions.
The office believes and so hold that the employees whose names
appear in the "Masterlist of Office and Technical Employees" submitted
during the hearing are eligible to join/form a labor organization of their
own choice."[9]
Our decision in Golden Farms, Inc., vs. Honorable Pura Ferrer-Calleja,
op. cit., does not pose any obstacle in holding a certification election
among petitioner's monthly paid rank-and-file employees. The issue
brought to fore in that case was totally different, i.e., whether or not
petitioner's confidential employees, considering the nature of their
work, should be included in the bargaining unit of the daily paid rank-
and-file employees. In the case at bench, the monthly paid rank-and-
file employees of petitioner are being separated as a bargaining unit
from its daily paid rank-and-file employees, on the ground that they
have different interest to protect. The principle of res judicata is,
therefore, inapplicable.
The second assigned error which was not raised in the proceedings
below must necessarily fail. The alleged error involves a question of
fact which this Court cannot resolve. Petitioner submitted this
contention only in its Memorandum dated February 12, 1993.[10] In
this Memorandum, petitioner cited LRD Case No. OXI-UR-70 for Direct
Recognition/Certification Election. But even a side glance of the cited
case will reveal that it involves a petition for direct certification among
the rank-and-file office and technical employees of the Golden Farms
Inc., (not supervisory employees) under the House of Investment,
Ladislawa Village, Buhangin, Davao City filed by the National
Federation of Labor (not the respondent Progressive Federation of
Labor). The averment of petitioner is baseless and its recklessness
borders the contemptuous.
Finally, we note that it was petitioner company that filed the motion to
dismiss the petition for election. The general rule is that an employer
has no standing to question a certification election since this is the
sole concern of the workers.[11] 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.
WHEREFORE, the petition is DISMISSED for lack of merit. With costs
against petitioner.
SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, Regalado, and Mendoza, JJ., concur.

75
G.R. No. 110399, August 15, 1997
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND
ERNESTO L. PONCE, PRESIDENT, PETITIONERS,
VS.
HONARABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS
UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO
L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL
CORPORATION, RESPONDENTS.
DECISION
ROMERO, J.:
This is a Petition for Certiorari with Prayer for the Issuance of
Preliminary Injunction seeking to reverse and set aside the Order of
public respondent, Undersecretary of the Department of Labor and
Employment, Bienvenido E. Laguesma, dated March 11, 1993, in Case
No. OS MA A-2-70-91[1] entitled In Re: Petition for Certification
Election Among the Supervisory and Exempt Employees of the San
Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando
and Otis, San Miguel Corporation Supervisors and Exempt Union,
Petitioner. The Order excluded the employees under supervisory
levels 3 and 4 and the so-called exempt employees from the proposed
bargaining unit and ruled out their participation in the certification
election.
The antecedent facts are undisputed:
On October 5, 1990, petitioner union filed before the Department of
Labor and Employment (DOLE) a Petition for District 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 among the supervisors and
exempt employees of the SMC Magnolia Poultry Products Plants of
Cabuyao, San Fernando and Otis as one bargaining unit.
76
On January 18, 1991, respondent San Miguel Corporation filed a Notice
of Appeal with Memorandum on Appeal, pointing out, among others,
the Med-Arbiters 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.
On July 23, 1991, the public respondent, Undersecretary Laguesma,
granted respondent companys Appeal and ordered the remand of the
case to the Med-Arbiter of origin for determination of the true
classification of each of the employees sought to be included in the
appropriate bargaining unit.
Upon petitioner-unions 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.
On September 21, 1991, respondent company, San Miguel Corporation
filed a Motion for Reconsideration with Motion to suspend proceedings.
On March 11, 1993, an Order was issued by the public respondent
granting the Motion, citing the doctrine enunciated in Philips Industrial
Development, Inc. v. NLRC[2] case. Said Order reads in part:
x x x Confidential employees, like managerial employees, are not
allowed to form, join or assist a labor union for purposes of collective
bargaining.
In this case, S3 and S4 and the so-called exempt employees are
admittedly confidential employees and therefore, they are not allowed
to form, join or assist a labor union for purposes of collective
bargaining following the above courts ruling. Consequently, they are
not allowed to participate in the certification election.
WHEREFORE, the motion is hereby granted and the Decision of this
Office dated 03 September 1991 is hereby modified to the extent that
employees under supervisory levels 3 and 4 (S3 and S4) and the so-
called exempt employees are not allowed to join the proposed
bargaining unit and are therefore excluded from those who could
participate in the certification election.[3]
Hence this petition.
For resolution in this case are the following 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. If they are not confidential employees, do the employees of the
three plants constitute an appropriate single bargaining unit.
On the first issue, this Court rules that said employees do not fall
within the term confidential employees who may be prohibited from
joining a union.
There is no question that the said employees, supervisors and the
exempt employees, are not vested with the powers and prerogatives
to lay down and execute management policies and/or to hire, transfer,
suspend, layoff, recall, discharge or dismiss employees. They are,
therefore, not qualified to be classified as managerial employees who,
under Article 245[4] of the Labor Code, are not eligible to join, assist
or form any labor organization. In the very same provision, they are
not allowed membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of
their own. The only question that need be addressed is whether these
employees are properly classified as confidential employees or not.
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.[5] 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 employees and his supervisor,
and the supervisor must handle the prescribed responsibilities relating
to labor relations.[6]
77
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.[7] Management should not be required
to handle labor relations matters through employees who are
represented by the union with the company is required to deal and
who in the normal performance of their duties may obtain advance
information of the companys position with regard to contract
negotiations, the disposition of grievances, or other labor relations
matters.[8]
There have been ample precedents in this regard, thus in Bulletin
Publishing Company v. Hon. Augusto Sanchez,[9] the Court held that
if these managerial employees would belong to or be affiliated with a
Union, the latter might not be assured of their loyalty to the Union in
view of evident conflict of interest. The Union can also become
company-dominated with the presence of managerial employees in
Union membership. The same rationale was applied to confidential
employees in Golden Farms, Inc. v. Ferrer-Calleja[10] and in the more
recent case of Philips Industrial Development, Inc. v. NLRC[11] which
held that confidential employees, by the very nature of their functions,
assist and act in a confidential capacity to, or have access to
confidential matters of, persons who exercise managerial functions in
the field of labor relations. Therefore, the rationale behind the
ineligibility of managerial employees to form, assist or join a labor
union was held equally applicable to them.[12]
An important element of the confidential employee rule is the
employees need to use labor relations information. Thus, in
determining the confidentiality of certain employees, a key questions
frequently considered is the employees necessary access to
confidential labor relations information.[13]
It is the contention of respondent corporation that Supervisory
employees 3 and 4 and the exempt employees come within the
meaning of the term confidential employees primarily because they
answered in the affirmative when asked Do you handle confidential
data or documents? in the Position Questionnaires submitted by the
Union.[14] In the same questionnaire, however, it was also stated that
the confidential information handled by questioned employees relate
to product formulation, product standards and product specification
which by no means relate to labor relations.[15]
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.
[16] If access to confidential labor relations information is to be a
factor in the determination of an employees confidential status, such
information must relate to the employers labor relations policies.
Thus, an employee of a labor union, or of a management association,
must have access to confidential labor 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 clause an employee to be excluded from the
bargaining unit representing employees of the union or
association.[17] Access to information which is regarded by the
employer to be confidential from the business standpoint, such as
financial information[18] or technical trade secrets, will not render an
employee a confidential employee.[19]
Herein listed are the functions of supervisors 3 and higher:
1. To undertake decisions to discontinue/temporarily stop shift
operations when situations require.
2. To effectively oversee the quality control function at the processing
lines in the storage of chicken and other products.
3. To administer efficient system of evaluation of products in the
outlets.
4. To be directly responsible for the recall, holding and rejection of
direct manufacturing materials.
5. To recommend and initiate actions in the maintenance of sanitation
and hygiene throughout the plant.[20]
78
It is evident that whatever confidential data the questioned employees
may handle will have to relate to their functions. From the foregoing
functions, it can be gleaned that the confidential information said
employees have access to concern the employers internal business
operations. As held in Westinghouse Electric Corporation v. National
Labor Relations Board,[21] an employee may not be excluded from
appropriate bargaining unit merely because he has access to
confidential information concerning employers internal business
operations and which is not related to the field of labor relations.
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 bargain collectively
through representatives of their choosing.[22]
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. Since the employees are not
classifiable under the confidential type, this Court rules that they may
appropriately form a bargaining unit for purposes of collective
bargaining. Furthermore, even assuming that they are confidential
employees, jurisprudence has established that there is no legal
prohibition against confidential employees who are not performing
managerial functions to form and join a union.[23]
In this connection, the issue of whether the employees of San Miguel
Corporation Magnolia Poultry Products Plants of Cabuyao, San
Fernando, and Otis constitute a single bargaining unit needs to be
threshed out.
It is the contention of the petitioner union that the creation of three (3)
separate bargaining units, one each for Cabuyao Otis and San
Fernando as ruled by the respondent Undersecretary, is contrary to
the one-company, one-union policy. It adds that Supervisors level 1 to
4 and exempt employees of the three plants have a similarity or a
community of interests.
This Court finds the contention of the petitioner meritorious.
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.[24]
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.[25]
It is readily seen that the employees in the instant case have
community or mutuality of interest, which is the standard in
determining the proper constituency of a collective bargaining unit.
[26] It is undisputed that they all belong to the Magnolia Poultry
Division of San Miguel 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.
San Fernando, Pampanga is immaterial. Geographical location can be
completely disregarded if the communal or mutual interests of the
employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer
where all non-academic rank and file employees of the University of
the Philippines inDiliman, Quezon City, Padre Faura, Manila, Los Baos,
Laguna and the Visayas were allowed to participate in a certification
election. We rule that the distance among the three plants is not
productive of insurmountable difficulties in the administration of union
affairs. Neither are there regional differences that are likely to impede
the operations of a single bargaining representative.
WHEREFORE, the assailed Order of March 11, 1993 is hereby SET
ASIDE and the Order of the Med-Arbiter on December 19, 1990 is
REINSTATED under which a certification election among the
supervisors (level 1 to 4) and exempt employees of the San Miguel
Corporation Magnolia Poultry Products Plants of Cabuyao, San
Fernando, and Otis as one bargaining unit is ordered conducted.
SO ORDERED.
Regalado, (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.

In light of these considerations, the Solicitor General has opined that

separate bargaining units in the three different plants of the division
will fragmentize the employees of the said division, thus greatly
diminishing their bargaining leverage. Any concerted activity held
against the private respondent for a labor grievance in one bargaining
unit will, in all probability, not create much impact on the operations of
the private respondent. The two other plants still in operation can well
step up their production and make up for the slack caused by the
bargaining unit engaged in the concerted activity. This situation will
clearly frustrate the provisions of the Labor Code and the Mandate of
the Constitution.[27]

The fact that the three plants are located in three different places,
namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in
79
G.R. No. 108855, February 28, 1996
METROLAB INDUSTRIES, INC., PETITIONER,
VS.
HONORABLE MA. NIEVES ROLDAN CONFESOR, IN HER CAPACITY AS
SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT AND
METRO DRUG CORPORATION EMPLOYEES ASSOCIATION-FEDERATION
OF FREE WORKERS, RESPONDENTS.
DECISION
KAPUNAN, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of
Court seeking the annulment of the Resolution and Omnibus
Resolution of the Secretary of Labor and Employment dated 14 April
1992 and 25 January 1993, respectively, in OS-AJ-04491-11 (NCMB-
NCR-NS-08-595-9 1; NCMB-NCR-NS-09-678-91) on grounds that these
were issued with grave abuse of discretion and in excess of
jurisdiction.
Private respondent Metro Drug Corporation Employees Association-
Federation of Free Workers (hereinafter referred to as the Union) is a
labor organization representing the rank and file employees of
petitioner Metrolab Industries, Inc. (hereinafter referred to as
Metrolab/MII) and also of Metro Drug, Inc.
On 31 December 1990, the Collective Bargaining Agreement (CBA)
between Metrolab and the Union expired. The negotiations for a new
CBA, however, ended in a deadlock.
Consequently, on 23 August 1991, 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 dated 20
September 1991, the dispositive portion of which reads, thus:
80
WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g)
of the Labor Code, as amended, this Office hereby assumes
jurisdiction over the entire labor dispute at Metro Drug, Inc. - Metro
Drug Distribution Division and Metrolab Industries Inc.
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.
Finally, the parties are directed to submit their position papers and
evidence on the aforequoted deadlocked issues to this office within
twenty (20) days from receipt hereof.
SO ORDERED.[1] (Italics ours.)
On 27 December 1991, then Labor Secretary Torres issued an order
resolving all the disputed items in the CBA and ordered the parties
involved to execute a new CBA.
Thereafter, the Union filed a motion for reconsideration.
On 27 January 1992, 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.
Metrolab further asserted that with the automation of the manufacture
of its product "Eskinol," the number of workers required its production
is significantly reduced.[3]
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 Metrolabs 94 rank and file workers
illegal and ordered their reinstatement with full backwages. The
dispositive portion reads as follows:
WHEREFORE, the Unions motion for reconsideration is granted in part,
and our order of 28 December 1991 is affirmed subject to the
modifications in allowances and in the close shop provision. The layoff
of the 94 employees at MII is hereby declared illegal for the failure of
the latter to comply with our injunction against committing any act
which may exacerbate the dispute and with the 30-day notice
requirement. Accordingly, MII is hereby ordered to reinstate the 94
employees, except those who have already been recalled, to their
former positions or substantially equivalent, positions with full
backwages from the date they were illegally laid off on 27 January
1992 until actually reinstated without loss of seniority rights and other
benefits. Issues relative to the CBA agreed upon by the parties and not
embodied in our earlier order are hereby ordered adopted for
incorporation in the CBA. Further, the dispositions and directives
contained in all previous orders and resolutions relative to the instant
dispute, insofar as not inconsistent herein, are reiterated. Finally, the
parties are enjoined to cease and desist from committing any act
which may tend to circumvent this resolution.
SO RESOLVED.[4]
On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration
alleging that the layoff did not aggravate the dispute since no
untoward incident occurred as a result thereof. It, likewise, filed a
motion for clarification regarding the constitution of the bargaining
unit covered by the CBA.
81
On 29 June 1992, after exhaustive negotiations, the parties entered
into a new CBA. The execution, however, was without prejudice to the
outcome of the issues raised in the reconsideration and clarification
motions submitted for decision to the Secretary of Labor.[5]
Pending the resolution of the aforestated motions, on 2 October 1992,
Metrolab laid off 73 of its employees on grounds of redundancy due to
lack of work which the Union again promptly opposed on 5 October
1992.
On 15 October 1992, Labor Secretary Confesor again issued a cease
and desist order. Metrolab moved for a reconsideration.[6]
On 25 January 1993, Labor Secretary Confesor issued the assailed
Omnibus Resolution containing the following orders:
xxx xxx xxx.
1. MIIs 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;
2. For the parties to incorporate in their respective collective
bargaining agreements the clarifications herein contained; and
3. MIIs motion for reconsideration with respect to the consequences of
the second wave of layoff affecting 73 employees, to the extent of
assailing our ruling that such layoff tended to exacerbate the dispute,
is hereby denied. But inasmuch as the legality of the layoff was not
submitted for our resolution and no evidence had been adduced upon
which a categorical finding thereon can be based, the same is hereby
referred to the NLRC for its appropriate action.
Finally, all prohibitory injunctions issued as a result of our assumption
of jurisdiction over this dispute are hereby lifted.
SO RESOLVED.[7]
Labor Secretary Confesor also ruled that executive secretaries are
excluded from the closed-shop provision of the CBA, not from the
bargaining unit.
On 4 February 1993, the Union filed a motion for execution. Metrolab
opposed. Hence, the present petition for certiorari with application for
issuance of a Temporary Restraining Order.
On 4 March 1993, we issued a Temporary Restraining Order enjoining
the Secretary of Labor from enforcing and implementing the assailed
Resolution and Omnibus Resolution dated 14 April 1992 and 25
January 1993, respectively.
In its petition, Metrolab assigns the following errors:
A discretion....
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND
EMPLOYMENT COMMITTED GRAVE ABUSE OF DISCRETION AND
EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF
ILLEGAL AND ORDERING THE REINSTATEMENT AND PAYMENT OF
BACKWAGES TO THE AFFECTED EMPLOYEES.[*]
B play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND
EMPLOYMENT GRAVELY ABUSED HER DISCRETION IN INCLUDING
EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK
AND FILE EMPLOYEES.[8]
Anent the first issue, we are asked to determine whether or not public
respondent Labor Secretary committed grave abuse of discretion and
exceeded her jurisdiction in declaring the subject layoffs instituted by
Metrolab illegal on grounds that these unilateral actions aggravated
the conflict between Metrolab and the Union who were, then, locked in
a stalemate in CBA negotiations.
Metrolab argues that the Labor Secretarys order enjoining the parties
from committing any act that might exacerbate the dispute is overly
broad, sweeping and vague and should not be used to curtail the
employers right to manage his business and ensure its viability.
82
We cannot give credence to Metrolabs contention.
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.[9]
In PAL v. NLRC,[10] we issued this reminder:
xxx xxx xxx
. . .the exercise of management prerogatives was never considered
boundless. Thus, in Cruz vs. Medina ( 177 SCRA 565 [1989]), it was
held that managements prerogatives must be without abuse of
xxx xxx xxx
All this points to the conclusion that the exercise of managerial
prerogatives is not unlimited. It is circumscribed by limitations found in
law, a collective bargaining agreement, or the general principles of fair
[1990]). . . . (Italics ours.)
xxx xxx xxx.
The case at bench constitutes one of the exceptions. The Secretary of
Labor is expressly given the power under the Labor Code to assume
jurisdiction and resolve labor disputes involving industries
indispensable to national interest. The disputed injunction is
subsumed under this special grant of authority. Art. 263 (g) of the
Labor Code specifically provides that:
xxx xxx xxx
(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. . .
(Italics ours.)
xxx xxx xxx.
That Metrolabs 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.
Metro labs 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:
xxx xxx xxx.
MII is right to the extent that as a rule, we may not interfere with the
legitimate exercise of management prerogatives such as layoffs. But it
may nevertheless be appropriate to mention here that 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 exercised
consistently with the statutory objective.[11]
xxx xxx xxx.
83
Metrolab insists that the subject layoffs did not exacerbate their
dispute with the Union since no untoward incident occurred after the
layoffs were implemented. There were no work disruptions or
stoppages and no mass actions were threatened or undertaken.
Instead, petitioner asserts, the affected employees calmly accepted
their fate "as this was a matter which they had been previously
advised would be inevitable."[12]
After a judicious review of the record, we find no compelling reason to
overturn the findings of the Secretary of Labor.
We reaffirm the doctrine that considering their expertise in their
respective fields, factual findings of administrative agencies supported
by substantial evidence are accorded great respect and binds this
Court.[13]
The Secretary of Labor ruled, thus:
xxx xxx xxx.
Any act committed during the pendency of the dispute that tends to
give rise to further contentious issues or increase the tensions
between the parties should be considered an act of exacerbation. One
must look at the act itself, not on speculative reactions. A misplaced
recourse is not needed to prove that a dispute has been exacerbated.
For instance, the Union could not be expected to file another notice of
strike. For this would depart from its theory of the case that the layoff
is subsumed under the instant dispute, for which a notice of strike had
already been filed. On the other hand, to expect violent reactions,
unruly behavior, and any other chaotic or drastic action from the
Union is to expect it to commit acts disruptive of public order or acts
that may be illegal. Under a regime of laws, legal remedies take the
place of violent ones.[14]
xxx xxx xxx.
Protest against the subject layoffs need not be in the form of violent
action or any other drastic measure. In the instant case the Union
registered their dissent by swiftly filing a motion for a cease and desist
order. Contrary to petitioners allegations, the Union strongly
condemned the layoffs and threatened mass action if the Secretary of
Labor fails to timely intervene:
xxx xxx xxx.
3. This unilateral action of management is a blatant violation of the
injunction of this Office against committing acts which would
exacerbate the dispute. Unless such act is enjoined the Union will be
compelled to resort to its legal right to mass actions and concerted
activities to protest and stop the said management action. This mass
layoff is clearly one which would result in a very serious labor dispute
unless this Office swiftly intervenes.[15]
xxx xxx xxx.
Metrolab and the Union were still in the process of resolving their CBA
deadlock when petitioner implemented the subject layoffs. As a result,
motions and oppositions were filed diverting the parties attention,
delaying resolution of the bargaining deadlock and postponing the
signing of their new CBA, thereby aggravating the whole conflict.
We, likewise, find untenable Metrolabs contention that the layoff of
the 94 rank-and-file employees was temporary, despite the recall of
some of the laid off workers.
If Metrolab intended the layoff of the 94 workers to be temporary, it
should have plainly stated so in the notices it sent to the affected
employees and the Department of Labor and Employment. Consider
the tenor of the pertinent portions of the layoff notice to the affected
employees:
xxx xxx xxx.
Dahil sa mga bagay na ito, napilitan ang ating kumpanya na
magsagawa ng "lay-off" ng mga empleyado sa Rank & File dahil
nabawasan ang trabaho at puwesto para sa kanila. Marami sa atin ang
kasama sa "lay-off" dahil wala nang trabaho para sa kanila. Mahirap
tanggapin ang mga bagay na ito subalit kailangan nating gawin dahil
hindi kaya ng kumpanya ang magbayad ng suweldo kung ang
84
empleyado ay walang trabaho. Kung tayo ay patuloy na magbabayad
ng suweldo, mas hihina ang ating kumpanya at mas marami ang
maaring maapektuhan.
Sa pagpapatupad ng "lay-off" susundin natin ang LAST IN-FIRST OUT
policy. Ang mga empleyadong may pinakamaikling serbisyo sa
kumpanya ang unang maaapektuhan. Ito ay batay na rin sa nakasaad
sa ating CBA na ang mga huling pumasok sa kumpanya ang unang
masasama sa "lay-off" kapag nagkaroon ng ganitong mga kalagayan.
Ang mga empleyado na kasama sa "lay-off" ay nakalista sa sulat na
ito. Ang umpisa ng lay-off ay sa Lunes, Enero 27. Hindi na muna sila
papasok sa kumpanya. Makukuha nila ang suweldo nila sa Enero 30,
1992.
Hindi po natin matitiyak kung gaano katagal ang "lay-off" ngunit ang
aming tingin ay matatagalan bago magkaroon ng dagdag na trabaho.
Dahil dito, sinimulan na namin ang isang "Redundancy Program" sa
mga supervisors. Nabawasan ang mga puwesto para sa kanila, kaya
sila ay mawawalan ng trabaho at bibigyan na ng redundancy pay.[16]
(Italics ours.)
xxx xxx xxx.
We agree with the ruling of the Secretary of Labor, thus:
xxx xxx xxx.
. . .MII insists that the layoff in question is temporary not permanent. It
then cites International Hardware, Inc. vs. NLRC, 176 SCRA 256, in
which the Supreme Court held that the 30-day notice required under
Article 283 of the Labor Code need not be complied with if the
employer has no intention to permanently severe (sic) the
employment relationship.
We are not convinced by this argument. International Hardware
involves a case where there had been a reduction of workload.
Precisely to avoid laying off the employees, the employer therein
opted to give them work on a rotating basis. Though on a limited
scale, work was available. This was the Supreme Courts basis for
holding that there was no intention to permanently severe (sic) the
employment relationship.
Here, there is no circumstance at all from which we can infer an
intention from MII not to sever the employment relationship
permanently. If there was such an intention, MII could have made it
very clear in the notices of layoff. But as it were, the notices are
couched in a language so uncertain that the only conclusion possible
is the permanent termination, not the continuation, of the
employment relationship.
MII also seeks to excuse itself from compliance with the 30-day notice
with a tautology. While insisting that there is really no best time to
announce a bad news, (sic) it also claims that it broke the bad news
only on 27 January 1992 because had it complied with the 30-day
notice, it could have broken the bad news on 02 January 1992, the first
working day of the year. If there is really no best time to announce a
bad news (sic), it wouldnt have mattered if the same was announced
at the first working day of the year. That way, MII could have at least
complied with the requirement of the law.[17]
The second issue raised by petitioner merits our consideration.
In the assailed Omnibus Resolution, Labor Secretary Confesor clarified
the CBA provisions on closed-shop and the scope of the bargaining
unit in this wise:
xxx xxx xxx.
Appropriateness of the bargaining unit.
xxx xxx xxx.
Exclusions. In our 14 April 1992 resolution, we ruled on the issue of
exclusion as follows:
These aside, we reconsider our denial of the modifications which the
Union proposes to introduce on the close shop provision. While we
note that the provision as presently worded has served the
relationship of the parties well under previous CBAs, the shift in
85
constitutional policy toward expanding the right of all workers to self-
organization should now be formally recognized by the parties, subject
to the following exclusions only:
1. Managerial employees; and
2. The executive secretaries of the President, Executive Vice-President,
Vice-President, Vice President for Sales, Personnel Manager, and
Director for Corporate Planning who may have access to vital labor
relations information or who may otherwise act in a confidential
capacity to persons who determine or formulate management policies.
The provisions of Article I (b) and Attachment I of the 1988-1990 CBA
shall thus be modified consistently with the foregoing.
Article I (b) of the 1988-1990 CBA provides:
b) Close Shop. - All Qualified Employees must join the Association
immediately upon regularization as a condition for continued
employment. This provision shall not apply to: (i) managerial
employees who are excluded from the scope of the bargaining unit; (ii)
the auditors and executive secretaries of senior executive officers,
such as, the President, Executive Vice-President, Vice-President for
Finance, Head of Legal, Vice-President for Sales, who are excluded
from membership in the Association; and (iii) those employees who
are referred to in Attachment I hereof, subject, however, to the
application of the provision of Article II, par. (b) hereof. Consequently,
the above-specified employees are not required to join the Association
as a condition for their continued employment.
On the other hand, Attachment I provides:
Exclusion from the Scope of the Close Shop Provision
The following positions in the Bargaining Unit are not covered by the
Close Shop provision of the CBA (Article I, par. b):
1. Executive Secretaries of Vice-Presidents, or equivalent positions.
2. Executive Secretary of the Personnel Manager, or equivalent
positions.
3. Executive Secretary of the Director for Corporate Planning, or
equivalent positions.
4. Some personnel in the Personnel Department, EDP Staff at Head
Office, Payroll Staff at Head Office, Accounting Department at Head
Office, and Budget Staff, who because of the nature of their duties and
responsibilities need not join the Association as a condition for their
employment.
5. Newly-hired secretaries of Branch Managers and Regional
Managers.
Both MDD and MII read the exclusion of managerial employees and
executive secretaries in our 14 April 1992 resolution as exclusion from
the bargaining unit. They point out that managerial employees are
lumped under one classification with executive secretaries, so that
since the former are excluded from the bargaining unit, so must the
latter be likewise excluded.
This reading is obviously contrary to the intent of our 14 April 1992
resolution. By recognizing the expanded scope of the right to self-
organization, our intent was to delimit the types of employees
excluded from the close shop provision, not from the bargaining unit,
to executive secretaries only. Otherwise, the conversion of the
exclusionary provision to one that refers to the bargaining unit from
one that merely refers to the close shop provision would effectively
curtail all the organizational rights of executive secretaries.
The exclusion of managerial employees, in accordance with law, must
therefore still carry the qualifying phrase "from the bargaining unit" in
Article I (b)(i) of the 1988-1990 CBA. In the same manner, the
exclusion of executive secretaries should be read together with the
qualifying phrase "are excluded from membership in the Association"
of the same Article and with the heading of Attachment I. The latter
refers to "Exclusions from Scope of Close Shop Provision" and provides
that "[t]he following positions in Bargaining Unit are not covered by
the close shop provision of the CBA."
86
The issue of exclusion has different dimension in the case of MII. In an
earlier motion for clarification, MII points out that it has done away
with the positions of Executive Vice-President, Vice-President for Sales,
and Director for Corporate Planning. Thus, the foregoing group of
exclusions is no longer appropriate in its present organizational
structure. Nevertheless, there remain MII officer positions for which
there may be executive secretaries. These include the General
Manager and members of the Management Committee, specifically i)
the Quality Assurance Manager; ii) the Product Development Manager;
iii) the Finance Director; iv) the Management System Manager; v) the
Human Resources Manager; vi) the Marketing Director; vii) the
Engineering Manager; viii) the Materials Manager; and ix) the
Production Manager.
xxx xxx xxx
The basis for the questioned exclusions, it should be noted, is no other
than the previous CBA between MII and the Union. If MII had
undergone an organizational restructuring since then, this is a fact to
which we have never been made privy. In any event, had this been
otherwise the result would have been the same. To repeat, we limited
the exclusions to recognize the expanded scope of the right to self-
organization as embodied in the Constitution.[18]
Metrolab, however, maintains that executive secretaries of the
General Manager and the executive secretaries of the Quality
Assurance Manager, Product Development Manager, Finance Director,
Management System Manager, Human Resources Manager, Marketing
Director, Engineering Manager, Materials Manager and Production
Manager, who are all members of the companys Management
Committee should not only be exempted from the closed-shop
provision but should be excluded from membership in the bargaining
unit of the rank and file employees as well on grounds that their
executive secretaries are confidential employees, having access to
"vital labor information."[19]
We concur with Metrolab.
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.
The rationale behind the exclusion of confidential employees from the
bargaining unit of the rank and file employees and their
disqualification to join any labor organization was succinctly discussed
in Philips Industrial Development v. NLRC:[21]
xxx xxx xxx.
On the main issue raised before Us, it is quite obvious that respondent
NLRC committed grave abuse of discretion in reversing the decision of
the Executive Labor Arbiter and in decreeing that PIDIs "Service
Engineers, Sales Force, division secretaries, all Staff of General
Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems are included within
the rank and file bargaining unit."
In the first place, all these employees, with the exception of the
service engineers and the sales force personnel, are confidential
employees. Their classification as such is not seriously disputed by
PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW
explicitly considered them as confidential employees. By the very
nature of their functions, they assist and act in a confidential capacity
to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. As such, the
rationale behind the ineligibility of managerial employees to form,
assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court
elaborated on this rationale, thus:
x x x The rationale for this inhibition has been stated to be, because if
these managerial employees would belong to or be affiliated with a
Union, the latter might not be assured of their loyalty to the Union in
87
view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in
Union membership."
In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this
rationale applicable to confidential employees:
This rationale holds true also for confidential employees such as
accounting personnel, radio and telegraph operators, who having
access to confidential information, may become the source of undue
advantage. Said employee(s) may act as a spy or spies of either party
to a collective bargaining agreement. This is specially true in the
present case where the petitioning Union is already the bargaining
agent of the rank-and-file employees in the establishment. To allow
the confidential employees to join the existing Union of the rank-and-
file would be in violation of the terms of the Collective Bargaining
Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded."
xxx xxx xxx.
Similarly, in National Association of Trade Union - Republic Planters
Bank Supervisors Chapter v. Torres[22] we declared:
xxx xxx xxx.
. . . As regards the other claim of respondent Bank that Branch
Managers/OICs, Cashiers and Controllers are confidential employees,
having control, custody and/ or access to confidential matters, e.g.,
the branchs cash position, statements of financial condition, vault
combination, cash codes for telegraphic transfers, demand drafts and
other negotiable instruments, pursuant to Sec. 1166.4 of the Central
Bank Manual regarding joint custody, this claim is not even disputed
by petitioner. A confidential employee is one entrusted with
confidence on delicate matters, or with the custody, handling, or care
and protection of the employers property. While Art. 245 of the Labor
Code singles out managerial employees as ineligible to join, assist or
form any labor organization, under the doctrine of necessary,
implication, confidential employees are similarly disqualified. . . .
xxx xxx xxx.
. . .(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. . .
. sympathy for his fellow rank and filer even if he were not a member of
xxx xxx xxx.
And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc.
vs. Roldan-Confesor,[23] we ruled that:
xxx xxx xxx.
Upon the other hand, legal secretaries are neither managers nor
supervisors. Their work is basically routinary and clerical. However,
they should be differentiated from rank-and-file employees because
they are tasked with, among others, the typing of legal documents,
memoranda and correspondence, the keeping of records and files, the
giving of and receiving notices, and such other duties as required by
the legal personnel of the corporation. Legal secretaries therefore fall
under the category of confidential employees. . . .
xxx xxx xxx.
88
We thus hold that public respondent acted with grave abuse of
discretion in not excluding the four foremen and legal secretary from
the bargaining unit composed of rank-and-file employees.
xxx xxx xxx.
In the case at bench, the Union does not disagree with petitioner that
the executive secretaries are confidential employees. It however,
makes the following contentions:
xxx xxx xxx.
There would be no danger of company domination of the Union since
the confidential employees would not be members of and would not
participate in the decision making processes of the Union.
Neither would there be a danger of espionage since the confidential
employees would not have any conflict of interest, not being members
of the Union. In any case, there is always the danger that any
employee would leak management secrets to the Union out of
the union nor the bargaining unit.
Confidential employees are rank and file employees and they, like all
the other rank and file employees, should be granted the benefits of
the Collective Bargaining Agreement. There is no valid basis for
discriminating against them. The mandate of the Constitution and the
Labor Code, primarily of protection to Labor, compels such conclusion.
[24]
xxx xxx xxx.
The Unions assurances fail to convince. The dangers sought to be
prevented, particularly the threat of conflict of interest and espionage,
are not eliminated by non-membership of Metrolabs executive
secretaries or confidential employees in the Union. Forming part of the
bargaining unit, the executive secretaries stand to benefit from any
agreement executed between the Union and Metrolab. Such a
scenario, thus, gives rise to a potential conflict between personal
interests and their duty as confidential employees to act for and in
behalf of Metrolab. They do not have to be union members to affect or
influence either side.
Finally, confidential employees cannot be classified as rank and file. As
previously discussed, the nature of employment of confidential
employees is quite distinct from the rank and file, thus, warranting a
separate category. Excluding confidential employees from the rank
and file bargaining unit, therefore, is not tantamount to discrimination.
WHEREFORE, premises considered, the petition is partially GRANTED.
The resolutions of public respondent Secretary of Labor dated 14 April
1992 and 25 January 1993 are hereby MODIFIED to the extent that
executive secretaries of petitioner Metrolabs General Manager and
the executive secretaries of the members of its Management
Committee are excluded from the bargaining unit of petitioners rank
and file employees.
SO ORDERED.
Padilla, Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.

89