Heritage Hotel Manila v.

NUWHRAIN HHMSC
G.R. No. 178296; January 12, 2011; Nachura, J.

FACTS
The respondent, NUWHRAIN HHMSC (Union), is a labor organization of the supervisory employees of Heritage
Hotel Manila. The Union filed with the DOLE a petition for certification election which was granted by the Med-
Arbiter. On appeal, the DOLE Sec. affirmed the Med-Arbiters order and remanded the case for the holding of the
preelection conference.
The preelection conference was not held as initially scheduled and was only resumed three years later.
Heritage Hotel (Company) discovered thereafter that the Union had failed to submit to the Bureau of Labor
Relations (BLR) its annual financial report for several years and the list of its members since it filed its registration
papers in 1995.
Consequently, the Company filed a Petition for Cancellation of Registration of the Union on the ground of non-
submission of the said documents. It further requested the suspension of the certification election proceedings.
Barely a month thereafter, the Company reiterated its request by filing a Motion to Dismiss or Suspend the
Certification Election Proceedings arguing that the dismissal or suspension is warranted considering that the
legitimacy of the Union is being challenged in the petition for cancellation of registration.

The certification election, nevertheless, pushed through and the Union emerged as the winner.

The Company filed a Protest with Motion to Defer Certification of Election Results and Winner stating that the
certification election was an exercise in futility because, once the Unions registration is cancelled, it would no
longer be entitled to be certified as the SEBA of the supervisory employees.

In its Answer, the Union averred that the petition was filed primarily to delay the conduct of the certification
elections and prayed for the dismissal of the petition because it has already complied with the reportorial
requirements.

The Med-Arbiter dismissed the Companys protest and certified the Union as the SEBA of all supervisory employees.
The appeal was later dismissed by the DOLE Sec.

Meanwhile, the Reg. Director denied the Petition for Cancellation of Registration. Though the Union indeed failed to
file the required documents for several years, the freedom of association and the employees right to self
organization are more substantive considerations. He considered the belated submission as sufficient compliance
and considered them as having been submitted on time.

o The Company appealed the decision to the BLR but the BLR Director inhibited himself from the case because he had
been a former counsel of the Union. Thus, the DOLE Sec. took cognizance of the appeal which was later dismissed.
o The company filed a petition for certiorari with the CA questioning the DOLE Sec.s taking cognizance of the appeal.

o The CA denied the petition holding that the DOLE Sec. may legally assume jurisdiction over an appeal from the decision
of the Reg. Director in the even the BLR Director inhibits himself from the case. There was also no GAD when the DOLE
Sec. affirmed the dismissal of the petition for cancellation of registration.

ISSUE:
Whether or not the CA erred in affirming the dismissal of the Cancellation Petition despite the mandatory and
unequivocal provisions of the Labor Core and its IRR.

HELD:
 NO. The freedom of association and right of the workers to self-organization are more substantive considerations. The
Decision of the CA is affirmed.

RATIO
Petitioner:
Once it is determined that a ground enumerated in Article 239 is present, cancellation of registration should follow
and it becomes the ministerial duty of the Reg. Director to cancel the registration of the labor organization.
Supreme Court:
Articles 238 and 239 give the Reg. Director ample discretion in dealing with a petition for cancellation of a unions
registration. It is sufficient to give the Reg. Director license to treat the late fling of required documents as sufficient
compliance with the law.
The union members and all the employees belonging to the appropriate bargaining unit should not be deprived of a
bargaining agent, merely because of the negligence of the union officers who were responsible for the submission
of the documents to the BLR

Registration confers upon a union the status of legitimacy and the concomitant rights and privileges granted by
law to a legitimate labor organization, particularly the right to participate in or ask for a certification election in a
bargaining unit.

Thus, the cancellation of a certification of registration is the equivalent of snuffing out the life of a labor
organization. For without such registration, it loses its right under the Labor Code.

It should be noted that the relevant provisions of the Labor Code has been amended by RA 9481. The last
paragraph under Article 242-A now provides that failure to comply with the reportorial requirements shall not be a
ground for cancellation of union registration but shall subject the erring officers/members to suspension, expulsion
from membership, or any appropriate penalty.

ILO Convention No. 87 provides that workers and employers organizations shall not be liable to be dissolved or
suspended by administrative authority. The cancellation of union registration by the registrar of labor unions (the
BLR) is tantamount to dissolution of the organization by administrative authority when it would give rise to the loss
of legal personality of the union or loss of advantages necessary to carry out its activities. It is therefore preferable if
such actions were to be taken only as a last resort.

(Minor Issue) DOLE Secretarys assumption of jurisdiction:

Jurisdiction to review the decision of the Reg. Director lies with the BLR. But in this case, the BLR inhibited himself
from the case.
When the Company filed its appeal to the BLR, the latter acquired jurisdiction over the case and it remained with
the BLR despite the BLR Directors inhibition. The DOLE Sec. merely stepped into the shoes of the BLR Director and
performed the function that the latter could not himself perform. This is pursuant to her power of supervision and
control over the BLR.

The principle of supervision and control, which is incorporated in the Admin. Code (1987), is defined as including
the authority to act directly whenever a specific function is entrusted by law or regulation to a subordinate.

The Company was not denied the right to due process. It was precisely to ensure fair trial that moved the BLR
Director to inhibit himself from the case and the DOLE Sec. to take over his function.