G.R. No. 170287 February 14, 2008 ALABANG COUNTRY CLUB, INC., petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION, ALABANG COUNTRY CLUB INDEPENDENT EMPLOYEES UNION, CHRISTOPHER PIZARRO, MICHAEL BRAZA, and NOLASCO CASTUERAS, respondents. Petitioner Alabang Country Club, Inc. (Club) is a domestic non-profit corporation with principal office at Country Club Drive, Ayala Alabang, Muntinlupa City. Respondent Alabang Country Club Independent Employees Union (Union) is the exclusive bargaining agent of the Club's rank-and-file employees. In April 1996, respondents Christopher Pizarro, Michael Braza, and Nolasco Castueras were elected Union President, Vice-President, and Treasurer, respectively. On June 21, 1999, the Club and the Union entered into a Collective Bargaining Agreement (CBA), which provided for a Union shop and maintenance of membership shop. The pertinent parts of the CBA included in Article II on Union Security read, as follows: ARTICLE II UNION SECURITY SECTION 1. CONDITION OF EMPLOYMENT. All regular rank-and-file employees, who are members or subsequently become members of the UNION shall maintain their membership in good standing as a condition for their continued employment by the CLUB during the lifetime of this Agreement or any extension thereof. SECTION 2. [COMPULSORY] UNION MEMBERSHIP FOR NEW REGULAR RANK-AND-FILE EMPLOYEES a) New regular rank-and-file employees of the Club shall join the UNION within five (5) days from the date of their appointment as regular employees as a condition for their continued employment during the lifetime of this Agreement, otherwise, their failure to do so shall be a ground for dismissal from the CLUB upon demand by the UNION. b) The Club agrees to furnish the UNION the names of all new probationary and regular employees covered by this Agreement not later than three (3) days from the date of regular appointment showing the positions and dates of hiring. xxxx SECTION 4. TERMINATION UPON UNION DEMAND. Upon written demand of the UNION and after observing due process, the Club shall dismiss a regular rank-and-file employee on any of the following grounds: (a) Failure to join the UNION within five (5) days from the time of regularization; (b) Resignation from the UNION, except within the period allowed by law; (c) Conviction of a crime involving moral turpitude; (d) Non-payment of UNION dues, fees, and assessments; (e) Joining another UNION except within the period allowed by law; (f) Malversation of union funds; (g) Actively campaigning to discourage membership in the UNION; and (h) Inflicting harm or injury to any member or officer of the UNION. It is understood that the UNION shall hold the CLUB free and harmless [sic] from any liability or damage whatsoever which may be imposed upon it by any competent judicial or quasi-judicial authority as a result of such dismissal and the UNION shall reimburse the CLUB for any and all liability or damage it may be adjudged.1 (Emphasis supplied.) Subsequently, in July 2001, an election was held and a new set of officers was elected. Soon thereafter, the new officers conducted an audit of the Union funds. They discovered some irregularly recorded entries, unaccounted expenses and disbursements, and uncollected loans from the Union funds. The Union notified respondents Pizarro, Braza, and Castueras of the audit results and asked them to explain the discrepancies in writing.2 Thereafter, on October 6, 2001, in a meeting called by the Union, respondents Pizarro, Braza, and Castueras explained their side. Braza denied any wrongdoing and instead asked that the investigation be addressed to Castueras, who was the Union Treasurer at that time. With regard to his unpaid loans, Braza claimed he had been paying through monthly salary deductions and said the Union could continue to deduct from his salary until full payment of his loans, provided he would be reimbursed should the result of the initial audit be proven wrong by a licensed auditor. With regard to the Union expenses which were without receipts, Braza explained that these were legitimate expenses for which receipts were not issued, e.g. transportation fares, food purchases from small eateries, and food and transportation allowances given to Union members with pending complaints with the Department of Labor and Employment, the National Labor Relations Commission (NLRC), and the fiscal's office. He explained that though there were no receipts for these expenses, these were supported by vouchers and itemized as expenses. Regarding his unpaid and unliquidated cash advances amounting to almost PhP 20,000, Braza explained that these were not actual cash advances but payments to a certain Ricardo Ricafrente who had loaned PhP 200,000 to the Union.3

Pizarro, for his part, blamed Castueras for his unpaid and uncollected loan and cash advances. He claimed his salaries were regularly deducted to pay his loan and he did not know why these remained unpaid in the records. Nonetheless, he likewise agreed to continuous salary deductions until all his accountabilities were paid.4 Castueras also denied any wrongdoing and claimed that the irregular entries in the records were unintentional and were due to inadvertence because of his voluminous work load. He offered that his unpaid personal loan of PhP 27,500 also be deducted from his salary until the loans were fully paid. Without admitting any fault on his part, Castueras suggested that his salary be deducted until the unaccounted difference between the loans and the amount collected amounting to a total of PhP 22,000 is paid.5 Despite their explanations, respondents Pizarro, Braza, and Castueras were expelled from the Union, and, on October 16, 2001, were furnished individual letters of expulsion for malversation of Union funds.6 Attached to the letters were copies of the Panawagan ng mga Opisyales ng Unyon signed by 37 out of 63 Union members and officers, and a Board of Directors' Resolution7 expelling them from the Union. In a letter dated October 18, 2001, the Union, invoking the Security Clause of the CBA, demanded that the Club dismiss respondents Pizarro, Braza, and Castueras in view of their expulsion from the Union.8 The Club required the three respondents to show cause in writing within 48 hours from notice why they should not be dismissed. Pizarro and Castueras submitted their respective written explanations on October 20, 2001, while Braza submitted his explanation the following day. During the last week of October 2001, the Club's general manager called respondents Pizarro, Braza, and Castueras for an informal conference inquiring about the charges against them. Said respondents gave their explanation and asserted that the Union funds allegedly malversed by them were even over the total amount collected during their tenure as Union officers-PhP 120,000 for Braza, PhP 57,000 for Castueras, and PhP 10,840 for Pizarro, as against the total collection from April 1996 to December 2001 of only PhP 102,000. They claimed the charges are baseless. The general manager announced he would conduct a formal investigation. Nonetheless, after weighing the verbal and written explanations of the three respondents, the Club concluded that said respondents failed to refute the validity of their expulsion from the Union. Thus, it was constrained to terminate the employment of said respondents. On December 26, 2001, said respondents received their notices of termination from the Club.9 Respondents Pizarro, Braza, and Castueras challenged their dismissal from the Club in an illegal dismissal complaint docketed as NLRC-NCR Case No. 30-01-00130-02 filed with the NLRC, National Capital Region Arbitration Branch. In his January 27, 2003 Decision,10 the Labor Arbiter ruled in favor of the Club, and found that there was justifiable cause in terminating said respondents. He dismissed the complaint for lack of merit. On February 21, 2003, respondents Pizarro, Braza, and Castueras filed an Appeal docketed as NLRC NCR CA No. 034601-03 with the NLRC. On February 26, 2004, the NLRC rendered a Decision11 granting the appeal, the fallo of which reads: WHEREFORE, finding merit in the Appeal, judgment is hereby rendered declaring the dismissal of the complainants illegal. x x x Alabang Country Club, Inc. and Alabang Country Club Independent Union are hereby ordered to reinstate complainants Christopher Pizarro, Nolasco Castueras and Michael Braza to their former positions without loss of seniority rights and other privileges with full backwages from the time they were dismissed up to their actual reinstatement. SO ORDERED. The NLRC ruled that there was no justifiable cause for the termination of respondents Pizarro, Braza, and Castueras. The commissioners relied heavily on Section 2, Rule XVIII of the Rules Implementing Book V of the Labor Code. Sec. 2 provides: SEC. 2. Actions arising from Article 241 of the Code. - Any action arising from the administration or accounting of union funds shall be filed and disposed of as an intra-union dispute in accordance with Rule XIV of this Book. In case of violation, the Regional or Bureau Director shall order the responsible officer to render an accounting of funds before the general membership and may, where circumstances warrant, mete the appropriate penalty to the erring officer/s, including suspension or expulsion from the union.12 According to the NLRC, said respondents' expulsion from the Union was illegal since the DOLE had not yet made any definitive ruling on their liability regarding the administration of the Union's funds. The Club then filed a motion for reconsideration which the NLRC denied in its June 20, 2004 Resolution.13 Aggrieved by the Decision and Resolution of the NLRC, the Club filed a Petition for Certiorari which was docketed as CA-G.R. SP No. 86171 with the Court of Appeals (CA). The CA Upheld the NLRC Ruling that the Three Respondents were Deprived Due Process On July 5, 2005, the appellate court rendered a Decision,14 denying the petition and upholding the Decision of the NLRC. The CA's Decision focused mainly on the Club's perceived failure to afford due process to the three respondents. It found that said respondents were not given the opportunity to be heard in a separate

hearing as required by Sec. 2(b), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, as follows: SEC. 2. Standards of due process; requirements of notice.-In all cases of termination of employment, the following standards of due process shall be substantially observed: For termination of employment based on just causes as defined in Article 282 of the Code: xxxx (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him. The CA also said the dismissal of the three respondents was contrary to the doctrine laid down in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos (Malayang Samahan), where this Court ruled that even on the assumption that the union had valid grounds to expel the local union officers, due process requires that the union officers be accorded a separate hearing by the employer company.15 In a Resolution16 dated October 20, 2005, the CA denied the Club's motion for reconsideration. The Club now comes before this Court with these issues for our resolution, summarized as follows: 1. Whether there was just cause to dismiss private respondents, and whether they were afforded due process in accordance with the standards provided for by the Labor Code and its Implementing Rules. 2. Whether or not the CA erred in not finding that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it ruled that respondents Pizarro, Braza, and Castueras were illegally expelled from the Union. 3. Whether the case of Agabon vs. NLRC17 should be applied to this case. 4. Whether that in the absence of bad faith and malice on the part of the Club, the Union is solely liable for the termination from employment of said respondents. The main issue is whether the three respondents were illegally dismissed and whether they were afforded due process. The Club avers that the dismissal of the three respondents was in accordance with the Union security provisions in their CBA. The Club also claims that the three respondents were afforded due process, since the Club conducted an investigation separate and independent from that conducted by the Union. Respondents Pizarro, Braza, and Castueras, on the other hand, contend that the Club failed to conduct a separate hearing as prescribed by Sec. 2(b), Rule XXIII, Book V of the implementing rules of the Code. First, we resolve the legality of the three respondents' dismissal from the Club. Valid Grounds for Termination Under the Labor Code, an employee may be validly terminated on the following grounds: (1) just causes under Art. 282; (2) authorized causes under Art. 283; (3) termination due to disease under Art. 284; and (4) termination by the employee or resignation under Art. 285. Another cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. Here, Art. II of the CBA on Union security contains the provisions on the Union shop and maintenance of membership shop. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated.18 Termination of employment by virtue of a union security clause embodied in a CBA is recognized and accepted in our jurisdiction.19 This practice strengthens the union and prevents disunity in the bargaining unit within the duration of the CBA. By preventing member disaffiliation with the threat of expulsion from the union and the consequent termination of employment, the authorized bargaining representative gains more numbers and strengthens its position as against other unions which may want to claim majority representation. In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the union's decision to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the CBA's union security provision. The language of Art. II of the CBA that the Union members must maintain their membership in good standing as a condition sine qua non for their continued employment with the Club is unequivocal. It is also clear that upon demand by the Union and after due process, the Club shall terminate the employment of a regular rank-and-file employee who may be found liable for a number of offenses, one of which is malversation of Union funds.20 Below is the letter sent to respondents Pizarro, Braza, and Castueras, informing them of their termination:

On October 18, 2001, the Club received a letter from the Board of Directors of the Alabang Country Club Independent Employees' Union ("Union") demanding your dismissal from service by reason of your alleged commission of act of dishonesty, specifically malversation of union funds. In support thereof, the Club was furnished copies of the following documents: 1. A letter under the subject "Result of Audit" dated September 14, 2001 (receipt of which was duly acknowledged from your end), which required you to explain in writing the charges against you (copy attached); 2. The Union's Board of Directors' Resolution dated October 2, 2001, which explained that the Union afforded you an opportunity to explain your side to the charges; 3. Minutes of the meeting of the Union's Board of Directors wherein an administrative investigation of the case was conducted last October 6, 2001; and 4. The Union's Board of Directors' Resolution dated October 15, 2001 which resolved your expulsion from the Union for acts of dishonesty and malversation of union funds, which was duly approved by the general membership. After a careful evaluation of the evidence on hand vis--vis a thorough assessment of your defenses presented in your letter-explanation dated October 6, 2001 of which you also expressed that you waived your right to be present during the administrative investigation conducted by the Union's Board of Directors on October 6, 2001, Management has reached the conclusion that there are overwhelming reasons to consider that you have violated Section 4(f) of the CBA, particularly on the grounds of malversation of union funds. The Club has determined that you were sufficiently afforded due process under the circumstances. Inasmuch as the Club is duty-bound to comply with its obligation under Section 4(f) of the CBA, it is unfortunate that Management is left with no other recourse but to consider your termination from service effective upon your receipt thereof. We wish to thank you for your services during your employment with the Company. It would be more prudent that we just move on independently if only to maintain industrial peace in the workplace. Be guided accordingly.21 Gleaned from the above, the three respondents were expelled from and by the Union after due investigation for acts of dishonesty and malversation of Union funds. In accordance with the CBA, the Union properly requested the Club, through the October 18, 2001 letter22 signed by Mario Orense, the Union President, and addressed to Cynthia Figueroa, the Club's HRD Manager, to enforce the Union security provision in their CBA and terminate said respondents. Then, in compliance with the Union's request, the Club reviewed the documents submitted by the Union, requested said respondents to submit written explanations, and thereafter afforded them reasonable opportunity to present their side. After it had determined that there was sufficient evidence that said respondents malversed Union funds, the Club dismissed them from their employment conformably with Sec. 4(f) of the CBA. Considering the foregoing circumstances, we are constrained to rule that there is sufficient cause for the three respondents' termination from employment. Were respondents Pizarro, Braza, and Castueras accorded due process before their employments were terminated? We rule that the Club substantially complied with the due process requirements before it dismissed the three respondents. The three respondents aver that the Club violated their rights to due process as enunciated in Malayang Samahan,23 when it failed to conduct an independent and separate hearing before they were dismissed from service. The CA, in dismissing the Club's petition and affirming the Decision of the NLRC, also relied on the same case. We explained in Malayang Samahan: x x x Although this Court has ruled that union security clauses embodied in the collective bargaining agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not erode the fundamental requirements of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot override one's right to due process.24 In the above case, we pronounced that while the company, under a maintenance of membership provision of the CBA, is bound to dismiss any employee expelled by the union for disloyalty upon its written request, this undertaking should not be done hastily and summarily. The company acts in bad faith in dismissing a worker without giving him the benefit of a hearing.25 We cautioned in the same case that the power to dismiss is a normal prerogative of the employer; however, this power has a limitation. The employer is bound to exercise caution in terminating the services of the employees especially so when it is made upon the request of a labor union pursuant to the CBA. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing employees because the dismissal affects not only their positions but also their means

of livelihood. Employers should respect and protect the rights of their employees, which include the right to labor.26 The CA and the three respondents err in relying on Malayang Samahan, as its ruling has no application to this case. In Malayang Samahan, the union members were expelled from the union and were immediately dismissed from the company without any semblance of due process. Both the union and the company did not conduct administrative hearings to give the employees a chance to explain themselves. In the present case, the Club has substantially complied with due process. The three respondents were notified that their dismissal was being requested by the Union, and their explanations were heard. Then, the Club, through its President, conferred with said respondents during the last week of October 2001. The three respondents were dismissed only after the Club reviewed and considered the documents submitted by the Union vis--vis the written explanations submitted by said respondents. Under these circumstances, we find that the Club had afforded the three respondents a reasonable opportunity to be heard and defend themselves. On the applicability of Agabon, the Club points out that the CA ruled that the three respondents were illegally dismissed primarily because they were not afforded due process. We are not unaware of the doctrine enunciated in Agabon that when there is just cause for the dismissal of an employee, the lack of statutory due process should not nullify the dismissal, or render it illegal or ineffectual, and the employer should indemnify the employee for the violation of his statutory rights.27 However, we find that we could not apply Agabon to this case as we have found that the three respondents were validly dismissed and were actually afforded due process. Finally, the issue that since there was no bad faith on the part of the Club, the Union is solely liable for the termination from employment of the three respondents, has been mooted by our finding that their dismissal is valid. WHEREFORE, premises considered, the Decision dated July 5, 2005 of the CA and the Decision dated February 26, 2004 of the NLRC are hereby REVERSED and SET ASIDE. The Decision dated January 27, 2003 of the Labor Arbiter in NLRC-NCR Case No. 30-01-00130-02 is hereby REINSTATED. No costs. SO ORDERED. G.R. Nos. 169829-30 April 16, 2008 STEEL CORPORATION OF THE PHILIPPINES, petitioner, vs. SCP EMPLOYEES UNION-NATIONAL FEDERATION OF LABOR UNIONS, respondent. Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court. The petition is seeking to set aside the Decision1 rendered by the Court of Appeals (CA) dated February 28, 2005 in the consolidated cases CA-G.R. SP Nos. 79446 and 82314, wherein the CA denied the petition in CA-G.R. SP No. 79446 while partially granting the petition in CA-G.R. SP No. 82314, as well as the Resolution2 dated September 22, 2005 denying petitioner's motion for reconsideration. The antecedents are as follows: Petitioner Steel Corporation of the Philippines (SCP) is engaged in manufacturing construction materials, supplying approximately 50% of the domestic needs for roofing materials.3 On August 17, 1998, SCPFederated Union of the Energy Leaders General and Allied Services (FUEL-GAS) filed a petition for Certification Election in its bid to represent the rank-and-file employees of the petitioner.4 Respondent SCP Employees Union (SCPEU) National Federation of Labor Unions (NAFLU) intervened, seeking to participate and be voted for in such election5 but the same was denied for having been filed out of time.6 On September 14, 1998, a consent election was conducted, with "FUEL-GAS" and "NO UNION" as choices. Said election was however declared a failure because less than a majority of the rank-and-file employees cast their votes. FUEL-GAS filed an Election Protest claiming that the certification election was characterized by and replete with irregularities.7 On September 21, 1998, NAFLU, the mother federation of respondent, filed a petition for Certification Election for and on behalf of its affiliate, seeking to represent the rank-and-file employees of petitioner.8 The Med-Arbiter denied the election protest of FUEL-GAS and granted the petition for certification election filed by NAFLU and further ordered the conduct of the election with "NAFLU" and "NO UNION" as choices. Both petitioner and FUEL-GAS appealed to the Secretary of Labor, which appeals were later consolidated.9 On August 27, 1999, the Department of Labor and Employment (DOLE) Undersecretary rendered a consolidated decision ordering the conduct of a certification election with "FUEL-GAS," respondent and "NO UNION" as choices.10 Subsequent motions for reconsideration were denied on October 18, 1999.11 Unsatisfied, petitioner and FUEL-GAS appealed to the CA by way of certiorari.12 On April 14, 2000, the certification election, as ordered by the Med-Arbiter, proceeded. FUEL-GAS participated without prejudice to the decision of the CA in its pending petition. In said election, respondent emerged as winner; hence, the second election protest filed by FUEL-GAS.13 On July 12, 2000, the CA, in CA-G.R. SP No. 55721, rendered a Decision14 which annulled and set aside the August 27, 1999 decision and October 18, 1999 resolution of the Undersecretary. The CA further directed the

holding of a certification election with "FUEL-GAS" and "NO UNION" as choices, to the exclusion of respondent.15 On July 31, 2000, the Med-Arbiter dismissed FUEL-GAS' election protest but deferred the request of respondent to be declared winner in the certification election until final resolution of the pending petitions with the CA.16 Not satisfied with the deferment of their certification as winner, respondent appealed to the Labor Secretary.17 It further filed a Manifestation before the CA pointing out that in the April 14, 2000 certification election, it emerged as winner, and thus, the election should be considered as an intervening event sufficient to bar another certification election.18 The CA, however, dismissed said manifestation on December 28, 2000.19 Meanwhile, on October 16, 2000, the Undersecretary rendered a Decision20 certifying respondent as the exclusive bargaining agent of petitioner's employees. Petitioner and FUEL-GAS timely filed motions for reconsideration of the aforesaid decision.21 As a consequence of its certification as the exclusive bargaining agent, respondent sent to petitioner CBA proposals. Petitioner, however, held in abeyance any action on the proposals in view of its pending motion for reconsideration.22 Finding no justification in petitioner's refusal to bargain with it, respondent filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) on December 11, 2000. The union raised the issue of unfair labor practice (ULP) allegedly committed by petitioner for the latter's refusal to bargain with it.23 On January 19, 2001, FUEL-GAS moved for the conduct of a certification election pursuant to the CA decision.24 On February 27, 2001, the Undersecretary affirmed its October 16, 2000 decision.25 On March 16, 2001, the labor dispute was certified to the National Labor Relations Commission (NLRC) for compulsory arbitration, which case was docketed as Cert. Case No. 000200-01.26 Again, on April 2, 2001, another Notice of Strike27 was filed by respondent for non-recognition as a certified union; refusal to bargain; discrimination against union officers and members; harassment and intimidation; and illegal dismissal, which was later consolidated with the certified case. On December 13, 2001, acting on the January 19, 2001 petition for certification election, the Med-Arbiter recommended the holding of another certification election but with respondent and FUEL-GAS as contenders.28 The decision was appealed to the Labor Secretary. The Labor Secretary in turn dismissed the motion to conduct certification election in a Resolution dated October 17, 2002.29 Meanwhile, in Cert. Case No. 000200-01, the NLRC issued a Resolution dated April 17, 2002, declaring petitioner as having no obligation to recognize respondent as the certified bargaining agent; dismissing the charge of unfair labor practice; declaring as illegal the strike held by the union; and declaring the loss of employment of the officers of the union.30 Petitioner filed a Motion for Partial Reconsideration31 of the resolution praying that additional employees be dismissed. For its part, respondent also filed a Motion for Reconsideration.32 On May 20, 2002, respondent filed another Notice of Strike alleging as grounds, petitioner's refusal to bargain and union busting.33 The notice was later dismissed and respondent was enjoined from holding a strike.34 On January 7, 2003, respondent filed another Notice of Strike on the grounds of refusal to bargain and union busting.35 Respondent thereafter went on strike on February 4, 2003. On February 7, 2003, the Labor Secretary certified the dispute to the NLRC and directed the employees to return to work.36 The second certified case was docketed as NLRC NCR CC No. 00253-03. On September 8, 2003, the NLRC rendered a Decision37 ordering petitioner to bargain collectively with respondent as the duly certified bargaining agent. In addition, it ordered the reinstatement of the employees who were dismissed in connection with the February 4, 2003 strike, without loss of seniority rights and diminution of salary.38 Petitioner filed a motion for reconsideration but it was denied in the Resolution39 dated January 26, 2004. The decision and resolution became the subject of a petition before the CA in CA-G.R. SP No. 82314. Meantime, in the first certified case, Cert. Case No. 000200-01, the NLRC, in a Decision40 dated February 12, 2003 opted to resolve the parties' respective motions for reconsideration collectively. In said decision, the NLRC modified its earlier resolution by ordering the reinstatement of the union officers whom it previously ordered terminated, which in effect denied petitioner's motion for partial reconsideration.41 Petitioner filed a motion for reconsideration but it was denied in a Resolution dated June 30, 2003.42 These decision and resolution became the subject of a petition before the CA in CA-G.R. SP No. 79446. The petitions before the CA were later consolidated. In CA-G.R. SP No. 79446, herein petitioner argued that: PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION IN ORDERING THE REINSTATEMENT OF THE OFFICERS OF PRIVATE RESPONDENT UNION DESPITE ITS CONCLUSION THAT [PRIVATE] RESPONDENT HAD CONDUCTED AN ILLEGAL STRIKE.43 In the other case, CA-G.R. SP No. 82314, petitioner herein argued that: I

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION IN DIRECTING PETITIONER TO RECOGNIZE PRIVATE RESPONDENT UNION DESPITE THE DECISION OF THIS COURT DIRECTING THE HOLDING OF ANOTHER CERTIFICATION ELECTION. II PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT REVERSED ITS OWN DECISION IN THE SAME CASE WHICH HAS BECOME FINAL AND EXECUTORY. III PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION WHEN IT CONCLUDED THAT THE STRIKE CONDUCTED BY SCPEU-NAFLU IS NOT ILLEGAL. IV PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION IN ORDERING THE REINSTATEMENT OF THE EMPLOYEES WHO DEFIED THE RETURN TO WORK ORDER OF THE SECRETARY OF LABOR.44 On February 28, 2005, the CA rendered a Decision45 denying the petition in CA-G.R. SP No. 79446 while partially granting the petition in CA-G.R. SP No. 82314. The decretal portion of which stated: WHEREFORE, premises considered, the Petition in CA-G.R. SP No. 79446 is DENIED while the Petition in CA-G.R. SP No. 82314 is PARTIALLY GRANTED, decreeing herein contending parties to comply with the directives of this Tribunal in CA-G.R. SP No. 55721. SO ORDERED. In denying the petition in CA-G.R. SP No. 79446, the CA found no cogent reason to reverse the assailed decision of the NLRC in Cert. Case No. 000200-01. The CA concluded that petitioner's claims are based on pure allegations and not supported by any substantial evidence.46 In partially granting the petition in CA-G.R. SP No. 82314, the CA reasoned that by virtue of its decision in CAG.R. SP No. 55721 dated July 12, 2000, the second certification election was, in effect, nullified and set aside. It is to be noted that FUEL-GAS participated in the second election without prejudice to the petition it filed in court. The CA added that since it did not recognize the second certification election held on April 14, 2000, wherein NAFLU was voted as the duly-elected bargaining agent of petitioner's rank-and-file employees, clearly it has no basis for its claim and it has no right to demand that petitioner collectively bargain with it.47 Petitioner filed a Motion for Reconsideration48 which was denied in the Resolution49 dated September 22, 2005. Hence, this petition raising the following issues: I [Whether or not] the Court of appeals has departed from the law and established jurisprudence when it affirmed the reinstatement of officers who participated in an illegal strike. II [Whether or not] the Court of appeals seriously erred when it failed to declare as illegal the strike held by the union on february 4, 2003. III [Whether or not] the Court of appeals seriously erred when it failed to invalidate the order of the national labor relations commission directing the reinstatement of the strikers who defied the return-to-work order of the labor secretary. IV [Whether or not] the Court of appeals committed a serious error when it ruled that the nlrc has reconsidered its conclusion on the illegality of the march 2001 strike. V [Whether or not] the Court of appeals committed a serious error when it concluded that the national labor relations commission may reconsider in the second certified case its decision on the first certified case which has become final and executory.50 Petitioner contends that the February 2003 strike held by respondent is illegal. To buttress its claim, petitioner argues that respondent has no right to demand that it bargain with the latter. Its refusal to recognize respondent as the bargaining representative of its employees is based on the directive of the CA in CA-G.R. SP No. 55721 to conduct another certification election. Petitioner maintains that respondent never denied that its purpose for holding the strike was to force it to recognize the latter over the other union. Since the strike is a union-recognition-strike, it is illegal.51 Petitioner further argues that the strike was manifestly illegal for it was in gross violation of the Labor Code, particularly Art. 264,52 which expressly prohibits the declaration of a strike over an issue that is pending arbitration between the parties.53 Since the labor dispute in the first certified case, Cert. Case No. 000200-01, was still pending compulsory arbitration at the time of the strike on February 4, 2003, and since the said strike was based substantially on the same grounds, i.e., the alleged refusal by petitioner to recognize the union, the strike is illegal by express provision of the law.

Moreover, petitioner adds that the issue of illegality of the February 2003 strike was already resolved by the NLRC in Cert. Case No. 000200-01 involving a strike in March 2001 over the same labor dispute, namely, the alleged refusal of petitioner to recognize respondent. As such, the NLRC's decision in Cert. Case No. 00020001 constitutes res judicata in the second certified case, NLRC NCR CC No. 00253-03.54 Petitioner also contends that the union officers who participated in the illegal strike are all deemed to have lost their employment. Unlike ordinary members of the union, whose dismissal requires that the employer prove that they committed illegal acts, mere participation of the union officers in an illegal strike warrants their termination from employment. Consequently, since the strike was illegal, it follows that the termination from employment of the union officers was warranted.55 Petitioner maintains that it was erroneous on the part of the CA not to have reversed the NLRC decision56 ordering the reinstatement of the employees which were dismissed in connection with the February 4, 2003 strike. It argues that since the termination of the employees was due to their refusal to comply with the return-to-work order issued by the Labor Secretary, not to their alleged participation in an illegal strike, the CA erred in affirming the decision.57 Finally, petitioner avers that the CA also committed serious errors on procedural issues when it concluded that the NLRC may reconsider in Cert. Case No. 000200-01 its decision in NLRC NCR CC No. 00253-03.58 The petition is meritorious. Whether or not respondent is the recognized collective bargaining agent had been finally resolved in the negative. Consequently, as correctly concluded by the CA, it could not compel petitioner to bargain with it. Thus, the only issues left for determination are: the validity of the strike participated in by the officers of the respondent union; and the validity of their termination from employment by reason of such participation. The strike is a legitimate weapon in the human struggle for a decent existence. It is considered as the most effective weapon in protecting the rights of the employees to improve the terms and conditions of their employment. But to be valid, a strike must be pursued within legal bounds. The right to strike as a means for the attainment of social justice is never meant to oppress or destroy the employer. The law provides limits for its exercise.59 In the instant case, the strike undertaken by the officers of respondent union is patently illegal for the following reasons: (1) it is a union-recognition-strike which is not sanctioned by labor laws; (2) it was undertaken after the dispute had been certified for compulsory arbitration; and (3) it was in violation of the Secretary's return-to-work order. Respondent's notices of strike were founded on petitioner's continued refusal to bargain with it. It thus staged the strike to compel petitioner to recognize it as the collective bargaining agent, making it a unionrecognition-strike. As its legal designation implies, this kind of strike is calculated to compel the employer to recognize one's union and not other contending groups, as the employees' bargaining representative to work out a collective bargaining agreement despite the striking union's doubtful majority status to merit voluntary recognition and lack of formal certification as the exclusive representative in the bargaining unit.60 The certification election that was conducted where respondent emerged as winner, not having been recognized as valid, it has no authority to represent the rank and file employees of petitioner. Thus, it could not ask petitioner to bargain with it. As the issue of its identity had been the subject of a separate case which had been settled by the court with finality,61 petitioner cannot, therefore, be faulted in refusing to bargain. Neither could this Court sustain respondent's imputation of unfair labor practice and union busting against petitioner. With more reason, this Court cannot sustain the validity of the strike staged on such basis. Even if this Court were to uphold the validity of respondent's purpose or objective in staging a strike, still, the strike would be declared illegal for having been conducted in utter defiance of the Secretary's return-to-work order and after the dispute had been certified for compulsory arbitration. Although ostensibly there were several notices of strike successively filed by respondent, these notices were founded on substantially the same grounds petitioner's continued refusal to recognize it as the collective bargaining representative. Article 263(g) of the Labor Code provides: 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 the compliance with this provision as well as with such orders as he may issue to enforce the same. x x x.62 The powers granted to the Secretary under Article 263(g) of the Labor Code have been characterized as an exercise of the police power of the State, aimed at promoting the public good. When the Secretary exercises

these powers, he is granted "great breadth of discretion" to find a solution to a labor dispute. The most obvious of these powers is the automatic enjoining of an impending strike or lockout or its lifting if one has already taken place.63 The moment the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest, such assumption shall have the effect of automatically enjoining the intended or impending strike. It was not even necessary for the Secretary of Labor to issue another order directing a return to work. The mere issuance of an assumption order by the Secretary of Labor automatically carries with it a return-towork order, even if the directive to return to work is not expressly stated in the assumption order.64 A return-to-work order imposes a duty that must be discharged more than it confers a right that may be waived. While the workers may choose not to obey, they do so at the risk of severing their relationship with their employer.65 Says the Labor Code: Art. 264. Prohibited activities. xxx No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. Returning to work in this situation is not a matter of option or voluntariness but of obligation. The worker must return to his job together with his co-workers so that the operations of the company can be resumed and it can continue serving the public and promoting its interest. This extraordinary authority given to the Secretary of Labor is aimed at arriving at a peaceful and speedy solution to labor disputes, without jeopardizing national interests. Regardless of their motives, or the validity of their claims, the striking workers must cease and/or desist from any and all acts that undermine or tend to undermine this authority of the Secretary of Labor, once an assumption and/or certification order is issued. They cannot, for instance, ignore return-to-work orders, citing unfair labor practices on the part of the company, to justify their action.66 Respondent, in the instant case, after the assumption of jurisdiction and certification of the dispute to the NLRC for compulsory arbitration, filed notices of strike and staged the strike obviously contrary to the provisions of labor laws. Worse, it filed not one but several notices of strike which resulted in two certified cases which were earlier consolidated. These disputes could have been averted had respondent respected the CA's decision. That way, the collective bargaining agent would have been determined and petitioner could have been compelled to bargain. Respondent, through its officers, instead opted to use the weapon of strike to force petitioner to recognize it as the bargaining agent. The strike, having been staged after the dispute had been certified for arbitration and contrary to the return-to-work order, became a prohibited activity, and was thus illegal. Strikes exert disquieting effects not only on the relationship between labor and management, but also on the general peace and progress of society, not to mention the economic well-being of the State. It is a weapon that can either breathe life to or destroy the union and members in their struggle with management for a more equitable due of their labors. Hence, the decision to wield the weapon of strike must therefore rest on a rational basis, free from emotionalism, unswayed by the tempers and tantrums of a few, and firmly focused on the legitimate interest of the union which should not however be antithetical to the public welfare. In every strike staged by a union, the general peace and progress of society and public welfare are involved.67 Having settled that the subject strike was illegal, this Court shall now determine the proper penalty to be imposed on the union officers who knowingly participated in the strike. Article 264 of the Labor Code further provides: Art. 264. Prohibited activities. x x x Any workers whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full back wages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, that mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. x x x. It bears stressing that the law makes a distinction between union members and union officers. A worker merely participating in an illegal strike may not be terminated from employment. It is only when he commits illegal acts during a strike that he may be declared to have lost employment status. For knowingly participating in an illegal strike or participating in the commission of illegal acts during a strike, the law provides that a union officer may be terminated from employment. The law grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. It possesses the right and prerogative to terminate the union officers from service.68 Otherwise, the workers will simply refuse to return to their work and cause a standstill in the company operations while retaining the positions they refuse to discharge and preventing management from filling up their positions.69

WHEREFORE, the petition is partly GRANTED. The decision of the Court of Appeals dated February 28, 2005 in the consolidated cases CA-G.R. SP Nos. 79446 and 82314 and its Resolution dated September 22, 2005 are MODIFIED in that the strike in question is found ILLEGAL and the order to reinstate the union officers who participated in the illegal strike is REVERSED and SET ASIDE. No costs. SO ORDERED. G.R. No. 178296 January 12, 2011 THE HERITAGE HOTEL MANILA, acting through its owner, GRAND PLAZA HOTEL CORPORATION, Petitioner, vs. NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC), Respondent. Before the Court is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) dated May 30, 2005 and Resolution dated June 4, 2007. The assailed Decision affirmed the dismissal of a petition for cancellation of union registration filed by petitioner, Grand Plaza Hotel Corporation, owner of Heritage Hotel Manila, against respondent, National Union of Workers in the Hotel, Restaurant and Allied IndustriesHeritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC), a labor organization of the supervisory employees of Heritage Hotel Manila. The case stemmed from the following antecedents: On October 11, 1995, respondent filed with the Department of Labor and Employment-National Capital Region (DOLE-NCR) a petition for certification election.2 The Med-Arbiter granted the petition on February 14, 1996 and ordered the holding of a certification election.3 On appeal, the DOLE Secretary, in a Resolution dated August 15, 1996, affirmed the Med-Arbiters order and remanded the case to the Med-Arbiter for the holding of a preelection conference on February 26, 1997. Petitioner filed a motion for reconsideration, but it was denied on September 23, 1996. The preelection conference was not held as initially scheduled; it was held a year later, or on February 20, 1998. Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of respondent. The latter agreed to suspend proceedings until further notice. The preelection conference resumed on January 29, 2000. Subsequently, petitioner discovered that respondent 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, on May 19, 2000, petitioner filed a Petition for Cancellation of Registration of respondent, on the ground of the non-submission of the said documents. Petitioner prayed that respondents Certificate of Creation of Local/Chapter be cancelled and its name be deleted from the list of legitimate labor organizations. It further requested the suspension of the certification election proceedings.4 On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or Suspend the [Certification Election] Proceedings,5 arguing that the dismissal or suspension of the proceedings is warranted, considering that the legitimacy of respondent is seriously being challenged in the petition for cancellation of registration. Petitioner maintained that the resolution of the issue of whether respondent is a legitimate labor organization is crucial to the issue of whether it may exercise rights of a legitimate labor organization, which include the right to be certified as the bargaining agent of the covered employees. Nevertheless, the certification election pushed through on June 23, 2000. Respondent emerged as the winner.6 On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of Election Results and Winner,7 stating that the certification election held on June 23, 2000 was an exercise in futility because, once respondents registration is cancelled, it would no longer be entitled to be certified as the exclusive bargaining agent of the supervisory employees. Petitioner also claimed that some of respondents members were not qualified to join the union because they were either confidential employees or managerial employees. It then prayed that the certification of the election results and winner be deferred until the petition for cancellation shall have been resolved, and that respondents members who held confidential or managerial positions be excluded from the supervisors bargaining unit. Meanwhile, respondent filed its Answer8 to the petition for the cancellation of its registration. It averred that the petition was filed primarily to delay the conduct of the certification election, the respondents certification as the exclusive bargaining representative of the supervisory employees, and the commencement of bargaining negotiations. Respondent prayed for the dismissal of the petition for the following reasons: (a) petitioner is estopped from questioning respondents status as a legitimate labor organization as it had already recognized respondent as such during the preelection conferences; (b) petitioner is not the party-in-interest, as the union members are the ones who would be disadvantaged by the non-submission of financial reports; (c) it has already complied with the reportorial requirements, having submitted its financial statements for 1996, 1997, 1998, and 1999, its updated list of officers, and its list of

members for the years 1995, 1996, 1997, 1998, and 1999; (d) the petition is already moot and academic, considering that the certification election had already been held, and the members had manifested their will to be represented by respondent. Citing National Union of Bank Employees v. Minister of Labor, et al.9 and Samahan ng Manggagawa sa Pacific Plastic v. Hon. Laguesma,10 the Med-Arbiter held that the pendency of a petition for cancellation of registration is not a bar to the holding of a certification election. Thus, in an Order11 dated January 26, 2001, the Med-Arbiter dismissed petitioners protest, and certified respondent as the sole and exclusive bargaining agent of all supervisory employees. Petitioner subsequently appealed the said Order to the DOLE Secretary.12 The appeal was later dismissed by DOLE Secretary Patricia A. Sto. Tomas (DOLE Secretary Sto. Tomas) in the Resolution of August 21, 2002.13 Petitioner moved for reconsideration, but the motion was also denied.14 In the meantime, Regional Director Alex E. Maraan (Regional Director Maraan) of DOLE-NCR finally resolved the petition for cancellation of registration. While finding that respondent had indeed failed to file financial reports and the list of its members for several years, he, nonetheless, denied the petition, ratiocinating that freedom of association and the employees right to self-organization are more substantive considerations. He took into account the fact that respondent won the certification election and that it had already been certified as the exclusive bargaining agent of the supervisory employees. In view of the foregoing, Regional Director Maraanwhile emphasizing that the non-compliance with the law is not viewed with favor considered the belated submission of the annual financial reports and the list of members as sufficient compliance thereof and considered them as having been submitted on time. The dispositive portion of the decision15 dated December 29, 2001 reads: WHEREFORE, premises considered, the instant petition to delist the National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage Hotel Manila Supervisors Chapter from the roll of legitimate labor organizations is hereby DENIED. SO ORDERED.16 Aggrieved, petitioner appealed the decision to the BLR.17 BLR Director Hans Leo Cacdac inhibited himself from the case because he had been a former counsel of respondent. In view of Director Cacdacs inhibition, DOLE Secretary Sto. Tomas took cognizance of the appeal. In a resolution18 dated February 21, 2003, she dismissed the appeal, holding that the constitutionally guaranteed freedom of association and right of workers to self-organization outweighed respondents noncompliance with the statutory requirements to maintain its status as a legitimate labor organization. Petitioner filed a motion for reconsideration,19 but the motion was likewise denied in a resolution20 dated May 30, 2003. DOLE Secretary Sto. Tomas admitted that it was the BLR which had jurisdiction over the appeal, but she pointed out that the BLR Director had voluntarily inhibited himself from the case because he used to appear as counsel for respondent. In order to maintain the integrity of the decision and of the BLR, she therefore accepted the motion to inhibit and took cognizance of the appeal. Petitioner filed a petition for certiorari with the CA, raising the issue of whether the DOLE Secretary acted with grave abuse of discretion in taking cognizance of the appeal and affirming the dismissal of its petition for cancellation of respondents registration. In a Decision dated May 30, 2005, the CA denied the petition. The CA opined that the DOLE Secretary may legally assume jurisdiction over an appeal from the decision of the Regional Director in the event that the Director of the BLR inhibits himself from the case. According to the CA, in the absence of the BLR Director, there is no person more competent to resolve the appeal than the DOLE Secretary. The CA brushed aside the allegation of bias and partiality on the part of the DOLE Secretary, considering that such allegation was not supported by any evidence. The CA also found that the DOLE Secretary did not commit grave abuse of discretion when she affirmed the dismissal of the petition for cancellation of respondents registration as a labor organization. Echoing the DOLE Secretary, the CA held that the requirements of registration of labor organizations are an exercise of the overriding police power of the State, designed for the protection of workers against potential abuse by the union that recruits them. These requirements, the CA opined, should not be exploited to work against the workers constitutionally protected right to self-organization. Petitioner filed a motion for reconsideration, invoking this Courts ruling in Abbott Labs. Phils., Inc. v. Abbott Labs. Employees Union,21 which categorically declared that the DOLE Secretary has no authority to review the decision of the Regional Director in a petition for cancellation of union registration, and Section 4,22 Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code. In its Resolution23 dated June 4, 2007, the CA denied petitioners motion, stating that the BLR Directors inhibition from the case was a peculiarity not present in the Abbott case, and that such inhibition justified the assumption of jurisdiction by the DOLE Secretary. In this petition, petitioner argues that: I.

The Court of Appeals seriously erred in ruling that the Labor Secretary properly assumed jurisdiction over Petitioners appeal of the Regional Directors Decision in the Cancellation Petition x x x. A. Jurisdiction is conferred only by law. The Labor Secretary had no jurisdiction to review the decision of the Regional Director in a petition for cancellation. Such jurisdiction is conferred by law to the BLR. B. The unilateral inhibition by the BLR Director cannot justify the Labor Secretarys exercise of jurisdiction over the Appeal. C. The Labor Secretarys assumption of jurisdiction over the Appeal without notice violated Petitioners right to due process. II. The Court of Appeals gravely erred in affirming the dismissal of the Cancellation Petition despite the mandatory and unequivocal provisions of the Labor Code and its Implementing Rules.24 The petition has no merit. Jurisdiction to review the decision of the Regional Director lies with the BLR. This is clearly provided in the Implementing Rules of the Labor Code and enunciated by the Court in Abbott. But as pointed out by the CA, the present case involves a peculiar circumstance that was not present or covered by the ruling in Abbott. In this case, the BLR Director inhibited himself from the case because he was a former counsel of respondent. Who, then, shall resolve the case in his place? In Abbott, the appeal from the Regional Directors decision was directly filed with the Office of the DOLE Secretary, and we ruled that the latter has no appellate jurisdiction. In the instant case, the appeal was filed by petitioner with the BLR, which, undisputedly, acquired jurisdiction over the case. Once jurisdiction is acquired by the court, it remains with it until the full termination of the case.25 Thus, jurisdiction remained with the BLR despite the BLR Directors inhibition. When the DOLE Secretary resolved the appeal, she merely stepped into the shoes of the BLR Director and performed a function that the latter could not himself perform. She did so pursuant to her power of supervision and control over the BLR.26 Expounding on the extent of the power of control, the Court, in Araneta, et al. v. Hon. M. Gatmaitan, et al.,27 pronounced that, if a certain power or authority is vested by law upon the Department Secretary, then such power or authority may be exercised directly by the President, who exercises supervision and control over the departments. This principle was incorporated in the Administrative Code of 1987, which defines "supervision and control" as including the authority to act directly whenever a specific function is entrusted by law or regulation to a subordinate.28 Applying the foregoing to the present case, it is clear that the DOLE Secretary, as the person exercising the power of supervision and control over the BLR, has the authority to directly exercise the quasi-judicial function entrusted by law to the BLR Director. It is true that the power of control and supervision does not give the Department Secretary unbridled authority to take over the functions of his or her subordinate. Such authority is subject to certain guidelines which are stated in Book IV, Chapter 8, Section 39(1)(a) of the Administrative Code of 1987.29 However, in the present case, the DOLE Secretarys act of taking over the function of the BLR Director was warranted and necessitated by the latters inhibition from the case and the objective to "maintain the integrity of the decision, as well as the Bureau itself."30 Petitioner insists that the BLR Directors subordinates should have resolved the appeal, citing the provision under the Administrative Code of 1987 which states, "in case of the absence or disability of the head of a bureau or office, his duties shall be performed by the assistant head."31 The provision clearly does not apply considering that the BLR Director was neither absent nor suffering from any disability; he remained as head of the BLR. Thus, to dispel any suspicion of bias, the DOLE Secretary opted to resolve the appeal herself. Petitioner was not denied the right to due process when it was not notified in advance of the BLR Directors inhibition and the DOLE Secretarys assumption of the case. Well-settled is the rule that the essence of due process is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of.32 Petitioner had the opportunity to question the BLR Directors inhibition and the DOLE Secretarys taking cognizance of the case when it filed a motion for reconsideration of the latters decision. It would be well to state that a critical component of due process is a hearing before an impartial and disinterested tribunal, for all the elements of due process, like notice and hearing, would be meaningless if the ultimate decision would come from a partial and biased judge.33 It was precisely to ensure a fair trial that moved the BLR Director to inhibit himself from the case and the DOLE Secretary to take over his function. Petitioner also insists that respondents registration as a legitimate labor union should be cancelled. Petitioner posits that once it is determined that a ground enumerated in Article 239 of the Labor Code is present, cancellation of registration should follow; it becomes the ministerial duty of the Regional Director to cancel the registration of the labor organization, hence, the use of the word "shall." Petitioner points out that the Regional Director has admitted in its decision that respondent failed to submit the required documents for a number of years; therefore, cancellation of its registration should have followed as a matter of course. We are not persuaded.

Articles 238 and 239 of the Labor Code read: ART. 238. CANCELLATION OF REGISTRATION; APPEAL The certificate of registration of any legitimate labor organization, whether national or local, shall be canceled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of the requirements herein prescribed.34 ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. The following shall constitute grounds for cancellation of union registration: xxxx (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself; xxxx (i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau.35 These provisions give the Regional Director ample discretion in dealing with a petition for cancellation of a unions registration, particularly, determining whether the union still meets the requirements prescribed by law. It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient compliance with the requirements of the law. After all, the law requires the labor organization to submit the annual financial report and list of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the employer and employees from fraudulent or fly-by-night unions. With the submission of the required documents by respondent, the purpose of the law has been achieved, though belatedly. We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the petition for cancellation of respondents registration. The union members and, in fact, 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. Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union registration, lest they be accused of interfering with union activities. In resolving the petition, consideration must be taken of the fundamental rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities. Labor authorities should bear in mind that registration confers upon a union the status of legitimacy and the concomitant right and privileges granted by law to a legitimate labor organization, particularly the right to participate in or ask for certification election in a bargaining unit.36 Thus, the cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it loses - as a rule - its rights under the Labor Code.37 It is worth mentioning that the Labor Codes provisions on cancellation of union registration and on reportorial requirements have been recently amended by Republic Act (R.A.) No. 9481, 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, which lapsed into law on May 25, 2007 and became effective on June 14, 2007. The amendment sought to strengthen the workers right to self-organization and enhance the Philippines compliance with its international obligations as embodied in the International Labour Organization (ILO) Convention No. 87,38 pertaining to the non-dissolution of workers organizations by administrative authority.39 Thus, R.A. No. 9481 amended Article 239 to read: ART. 239. Grounds for Cancellation of Union Registration.The following may constitute grounds for cancellation of union registration: (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, and the list of members who took part in the ratification; (b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters; (c) Voluntary dissolution by the members. R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides: ART. 242-A. Reportorial Requirements.The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned: (a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto; (b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election; (c) Its annual financial report within thirty (30) days after the close of every fiscal year; and (d) Its list of members at least once a year or whenever required by the Bureau.

Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty. ILO Convention No. 87, which we have ratified in 1953, provides that "workers and employers organizations shall not be liable to be dissolved or suspended by administrative authority." The ILO has expressed the opinion that the cancellation of union registration by the registrar of labor unions, which in our case is the BLR, is tantamount to dissolution of the organization by administrative authority when such measure would give rise to the loss of legal personality of the union or loss of advantages necessary for it to carry out its activities, which is true in our jurisdiction. Although the ILO has allowed such measure to be taken, provided that judicial safeguards are in place, i.e., the right to appeal to a judicial body, it has nonetheless reminded its members that dissolution of a union, and cancellation of registration for that matter, involve serious consequences for occupational representation. It has, therefore, deemed it preferable if such actions were to be taken only as a last resort and after exhausting other possibilities with less serious effects on the organization.40 The aforesaid amendments and the ILOs opinion on this matter serve to fortify our ruling in this case. We therefore quote with approval the DOLE Secretarys rationale for denying the petition, thus: It is undisputed that appellee failed to submit its annual financial reports and list of individual members in accordance with Article 239 of the Labor Code. However, the existence of this ground should not necessarily lead to the cancellation of union registration. Article 239 recognizes the regulatory authority of the State to exact compliance with reporting requirements. Yet there is more at stake in this case than merely monitoring union activities and requiring periodic documentation thereof. The more substantive considerations involve the constitutionally guaranteed freedom of association and right of workers to self-organization. Also involved is the public policy to promote free trade unionism and collective bargaining as instruments of industrial peace and democracy.1avvphi1 An overly stringent interpretation of the statute governing cancellation of union registration without regard to surrounding circumstances cannot be allowed. Otherwise, it would lead to an unconstitutional application of the statute and emasculation of public policy objectives. Worse, it can render nugatory the protection to labor and social justice clauses that pervades the Constitution and the Labor Code. Moreover, submission of the required documents is the duty of the officers of the union. It would be unreasonable for this Office to order the cancellation of the union and penalize the entire union membership on the basis of the negligence of its officers. In National Union of Bank Employees vs. Minister of Labor, L53406, 14 December 1981, 110 SCRA 296, the Supreme Court ruled: As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to selforganization finds general and specific constitutional guarantees. x x x Such constitutional guarantees should not be lightly taken much less nullified. A healthy respect for the freedom of association demands that acts imputable to officers or members be not easily visited with capital punishments against the association itself." At any rate, we note that on 19 May 2000, appellee had submitted its financial statement for the years 19961999. With this submission, appellee has substantially complied with its duty to submit its financial report for the said period. To rule differently would be to preclude the union, after having failed to meet its periodic obligations promptly, from taking appropriate measures to correct its omissions. For the record, we do not view with favor appellees late submission. Punctuality on the part of the union and its officers could have prevented this petition.41 WHEREFORE, premises considered, the Court of Appeals Decision dated May 30, 2005 and Resolution dated June 4, 2007 are AFFIRMED. SO ORDERED. G.R. No. 162356 April 14, 2008 DONG SEUNG INCORPORATED, petitioner, vs. BUREAU OF LABOR RELATIONS, HANS LEO J. CACDAC, Director and NAMAWU Local 188 Dong Seung Workers Union, respondents. Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the September 26, 2003 Decision1 of the Court of Appeals (CA), which affirmed the dismissal of the petition of Dong Seung Incorporated (petitioner) for cancellation of the registration of NAMAWU Local 188-Dong Seung Workers Union (respondent union); and the February 23, 2004 CA Resolution2 which denied petitioner's motion for reconsideration. The facts now in dispute are as follows: On July 10, 2000, petitioner filed with the Department of Labor and Employment (DOLE), Region IV a Petition3 for cancellation of the union registration of respondent union on the grounds that the List of Officers and Constitution and By-laws which the respondent union attached to its application for union registration contain the union secretary's certification but the same is not under oath, contrary to Section 1, Rule VI of the Implementing Rules of Book V of the Labor Code, as amended by Department Order No. 9,

series of 1997;4 and that, as shown in a Sinumpaang Petisyon,5 148 out of approximately 200 employeesmembers have since denounced respondent union for employing deceit in obtaining signatures to support its registration application.6 After hearing the petition, DOLE (Region IV) Regional Director Ricardo Martinez, Sr. issued an Order dated December 1, 2000, to wit: WHEREFORE, premises considered, herein petition is granted. Likewise, Charter Certificate [of] NAMAWU-Local 188 is hereby delisted from the roster of legitimate labor organization[s] in this jurisdiction. SO ORDERED.7 Respondent union appealed to the Bureau of Labor Relations (BLR) on March 27, 2001.8 Petitioner filed a Motion to Dismiss9 the appeal on the ground that, as respondent union received copy of the December 1, 2000 DOLE Region IV Order on December 8, 2000, its appeal, filed only on March 27, 2001, was already beyond the appeal period. The BLR gave due course to the appeal and granted the same in a Decision dated August 19, 2002, viz: WHEREFORE, premises considered, the appeal is hereby GRANTED. The Order of the Regional Director, DOLE-Region IV dated 01 December 2000 is hereby REVERSED AND SET ASIDE. The NAMAWU LOCAL 188 - DONG SEUNG WORKERS' UNION, shall remain in the roster of legitimate labor organizations. NAMAWU Local 188 - Dong Seung Workers' Union, however, is required to submit its constitution and by-laws, updated list of officers and members, their addresses and the principal office of the local/chapter as certified under oath by the Secretary or the Treasurer and attested to by the President, within thirty (30) days from finality of this decision. SO RESOLVED.10 After its motion for reconsideration11 was denied by the BLR,12 petitioner filed with the CA a Petition for Certiorari,13 insisting that the BLR acted with grave abuse of discretion in giving due course to respondent union's appeal despite its having been filed out of time. To prove its claim, petitioner attached a Certification dated February 8, 2001 issued by Acting Postmaster Edwin O. Mendoza, stating that "registered letter x x x no. 1062 addressed to Jeorge [sic] Villamarin was received on December 8, 2000 and delivered on December 8, 2000 and received by Evelyn Villamarin;"14 showing that the latter had only until December 18, 2000 to appeal. The CA dismissed the petition in its herein assailed September 26, 2003 Decision and denied petitioner's motion for reconsideration in its February 23, 2004 Resolution. Hence, the present petition. The Court gave due course to the petition and, in compliance with its Resolution dated March 16, 2005, parties submitted their respective memoranda. As may be gleaned from its Memorandum, petitioner assails the CA Decision and Resolution on the grounds that: I. The CA erred in affirming the BLR when it gave due course to respondent's belated appeal;15 II. The CA erred in not finding that the BLR acted with bias; 16 and III. The CA erred in sustaining the BLR when it declared respondent's union registration valid.17 The Court finds no such reversible error in the CA Decision and Resolution. On the timeliness of respondent union's appeal to the BLR The BLR found respondent union's appeal tardy yet gave due course to it on account of its inherent merit.18 The CA found respondent union's appeal to have "substantially complied with the requirements provided by law."19 Petitioner insists that, based on the Certification of Acting Postmaster Mendoza, respondent union had only until December 18, 2000 to appeal for it received the December 1, 2000 DOLE Region IV Order as early as December 8, 2000.20 The timeliness of an appeal is a factual issue as it requires a review or evaluation of evidence on when the judgment was actually received and the appeal filed. The Court cannot entertain such factual issue in a proceeding under Rule 45 for it does not try facts nor evaluate evidence,21 much less in the present case where the only evidence submitted by petitioner on the issue of timeliness consists of a certification by Acting Postmaster Mendoza which is of dubious authenticity as it is a plain photocopy, completely deviod of any marking or note of authentication. Moreover, the certification is woefully lacking in material details such as the exact nature and origin of the letter that was purportedly sent to Jorge Villamarin and the date it was received by Evelyn Villamarin - that it could not be reasonably concluded that what was sent and received was actually the December 1, 2000 DOLE Region IV Order. Therefore, the certification alone cannot serve as basis for the reversal of the findings of the CA.22 On the alleged bias of the BLR Without elaborating, petitioner also criticizes what it claims to be the personal bias and self-interest of BLR as shown by its "hasty" resolution of respondent union's appeal.23 The Court fails to see why the BLR's speedy resolution of an appeal should be taken against it. For as long as the BLR observes due process, its

proceedings cannot be impugned merely for being expeditious.24 It is of record that the BLR allowed petitioner every opportunity to be heard. In fact, the latter was able to file a motion to dismiss the appeal and a motion for reconsideration of the August 19, 2002 BLR Decision. Clearly, although the BLR took expeditious action on the appeal, it did not sacrifice petitioner's right to due process. On the validity of respondent union's registration Petitioner insists that the BLR erred in its interpretation of the requirement that the union secretary's certification of all the documents for union registration be under oath.25 The requirement that the union secretary certify under oath all documents and papers filed in support of an application for union registration is imposed by Article 235 of the Labor Code, to wit: 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. DOLE Region IV cancelled the registration of respondent union on the ground that the secretary's certification of the correctness of the List of Officers and the Constitution and By-laws attached to the application is not under oath, viz: Considering that the respondent union failed to submit its answer or comment to the petition to controvert the allegations that although it submitted the list of union officers and Constitution and By laws which was attested to by the president but not duly sworn and subscribed under oath by the Secretary or Treasurer is a fatal defect that would warrant the withholding of status of legitimacy to the local union or chapter as held by the Supreme Court in the case of Progressive Development Corp. vs. Honorable Secretary of Labor and Employment.26 (Emphasis supplied) In reversing DOLE Region IV, the BLR cited its Advisory,27 dated October 14, 1998, which interprets the requirement under Article 235, to wit: Pursuant to Rule XVII, Section 1 of Department Order No. 09, Series of 1997 x x x. [T]he Bureau of Labor Relations is empowered, consistent with the State policy to promote unionism, to "devise or prescribe such forms as are necessary to facilitate the process of registration of labor organizations x x x," including the chartering of locals or chapters. Accordingly, the Bureau has devised and transmitted to the Regional Offices the appropriate official registration forms, particularly the following: xxxx 5. BLR Reg. Form No. 5-LOC-LO. S. 1998 For Chartering Locals/ Chapters xxxx Part I of each of the first seven forms is a space provided for the notarization of the application x x x. However, considering that applicants are not yet fully familiar with the forms in spite of orientation and seminar conducted, some applications have been submitted without using the forms prescribed by the Bureau. In lieu of submitting a notarized application using the official forms, some applicants comply with the requirements by having their supporting documents separately notarized. To prevent inconvenience to the public, particularly to the applicants, the Regional Offices are hereby advised that applications submitted with supporting documents which are separately notarized need not comply with the notarization requirement under Part I or Part II, as the case may be, of the prescribed forms. x x x Accordingly, the absence of notarization under Part I or Part II of the appropriate forms shall not be a basis for denying applications where it appears that all the required supporting documents have already been notarized or attested. (Emphasis supplied) The BLR explained that under the foregoing Advisory, the certification issued by respondent union's secretary may be notarized either separately or along with the main application. The BLR noted that respondent union correctly availed of the second option: A perusal of the registration records of the [respondent] revealed that respondent's registration application was sufficient in form and substance, having been notarized as provided in the BLR official forms. (Atty. Manuel E. Robles notarized such application on 8 February 1999 at Cavite City.) All the other supporting documents to the charter certificate issued by the National Mines and Allied Workers Union were certified true and correct by the secretary and attested to by the president. Thus, from the standpoint of compliance, [respondent] x x x submitted all the documentary requirements for the creation of a local/chapter in accordance with Section 1, Rule VI, D.O. 9 series of 1997.28 (Emphasis supplied) Indeed, all that Article 235 requires is that the secretary's certification be under oath. It does not prescribe a specific manner of its notarization. Based on its interpretation of Article 235, the BLR, in its October 14, 1998 Advisory, allows for the wholesale notarization of a union's application for registration and recognizes the effects thereof even on the attachments, including the secretary's certification. This is a reasonable

interpretation considering that the form of notarization contemplated in said Advisory adequately serves the purpose of Article 235, which is to forestall fraud and misrepresentation. More importantly, such interpretation of the BLR is accorded great weight by the Court for it is said agency which is vested with authority and endowed with expertise to implement the law in question.29 Petitioner cannot rely on the ruling of the Court in Progressive Development Corporation v. DOLE Secretary30 as said case is hardly germane to the present case. For one, Progressive Development Corporation involved a petition for certification of election, and not a petition for cancellation of union registration. Thus, the Court merely restrained action on the petition for certification filed by the local union whose legitimacy was under question, but did not cancel the registration of said union. Moreover, the defect in the registration of the said union consisted of the utter lack of a secretary's certification under oath. On the other hand, in the present case, the documents filed by respondent union contain the requisite secretary's certification which, along with the entire application, was found by the BLR to have been duly notarized. The second ground cited by DOLE Region IV in canceling the registration of respondent union is that the latter allegedly committed misrepresentation in securing the signatures of its members: Considering further that the respondent failed to refute the "Sinumpaang Petisyon" executed by 148 out of 200 employees of the petitioner company that they were made to sign a blank sheet of paper purportedly to be used to request a dialogue with the president of the company which turned out later the signatures were misused and misrepresented to form a local union under NAMAWU constitute grave misrepresentation in violation of par. (A) of Article 239 of the Labor Code as amended, a valid ground for cancellation of union registration.31 The CA and BLR, on the other hand, assign no credence to the Sinumpaang Petisyon for it is a mere photocopy,32 the genuineness and due execution of which cannot be reasonably ascertained. Moreover, citing Oriental Tin Can Labor Union v. Secretary of Labor,33 the BLR held that it has reason to be wary of the Sinumpaang Petisyon for the withdrawal of support by the alleged signatories to the petition may have been "procured through duress, coercion, or for a valuable consideration." The Court adopts the foregoing observations of the CA and BLR. Another factor which militates against the veracity of the allegations in the Sinumpaang Petisyon is the lack of particularities on how, when and where respondent union perpetrated the alleged fraud on each member.34 Such details are crucial for in the proceedings for cancellation of union registration on the ground of fraud or misrepresentation, what needs to be established is that the specific act or omission of the union deprived the complaining employees-members of their right to choose. WHEREFORE, the petition is DENIED. No costs. SO ORDERED. G.R. No. 169717 March 16, 2011 SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union President, Petitioner, vs. CHARTER CHEMICAL and COATING CORPORATION, Respondent. The right to file a petition for certification election is accorded to a labor organization provided that it complies with the requirements of law for proper registration. The inclusion of supervisory employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization. We apply these principles to this case. This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeals March 15, 2005 Decision1 in CA-G.R. SP No. 58203, which annulled and set aside the January 13, 2000 Decision2 of the Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16, 2005 Resolution3 denying petitioner unions motion for reconsideration. Factual Antecedents On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE, National Capital Region. On April 14, 1999, respondent company filed an Answer with Motion to Dismiss4 on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law, and (2) the inclusion of supervisory employees within petitioner union.5 Med-Arbiters Ruling On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision6 dismissing the petition for certification election. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and "Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under oath

and certified by the union secretary and attested to by the union president as required by Section 235 of the Labor Code7 in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union registration was, thus, fatally defective. The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman, mill operator and leadman who performed supervisory functions. Under Article 245 of the Labor Code, said supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-andfile employees of respondent company. As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification election for the purpose of collective bargaining. Department of Labor and Employments Ruling On July 16, 1999, the DOLE initially issued a Decision8 in favor of respondent company dismissing petitioner unions appeal on the ground that the latters petition for certification election was filed out of time. Although the DOLE ruled, contrary to the findings of the Med-Arbiter, that the charter certificate need not be verified and that there was no independent evidence presented to establish respondent companys claim that some members of petitioner union were holding supervisory positions, the DOLE sustained the dismissal of the petition for certification after it took judicial notice that another union, i.e., Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation, previously filed a petition for certification election on January 16, 1998. The Decision granting the said petition became final and executory on September 16, 1998 and was remanded for immediate implementation. Under Section 7, Rule XI of D.O. No. 9, series of 1997, a motion for intervention involving a certification election in an unorganized establishment should be filed prior to the finality of the decision calling for a certification election. Considering that petitioner union filed its petition only on February 14, 1999, the same was filed out of time. On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its January 13, 2000 Decision, the DOLE found that a review of the records indicates that no certification election was previously conducted in respondent company. On the contrary, the prior certification election filed by Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter and, on appeal, was dismissed by the DOLE for being filed out of time. Hence, there was no obstacle to the grant of petitioner unions petition for certification election, viz: WHEREFORE, the motion for reconsideration is hereby GRANTED and the decision of this Office dated 16 July 1999 is MODIFIED to allow the certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation with the following choices: 1. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the Philippines for Empowerment and Reform (SMCC-SUPER); and 2. No Union. Let the records of this case be remanded to the Regional Office of origin for the immediate conduct of a certification election, subject to the usual pre-election conference. SO DECIDED.9 Court of Appeals Ruling On March 15, 2005, the CA promulgated the assailed Decision, viz: WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution dated January 13, 2000 and February 17, 2000 are hereby [ANNULLED] and SET ASIDE. SO ORDERED.10 In nullifying the decision of the DOLE, the appellate court gave credence to the findings of the Med-Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code. It, likewise, upheld the Med-Arbiters finding that petitioner union consisted of both rank-and-file and supervisory employees. Moreover, the CA held that the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot be remedied through the exclusion-inclusion proceedings in a pre-election conference pursuant to the ruling in Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union.11 Thus, considering that petitioner union is not a legitimate labor organization, it has no legal right to file a petition for certification election. Issues I Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in granting the respondent *companys+ petition for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the issues subject of the respondent company*s+ petition was already settled with finality and barred from being re-litigated. II Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-file and supervisory employee[s] of petitioner

*unions+ membership is *a+ ground for the cancellation of petitioner *unions+ legal personality and dismissal of [the] petition for certification election. III Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged failure to certify under oath the local charter certificate issued by its mother federation and list of the union membership attending the organizational meeting [is a ground] for the cancellation of petitioner *unions+ legal personality as a labor organization and for the dismissal of the petition for certification election.12 Petitioner Unions Arguments Petitioner union claims that the litigation of the issue as to its legal personality to file the subject petition for certification election is barred by the July 16, 1999 Decision of the DOLE. In this decision, the DOLE ruled that petitioner union complied with all the documentation requirements and that there was no independent evidence presented to prove an illegal mixture of supervisory and rank-and-file employees in petitioner union. After the promulgation of this Decision, respondent company did not move for reconsideration, thus, this issue must be deemed settled. Petitioner union further argues that the lack of verification of its charter certificate and the alleged illegal composition of its membership are not grounds for the dismissal of a petition for certification election under Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are they grounds for the cancellation of a unions registration under Section 3, Rule VIII of said issuance. It contends that what is required to be certified under oath by the local unions secretary or treasurer and attested to by the local unions president are limited to the unions constitution and by-laws, statement of the set of officers, and the books of accounts. Finally, the legal personality of petitioner union cannot be collaterally attacked but may be questioned only in an independent petition for cancellation pursuant to Section 5, Rule V, Book IV of the Rules to Implement the Labor Code and the doctrine enunciated in Tagaytay Highlands International Golf Club Incoprorated v. Tagaytay Highlands Empoyees Union-PTGWO.13 Respondent Companys Arguments Respondent company asserts that it cannot be precluded from challenging the July 16, 1999 Decision of the DOLE. The said decision did not attain finality because the DOLE subsequently reversed its earlier ruling and, from this decision, respondent company timely filed its motion for reconsideration. On the issue of lack of verification of the charter certificate, respondent company notes that Article 235 of the Labor Code and Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997, expressly requires that the charter certificate be certified under oath. It also contends that petitioner union is not a legitimate labor organization because its composition is a mixture of supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Respondent company maintains that the ruling in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union14 continues to be good case law. Thus, the illegal composition of petitioner union nullifies its legal personality to file the subject petition for certification election and its legal personality may be collaterally attacked in the proceedings for a petition for certification election as was done here. Our Ruling The petition is meritorious. The issue as to the legal personality of petitioner union is not barred by the July 16, 1999 Decision of the DOLE. A review of the records indicates that the issue as to petitioner unions legal personality has been timely and consistently raised by respondent company before the Med-Arbiter, DOLE, CA and now this Court. In its July 16, 1999 Decision, the DOLE found that petitioner union complied with the documentation requirements of the Labor Code and that the evidence was insufficient to establish that there was an illegal mixture of supervisory and rank-and-file employees in its membership. Nonetheless, the petition for certification election was dismissed on the ground that another union had previously filed a petition for certification election seeking to represent the same bargaining unit in respondent company. Upon motion for reconsideration by petitioner union on January 13, 2000, the DOLE reversed its previous ruling. It upheld the right of petitioner union to file the subject petition for certification election because its previous decision was based on a mistaken appreciation of facts.15 From this adverse decision, respondent company timely moved for reconsideration by reiterating its previous arguments before the Med-Arbiter that petitioner union has no legal personality to file the subject petition for certification election. The July 16, 1999 Decision of the DOLE, therefore, never attained finality because the parties timely moved for reconsideration. The issue then as to the legal personality of petitioner union to file the certification election was properly raised before the DOLE, the appellate court and now this Court. The charter certificate need not be certified under oath by the local unions secretary or treasurer and attested to by its president.

Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 948116 which took effect on June 14, 2007.17 This law introduced substantial amendments to the Labor Code. However, since the operative facts in this case occurred in 1999, we shall decide the issues under the pertinent legal provisions then in force (i.e., R.A. No. 6715,18 amending Book V of the Labor Code, and the rules and regulations19 implementing R.A. No. 6715, as amended by D.O. No. 9,20 series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.21 In the main, the CA ruled that petitioner union failed to comply with the requisite documents for registration under Article 235 of the Labor Code and its implementing rules. It agreed with the Med-Arbiter that the Charter Certificate, Sama-samang Pahayag ng Pagsapi at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath. Thus, petitioner union cannot be accorded the status of a legitimate labor organization. We disagree. The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997, provides: 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/chapters officers, their addresses, and the principal office of the local/chapter; and (c) The local/chapters constitution and by-laws provided that where the local/chapters constitution and by-laws [are] the same as [those] 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. As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization. As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFUFFW),22 which was decided under the auspices of D.O. No. 9, Series of 1997, we ruled In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id. While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have the local/chapters officers x x x certify or attest to a document which they had no hand in the preparation of.23 (Emphasis supplied) In accordance with this ruling, petitioner unions charter certificate need not be executed under oath. Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate,24 (2) the names of its officers, their addresses, and its principal office,25 and (3) its constitution and by-laws26 the last two requirements having been executed under oath by the proper union officials as borne out by the records. The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization. The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However, petitioner union sought to represent the bargaining unit consisting of rank-and-file employees. Under Article 24527 of the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file employees. Thus, the appellate court ruled that petitioner union cannot be considered a legitimate labor organization pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union28 (hereinafter Toyota). Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by the appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after respondent company submitted in evidence the job descriptions29 of the aforesaid employees. The job descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary but require the use of independent judgment, hence, falling within the definition of supervisory employees under Article 212(m)30 of the Labor Code. For this reason, we are

constrained to agree with the Med-Arbiter, as upheld by the appellate court, that petitioner union consisted of both rank-and-file and supervisory employees. Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. The appellate courts reliance on Toyota is misplaced in view of this Courts subsequent ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.31 (hereinafter Kawashima). In Kawashima, we explained at length how and why the Toyota doctrine no longer holds sway under the altered state of the law and rules applicable to this case, viz: R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the co-mingling of supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization. It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions): "Sec. 1. Who may join unions. - x x x Supervisory employees and security guards 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; Provided, that those 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 x x x. (Emphasis supplied) and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz: "Sec. 1. Where to file. - A petition for certification election may be filed with the Regional Office which has jurisdiction over the principal office of the employer. The petition shall be in writing and under oath. Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain collectively, may file the petition. The petition, when filed by a legitimate labor organization, shall contain, among others: xxxx (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; and provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or security guards. (Emphasis supplied) By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor organization from exercising its right to file a petition for certification election. Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held: "Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. xxxx In the case at bar, as respondent union's membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election." (Emphasis supplied) In Dunlop, in which the labor organization that filed a petition for certification election was one for supervisory employees, but in which the membership included rank-and-file employees, the Court reiterated that such labor organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its members. It should be emphasized that the petitions for certification election involved in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was applied in both cases. But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules that the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been mingled with supervisory employees was removed. Instead, what the 1997 Amended Omnibus Rules requires is a plain description of the bargaining unit, thus: Rule XI Certification Elections xxxx Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and shall contain, among others, the following: x x x (c) The description of the bargaining unit.

In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the 1997 Amended Omnibus Rules, although the specific provision involved therein was only Sec. 1, Rule VI, to wit: "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." which does not require that, for its creation and registration, a local or chapter submit a list of its members. Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO in which the core issue was whether mingling affects the legitimacy of a labor organization and its right to file a petition for certification election. This time, given the altered legal milieu, the Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-FFW, the Court explained that since the 1997 Amended Omnibus Rules does not require a local or chapter to provide a list of its members, it would be improper for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual members. More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which involved a petition for cancellation of union registration filed by the employer in 1999 against a rank-and-file labor organization on the ground of mixed membership: the Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code. All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered state of the law and the rules.32 [Underline supplied] The applicable law and rules in the instant case are the same as those in Kawashima because the present petition for certification election was filed in 1999 when D.O. No. 9, series of 1997, was still in effect. Hence, Kawashima applies with equal force here. As a result, petitioner union was not divested of its status as a legitimate labor organization even if some of its members were supervisory employees; it had the right to file the subject petition for certification election. The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification election proceedings. Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election proceedings. As we explained in Kawashima: Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election. The employer's only right in the proceeding is to be notified or informed thereof. The amendments to the Labor Code and its implementing rules have buttressed that policy even more.33 WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 58203 are REVERSED and SET ASIDE. The January 13, 2000 Decision of the Department of Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED. No pronouncement as to costs. SO ORDERED.

JACKBILT INDUSTRIES, INC., v e r s u s JACKBILT EMPLOYEES WORKERS UNION-NAFLU-KMU G.R. Nos. 171618-19 March 20, 2009 This petition for review on certiorari seeks to reverse and set aside the July 13, 2005 decision and February 9, 2006 resolution of the Court of Appeals in CA-G.R. SP No. 65208 and CA-G.R. SP No. 65425. Due to the adverse effects of the Asian economic crisis on the construction industry beginning 1997, petitioner Jackbilt Industries, Inc. decided to temporarily stop its business of producing concrete hollow blocks, compelling most of its employees to go on leave for six months. Respondent Jackbilt Employees Workers Union-NAFLU-KMU immediately protested the temporary shutdown. Because its collective bargaining agreement with petitioner was expiring during the period of the shutdown, respondent claimed that petitioner halted production to avoid its duty to bargain collectively. The shutdown was allegedly motivated by anti-union sentiments. Accordingly, on March 9, 1998, respondent went on strike. Its officers and members picketed petitioners main gates and deliberately prevented persons and vehicles from going into and out of the compound. On March 19, 1998, petitioner filed a petition for injunction with a prayer for the issuance of a temporary restraining order (TRO) in the National Labor Relations Commission (NLRC). It sought to enjoin respondent from obstructing free entry to and exit from its production facility. On April 14, 1998, the NLRC issued a TRO directing the respondents to refrain from preventing access to petitioners property. The reports of both the implementing officer and the investigating labor arbiter revealed, however, that respondent union violated the April 14, 1998 order. Union members, on various occasions, stopped and inspected private vehicles entering and exiting petitioners production facility. Thus, in a decision dated July 17, 1998, the NLRC ordered the issuance of a writ of preliminary injunction. Meanwhile, petitioner sent individual memoranda to the officers and members of respondent who participated in the strike ordering them to explain why they should not be dismissed for committing illegal acts in the course of a strike. However, respondent repeatedly ignored petitioners memoranda despite the extensions granted. Thus, on May 30, 1998, petitioner dismissed the concerned officers and members and barred them from entering its premises effective June 1, 1998. Aggrieved, respondent filed complaints for illegal lockout, runaway shop and damages, unfair labor practice, illegal dismissal and attorneys fees, and refusal to bargain on behalf of its officers and members against petitioner and its corporate officers. It argued that there was no basis for the temporary partial shutdown as it was undertaken by petitioner to avoid its duty to bargain collectively. Petitioner, on the other hand, asserted that because respondent conducted a strike without observing the procedural requirements provided in Article 263 of the Labor Code, the March 9, 1998 strike was illegal. Furthermore, in view of the July 17, 1998 decision of the NLRC (which found that respondent obstructed the free ingress to and egress from petitioners premises), petitioner validly dismissed respondents officers and employees for committing illegal acts in the course of a strike. In a decision dated October 15, 1999, the labor arbiter dismissed the complaints for illegal lockout and unfair labor practice for lack of merit. However, because petitioner did not file a petition to declare the strike illegal before terminating respondents officers and employees, it was found guilty of illegal dismissal. The dispositive portion of the decision read:
WHEREFORE, judgment is hereby rendered finding [petitioner and its corporate officers] liable for the illegal dismissal of the 61 union officer and members of [respondent] and concomitantly, [petitioner and its corporate officers] are hereby jointly and severally ordered to pay *respondents officers and members+ limited backwages from June 1, 1998 to October 4, 1998. *Petitioner and its corporate officers+ are further ordered to pay *respondents officers and members] separation pay based on salary for every year of credited service, a fraction of at least 6 months to be considered as one whole year in lieu of reinstatement.

The complaint for unfair labor practice, moral and exemplary damages and runaway shop are hereby disallowed for lack of merit. SO ORDERED.

On December 28, 2000, the NLRC, on appeal, modified the decision of the labor arbiter. It held that only petitioner should be liable for monetary awards granted to respondents officers and members. Both petitioner and respondent moved for reconsideration but they were denied for lack of merit. Aggrieved, petitioner assailed the December 28, 2000 decision of the NLRC via a petition for certiorari in the CA. It asserted that the NLRC committed grave abuse of discretion in disregarding its July 17, 1998 decision wherein respondents officers and employees were found to have committed illegal acts in the course of the March 9, 1998 strike. In view thereof and pursuant to Article 264(a)(3) of the Labor Code, petitioner validly terminated respondents officers and employees. The CA dismissed the petition but modified the December 28, 2000 decision of the NLRC. Because most of affected employees were union members, the CA held that the temporary shutdown was moved by anti-union sentiments. Petitioner was therefore guilty of unfair labor practice and, consequently, was ordered to pay respondents officers and employees backwages from March 9, 1998 (instead of June 1, 1998) to October 4, 1998 and separation pay of one month salary for every year of credited service. Petitioner moved for reconsideration but it was denied. Thus, this recourse. The primordial issue in this petition is whether or not the filing of a petition with the labor arbiter to declare a strike illegal is a condition sine qua non for the valid termination of employees who commit an illegal act in the course of such strike. Petitioner asserts that the filing of a petition to declare the strike illegal was unnecessary since the NLRC, in its July 17, 1998 decision, had already found that respondent committed illegal acts in the course of the strike. We grant the petition. The principle of conclusiveness of judgment, embodied in Section 47(c), Rule 39 of the Rules of Court, holds that the parties to a case are bound by the findings in a previous judgment with respect to matters actually raised and adjudged therein. Article 264(e) of the Labor Code prohibits any person engaged in picketing from obstructing the free ingress to and egress from the employers premises. Since respondent was found in the July 17, 1998 decision of the NLRC to have prevented the free entry into and exit of vehicles from petitioners compound, respondents officers and employees clearly committed illegal acts in the course of the March 9, 1998 strike. The use of unlawful means in the course of a strike renders such strike illegal. Therefore, pursuant to the principle of conclusiveness of judgment, the March 9, 1998 strike was ipso facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary. Consequently, we uphold the legality of the dismissal of respondents officers and employees. Article 264 of the Labor Code further provides that an employer may terminate employees found to have committed illegal acts in the course of a strike. Petitioner clearly had the legal right to terminate respondents officers and employees. WHEREFORE, the petition is hereby granted. The July 13, 2005 decision and February 9, 2006 resolution of the Court of Appeals in CA-G.R. SP No. 65208 and CA-G.R. SP No. 65425 are hereby REVERSED and SET ASIDE. The December 28, 2000 and March 6, 2001 resolutions of the National Labor Relations Commission in NLRC-CA No. 022614-2000 are MODIFIED insofar as they affirmed the October 15, 1999 decision of the labor arbiter in NLRC-NCR-Case No. 00-06-05017-98 finding petitioner Jackbilt Industries, Inc. guilty of illegal dismissal for terminating respondents officers and employees. New judgment is hereby entered DISMISSING NLRC-NCR-Case No. 00-06-05017-98 for lack of merit.

G.R. No. 164032 January 19, 2009 LOLITA A. LOPEZ, JOSECITO M. DE LA VEGA, MANUEL ANTIOQUIA ELMER G. HILAUS, LUCIA B. MONTEMAYOR, CAROLINA ESPIRITU, LEONARDO FORTE, HELEN NATIVIDAD, ROGER C. OBINSA, CARLOS C. ASILO, JR., RICARDO FRONDA, ALEX SANTIAGO, LEONORA S.J. BALABBO, CATALINO BALABBO, FE S. SANTOS, VICTORIA V. MOLAS, ANTONIO ATENTA, MA. DONNA SUSVILLA, ANDRES V. OCAMPO, JOVENCIO JUSAYAN, ARGIL LABRIS, EDNA R. MORAL, NESTOR LERIOS, EFREN TURBANADA, RICKY ASPAN, EMMANUEL MEANA, MA. CECILIA PANGAN, HILARIO J. CACHO, RONALDO LIM, represented by ESTELITA LIM, LIM, represented by ESTELITA LIM, F. PAGUERGAN, ROLANDO H. ABAO, JOSEPH MACARANAS, MARGARITO PERILLA, MARTIN GONZALES, JOEY MAHINAY, MARDI F. ALARDE, DOMINGITO DAO, SERAPIO MARDOQUIO, NORBERTA DE GUIA, PASTORA S. BASALLO, MELCHOR BARCELONA, DANILO VALENCIA, FERNANDO TOLENTINO, ARIEL DACAYO, represented by LEONARDA G. DACAYO, attorney-in-fact, TERESITA BANDO, in her behalf and in behalf of her minor children MICHAEL, JAY LEE, LARRA MELISSA and MARY ANNE, all surnamed BANDO, RONILO E. LEE, represented by THELMA V. LEE, attorney-in-fact, ANGELITO BASILIO, and HEIRS OF VICTORINO CARAIG, namely: EDNA L. AURELIO VDA. DE CARAIG, minors JENNICA, JESSA, CHRISTINE MAY and CATHERINE, all surnamed CARAIG, represented by their mother EDNA AURELIO VDA. DE CARAIG, petitioner, vs. QUEZON CITY SPORTS CLUB, INC., respondents. TINGA, J.: Before us is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court, seeking to reverse and set aside the 18 February 2004 decision2 and the 3 June 2004 resolution3 of the Court of Appeals in CA-GR SP No. 78245. The factual antecedents of the case follow. Claiming that it is a registered independent labor organization and the incumbent collective bargaining agent of Quezon City Sports Club (QCSC), the Kasapiang Manggagawa sa Quezon City Sports Club (union) filed a complaint for unfair labor practice 4 against QCSC on 12 November 1997, alleging that the latter committed the following unfair labor practices: 1. Interference with, restraining and/or coercing employees, particularly members of the incumbent union in their exercise of their rights to self-organization; 2. Discrimination in regards to payment of wages, hours of work and other terms and conditions of employment in order to discourage continued membership to the incumbent union; 3. Violation of several economic provisions of the CBA such as, across the board implementation of any legislated wage increases, non-payment of salaries and wages for [the] period already worked, and non-payment of overtime pay to some employees and other related economic benefits which will be specifically enunciated by the petitioner in the succeeding pleadings to be filed. 5 The Union averred that it was ordered to submit a new information sheet. 6 It immediately wrote a letter addressed to the general manager, Angel Sadang, to inquire about the information sheet, only to be insulted by the latter. The members of the union were not paid their salaries on 30 June 1997. 7 A board member, Antonio Chua allegedly harassed one of the employees and told him not to join the strike and even promised a promotion. 8 On 4 July 1997, the union wrote a letter to the management for the release of the members salaries for the period 16-30 June 1997, implementation of Wage Order No. 5, and granting of wage increases mandated by the Collective Bargaining Agreement (CBA). 9 When its letter went unanswered, the union filed a notice of strike on 10 July 1997 for violation of Article 248 (a)(c)(e) of the Labor Code, nonpayment of overtime pay, refusal to hear its grievances, and malicious refusal to comply with the economic provisions of the CBA. 10 After conducting a strike vote, 11 it staged a strike on 12 August 1997. On 16 August 1997, the QCSC placed some of its employees under temporary lay-off status due to redundancy. 12 It appears that on 22 December 1997, QCSC also filed a petition for cancellation of registration against the union. 13 QCSC, for its part, contended that the union was not a legitimate labor union as it had a pending complaint for cancellation of certificate of registration; that there was no valid CBA; that it had not committed any unfair labor practice; and that the union had staged an illegal strike. 14 On 29 December 1998, Labor Arbiter Joel S. Lustria promulgated a decision 15 (Lustria decision) finding QCSC guilty of unfair labor practice and ordering it to pay the affected employees their separation pay, backwages, and salary increase, totaling P27,504,864.46. 16 QCSC appealed from the labor arbiters decision. 17 In turn, the union filed a motion to dismiss the appeal for non-perfection due to failure to post the appeal bond. 18 QCSC filed a motion for reduction of the appeal bond to FOUR MILLION PESOS (P4,000,000.00). 19 On 4 January 2000, QCSC filed a supplement to its appeal, citing a decision (Dinopol decision) dated 9 October 1998 of Labor Arbiter Ernesto Dinopol declaring the strike of the union illegal. The dispositive portion reads:

WHEREFORE, in view of the Unions having violated the no-strike-no-lockout provision of the Collective Bargaining Agreement, the strike it staged on August 12, 1998 is hereby declared illegal and consequently, pursuant to Article 264 of the Labor Code, the individual respondents, namely: RONILO C. LEE, EDUARDO V. SANTIA, CECILLE C. PANGAN, ROMEO M. MORGA, GENARO C. BANDO AND ALEX J. SANTIAGO, who admitted in paragraph 1 of their position paper that they are officers/members of the complaining Union are hereby declared to have lost their employment status. The claim for damages is hereby DISMISSED for lack of merit. SO ORDERED. 20 Meanwhile, the National Labor Relations Commission (NLRC) 21 ordered the posting of an additional SIX MILLION PESO (P6,000,000.00)-bond. And on 1 August 2001, it 22 rendered a decision granting the appeal and reversing the Lustria decision. It ratiocinated: We are now called upon to harmonize two conflicting decisions rendered by two different Labor Arbiters, as discussed above, in order to maintain uniformity of our Decision. Both Decisions involve the same rights and interests of the same contending parties. From all indications, Labor Arbiter Lustria was apparently of the impression that herein individual complainants still retain their employment status when he decided this case. He was unaware, presumably, of the existence of the Decision rendered in NLRC CASE NO. 00-09-0667-97 which has already attained finality when he issued his decision granting the monetary claims of herein individual complainants. Be that as it may, We are of the view that the Decision in NLRC CASE NO. 00-09-0663-97 must perforce prevail over the appealed Decision and the latter to yield to it. It must remain undisturbed following the established doctrine on primacy and finality of decision. It bears stressing at this juncture, at the risk of being repetitious, that in NLRC Case No. 00-09-0663-97 the employment status of herein individual complainants was already declared lost or forfeited as of August 12, 1998, the day the illegal strike was staged. From then on, they ceased to be employees of respondent Sports Club. The forfeiture of their employment status carries with it the extinction of their right to demand for and be entitled to the economic benefits accorded them by law and the existing CBA. For, such right is premised on the fact of employment. Such being the case, it follows that the assailed decision did not create a demandable right or obligation, and therefore, any monetary award granted in their favor in the appealed decision pursuant to such right must necessarily be declared as wanting in legal basis, devoid of any force and effect. Compliance therewith can not be compelled as the respondent-appellant has nothing to comply. 23 In said decision, the NLRC noted that forty-three (43) complainants had already entered into an amicable settlement with QCSC. The other complainants (petitioners) meanwhile filed a motion for reconsideration which was denied by the NLRC. Thus, they filed a petition for certiorari under Rule 65 before the Court of Appeals. The petition was dismissed for lack of merit. Petitioners assailed the ruling of the NLRC for having been decided with grave abuse of discretion on two grounds: first, when it entertained the appeal despite the failure of respondent to post an appeal bond within the reglementary period and in ordering the reduction of the amount of the appeal bond to P10,000,000.00; and second, when it reversed the Lustria decision and upheld the Dinopol decision. Relying heavily on the NLRC decision, the Court of Appeals dismissed the petition for certiorari. In the instant petition, petitioners insist that the requirement for perfecting an appeal before the NLRC had not been met because under the Lustria decision, QCSC was ordered to pay the sum of P25,004,442.22 but it merely posted P4,000,000.00 and filed a motion for reduction of the bond. Moreover, QCSC failed to provide a sufficient justification in support of its motion to reduce the bond. On the substantive matter, petitioners once again challenge the ruling of the NLRC in declaring them to have lost their employment contrary to the Dinopol decision which only affected a few of the employees who were union members. Participation in an illegal strike, according to petitioners, does not automatically result in termination. Likewise, they maintain that the award of backwages in the Lustria decision was grounded on the lay-offs effected by QCSC, which are considered constructive dismissals. Furthermore, petitioners assail the NLRC decision when it avoided giving a definitive ruling on the charge of unfair labor practice. They also counter that the labor arbiter had jurisdiction over the money claims pertaining to wage orders and increases mandated by the CBA in the absence of a valid grievance machinery and for gross violation of the CBA, which is considered an unfair labor practice. This petition essentially presents two legal questions. First, do the simultaneous filing of the motion to reduce the appeal bond and posting of the reduced amount of bond within the reglementary period for appeal constitute substantial compliance with Article 223 of the Labor Code?

At the outset, it should be stressed that the right to appeal is not a natural right or a part of due process; it is merely a statutory privilege, and may be exercised only in the manner and in accordance with the provisions of law. The party who seeks to avail himself of the same must comply with the requirements of the rules. Failing to do so, the right to appeal is lost. 24 Article 223 of the Labor Code partly provides that: Art. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; b. If the decision, order or award was secured through fraud or coercion, including graft and corruption; c. If made purely on questions of law; and d. If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. Likewise, Sections 4(a) and 6 of Rule VI of the New Rules of Procedure of the NLRC, as amended, provide: SECTION 4. Requisites for Perfection of Appeal.(a) The Appeal shall be filed within the reglementary period as provided in Section 1 of this Rule; shall be verified by appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, with proof of payment of the required appeal fee and the posting of a cash or surety bond as provided in Section 6 of this Rule; shall be accompanied by a memorandum of appeal in three (3) legibly typewritten copies which shall state the grounds relied upon and the arguments in support thereof; the relief prayed for; and a statement of the date when the appellant received the appealed decision, resolution or order and a certificate of non-forum shopping with proof of service on the other party of such appeal. A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period of perfecting an appeal. SECTION 6. Bond.In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond. The appeal bond shall either be in cash or surety in an amount equivalent to the monetary award, exclusive of damages and attorneys fees. xxx No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the monetary award. The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph shall not stop the running of the period to perfect an appeal. Under the Rules, appeals involving monetary awards are perfected only upon compliance with the following mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the memorandum of appeal; and (3) payment of the required cash or surety bond. 25 Thus, the posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the labor arbiter. The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly expressed in the provision that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it unmistakably plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employer's appeal may be perfected. The word "may" refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction. The filing of the bond is not only mandatory but also a jurisdictional requirement that must be complied with in order to confer jurisdiction upon the NLRC. Noncompliance with the requirement renders the decision of the labor arbiter final and executory. This requirement is intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer's appeal. It is intended to discourage employers from using an appeal to delay or evade their obligation to satisfy their employees' just and lawful claims. 26 However, Section 6 of the New Rules of Procedure of the NLRC also mandates, among others, that no motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the monetary award. Hence, the NLRC has the full discretion to grant or deny the motion to reduce the amount of the appeal bond. 27

In addition, while the bond requirement on appeals involving a monetary award has been relaxed in certain cases, this can only be done where there was substantial compliance with the Rules; or where the appellants, at the very least, exhibited willingness to pay by posting a partial bond. 28 This rule was given a liberal interpretation by this Court in Nicol v. Footjoy Industrial Corporation. 29 In said case, Footjoy Industrial Corporation was sued by its employees for illegal dismissal. The Labor Arbiter declared the employees as having been constructively terminated and ordered Footjoy Industrial Corporation to pay wage differentials, backwages and attorneys fees totaling P51,956,314.00. Footjoy Industrial Corporation appealed to the NLRC and moved to reduce its appeal bond to P10,000,000.00. The NLRC, however, denied Footjoy Industrial Corporations motion and later dismissed its appeal. The Court of Appeals reversed the NLRC. This Court through the Second Division ruled that the bond requirement on appeals involving monetary awards had been and could be relaxed in meritorious cases such as: (1) there was substantial compliance with the Rules; (2) the surrounding facts and circumstances constitute meritorious grounds to reduce the bond; (3) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving controversies on the merits; or (4) the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond during the reglementary period. 30 Applying these jurisprudential guidelines, we find and hold that the NLRC did not err in reducing the amount of the appeal bond and considering the appeal as having been filed within the reglementary period. As correctly observed by the NLRC: Since, in its Order of 29 February 2000, the Commission [with former Chairman Rogelio I. Rayala acting as Ponente] granted the motion to reduce bond, and in fact, directed respondent-appellant to post an additional cash or surety bond in the amount of Six Million (P6,000,000.00) a matter which respondent complied with on March 21, 2000, it then is clear that respondents appeal was perfected on time. Complainants-movants questioning them anew in their motion for reconsideration is quite futile because under Article 223 of the Labor Code, our aforesaid 29 February 2000 Order obtained finality 10 days from complainant Unions receipt thereof, a fact that is not being disputed here. 31 (citations omitted) Moreover, the posting of the amount of P4,000,000.00 simultaneously with the filing of the motion to reduce the bond to that amount, as well as the filing of the memorandum of appeal, all within the reglementary period, altogether constitute substantial compliance with the Rules. The NLRCs favorable ruling on QCSCs motion to reduce the appeal bond should be accorded due weight and respect absent any indication of grave error. The second legal question deals with the validity of the NLRC decision, as affirmed by the Court of Appeals. We rule in favor of petitioners. The assailed Dinopol decision involves a complaint for illegal strike filed by QCSC on the ground of a "nostrike no lockout" provision in the CBA. The challenged decision was rendered in accordance with law and is supported by factual evidence on record. Indeed, the grounds for declaring the strike, as alleged by the Union, were not substantially proven. In the notice of strike, the union did not state in particular the acts which allegedly constitute unfair labor practice. Moreover, by virtue of the "no-strike no lockout" provision in the CBA, the union was prohibited from staging an economic strike, i.e., to force wage or other concessions from the employer which he is not required by law to grant. However, it should be noted that while the strike declared by the union was held illegal, only the union officers were declared as having lost their employment status. In effect, there was a ruling only with respect to some union members while the status of all others had remained disputed. Then came the Lustria decision, issued two (2) months later, finding that QCSC had committed unfair labor practices against the union and accordingly granting backwages and separation pay in favor of 112 employees. The Lustria decision emanated from a complaint for unfair labor practice against QCSC. Culled from the unions pleadings were the specific acts committed by QCSC, such as: 1. Insulting of the Union President as evidenced by the Salaysay of Ma. Cecilia Pangan; 2. Cuddling and treating the minority union with favor, such as paying their salaries/wages fully and ahead of the incumbent union and as if it were the incumbent bargaining agents; 3. Discouraging the members of the incumbent union from continuing their membership with the incumbent union as evidenced by the Pinagsamang Salaysay of Ramiro Espinosa and Ronaldo Q. Lim; 4. Bribing union member and promising promotion if he will not join the strike as evidenced by the Salaysay of Bernard Delta; 5. Transferring union members to another job description; 6. Replacing them with members of minority union evidenced by Leslie Tamayos Salaysay; 7. Subjecting one union member to a very tense confrontation in the General Managers Office after she commented during the NCMB conference that the 201 file of the employees are intact, resulting to her being taken to the hospital for nervous breakdown; and 8. Requiring the union members to submit another information sheet, and failure to do so would mean no payment of their June 16-30, 1997 salary.32

Applying the totality of the conduct doctrine, Labor Arbiter Lustria held that QCSC had committed unfair labor practices. There is no conflict between the Dinopol and the Lustria decisions. While both rulings involve the same parties and same issues, there is a distinction between the remedies sought by the parties in these two cases. In the Dinopol decision, it was QCSC which filed a petition to declare the illegality of the 12 August 1997 strike by the union. The consequence of the declaration of an illegal strike is termination from employment, which the Labor Arbiter did so rule in said case. However, not all union members were terminated. In fact, only a few union officers were validly dismissed in accordance with Article 264 of the Labor Code. Corollarily, the other union members who had merely participated in the strike but had not committed any illegal acts were not dismissed from employment. Hence, the NLRC erred in declaring the employment status of all employees as having been lost or forfeited by virtue of the Dinopol decision. On the other hand, the Lustria decision involved the unfair labor practices alleged by the union with particularity. In said case, Labor Arbiter Lustria sided with the Union and found QCSC guilty of such practices. As a consequence, the affected employees were granted backwages and separation pay. The grant of backwages and separation pay however was not premised on the declaration of the illegality of the strike but on the finding that these affected employees were constructively dismissed from work, as evidenced by the layoffs effected by the company. As explained in the Lustria decision: Considering that the temporary lay-off of listed employees effected by the respondents on 16 August 1997 was without documentary evidence to determine its validity, it is our considered view and we so hold that said employees were constructively dismissed without just or authorized cause and observance of due process. This opinion finds support from the hard and cold fact of absence of prior notice, report with the regional office of the Department of Labor and Employment having jurisdiction over the area and they remain under lay-off status of employment. In conclusion, they are entitled to backwages and separation pay in lieu of reinstatement as prayed. 33 Clearly, there are two separate decisions issued by two different labor arbiters involving the same parties and interests. Considering that the remedies sought by the parties in each case differ, these two rulings may coexist. Therefore, with respect to petitioners and union officers Alex J. Santiago, Ma. Cecilia Pangan, Ronilo E. Lee, and Genaro Bando, who apparently had been substituted by present petitioner Teresita Bando, the Dinopol decision declaring them as having lost their employment status still stands. To recapitulate, the NLRC erred in setting aside the Lustria decision, as well as in deleting the award of backwages and separation pay, despite the finding that the affected employees had been constructively dismissed. Based on the foregoing, the Lustria decision should be upheld and therefore reinstated except as regards the four petitioners. WHEREFORE, the petition is GRANTED IN PART. The decision of the Court of Appeals affirming the NLRC ruling is REVERSED AND SET ASIDE. The decision of Labor Arbiter Lustria dated 29 December 1998 in NLRC Case No. 00-11-08181-97 granting the monetary claims of petitioners is REINSTATED, except with respect to petitioners Alex J. Santiago, Ma. Cecilia Pangan, Ronilo E. Lee and Teresita Bando. SO ORDERED.

G.R. No. 166879 August 14, 2009 A. SORIANO AVIATION, Petitioner, vs. EMPLOYEES ASSOCIATION OF A. SORIANO AVIATION, JULIUS S. VARGAS IN HIS CAPACITY AS UNION PRESIDENT, REYNALDO ESPERO, JOSEFINO ESPINO, GALMIER BALISBIS, GERARDO BUNGABONG, LAURENTE BAYLON, JEFFREY NERI, ARTURO INES, REYNALDO BERRY, RODOLFO RAMOS, OSWALD ESPION, ALBERT AGUILA, RAYMOND BARCO, REYNANTE AMIMITA, SONNY BAWASANTA, MAR NIMUAN AND RAMIR LICUANAN, Respondents. DECISION CARPIO MORALES, J.: On May 22, 1997, A. Soriano Aviation (petitioner or the company) which is engaged in providing transportation of guests to and from Amanpulo and El Nido resorts in Palawan, and respondent Employees Association of A. Soriano Aviation (the Union), the duly-certified exclusive bargaining agent of the rank and file employees of petitioner, entered into a Collective Bargaining Agreement (CBA) effective January 1, 1997 up to December 31, 1999. The CBA included a "No-Strike, No-Lock-out" clause. On May 1 & 12, and June 12, 1997, which were legal holidays and peak season for the company, eight mechanics-members of respondent Union, its herein co-respondents Albert Aguila (Aguila), Reynante Amimita (Amimita), Galmier Balisbis (Balisbis), Raymond Barco (Barco), Gerardo Bungabong (Bungabong),

Josefino Espino (Espino), Jeffrey Neri (Neri) and Rodolfo Ramos, Jr. (Ramos), refused to render overtime work. Petitioner treated the refusal to work as a concerted action which is a violation of the "No-Strike, NoLockout" clause in the CBA. It thus meted the workers a 30-day suspension. It also filed on July 31, 1997 a complaint for illegal strike against them, docketed as NLRC Case No. 07-05409-97, which was later dismissed at its instance in order to give way to settlement, without prejudice to its re-filing should settlement be unavailing. The attempted settlement between the parties having been futile, the Union filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) on October 3, 1997, attributing to petitioner the following acts: (1) union busting, (2) illegal dismissal of union officer, (3) illegal suspension of eight mechanics, (4) violation of memorandum of agreement, (5) coercion of employees and interrogation of newly-hired mechanics with regard to union affiliation, (6) discrimination against the aircraft mechanics, (7) harassment through systematic fault-finding, (8) contractual labor, and (9) constructive dismissal of the Union President, Julius Vargas (Vargas). As despite conciliation no amicable settlement of the dispute was arrived at, the Union went on strike on October 22, 1997. Meanwhile, pursuant to its reservation in NLRC Case No. 07-05409-97, petitioner filed a Motion to Re-Open the Case which was granted by Labor Arbiter Manuel P. Asuncion by Order of October 21, 1997. By Decision1 dated September 28, 1998 rendered in petitioners complaint in NLRC Case No. 07-05409-97, the Labor Arbiter declared that the newly implemented work-shift schedule was a valid exercise of management prerogative and the refusal of herein individual respondents to work on three consecutive holidays was a form of protest by the Union, hence, deemed a concerted action. Noting that the Union failed to comply with the formal requirements prescribed by the Labor Code in the holding of strike, the strike was declared illegal. The Union appealed to the NLRC which dismissed it in a per curiam Decision2 dated September 14, 1999, and the subsequent motion for reconsideration was denied by Resolution dated November 11, 1999. In the interim or on June 16, 1998, eight months into the "second strike," petitioner filed a complaint against respondents before the Labor Arbiter, praying for the declaration as illegal of the strike on account of their alleged pervasive and widespread use of force and violence and for the loss of their employment, citing the following acts committed by them: publicly shouting of foul and vulgar words to company officers and nonstriking employees; threatening of officers and non-striking employees with bodily harm and dousing them with water while passing by the strike area; destruction of or inflicting of damage to company property, as well as private property of company officers; and putting up of placards and streamers containing vulgar and insulting epithets including imputing crime on the company. By Decision3 of June 15, 2000, Labor Arbiter Ramon Valentin C. Reyes declared the "second strike" illegal. Taking judicial notice of the September 28, 1998 Decision of Labor Arbiter Asuncion, he noted that as the Union went on the "first strike" on a non-strikeable issue the questioned change of work schedule, it violated the "No-Strike, No-Lockout" clause in the CBA and, in any event, the Union failed to comply with the requirements for a valid strike. The Labor Arbiter went on to hold that the Union deliberately resorted to the use of violent and unlawful acts in the course of the "second strike," hence, the individual respondents were deemed to have lost their employment. On appeal, the National Labor Relations Commission (NLRC) affirmed in toto the Labor Arbiters decision, by Resolution4 dated October 31, 2001. It held that even if the strike were legal at the onset, the commission of violent and unlawful acts by individual respondents in the course thereof rendered it illegal. Its motion for reconsideration having been denied by Resolution5 dated December 14, 2001, the Union appealed to the Court of Appeals. By the assailed Decision of April 16, 2004,6 the appellate court reversed and set aside the NLRC ruling, holding that the acts of violence committed by the Union members in the course of the strike were not, as compared to the acts complained of in Shell Oil Workers Union v. Shell Company of the Philippines,7 First City Interlink Transportation Co., Inc., v. Roldan-Confesor8 and Maria Cristina Fertilizer Plant Employees Association v. Tandaya, 9 (this case was applied by the Labor Arbiter in his Decision of September 28, 2008) where the acts of violence resulted in loss of employment, concluded that the acts in the present case were not as serious or pervasive as in these immediately-cited cases to call for loss of employment of the striking employees. Specifically, the appellate court noted that at the time petitioner filed its complaint in June 1998, almost eight months had already elapsed from the commencement of the strike and, in the interim, the alleged acts of violence were committed only during nine non-consecutive days, viz: one day in October, two days in November, four days in December, all in 1997, and two days in January 1998. To the appellate court, these incidents did not warrant the conversion of an otherwise legal strike into an illegal one, and neither would it result in the loss of employment of the strikers. For, so the appellate court held, the incidents consisted

merely of name-calling and using of banners imputing negligence and criminal acts to the company and its officers, which do not indicate a degree of violence that could be categorized as grave or serious to warrant the loss of employment of the individual strikers found to be responsible. By Resolution of January 25, 2005, the appellate court denied petitioners motion for reconsideration, hence, the present petition. Petitioner insists that, contrary to the appellate courts finding, the questioned acts of the strikers were of a serious character, widespread and pervasive; and that the Unions imputation of crime and negligence on its part, and the prolonged strike resulted in its loss of goodwill and business, particularly the termination of its lease and air-service contract with Amanpulo, the loss of its after-sales repair service agreement with Bell Helicopters, the loss of its accreditation as the Beechcraft service facility, and the decision of El Nido to put up its own aviation company. Apart from the acts of violence committed by the strikers, petitioner bases its plea that the strike should be declared illegal on the violation of the "No-Strike-No-Lockout" clause in the CBA, the strike having arisen from non-strikeable issues. Petitioner proffers that what actually prompted the holding of the strike was the implementation of the new shift schedule, a valid exercise of management prerogative. In issue then is whether the strike staged by respondents is illegal due to the alleged commission of illegal acts and violation of the "No Strike-No Lockout" clause of the CBA and, if in the affirmative, whether individual respondents are deemed to have lost their employment status on account thereof. The Court rules in the affirmative. The Court notes that, as found by the Labor Arbiter in NLRC Case No. 07-05409-97, the first strike or the mechanics refusal to work on 3 consecutive holidays was prompted by their disagreement with the management-imposed new work schedule. Having been grounded on a non-strikeable issue and without complying with the procedural requirements, then the same is a violation of the "No Strike-No Lockout Policy" in the existing CBA. Respecting the second strike, where the Union complied with procedural requirements, the same was not a violation of the "No Strike- No Lockout" provisions, as a "No Strike-No Lockout" provision in the Collective Bargaining Agreement (CBA) is a valid stipulation but may be invoked only by employer when the strike is economic in nature or one which is conducted to force wage or other concessions from the employer that are not mandated to be granted by the law. It would be inapplicable to prevent a strike which is grounded on unfair labor practice.10 In the present case, the Union believed in good faith that petitioner committed unfair labor practice when it went on strike on account of the 30-day suspension meted to the striking mechanics, dismissal of a union officer and perceived union-busting, among others. As held in Malayang Samahan ng mga Manggaggawa sa M. Greenfield v. Ramos:11 On the submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the intraunion conflict between the federation and the local union, it bears reiterating that when respondent company dismissed the union officers, the issue was transformed into a termination dispute and brought respondent company into the picture. Petitioners believed in good faith that in dismissing them upon request by the federation, respondent company was guilty of unfair labor practice in that it violated the petitioners right to self-organization. The strike was staged to protest respondent companys act of dismissing the union officers. Even if the allegations of unfair labor practice are subsequently found out to be untrue, the presumption of legality of the strike prevails. (Emphasis supplied) Be that as it may, the Court holds that the second strike became invalid due to the commission of illegal action in its course. It is hornbook principle that the exercise of the right of private sector employees to strike is not absolute. Thus Section 3 of Article XIII of the Constitution provides: SECTION 3. x x x It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. (Emphasis and underscoring supplied) Indeed, even if the purpose of a strike is valid, the strike may still be held illegal where the means employed are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are injurious to the right to property renders a strike illegal. And so is picketing or the obstruction to the free use of property or the comfortable enjoyment of life or property, when accompanied by intimidation, threats, violence, and coercion as to constitute nuisance.12 Apropos is the following ruling in Sukhothai Cuisine v. Court of Appeals:13 Well-settled is the rule that even if the strike were to be declared valid because its objective or purpose is lawful, the strike may still be declared invalid where the means employed are illegal. Among such limits are the prohibited activities under Article 264 of the Labor Code, particularly paragraph (e), which states that no person engaged in picketing shall: a) commit any act of violence, coercion, or intimidation or

b) obstruct the free ingress to or egress from the employer's premises for lawful purposes, or c) obstruct public thoroughfares. The following acts have been held to be prohibited activities: where the strikers shouted slanderous and scurrilous words against the owners of the vessels; where the strikers used unnecessary and obscene language or epithets to prevent other laborers to go to work, and circulated libelous statements against the employer which show actual malice; where the protestors used abusive and threatening language towards the patrons of a place of business or against co-employees, going beyond the mere attempt to persuade customers to withdraw their patronage; where the strikers formed a human cordon and blocked all the ways and approaches to the launches and vessels of the vicinity of the workplace and perpetrated acts of violence and coercion to prevent work from being performed; and where the strikers shook their fists and threatened non-striking employees with bodily harm if they persisted to proceed to the workplace. Permissible activities of the picketing workers do not include obstruction of access of customers. (emphasis supplied) The appellate court found in the present case, as in fact it is not disputed, that the acts complained of were the following:14 1. On 29 October 1997, while Robertus M. Cohen, personnel manager of the Company, was eating at the canteen, petitioner Rodolfo Ramos shouted "insults and other abusive, vulgar and foul-mouthed word" with the use of a megaphone, such as, "sige, ubusin mo yung pagkain," "kapal ng mukha mo;" that when he left the canteen to go back to his office he was splashed with water from behind so that his whole back was drenched; that when he confronted that strikers at the picket line accompanied by three (3) security guards, to find out who was responsible, he was told by petitioner Oswald Espion who was then holding a thick piece of wood approximately two (2) feet long to leave. 2. On the same day, 29 October 1997, petitioners Julius Vargas, Jeffrey Neri, and Rodolfo Ramos, together with Jose Brin, shouted to Capt. Ben Hur Gomez, the chief operating officer of the Company, in this wise, "Matanda ka na, balatuba ka pa rin. Mangungurakot ka sa kompanya!" 3. In the morning of 11 November 1997, petitioner Ramos was reported to have shouted to Mr. Maximo Cruz, the Mechanical and Engineering Manager of the Company, "Max, mag-resign ka na, ang baho ng bunganga mo!" 4. In the afternoon of the same day, 11 November 1997, petitioner Jeffrey Neri was said to have shouted these words "Max, mag-resign ka na, ang baho ng bunganga mo!" to Mr. Maximo Cruz; 5. On 12 November 1997. petitioners Julius Vargas, Jeffrey Neri, Oswald Espion, Raymond Barco, together with Jose Brin, were reported to have shouted to Capt. Gomez and Mr. Maximo Cruz, "Matanda ka na, balatuba ka pa rin! Max, ang baho ng bunganga mo, kasing baho ng ugali mo!" 6. On the same day, 12 November 1997, petitioner Oswald Espion was said to have shouted to the non-striking employees and officers of the Company, "putang-ina ninyo!" 7. Also, on 12 November 1997, petitioner Oswald Espion was reported to have thrown gravel and sand to the car owned by Celso Villamor Gomez, lead man of the Company, as the said car was traveling along company premises near the picket line; (apart from the marks of mud, gravel and sand found on the entire body of the car, no heavy damages, however, appears to have been sustained by the car)." 8. On 08 December 1997, petitioners Julius Vargas, Rey Espero, Rey Barry, Galmier Balisbis, Rodolfo Ramos, Sonny Bawasanta and Arturo Ines, together with Jose Brin, shouted, "Max, ang sama mo talaga, lumabas ka dito at pipitpitin ko ang mukha mo!" "Cohen, inutil ka talaga. Nagpahaba ka pa ng balbas para kang tsonggo!" Cohen, lumabas ka dito at hahalikan kita." 9. On 10 December 1997, petitioners Vargas and Espion were reported to have shouted to Mr. Maximino Cruz, "Hoy, Max Cruz, wala kang alam dyan, huwag kang poporma-porma dyan!" and then flashed the "dirty finger" at him; 10. On 15 December 1997, petitioner Neri was said to have shouted to non-striking employees at the canteen, "Hoy, mga iskerol, kain lang ng kain, mga putangina ninyo!" 11. Also on 15 December 1997, petitioners Vargas, Neri, Espion, Mar Nimuan, Ramir Licuanan, Albert Aguila and Sonny Bawasanta, together with Jose Brin, splashed water over Edmund C. Manibog, Jr., security guard of the Company; 12. On 20 December 1997, the strikers admittedly lit and threw firecrackers purportedly outside the Company premises, as part of a noise barrage, while the Company was having its Christmas party inside the Company premises; 13. On 14 January 1998, when Chris A. Oballas, collector of the Company, boarded a public utility jeepney where Jose Brin, a striker, was also passenger, Jose Brin was said to have shouted to the other passengers and driver of the jeepney, "Mga pasahero, driver, itong tao ito sherol, ang kapal ng mukha. Iyong pinagtrabahuhan namin kinakain nito, ibenebent[a] kami nito, hudas ito! Mga pasahero, tingnan niyo, hindi makatingin-tingin sa akin, hindi makapagsalita. Hoy, tingin ka sa akin, napahiya ka sa mga ginagawa mo ano?" and, that when Chris Oballas was alighting from the jeepney, he was kicked on his leg by Jose Brin; and,

14. On 15 January 1998, while Julio Tomas, Avionics Technician of the Company, and his girlfriend, Elizabeth Gali, also an employee of the Company, were waiting for their ride, several union members shouted to Elizabeth Gali, Beth iwanan mo na yang taong yan, walang kwentang tao yan!" "Beth, paano na yung pinagsamahan natin?" irked, Julio Tomas upon boarding the passenger jeepney with his girlfriend threw a P2.00 coin in the direction of the picketers, the coin hit the windshield of a privately-owned jeepney belonging to petitioner Espion which was parked alongside the premises of the strike area; The act of Tomas, provoked the petitioners Espion and Amimita to follow Tomas, who when left alone inside the tricycle after his girlfriend took a separate tricycle to her home, was approached by petitioners Espion and Amimita; petitioner Espion then threw a P2.00 coin at him, and while pointing a baseball bat to his face shouted, "Huwag mong uulitin yung ginawa mo kundi tatamaan ka sa akin!" (Emphasis and italics in the original) The Court notes that the placards and banners put up by the striking workers in the company premises read: "ANDRES SORIANO AVIATION, INC. CAUGHT IN THE ACT, ATTEMPTING TO BRIBE GOVERNMENT OFFICIALS BEWARE, NOW A NAME YOU CAN TRASH," "ASAI DETERIORATING SAFETY RECORD KILLS 2 DEAD + VARIOUS (IN PLANE CRASH) FLIGHT MISHAPS BEWARE," "FLY AT YOUR OWN RISK," "ANDRES SORIANO AVIATION, INC. DETERIORATING SAFETY RECORD KILLS INNOCENT PEOPLE IN PLANE CRASH, THE CAUSE: UNTRAINED MECHANICS DOING AIRCRAFT RELEASE, THE RESULT: SLIPSHOD MAINTENANCE AND SLOPPY PLANE INSPECTION," "WANNA FLY BLIND?," "BENHUR GOMEZ DRAGS COMPANY TO DEBT AND SHAMEFUL EXPERIENCE (MAHIYA KA NAMAN, OY!)," "A. SORIANO AVIATION, INC., DEAD PEOPLE IN PLANE CRASH," "ELY BONIFACIO (MASAKIT ANG TOTOO) MAGNANAKAW NG PIYESA, PALITAN NA RIN! TINGNAN NYO KUNG NAGNANAKAW," "MEKANIKO DE EROPLANO Y HUELGA UN VIAJE DE PELIGRO, AIRCRAFT MANAGEMENT BULOK; "A. SORIANO AVIATION KILLS PEOPLE FOR LAX OVERSIGHT OF SAFETY PROC." "(ELY BONIFACIOPATALSIKIN NA RIN," "MANDARAMBONG" "MUKHANG KWARTA," "SAAN MO DINALA ANG DORNIER SPECIAL TOOLS? IKAW HA!)," "ELY BONIFACIO KAWATAN BANTAY SALAKAY," "AMANPULO AND EL NIDO GUESTS, BEWARE OF ASAI FLIGHTS, AIRCRAFT MECHANICS STILL ON STRIKE," "GOING TO BORACAY AND EL NIDO IS GOOD BUT FLYING WITH A. SORIANO AVIATION? THINK TWICE!" "ACHTUNG: A SORIANO AVIATION DEAD PEOPLE IN PLANE CRASH INSURANCE ENTITLEMENTS DENIED DUE TO CAR VIOLATIONS," "UNDRESS SORIANO AVIATION, INC. UNRELIABLE FIXED BASED OPERATOR KILLS PEOPLE FOR LAX OVERSIGHT OF SAFETY PROCEDURES." It cannot be gainsaid that by the above-enumerated undisputed acts, the Union committed illegal acts during the strike. The Union members repeated name-calling, harassment and threats of bodily harm directed against company officers and non-striking employees and, more significantly, the putting up of placards, banners and streamers with vulgar statements imputing criminal negligence to the company, which put to doubt reliability of its operations, come within the purview of illegal acts under Art. 264 and jurisprudence. That the alleged acts of violence were committed in nine non-consecutive days during the almost eight months that the strike was on-going does not render the violence less pervasive or widespread to be excusable. Nowhere in Art. 264 does it require that violence must be continuous or that it should be for the entire duration of the strike.1avvphil The appellate court took against petitioner its filing of its complaint to have the strike declared illegal almost eight months from the time it commenced. Art. 264 does not, however, state for purposes of having a strike declared as illegal that the employer should immediately report the same. It only lists what acts are prohibited. It is thus absurd to expect an employer to file a complaint at the first instance that an act of violence is alleged to be committed, especially, as in the present case, when an earlier complaint to have the refusal of the individual respondents to work overtime declared as an illegal strike was still pending an issue resolved in its favor only on September 25, 1998. The records show that the Union went on strike on October 22, 1997, and the first reported harassment incident occurred on October 29, 1997, while the last occurred in January, 1998. Those instances may have been sporadic, but as found by the Labor Arbiter and the NLRC, the display of placards, streamers and banners even up to the time the appeal was being resolved by the NLRC works against the Unions favor. The acts complained of including the display of placards and banners imputing criminal negligence on the part of the company and its officers, apparently with the end in view of intimidating the companys clientele, are, given the nature of its business, that serious as to make the "second strike" illegal. Specifically with respect to the putting up of those banners and placards, coupled with the name-calling and harassment, the same indicates that it was resorted to to coerce the resolution of the dispute the very evil which Art. 264 seeks to prevent. While the strike is the most preeminent economic weapon of workers to force management to agree to an equitable sharing of the joint product of labor and capital, it exerts some disquieting effects not only on the relationship between labor and management, but also on the general peace and progress of society and economic well-being of the State.15 If such weapon has to be used at all, it must be used sparingly and within the bounds of law in the interest of industrial peace and public welfare. As to the issue of loss of employment of those who participated in the illegal strike, Sukhothai16 instructs:

In the determination of the liabilities of the individual respondents, the applicable provision is Article 264(a) of the Labor Code: Art. 264. Prohibited Activities (a) x x x xxxx x x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during an illegal strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. xxxx In Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc., this Court explained that the effects of such illegal strikes, outlined in Article 264, make a distinction between workers and union officers who participate therein: an ordinary striking worker cannot be terminated for mere participation in an illegal. There must be proof that he or she committed illegal acts during a strike. A union officer, on the other hand, may be terminated from work when he knowingly participates in an illegal strike, and like other workers, when he commits an illegal act during an illegal strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice.17 (Emphasis supplied) The liability for prohibited acts has thus to be determined on an individual basis.1awph!1.e+ A perusal of the Labor Arbiters Decision, which was affirmed in toto by the NLRC, shows that on account of the staging of the illegal strike, individual respondents were all deemed to have lost their employment, without distinction as to their respective participation. Of the participants in the illegal strike, whether they knowingly participated in the illegal strike in the case of union officers or knowingly participated in the commission of violent acts during the illegal strike in the case of union members, the records do not indicate. While respondent Julius Vargas was identified to be a union officer, there is no indication if he knowingly participated in the illegal strike. The Court not being a trier of facts, the remand of the case to the NLRC is in order only for the purpose of determining the status in the Union of individual respondents and their respective liability, if any. WHEREFORE, the petition is GRANTED. The Court of Appeals Decision and Resolution dated April 16, 2004 and January 25, 2005, respectively, are REVERSED and SET ASIDE. The Resolutions dated October 31, 2001 and December 14, 2001 of the National Labor Relations Commission affirming the Decision of the Labor Arbiter in NLRC-NCR Case No. 00-06-04890-98 are AFFIRMED with the MODIFICATION in light of the foregoing discussions. The case is accordingly REMANDED to the National Labor Relations Commission for the purpose of determining the Union status and respective liabilities, if any, of the individual respondents. SO ORDERED. G.R. No. 181531 July 31, 2009 NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIES- MANILA PAVILION HOTEL CHAPTER, Petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL CORPORATION, Respondents. DECISION CARPIO MORALES, J.: National Union of Workers in Hotels, Restaurants and Allied Industries Manila Pavilion Hotel Chapter (NUWHRAIN-MPHC), herein petitioner, seeks the reversal of the Court of Appeals November 8, 2007 Decision1 and of the Secretary of Labor and Employments January 25, 2008 Resolution2 in OS-A-9-52-05 which affirmed the Med-Arbiters Resolutions dated January 22, 20073 and March 22, 2007.4 A certification election was conducted on June 16, 2006 among the rank-and-file employees of respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following results: EMPLOYEES IN VOTERS LIST = 353 TOTAL VOTES CAST = NUWHRAIN-MPHC = HIMPHLU = NO UNION = 346 151 169 1

SPOILED = SEGREGATED =

3 22

In view of the significant number of segregated votes, contending unions, petitioner, NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union (HIMPHLU), referred the case back to MedArbiter Ma. Simonette Calabocal to decide which among those votes would be opened and tallied. Eleven (11) votes were initially segregated because they were cast by dismissed employees, albeit the legality of their dismissal was still pending before the Court of Appeals. Six other votes were segregated because the employees who cast them were already occupying supervisory positions at the time of the election. Still five other votes were segregated on the ground that they were cast by probationary employees and, pursuant to the existing Collective Bargaining Agreement (CBA), such employees cannot vote. It bears noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a probationary employee, was counted. By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes, specially those cast by the 11 dismissed employees and those cast by the six supposedly supervisory employees of the Hotel. Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE), arguing that the votes of the probationary employees should have been opened considering that probationary employee Gatbontons vote was tallied. And petitioner averred that respondent HIMPHLU, which garnered 169 votes, should not be immediately certified as the bargaining agent, as the opening of the 17 segregated ballots would push the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered would be one vote short of the majority which would then become 169. By the assailed Resolution of January 22, 2007, the Secretary of Labor and Employment (SOLE), through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiters Order. It held that pursuant to Section 5, Rule IX of the Omnibus Rules Implementing the Labor Code on exclusion and inclusion of voters in a certification election, the probationary employees cannot vote, as at the time the Med-Arbiter issued on August 9, 2005 the Order granting the petition for the conduct of the certification election, the six probationary employees were not yet hired, hence, they could not vote. The SOLE further held that, with respect to the votes cast by the 11 dismissed employees, they could be considered since their dismissal was still pending appeal. As to the votes cast by the six alleged supervisory employees, the SOLE held that their votes should be counted since their promotion took effect months after the issuance of the above-said August 9, 2005 Order of the Med-Arbiter, hence, they were still considered as rank-and-file. Respecting Gatbontons vote, the SOLE ruled that the same could be the basis to include the votes of the other probationary employees, as the records show that during the pre-election conferences, there was no disagreement as to his inclusion in the voters list, and neither was it timely challenged when he voted on election day, hence, the Election Officer could not then segregate his vote. The SOLE further ruled that even if the 17 votes of the dismissed and supervisory employees were to be counted and presumed to be in favor of petitioner, still, the same would not suffice to overturn the 169 votes garnered by HIMPHLU. In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent was proper. Petitioners motion for reconsideration having been denied by the SOLE by Resolution of March 22, 2007, it appealed to the Court of Appeals. By the assailed Decision promulgated on November 8, 2007, the appellate court affirmed the ruling of the SOLE. It held that, contrary to petitioners assertion, the ruling in Airtime Specialist, Inc. v. Ferrer Calleja5 stating that in a certification election, all rank-and-file employees in the appropriate bargaining unit, whether probationary or permanent, are entitled to vote, is inapplicable to the case at bar. For, the appellate court continued, the six probationary employees were not yet employed by the Hotel at the time the August 9, 2005 Order granting the certification election was issued. It thus held that Airtime Specialist applies only to situations wherein the probationary employees were already employed as of the date of filing of the petition for certification election. Respecting Gatbontons vote, the appellate court upheld the SOLEs finding that since it was not properly challenged, its inclusion could no longer be questioned, nor could it be made the basis to include the votes of the six probationary employees. The appellate court brushed aside petitioners contention that the opening of the 17 segregated votes would materially affect the results of the election as there would be the likelihood of a run-off election in the event none of the contending unions receive a majority of the valid votes cast. It held that the "majority" contemplated in deciding which of the unions in a certification election is the winner refers to the majority of valid votes cast, not the simple majority of votes cast, hence, the SOLE was correct in ruling that even if the 17 votes were in favor of petitioner, it would still be insufficient to overturn the results of the certification election.

Petitioners motion for reconsideration having been denied by Resolution of January 25, 2008, the present recourse was filed. Petitioners contentions may be summarized as follows: 1. Inclusion of Jose Gatbontons vote but excluding the vote of the six other probationary employees violated the principle of equal protection and is not in accord with the ruling in Airtime Specialists, Inc. v. Ferrer-Calleja; 2. The time of reckoning for purposes of determining when the probationary employees can be allowed to vote is not August 9, 2005 the date of issuance by Med-Arbiter Calabocal of the Order granting the conduct of certification elections, but March 10, 2006 the date the SOLE Order affirmed the Med-Arbiters Order. 3. Even if the votes of the six probationary employees were included, still, HIMPHLU could not be considered as having obtained a majority of the valid votes cast as the opening of the 17 ballots would increase the number of valid votes from 321 to 338, hence, for HIMPHLU to be certified as the exclusive bargaining agent, it should have garnered at least 170, not 169, votes. Petitioner justifies its not challenging Gatbontons vote because it was precisely its position that probationary employees should be allowed to vote. It thus avers that justice and equity dictate that since Gatbontons vote was counted, then the votes of the 6 other probationary employees should likewise be included in the tally. Petitioner goes on to posit that the word "order" in Section 5, Rule 9 of Department Order No. 40-03 reading "[A]ll employees who are members of the appropriate bargaining unit sought to be represented by the petitioner at the time of the issuance of the order granting the conduct of certification election shall be allowed to vote" refers to an order which has already become final and executory, in this case the March 10, 2002 Order of the SOLE. Petitioner thus concludes that if March 10, 2006 is the reckoning date for the determination of the eligibility of workers, then all the segregated votes cast by the probationary employees should be opened and counted, they having already been working at the Hotel on such date. Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner argues that the same was not proper for if the 17 votes would be counted as valid, then the total number of votes cast would have been 338, not 321, hence, the majority would be 170; as such, the votes garnered by HIMPHLU is one vote short of the majority for it to be certified as the exclusive bargaining agent. The relevant issues for resolution then are first, whether employees on probationary status at the time of the certification elections should be allowed to vote, and second, whether HIMPHLU was able to obtain the required majority for it to be certified as the exclusive bargaining agent. On the first issue, the Court rules in the affirmative. The inclusion of Gatbontons vote was proper not because it was not questioned but because probationary employees have the right to vote in a certification election. The votes of the six other probationary employees should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds: In a certification election, all rank and file employees in the appropriate bargaining unit, whether probationary or permanent are entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states that the "labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for purposes of collective bargaining." Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the bargaining unit. Hence, all rank and file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their employment status as basis for eligibility in supporting the petition for certification election. The law refers to "all" the employees in the bargaining unit. All they need to be eligible to support the petition is to belong to the "bargaining unit." (Emphasis supplied) Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of the Omnibus Rules Implementing the Labor Code, provides: Rule II Section 2. Who may join labor unions and workers' associations. - All persons employed in commercial, industrial and agricultural enterprises, including employees of government owned or controlled corporations without original charters established under the Corporation Code, as well as employees of religious, charitable, medical or educational institutions whether operating for profit or not, shall have the right to selforganization and to form, join or assist labor unions for purposes of collective bargaining: provided, however, that supervisory employees shall not be eligible for membership in a labor union of the rank-and-file employees but may form, join or assist separate labor unions of their own. Managerial employees shall not be eligible to form, join or assist any labor unions for purposes of collective bargaining. Alien employees with valid working permits issued by the Department may exercise the right to self-organization and join or assist labor unions for purposes of collective bargaining if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the Department of Foreign Affairs.

For purposes of this section, any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership in any labor organization. All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection and other legitimate purposes except collective bargaining. (Emphasis supplied) The provision in the CBA disqualifying probationary employees from voting cannot override the Constitutionally-protected right of workers to self-organization, as well as the provisions of the Labor Code and its Implementing Rules on certification elections and jurisprudence thereon. A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not contrary to law, morals, good customs, public order or public policy.6 Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to support their position that probationary employees hired after the issuance of the Order granting the petition for the conduct of certification election must be excluded, should not be read in isolation and must be harmonized with the other provisions of D.O. Rule XI, Sec. 5 of D.O. 40-03, viz: Rule XI xxxx Section 5. Qualification of voters; inclusion-exclusion. - All employees who are members of the appropriate bargaining unit sought to be represented by the petitioner at the time of the issuance of the order granting the conduct of a certification election shall be eligible to vote. An employee who has been dismissed from work but has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification election shall be considered a qualified voter, unless his/her dismissal was declared valid in a final judgment at the time of the conduct of the certification election. (Emphasis supplied) xxxx Section 13. Order/Decision on the petition. - Within ten (10) days from the date of the last hearing, the MedArbiter shall issue a formal order granting the petition or a decision denying the same. In organized establishments, however, no order or decision shall be issued by the Med-Arbiter during the freedom period. The order granting the conduct of a certification election shall state the following: (a) the name of the employer or establishment; (b) the description of the bargaining unit; (c) a statement that none of the grounds for dismissal enumerated in the succeeding paragraph exists; (d) the names of contending labor unions which shall appear as follows: petitioner union/s in the order in which their petitions were filed, forced intervenor, and no union; and (e) a directive upon the employer and the contending union(s) to submit within ten (10) days from receipt of the order, the certified list of employees in the bargaining unit, or where necessary, the payrolls covering the members of the bargaining unit for the last three (3) months prior to the issuance of the order. (Emphasis supplied) xxxx Section 21. Decision of the Secretary. - The Secretary shall have fifteen (15) days from receipt of the entire records of the petition within which to decide the appeal. The filing of the memorandum of appeal from the order or decision of the Med-Arbiter stays the holding of any certification election. The decision of the Secretary shall become final and executory after ten (10) days from receipt thereof by the parties. No motion for reconsideration of the decision shall be entertained. (Emphasis supplied) In light of the immediately-quoted provisions, and prescinding from the principle that all employees are, from the first day of their employment, eligible for membership in a labor organization, it is evident that the period of reckoning in determining who shall be included in the list of eligible voters is, in cases where a timely appeal has been filed from the Order of the Med-Arbiter, the date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes final and executory. The filing of an appeal to the SOLE from the Med-Arbiters Order stays its execution, in accordance with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to furnish him/her with the list of eligible voters pending the resolution of the appeal. During the pendency of the appeal, the employer may hire additional employees. To exclude the employees hired after the issuance of the Med-Arbiters Order but before the appeal has been resolved would violate the guarantee that every employee has the right to be part of a labor organization from the first day of their service. In the present case, records show that the probationary employees, including Gatbonton, were included in the list of employees in the bargaining unit submitted by the Hotel on May 25, 2006 in compliance with the directive of the Med-Arbiter after the appeal and subsequent motion for reconsideration have been denied by the SOLE, rendering the Med-Arbiters August 22, 2005 Order final and executory 10 days after the March 22, 2007 Resolution (denying the motion for reconsideration of the January 22 Order denying the appeal),

and rightly so. Because, for purposes of self-organization, those employees are, in light of the discussion above, deemed eligible to vote. A certification election is the process of determining the sole and exclusive bargaining agent of the employees in an appropriate bargaining unit for purposes of collective bargaining. Collective bargaining, refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit.7 The significance of an employees right to vote in a certification election cannot thus be overemphasized. For he has considerable interest in the determination of who shall represent him in negotiating the terms and conditions of his employment. Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the Order of the MedArbiter, experience shows that it sometimes takes months to be resolved. To rule then that only those employees hired as of the date of the issuance of the Med-Arbiters Order are qualified to vote would effectively disenfranchise employees hired during the pendency of the appeal. More importantly, reckoning the date of the issuance of the Med-Arbiters Order as the cut-off date would render inutile the remedy of appeal to the SOLE.1avvph!1 But while the Court rules that the votes of all the probationary employees should be included, under the particular circumstances of this case and the period of time which it took for the appeal to be decided, the votes of the six supervisory employees must be excluded because at the time the certification elections was conducted, they had ceased to be part of the rank and file, their promotion having taken effect two months before the election. As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules in the negative. It is well-settled that under the so-called "double majority rule," for there to be a valid certification election, majority of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast. Prescinding from the Courts ruling that all the probationary employees votes should be deemed valid votes while that of the supervisory employees should be excluded, it follows that the number of valid votes cast would increase from 321 to 337. Under Art. 256 of the Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters shall be certified as the sole and exclusive bargaining agent of all the workers in the appropriate bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170. HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to obtain a majority vote. The position of both the SOLE and the appellate court that the opening of the 17 segregated ballots will not materially affect the outcome of the certification election as for, so they contend, even if such member were all in favor of petitioner, still, HIMPHLU would win, is thus untenable. It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to serve as basis for computing the required majority, and not just to determine which union won the elections. The opening of the segregated but valid votes has thus become material. To be sure, the conduct of a certification election has a two-fold objective: to determine the appropriate bargaining unit and to ascertain the majority representation of the bargaining representative, if the employees desire to be represented at all by anyone. It is not simply the determination of who between two or more contending unions won, but whether it effectively ascertains the will of the members of the bargaining unit as to whether they want to be represented and which union they want to represent them. Having declared that no choice in the certification election conducted obtained the required majority, it follows that a run-off election must be held to determine which between HIMPHLU and petitioner should represent the rank-and-file employees. A run-off election refers to an election between the labor unions receiving the two (2) highest number of votes in a certification or consent election with three (3) or more choices, where such a certified or consent election results in none of the three (3) or more choices receiving the majority of the valid votes cast; provided that the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.8 With 346 votes cast, 337 of which are now deemed valid and HIMPHLU having only garnered 169 and petitioner having obtained 151 and the choice "NO UNION" receiving 1 vote, then the holding of a run-off election between HIMPHLU and petitioner is in order. WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and Resolution dated January 25, 2008 of the Court of Appeals affirming the Resolutions dated January 22, 2007 and March 22, 2007, respectively, of the Secretary of Labor and Employment in OS-A-9-52-05 are ANNULLED and SET ASIDE. The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to cause the holding of a run-off election between petitioner, National Union of Workers in Hotels, Restaurants and Allied IndustriesManila Pavilion Hotel Chapter (NUWHRAIN-MPC), and respondent Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU). SO ORDERED.

Republic of the Philippines Congress of the Philippines Metro Manila Thirteenth Congress Third Special Session Begun and held in Metro Manila, on Monday, the nineteenth day of February, two thousand seven. Republic Act No. 9481 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 Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled: 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." SEC. 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." SEC. 3. Article 238 of the Labor Code is hereby amended to read as follows: "ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor organization, whether national or local, may be cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239 hereof." SEC. 4. A new provision is hereby inserted into the Labor Code as Article 238-A t o read as follows: "ART. 238-A. Effect of a Petition for Cancellation of Registration. - A petition for cancellation of union registration shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election. In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts." SEC. 5. Article 239 of the Labor Code is amended to read as follows: "ART. 239. Grounds for Cancellation of Union Registration. - The following may constitute grounds for cancellation of union registration: (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, and the list of members who took part in the ratification; (b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members." SEC. 6. A new provision, Article 239-A is inserted into the Labor Code to read as follows: "ART. 239-A. Voluntary Cancellation of Registration. - The registration of a legitimate labor organization may be cancelled by the organization itself. Provided, That at least two-thirds of its general membership votes, in a meeting duly called for that purpose to dissolve the organization: Provided, further, That an application to cancel registration is thereafter submitted by the board of the organization, attested to by the president thereof." SEC. 7. A new provision, Article 242-A is hereby inserted into the Labor Code to read as follows: "ART. 242-A. Reportorial Requirements. - The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned: (a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and by-lam or amendments thereto; (b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election; (c) Its annual financial report within thirty (30) days after the close of every fiscal year; and (d) Its list of members at least once a year or whenever required by the Bureau. Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty." SEC. 8. Article 245 of the Labor Code is hereby amended to read as follows: "ART. 245. Ineligibility of Managerial Employees to Join any Labor Organization; Right of Supervisory Employees. - Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. The rank and file union and the supervisors' union operating within the same establishment may join the same federation or national union." SEC. 9. A new provision, Article 245-A is inserted into the Labor Code to read as follows: "ART. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. - The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union." SEC. 10. Article 256 of the Labor Code is hereby amended to read as follows: "ART. 256. Representation Issue in Organized Establishments. - In organized establishments, when a verified petition questioning the majority status of the incumbent bargaining agent is filed by any legitimate labor organization including a national union or federation which has already issued a charter certificate to its local chapter participating in the certification election or a local chapter which has been issued a charter certificate by the national union or federation before the Department of Labor and Employment within the sixty (60)-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit. To have a valid election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted between the labor unions receiving the two highest number of votes: Provided, That the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast. In cases where the petition was filed by a national union or federation, it shall not be required to disclose the names of the local chapter's officers and members. At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed." SEC. 11. Article 257 of the Labor Code is hereby amended to read as follows: "ART. 257. Petitions in Unorganized Establishments. - In any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by any legitimate labor organization, including a national union or federation which has already issued a charter certificate to its 1ocal/chapter participating in the certification election or a local/chapter which has been issued a charter certificate by the national union or federation. In cases where the petition was filed by a national union or federation, it shall not be required to disclose the names of the local chapter's officers and members."

SEC. 12. A new provision, Article 258-A is hereby inserted into the Labor Code to read as follows: "ART. 258-A. Employer as Bystander. - In all cases, whether the petition for certification election is filed by an employer or a legitimate labor organization, the employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification election. The employer's participation in such proceedings shall be limited to: (1) being notified or informed of petitions of such nature; and (2) submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the petition." SEC. 13. Separability Clause. - If any part, section or provision of this Act shall be held invalid or unconstitutional, the other provisions shall not be affected thereby. SEC. 14. Repealing Clause. - Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, and all other acts, laws, presidential issuances, rules and regulations are hereby repealed, modified or amended accordingly. SEC. 15. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in at least two newspapers of general circulation. Approved, JOSE DE VENECIA JR. MANNY VILLAR Speaker of the House of President of the Senate Representatives This Act which is a consolidation of Senate Bill No. 2466 and House Bill No. 1351 was finally passed by the Senate and the House of Representatives on February 20, 2007. ROBERTO P. NAZARENO OSCAR G. YABES Secretary General Secretary of Senate House of Representatives Approved: GLORIA MACAPAGAL-ARROYO President of the Philippines Lapsed into law on MAY 25, 2007 Without the signature of the President, In accordance with Article VI, Section 27 (1) of the Constitution

BANK OF THE PHILIPPINE ISLANDS, versus BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No. 164301 October 19, 2011 In the present incident, petitioner Bank of the Philippine Islands (BPI) moves for reconsideration of our Decision dated August 10, 2010, holding that former employees of the Far East Bank and Trust Company (FEBTC) absorbed by BPI pursuant to the two banks merger in 2000 were covered by the Union Shop Clause in the then existing collective bargaining agreement (CBA) of BPI with respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank (the Union). To recall, the Union Shop Clause involved in this long standing controversy provided, thus:
ARTICLE II xxxx Section 2. Union Shop - New employees falling within the bargaining unit as defined in Article I of this Agreement, who may hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular employees, join the Union as a condition of their continued employment. It is understood that membership in good standing in the Union is a condition of their continued employment with the Bank. (Emphases supplied.)

The bone of contention between the parties was whether or not the absorbed FEBTC employees fell within the definition of new employees under the Union Shop Clause, such that they may be required to join respondent union and if they fail to do so, the Union may request BPI

to terminate their employment, as the Union in fact did in the present case. Needless to state, BPI refused to accede to the Unions request. Although BPI won the initial battle at the Voluntary Arbitrator level, BPIs position was rejected by the Court of Appeals which ruled that the Voluntary Arbitrators interpretation of the Union Shop Clause was at war with the spirit and rationale why the Labor Code allows the existence of such provision. On review with this Court, we upheld the appellate courts ruling and disposed of the case as follows:
WHEREFORE, the petition is hereby DENIED, and the Decision dated September 30, 2003 of the Court of Appeals is AFFIRMED, subject to the thirty (30) day notice requirement imposed herein. Former FEBTC employees who opt not to become union members but who qualify for retirement shall receive their retirement benefits in accordance with law, the applicable retirement plan, or the CBA, as the case may be.

Notwithstanding our affirmation of the applicability of the Union Shop Clause to former FEBTC employees, for reasons already extensively discussed in the August 10, 2010 Decision, even now BPI continues to protest the inclusion of said employees in the Union Shop Clause. In seeking the reversal of our August 10, 2010 Decision, petitioner insists that the parties to the CBA clearly intended to limit the application of the Union Shop Clause only to new employees who were hired as non-regular employees but later attained regular status at some point after hiring. FEBTC employees cannot be considered new employees as BPI merely stepped into the shoes of FEBTC as an employer purely as a consequence of the merger. Petitioner likewise relies heavily on the dissenting opinions of our respected colleagues, Associate Justices Antonio T. Carpio and Arturo D. Brion. From both dissenting opinions, petitioner derives its contention that the situation of absorbed employees can be likened to old employees of BPI, insofar as their full tenure with FEBTC was recognized by BPI and their salaries were maintained and safeguarded from diminution but such absorbed employees cannot and should not be treated in exactly the same way as old BPI employees for there are substantial differences between them. Although petitioner admits that there are similarities between absorbed and new employees, they insist there are marked differences between them as well. Thus, adopting Justice Brions stance, petitioner contends that the absorbed FEBTC employees should be considered a sui generis group of employees whose classification will not be duplicated until BPI has another merger where it would be the surviving corporation. Apparently borrowing from Justice Carpio, petitioner propounds that the Union Shop Clause should be strictly construed since it purportedly curtails the right of the absorbed employees to abstain from joining labor organizations. Pursuant to our directive, the Union filed its Comment on the Motion for Reconsideration. In opposition to petitioners arguments, the Union, in turn, adverts to our discussion in the August 10, 2010 Decision regarding the voluntary nature of the merger between BPI and FEBTC, the lack of an express stipulation in the Articles of Merger regarding the transfer of employment contracts to the surviving corporation, and the consensual nature of employment contracts as valid bases for the conclusion that former FEBTC employees should be deemed new employees. The Union argues that the creation of employment relations between former FEBTC employees and BPI (i.e., BPIs selection and engagement of former FEBTC employees, its payment of their wages, power of dismissal and of control over the employees conduct) occurred after the merger, or to be more precise, after the Securities and Exchange Commissions (SEC) approval of the merger. The Union likewise points out that BPI failed to offer any counterargument to the Courts reasoning that:
The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual employee's right or freedom of association, is not to protect the union for the union's sake. Laws and jurisprudence promote unionism and afford certain protections to the certified bargaining agent in a unionized company because a strong and effective union presumably benefits all employees in the bargaining unit since such a union would be in a better position to demand improved benefits and conditions of work from the employer. x x x.

x x x Nonetheless, settled jurisprudence has already swung the balance in favor of unionism, in recognition that ultimately the individual employee will be benefited by that policy. In the hierarchy of constitutional values, this Court has repeatedly held that the right to abstain from joining a labor organization is subordinate to the policy of encouraging unionism as an instrument of social justice.

While most of the arguments offered by BPI have already been thoroughly addressed in the August 10, 2010 Decision, we find that a qualification of our ruling is in order only with respect to the interpretation of the provisions of the Articles of Merger and its implications on the former FEBTC employees security of tenure. Taking a second look on this point, we have come to agree with Justice Brions view that it is more in keeping with the dictates of social justice and the State policy of according full protection to labor to deem employment contracts as automatically assumed by the surviving corporation in a merger, even in the absence of an express stipulation in the articles of merger or the merger plan. In his dissenting opinion, Justice Brion reasoned that:
To my mind, due consideration of Section 80 of the Corporation Code, the constitutionally declared policies on work, labor and employment, and the specific FEBTC-BPI situation i.e., a merger with complete "body and soul" transfer of all that FEBTC embodied and possessed and where both participating banks were willing (albeit by deed, not by their written agreement) to provide for the affected human resources by recognizing continuity of employment should point this Court to a declaration that in a complete merger situation where there is total takeover by one corporation over another and there is silence in the merger agreement on what the fate of the human resource complement shall be, the latter should not be left in legal limbo and should be properly provided for, by compelling the surviving entity to absorb these employees. This is what Section 80 of the Corporation Code commands, as the surviving corporation has the legal obligation to assume all the obligations and liabilities of the merged constituent corporation. Not to be forgotten is that the affected employees managed, operated and worked on the transferred assets and properties as their means of livelihood; they constituted a basic component of their corporation during its existence. In a merger and consolidation situation, they cannot be treated without consideration of the applicable constitutional declarations and directives, or, worse, be simply disregarded. If they are so treated, it is up to this Court to read and interpret the law so that they are treated in accordance with the legal requirements of mergers and consolidation, read in light of the social justice, economic and social provisions of our Constitution. Hence, there is a need for the surviving corporation to take responsibility for the affected employees and to absorb them into its workforce where no appropriate provision for the merged corporation's human resources component is made in the Merger Plan.

By upholding the automatic assumption of the non-surviving corporations existing employment contracts by the surviving corporation in a merger, the Court strengthens judicial protection of the right to security of tenure of employees affected by a merger and avoids confusion regarding the status of their various benefits which were among the chief objections of our dissenting colleagues. However, nothing in this Resolution shall impair the right of an employer to terminate the employment of the absorbed employees for a lawful or authorized cause or the right of such an employee to resign, retire or otherwise sever his employment, whether before or after the merger, subject to existing contractual obligations. In this manner, Justice Brions theory of automatic assumption may be reconciled with the majoritys concerns with the successor employers prerogative to choose its employees and the prohibition against involuntary servitude. Notwithstanding this concession, we find no reason to reverse our previous pronouncement that the absorbed FEBTC employees are covered by the Union Shop Clause.

Even in our August 10, 2010 Decision, we already observed that the legal fiction in the law on mergers (that the surviving corporation continues the corporate existence of the non-surviving corporation) is mainly a tool to adjudicate the rights and obligations between and among the merged corporations and the persons that deal with them. Such a legal fiction cannot be unduly extended to an interpretation of a Union Shop Clause so as to defeat its purpose under labor law. Hence, we stated in the Decision that:
In any event, it is of no moment that the former FEBTC employees retained the regular status that they possessed while working for their former employer upon their absorption by petitioner. This fact would not remove them from the scope of the phrase "new employees" as contemplated in the Union Shop Clause of the CBA, contrary to petitioner's insistence that the term "new employees" only refers to those who are initially hired as non-regular employees for possible regular employment. The Union Shop Clause in the CBA simply states that "new employees" who during the effectivity of the CBA "may be regularly employed" by the Bank must join the union within thirty (30) days from their regularization. There is nothing in the said clause that limits its application to only new employees who possess non-regular status, meaning probationary status, at the start of their employment. Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new employees who are "absorbed" as regular employees from the beginning of their employment. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioner's new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Union as a condition of their continued employment.

Although by virtue of the merger BPI steps into the shoes of FEBTC as a successor employer as if the former had been the employer of the latters employees from the beginning it must be emphasized that, in reality, the legal consequences of the merger only occur at a specific date, i.e., upon its effectivity which is the date of approval of the merger by the SEC. Thus, we observed in the Decision that BPI and FEBTC stipulated in the Articles of Merger that they will both continue their respective business operations until the SEC issues the certificate of merger and in the event no such certificate is issued, they shall hold each other blameless for the non-consummation of the merger. We likewise previously noted that BPI made its assignments of the former FEBTC employees effective on April 10, 2000, or after the SEC approved the merger. In other words, the obligation of BPI to pay the salaries and benefits of the former FEBTC employees and its right of discipline and control over them only arose with the effectivity of the merger. Concomitantly, the obligation of former FEBTC employees to render service to BPI and their right to receive benefits from the latter also arose upon the effectivity of the merger. What is material is that all of these legal consequences of the merger took place during the life of an existing and valid CBA between BPI and the Union wherein they have mutually consented to include a Union Shop Clause. From the plain, ordinary meaning of the terms of the Union Shop Clause, it covers employees who (a) enter the employ of BPI during the term of the CBA; (b) are part of the bargaining unit (defined in the CBA as comprised of BPIs rank and file employees); and (c) become regular employees without distinguishing as to the manner they acquire their regular status. Consequently, the number of such employees may adversely affect the majority status of the Union and even its existence itself, as already amply explained in the Decision. Indeed, there are differences between (a) new employees who are hired as probationary or temporary but later regularized, and (b) new employees who, by virtue of a merger, are absorbed from another company as regular and permanent from the beginning of their employment with the surviving corporation. It bears reiterating here that these differences are too insubstantial to warrant the exclusion of the absorbed employees from the application of the Union Shop Clause. In the Decision, we noted that:

Verily, we agree with the Court of Appeals that there are no substantial differences between a newly hired non-regular employee who was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee pursuant to a merger, for purposes of applying the Union Shop Clause. Both employees were hired/employed only after the CBA was signed. At the time they are being required to join the Union, they are both already regular rank and file employees of BPI. They belong to the same bargaining unit being represented by the Union. They both enjoy benefits that the Union was able to secure for them under the CBA. When they both entered the employ of BPI, the CBA and the Union Shop Clause therein were already in effect and neither of them had the opportunity to express their preference for unionism or not. We see no cogent reason why the Union Shop Clause should not be applied equally to these two types of new employees, for they are undeniably similarly situated.

Again, it is worthwhile to highlight that a contrary interpretation of the Union Shop Clause would dilute its efficacy and put the certified union that is supposedly being protected thereby at the mercy of management. For if the former FEBTC employees had no say in the merger of its former employer with another bank, as petitioner BPI repeatedly decries on their behalf, the Union likewise could not prevent BPI from proceeding with the merger which undisputedly affected the number of employees in the bargaining unit that the Union represents and may negatively impact on the Unions majority status. In this instance, we should be guided by the principle that courts must place a practical and realistic construction upon a CBA, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. We now come to the question: Does our affirmance of our ruling that former FEBTC employees absorbed by BPI are covered by the Union Shop Clause violate their right to security of tenure which we expressly upheld in this Resolution? We answer in the negative. In Rance v. National Labor Relations Commission, we held that:
It is the policy of the state to assure the right of workers to "security of tenure" (Article XIII, Sec. 3 of the New Constitution, Section 9, Article II of the 1973 Constitution). The guarantee is an act of social justice. When a person has no property, his job may possibly be his only possession or means of livelihood. Therefore, he should be protected against any arbitrary deprivation of his job. Article 280 of the Labor Code has construed security of tenure as meaning that "the employer shall not terminate the services of an employee except for a just cause or when authorized by" the Code. x x x (Emphasis supplied.)

We have also previously held that the fundamental guarantee of security of tenure and due process dictates that no worker shall be dismissed except for a just and authorized cause provided by law and after due process is observed. Even as we now recognize the right to continuous, unbroken employment of workers who are absorbed into a new company pursuant to a merger, it is but logical that their employment may be terminated for any causes provided for under the law or in jurisprudence without violating their right to security of tenure. As Justice Carpio discussed in his dissenting opinion, it is well-settled that termination of employment by virtue of a union security clause embodied in a CBA is recognized in our jurisdiction. In Del Monte Philippines, Inc. v. Saldivar, we explained the rationale for this policy in this wise:
Article 279 of the Labor Code ordains that "in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by [Title I, Book Six of the Labor Code]." Admittedly, the enforcement of a closed-shop or union security provision in the CBA as a ground for termination finds no extension within any of the provisions under Title I, Book Six of the Labor Code. Yet jurisprudence has consistently recognized, thus: "It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. For this reason, the law has allowed stipulations for 'union shop' and 'closed shop' as means

of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis-a-vis the employer." (Emphasis supplied.)

Although it is accepted that non-compliance with a union security clause is a valid ground for an employees dismissal, jurisprudence dictates that such a dismissal must still be done in accordance with due process. This much we decreed in General Milling Corporation v. Casio, to wit:
The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos that: While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees' right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be accorded a separate hearing by respondent company. The twin requirements of notice and hearing constitute the essential elements of procedural due process. The law requires the employer to furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the employer's decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality. Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the CBA. The rights 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 are not wiped away by a union security clause or a union shop clause in a collective bargaining agreement. x x x (Emphases supplied.)

In light of the foregoing, we find it appropriate to state that, apart from the fresh thirty (30)day period from notice of finality of the Decision given to the affected FEBTC employees to join the Union before the latter can request petitioner to terminate the formers employment, petitioner must still accord said employees the twin requirements of notice and hearing on the possibility that they may have other justifications for not joining the Union. Similar to our August 10, 2010 Decision, we reiterate that our ruling presupposes there has been no material change in the situation of the parties in the interim. WHEREFORE, the Motion for Reconsideration is DENIED. The Decision dated August 10, 2010 is AFFIRMED, subject to the qualifications that: (a) Petitioner is deemed to have assumed the employment contracts of the Far East Bank and Trust Company (FEBTC) employees upon effectivity of the merger without break in the continuity of their employment, even without express stipulation in the Articles of Merger; and (b) Aside from the thirty (30) days, counted from notice of finality of the August 10, 2010 Decision, given to former FEBTC employees to join the respondent, said employees shall be accorded full procedural due process before their employment may be terminated. SO ORDERED.

G.R. No. 178409 June 8, 2011 YOLITO FADRIQUELAN, ARTURO EGUNA, ARMANDO MALALUAN, DANILO ALONSO, ROMULO DIMAANO, ROEL MAYUGA, WILFREDO RIZALDO, ROMEO SUICO, DOMINGO ESCAMILLAS and DOMINGO BAUTRO, Petitioners, vs. MONTEREY FOODS CORPORATION, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 178434 MONTEREY FOODS CORPORATION, Petitioner, vs. BUKLURAN NG MGA MANGGAGAWA SA MONTEREY-ILAW AT BUKLOD NG MANGGAGAWA, YOLITO FADRIQUELAN, CARLITO ABACAN, ARTURO EGUNA, DANILO ROLLE, ALBERTO CASTILLO, ARMANDO MALALUAN, DANILO ALFONSO, RUBEN ALVAREZ, ROMULO DIMAANO, ROEL MAYUGA, JUANITO TENORIO, WILFREDO RIZALDO, JOHN ASOTIGUE, NEMESIO AGTAY, ROMEO SUICO, DOMINGO ESCAMILLAS and DOMINGO BAUTRO, Respondents. DECISION ABAD, J.: These cases are about the need to clearly identify, for establishing liability, the union officers who took part in the illegal slowdown strike after the Department of Labor and Employment (DOLE) Secretary assumed jurisdiction over the labor dispute. The Facts and the Case On April 30, 2002 the three-year collective bargaining agreement or CBA between the union Bukluran ng Manggagawa sa Monterey-Ilaw at Buklod ng Manggagawa (the union) and Monterey Foods Corporation (the company) expired. On March 28, 2003 after the negotiation for a new CBA reached a deadlock, the union filed a notice of strike with the National Conciliation and Mediation Board (NCMB). To head off the strike, on April 30, 2003 the company filed with the DOLE a petition for assumption of jurisdiction over the dispute in view of its dire effects on the meat industry. In an Order dated May 12, 2003, the DOLE Secretary assumed jurisdiction over the dispute and enjoined the union from holding any strike. It also directed the union and the company to desist from taking any action that may aggravate the situation. On May 21, 2003 the union filed a second notice of strike before the NCMB on the alleged ground that the company committed unfair labor practices. On June 10, 2003 the company sent notices to the union officers, charging them with intentional acts of slowdown. Six days later or on June 16 the company sent new notices to the union officers, informing them of their termination from work for defying the DOLE Secretarys assumption order. On June 23, 2003, acting on motion of the company, the DOLE Secretary included the unions second notice of strike in his earlier assumption order. But, on the same day, the union filed a third notice of strike based on allegations that the company had engaged in union busting and illegal dismissal of union officers. On July 7, 2003 the company filed a petition for certification of the labor dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration but the DOLE Secretary denied the motion. He, however, subsumed the third notice of strike under the first and second notices. On November 20, 2003 the DOLE rendered a decision that, among other things, upheld the companys termination of the 17 union officers. The union and its officers appealed the decision to the Court of Appeals (CA). On May 29, 2006 the CA rendered a decision, upholding the validity of the companys termination of 10 union officers but declaring illegal that of the other seven. Both parties sought recourse to this Court, the union in G.R. 178409 and the company in G.R. 178434. The Issues Presented The issues these cases present are: 1. Whether or not the CA erred in holding that slowdowns actually transpired at the companys farms; and 2. Whether or not the CA erred in holding that union officers committed illegal acts that warranted their dismissal from work. The Rulings of the Court First. The law is explicit: no strike shall be declared after the Secretary of Labor has assumed jurisdiction over a labor dispute. A strike conducted after such assumption is illegal and any union officer who knowingly participates in the same may be declared as having lost his employment.1 Here, what is involved is a slowdown strike. Unlike other forms of strike, the employees involved in a slowdown do not walk out of their jobs to hurt the company. They need only to stop work or reduce the rate of their work while generally remaining in their assigned post.

The Court finds that the union officers and members in this case held a slowdown strike at the companys farms despite the fact that the DOLE Secretary had on May 12, 2003 already assumed jurisdiction over their labor dispute. The evidence sufficiently shows that union officers and members simultaneously stopped work at the companys Batangas and Cavite farms at 7:00 a.m. on May 26, 2003. The union of course argues that it merely held assemblies to inform members of the developments in the CBA negotiation, not protest demonstrations over it. But as the CA correctly observed, if the meetings had really been for the stated reason, why did the union officers and members from separate company farms choose to start and end their meetings at the same time and on the same day? And if they did not intend a slowdown, why did they not hold their meetings after work. There is no allegation that the company prevented the union from holding meetings after working hours. Second. A distinction exists, however, between the ordinary workers liability for illegal strike and that of the union officers who participated in it. The ordinary worker cannot be terminated for merely participating in the strike. There must be proof that he committed illegal acts during its conduct. On the other hand, a union officer can be terminated upon mere proof that he knowingly participated in the illegal strike.2 Still, the participating union officers have to be properly identified.3 The CA held that the company illegally terminated union officers Ruben Alvarez, John Asotigue, Alberto Castillo, Nemesio Agtay, Carlito Abacan, Danilo Rolle, and Juanito Tenorio, there being no substantial evidence that would connect them to the slowdowns. The CA said that their part in the same could not be established with certainty. But, although the witnesses did not say that Asotigue, Alvarez, and Rolle took part in the work slowdown, these officers gave no credible excuse for being absent from their respective working areas during the slowdown. Tenorio allegedly took a break and never went back to work. He claimed that he had to attend to an emergency but did not elaborate on the nature of such emergency. In Abacans case, however, he explained that he was not feeling well on May 26, 2003 and so he decided to take a two-hour rest from work. This claim of Abacan is consistent with the report4 that only one officer (Tenorio) was involved in the slowdown at the Calamias farm.1avvphi1 At the Quilo farm, the farm supervisor did not include Castillo in the list of employees who failed to report for work on May 26, 2003.5 In Agtays case, the evidence is that he was on his rest day. There is no proof that the unions president, Yolito Fadriquelan, did not show up for work during the slowdowns. The CA upheld his dismissal, relying solely on a security guards report that the company submitted as evidence. But, notably, that report actually referred to a Rolly Fadrequellan, another employee who allegedly took part in the Lipa farm slowdown. Besides, Yolito Fadriquelan was then assigned at the General Trias farm in Cavite, not at the Lipa farm. In fact, as shown in the sworn statements6 of the Cavite farm employees, Fadriquelan even directed them not to do anything which might aggravate the situation. This clearly shows that his dismissal was mainly based on his being the union president. The Court sustains the validity of the termination of the rest of the union officers. The identity and participations of Arturo Eguna,7 Armando Malaluan,8 Danilo Alonso,9 Romulo Dimaano,10 Roel Mayuga,11 Wilfredo Rizaldo,12 Romeo Suico,13 Domingo Escamillas,14 and Domingo Bautro15 in the slowdowns were properly established. These officers simply refused to work or they abandoned their work to join union assemblies. In termination cases, the dismissed employee is not required to prove his innocence of the charges against him. The burden of proof rests upon the employer to show that the employees dismissal was for just cause. The employers failure to do so means that the dismissal was not justified.16 Here, the company failed to show that all 17 union officers deserved to be dismissed. Ordinarily, the illegally dismissed employees are entitled to two reliefs: reinstatement and backwages. Still, the Court has held that the grant of separation pay, instead of reinstatement, may be proper especially when as in this case such reinstatement is no longer practical or will be for the best interest of the parties.17 But they shall likewise be entitled to attorneys fees equivalent to 10% of the total monetary award for having been compelled to litigate in order to protect their interests.18 WHEREFORE, the Court MODIFIES the decision of the Court of Appeals in CA-G.R. SP 82526, DECLARES Monterey Foods Corporations dismissal of Alberto Castillo, Nemesio Agtay, Carlito Abacan, and Yolito Fadriquelan illegal, and ORDERS payment of their separation pay equivalent to one month salary for every year of service up to the date of their termination. The Court also ORDERS the company to pay 10% attorneys fees as well as interest of 6% per annum on the due amounts from the time of their termination and 12% per annum from the time this decision becomes final and executory until such monetary awards are paid. SO ORDERED. G.R. No. 93468 December 29, 1994 NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER, petitioner, vs.

HON. RUBEN D. TORRES, SECRETARY OF LABOR AND EMPLOYMENT and REPUBLIC PLANTERS BANK, respondents. Filemon G. Tercero for petitioner. The Government Corporate Counsel for Republic Planters Bank. BELLOSILLO, J.: NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER seeks nullification of the decision of public respondent Secretary of Labor dated 23 March 1990, which modified the order of Med-Arbiter Manases T. Cruz dated 17 August 1989 as well as his order dated 20 April 1990 denying reconsideration. On 17 March 1989, NATU filed a petition for certification election to determine the exclusive bargaining representative of respondent Bank's employees occupying supervisory positions. On 24 April 1989, the Bank moved to dismiss the petition on the ground that the supposed supervisory employees were actually managerial and/or confidential employees thus ineligible to join, assist or form a union, and that the petition lacked the 20% signatory requirement under the Labor Code. On 17 August 1989, Med-Arbiter Manases T. Cruz granted the petition thus
WHEREFORE, . . . let a certification election be ordered conducted among all the regular employees of the Republic Planters Bank occupying supervisory positions or the equivalent within 20 days from receipt of a copy of this Order. The choice shall be: (1) National Association of Trade Unions (NATU)-Republic Planters Bank Supervisors Chapter; and (2) No Union. The payroll three months prior to the filing of this petition shall be utilized in determining the list of eligible voters 1 ....

Respondent Bank appealed the order to the Secretary of Labor on the main ground that several of the employees sought to be included in the certification election, particularly the Department Managers, Branch Managers/OICs, Cashiers and Controllers were managerial and/or confidential employees and thus ineligible to join, assist or form a union. It presented annexes detailing the job description and duties of the positions in question and affidavits of certain employees. It also invoked provisions of the General Banking Act and the Central Bank Act to show the duties and responsibilities of the bank and its branches. On 23 March 1990, public respondent issued a decision partially granting the appeal, which is now being challenged before us
WHEREFORE, . . . the appeal is hereby partially granted. Accordingly, the Order dated 17 August 1989 is modified to the extent that Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers are declared managerial employees. Perforce, they cannot join the union of supervisors such as Division Chiefs, 2 Accounts Officers, Staff Assistants and OIC's (sic) unless the latter are regular managerial employees . . . .

NATU filed a motion for reconsideration but the same was denied on 20 April 1990. 3 Hence this recourse assailing public respondent for rendering the decision of 23 March 1990 and the order of 20 April 1990 both with grave abuse of discretion. The crucial issue presented for our resolution is whether the Department Managers, Assistant Managers, Branch Managers/OICs, Cashiers and Controllers of respondent Bank are managerial and/or confidential employees hence ineligible to join or assist the union of petitioner. NATU submits that an analysis of the decision of public respondent readily yields certain flaws that result in erroneous conclusions. Firstly, a branch does not enjoy relative autonomy precisely because it is treated as one unit with the head office and has to comply with uniform policies and guidelines set by the bank itself. It would be absurd if each branch of a particular bank would be adopting and implementing different policies covering multifarious banking transactions. Moreover, respondent Bank's own evidence clearly shows that policies and guidelines covering the various branches are set by the head office. Secondly, there is absolutely no evidence showing that bank policies are laid down through the collective action of the Branch Manager, the Cashier and the Controller. Thirdly, the organizational setup where the Branch Manager exercises control over branch operations, the Controller controls the Accounting Division, and the Cashier controls the Cash Division, is nothing but a proper delineation of duties and responsibilities. This delineation is a Central Bank prescribed internal control measure intended to objectively establish responsibilities among the officers to easily pinpoint culpability in case of error. The "dual control" and "joint custody" aspects mentioned in the decision of public respondent are likewise internal control measures prescribed by the Central Bank. Neither is there evidence showing that subject employees are vested with powers or prerogatives to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. The bare allegations in the affidavits of respondent Bank's Executive Assistant to the President 4 and the Senior Manager of the Human Resource Management Department 5 that those powers and prerogatives are inherent in subject positions are self-serving. Their claim cannot be made to prevail upon the actual duties and responsibilities of subject employees. The other evidence of respondent Bank which purports to show that subject employees exercise managerial functions even belies such claim. Insofar as Department Managers and Assistant Managers are concerned, there is absolutely no reason mentioned in the decision why they are managerial employees. Not even

respondent Bank in its appeal questioned the inclusion of Assistant Managers among the qualified petitioning employees. Public respondent has deviated from the real issue in this case, which is, the determination of whether subject employees are managerial employees within the contemplation of the Labor Code, as amended by RA 6715; instead, he merely concentrated on the nature, conduct and management of banks conformably with the General Banking Act and the Central Bank Act. Petitioner concludes that subject employees are not managerial employees but supervisors. Even assuming that they are confidential employees, there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. On the other hand, respondent Bank maintains that the Department Managers, Branch Managers, Cashiers and Controllers are inherently possessed of the powers enumerated in Art. 212, par. (m), of the Labor Code. It relies heavily on the affidavits of its Executive Assistant to the President and Senior Manager of the Human Resource Department. The Branch Managers, Cashiers and Controllers are vested not only with policymaking powers necessary to run the affairs of the branch, given the independence and relative autonomy which it enjoys in the pursuit of its goals and objectives, but also with the concomitant disciplinary authority over the employees. The Solicitor General argues that NATU loses sight of the fact that by virtue of the appeal of respondent Bank, the whole case is thrown open for consideration by public respondent. Even errors not assigned in the appeal, such as the exclusion by the Med-Arbiter of Assistant Managers from the managerial employees category, is within his discretion to consider as it is closely related to the errors properly assigned. The fact that Department Managers are managerial employees is borne out by the evidence of petitioner itself. Furthermore, while it assails public respondent's finding that subject employees are managerial employees, petitioner never questioned the fact that said officers also occupy confidential positions and thus remain prohibited from forming or joining any labor organization. Respondent Bank has no legal personality to move for the dismissal of the petition for certification election on the ground that its supervisory employees are in reality managerial employees. An employer has no standing to question the process since this is the sole concern of the workers. The only exception is where the employer itself has to file the petition pursuant to Art. 258 of the Labor Code because of a request to bargain collectively. 6 Public respondent, invoking RA 6715 and the inherent functions of Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers, held that these officers properly fall within the definition of managerial employees. The ratiocination in his Decision of 23 March 1990 7 is that
Republic Act No. 6715, otherwise known as the Herrera-Veloso Law, restored the right of supervisors to form their own unions while maintaining the proscription on the right to self-organization of managerial employees. Accordingly, the Labor Code, as amended, distinguishes managerial, supervisory and rank-and-file employees thus: Art. 212 (m) Managerial employee is 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. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions, if the exercise of such managerial authority is not routinary in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rankand-file employees (emphasis supplied). At first glance, pursuant to the above-definitions and based on their job descriptions as guideposts, there would seem to be no difficulty in distinguishing a managerial employee from that of a supervisor, or from that of a mere rank-and-file employee. Yet, this task takes on a different dimension when applied to banks, particularly the branches thereof. This is so because unlike ordinary corporations, a bank's organizational operation is governed and regulated by the General Banking Act and the Central Bank Act, both special laws . . . . As pointed out by the respondent, in the banking industry, a branch is the microcosm of a banking institution, uniquely autonomous and self-governing. This relative autonomy of a branch finds legal basis in Section 27 of the General Banking Act, as amended, thus: . . . . The bank shall be responsible for all business conducted in such branches to the same extent and in the same manner as though such business had all been conducted in the head office. For the purpose of this Act, a bank and its branches shall be treated as a unit (emphasis supplied). Conformably with the above, bank policies are laid down and/or executed through the collective action of the Branch Manager, Cashier and Controller at the branch level. The Branch Manager exercises over-all control and supervision over branch operation being on the top of the branch's pyramid structure. However, both the controller and the cashier who are called in banking parlance as "Financial Managers" due to their fiscal functions are given such a share and sphere of responsibility in the operations of the bank. The cashier controls and supervises the cash division while the controller that of the Accounting Division. Likewise, their assigned task is of great significance, without which a bank or branch for that matter cannot operate or function. Through the collective action of these three branch officers operational transactions are carried out like: The two (2)-signature requirement of the manager, on one hand, and that of the controller or cashier on the other hand as required in bank's issuances and releases. This is the so-called "dual control" through check-and-balance as prescribed by the Central Bank, per Section 1166.6, Book I, Manual of Regulations for Banks and Financial

Intermediaries. Another is in the joint custody of the branch's cash in vault, accountable forms, collaterals, documents of title, deposit, ledgers and others, among the branch manager and at least two (2) officers of the branch as required under Section 1166.6 of the Manual of Regulations for Banks and Other Financial Intermediaries. This structural set-up creates a triad of managerial authority among the branch manager, cashier and controller. Hence, no officer of the bank ". . . have (sic) complete authority and responsibility for handling all phases of any transaction from beginning to end without some control or balance from some other part of the organization" (Section 1166.3, Division of Duties and Responsibilities, Ibid). This aspect in the banking system which calls for the division of duties and responsibilities is a clear manifestation of managerial power and authority. No operational transaction at branch level is carried out by the singular act of the Branch Manager but rather through the collective act of the Branch Manager, Cashier/Controller (emphasis supplied). Noteworthy is the "on call client" set up in banks. Under this scheme, the branch manager is tasked with the responsibility of business development and marketing of the bank's services which place him on client call. During such usual physical absences from the branch, the cashier assumes the reins of branch control and administration. On those occasions, the "dual control system" is clearly manifest in the transactions and operations of the branch bank as it will then require the necessary joint action of the controller and the cashier.

The grave abuse of discretion committed by public respondent is at once apparent. Art. 212, par. (m), of the Labor Code is explicit. A managerial employee is (a) one who is vested with powers or prerogatives to lay down and execute management policies, or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees; or (b) one who is vested with both powers or prerogatives. A supervisory employee is different from a managerial employee in the sense that the supervisory employee, in the interest of the employer, effectively recommends such managerial actions, if the exercise of such managerial authority is not routinary in nature but requires the use of independent judgment. Ranged against these definitions and after a thorough examination of the evidence submitted by both parties, we arrive at a contrary conclusion. Branch Managers, Cashiers and Controllers of respondent Bank are not managerial employees but supervisory employees. The finding of public respondent that bank policies are laid down and/or executed through the collective action of these employees is simply erroneous. His discussion on the division of their duties and responsibilities does not logically lead to the conclusion that they are managerial employees, as the term is defined in Art. 212, par. (m). Among the general duties and responsibilities of a Branch Manager is "[t]o discharge his duties and authority with a high sense of responsibility and integrity and shall at all times be guided by prudence like a good father of the family, and sound judgment in accordance with and within the limitations of the policy/policies promulgated by the Board of Directors and implemented by the Management until suspended, superseded, revoked or modified" (par. 5, emphasis supplied). 8 Similarly, the job summary of a Controller states: "Supervises the Accounting Unit of the branch; sees to the compliance by the Branch with established procedures, policies, rules and regulations of the Bank and external supervising authorities; sees to the strict implementation of control procedures (emphasis supplied). 9 The job description of a Cashier does not mention any authority on his part to lay down policies, either. 10 On the basis of the foregoing evidence, it is clear that subject employees do not participate in policy-making but are given approved and established policies to execute and standard practices to observe, 11 leaving little or no discretion at all whether to implement said policies or not. 12 It is the nature of the employee's functions, and not the nomenclature or title given to his job, which determines whether he has rank-and-file, supervisory or managerial status. 13 Moreover, the bare statement in the affidavit of the Executive Assistant to the President of respondent Bank that the Branch Managers, Cashiers and Controllers "formulate and implement the plans, policies and marketing strategies of the branch towards the successful accomplishment of its profit targets and objectives," 14 is contradicted by the following evidence submitted by respondent Bank itself:
(a) Memorandum issued by respondent Bank's Assistant Vice President to all Regional Managers and Branch Managers giving them temporary discretionary authority to grant additional interest over the prescribed board rates for both short-term and long-term CTDs subject, however, to specific limitations and guidelines set forth in 15 the same memorandum; (b) Memorandum issued by respondent Bank's Executive Vice President to all Regional Managers and Branch 16 Officers regarding the policy and guidelines on drawing against uncollected deposits (DAUD); (c) Memorandum issued by respondent Bank's President to all Field Offices regarding the guidelines on domestic bills purchased 17 (DBP); and (d) Memorandum issued by the same officer to all Branch Managers regarding lending authority at the branch 18 level and the terms and conditions thereof.

As a consequence, the affidavit of the Executive Assistant cannot be given any weight at all. Neither do the Branch Managers, Cashiers and Controllers have the power to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. The Senior Manager of the Human Resource Management Department of respondent Bank, in her affidavit, stated that "the power to hire, fire, suspend, transfer, assign or otherwise impose discipline among subordinates within their respective jurisdictions is lodged with the heads of the various departments, the branch managers and officers-in-charge, the branch cashiers and the branch controllers. Inherent as it is in the aforementioned positions, the authority to hire, fire, suspend, transfer, assign or otherwise discipline employees within their respective domains was deemed unnecessary to be incorporated in their individual job descriptions; By way of illustration, on August 24, 1989, Mr. Renato

A. Tuates, the Officer-in-Charge/Branch Cashier of the Bank's Dumaguete Branch, placed under preventive suspension and thereafter terminated the teller of the same branch . . . . Likewise, on February 22, 1989, Mr. Francis D. Robite, Sr., the Officer-in-Charge of International Department, assigned the cable assistant of the International Department as the concurrent FCDU Accountable Forms Custodian." 19 However, a close scrutiny of the memorandum of Mr. Tuates reveals that he does not have said managerial power because as plainly stated therein, it was issued "upon instruction from Head Office." 20 With regard to the memorandum of Mr. Robite, Sr., it appears that the power he exercised was merely in an isolated instance, taking into account the other evidence submitted by respondent Bank itself showing lack of said power by other Branch Managers/OICs:
(a) Memorandum from the Branch Manager for the AVP-Manpower Management Department expressing the opinion that a certain employee, due to habitual absenteeism and tardiness, must be penalized in accordance with respondent Bank's Code of Discipline; and (b) Memorandum from a Branch OIC for the Assistant Vice President recommending a certain employee's promotional adjustment to the present position he occupies.

Clearly, those officials or employees possess only recommendatory powers subject to evaluation, review and final action by higher officials. Therefore, the foregoing affidavit cannot bolster the stand of respondent Bank. The positions of Department Managers and Assistant Managers were also declared by public respondent as managerial, without providing any basis therefor. Petitioner asserts that the position of Assistant Manager was not even included in the appeal filed by respondent Bank. While we agree with the Office of the Solicitor General that it is within the discretion of public respondent to consider an unassigned issue that is closely related to an issue properly assigned, still, public respondent's error lies in the fact that his finding has no leg to stand on. Anyway, inasmuch as the entire records are before us, now is the opportunity to discuss this issue. We analyzed the evidence submitted by respondent Bank in support of its claim that Department Managers are managerial employees 21 and concluded that they are not. Like Branch Managers, Cashiers and Controllers, Department Managers do not possess the power to lay down policies nor to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. They occupy supervisory positions, charged with the duty among others to "recommend proposals to improve and streamline operations." 22 With respect to Assistant Managers, there is absolutely no evidence submitted to substantiate public respondent's finding that they are managerial employees; understandably so, because this position is not included in the appeal of respondent Bank. 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 branch's cash position, statements of financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable instruments, 23 pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, 24 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 employer's property. 25 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. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed, as elucidated in several cases 26 the latest of which is Chua v. Civil Service Commission 27 where we said:
No statute can be enacted that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is thought, at the time of enactment, to be an all-embracing legislation may be inadequate to provide for the unfolding events of the future. So-called gaps in the law develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication . . . . Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis . . . .

In applying the doctrine of necessary implication, we took into consideration the rationale behind the disqualification of managerial employees expressed in Bulletin Publishing Corporation v. Sanchez, 28 thus: ". . . 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 companydominated with the presence of managerial employees in Union membership." Stated differently, in 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 interests 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. 29 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. 30 It is not farfetched that in the course of collective bargaining, they might jeopardize that interest which they are duty-bound to protect. Along the same line of reasoning we held in Golden Farms, Inc. v. Ferrer-Calleja 31 reiterated in Philips Industrial Development, Inc. v. NLRC, 32 that "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 spy or spies of either party to a collective bargaining agreement." In fine, only the Branch Managers/OICs, Cashiers and Controllers of respondent Bank, being confidential employees, are disqualified from joining or assisting petitioner Union, or joining, assisting or forming any other labor organization. But this ruling should be understood to apply only to the present case based on the evidence of the parties, as well as to those similarly situated. It should not be understood in any way to apply to banks in general. WHEREFORE, the petition is partially GRANTED. The decision of public respondent Secretary of Labor dated 23 March 1990 and his order dated 20 April 1990 are MODIFIED, hereby declaring that only the Branch Managers/OICs, Cashiers and Controllers of respondent Republic Planters Bank are ineligible to join or assist petitioner National Association of Trade Unions (NATU)-Republic Planters Bank Supervisors Chapter, or join, assist or form any other labor organization. SO ORDERED.