THIRD DIVISION [G.R. No. 131235.

November 16, 1999]

UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and LEONCIO CASAL, petitioners vs. Dir. BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor Relations, Med-Arbiter TOMAS F. FALCONITIN of The National Capital Region, Department of Labor and Employment (DOLE), EDUARDO J. MARIO JR., MA. MELVYN ALAMIS, NORMA COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY CURA, FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents. DECISION PANGANIBAN, J.:

There is a right way to do the right thing at the right time for the right reasons,[1] and in the present case, in the right forum by the right parties. While grievances against union leaders constitute legitimate complaints deserving appropriate redress, action thereon should be made in the proper forum at the proper time and after observance of proper procedures. Similarly, the election of union officers should be conducted in accordance with the provisions of the unions constitution and bylaws, as well as the Philippine Constitution and the Labor Code. Specifically, while all legitimate faculty members of the University of Santo Tomas (UST) belonging to a collective bargaining unit may take part in a duly convened certification election, only bona fide members of the UST Faculty Union (USTFU) may participate and vote in a legally called election for union officers. Mob hysteria, however well-intentioned, is not a substitute for the rule of law.

The Case

The Petition for Certiorari before us assails the August 15, 1997 Resolution[2] of Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in BLR Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of Med-Arbiter Tomas F. Falconitin. The med-arbiters Decision disposed as follows:

WHEREFORE, premises considered, judgment is hereby rendereddeclaring the election of USTFU officers conducted on October 4, 1996 and itselection results as null and void ab initio.

Accordingly, respondents Gil Gamilla, et al are hereby ordered tocease and desist from acting and performing the duties and functions of thelegitimate officers of [the] University of Santo Tomas Faculty Union (USTFU)pursuant to [the] unions constitution and by-laws (CBL).

The Temporary Restraining Order (TRO ) issued by this Office onDecember 11, 1996 in connection with the instant petition, is hereby made anddeclared permanent.[3]

Likewise challenged isthe October 30, 1997 Resolution[4]of Director Bitonio, which deniedpetitioners Motion for Reconsideration.

The Facts

The factual antecedentsof the case are summarized in the assailed Resolution as follows:

Petitioners-appellees [herein Private Respondents] Marino, et. al.(appellees) are duly elected officers of the UST Faculty Union (USTFU). The union has a subsisting fiveyearCollective Bargaining Agreement with its employer, the University of SantoTomas

(UST). The CBA was registeredwith the Industrial Relations Division, DOLE-NCR, on 20 February 1995. It is set to expire on 31 May 1998.

On 21 September 1996, appellee Collantes, in her capacity asSecretary General of USTFU, posted a notice addressed to all USTFU membersannouncing a general assembly to be held on 05 October 1996. Among others, the general assembly wascalled to elect USTFUs next set of officers. Through the notice, the members were also informed of the constitutionof a Committee on Elections (COMELEC) to oversee the elections. (Annex B, petition)

On 01 October 1996, some of herein appellants filed a separatepetition with the Med Arbiter, DOLE-NCR, directed against herein appellees andthe members of the COMELEC. Docketed asCase No. NCR-OD-M-9610-001, the petition alleged that the COMELEC was notconstituted in accordance with USTFUs constitution and by-laws (CBL) and thatno rules had been issued to govern the conduct of the 05 October 1996 election.

On 02 October 1996, the secretary general of UST, upon the requestof the various UST faculty club presidents (See paragraph VI, RespondentsComment and Motion to Dismiss), issued notices allowing all faculty members tohold a convocation on 04 October 1996 (See Annex C Petition; Annexes 4 to10, Appeal). Denominated as [a]general faculty assembly, the convocation was supposed to discuss the state ofthe unratified UST-USTFU CBA and status and election of USTFU officers(Annex 11, Appeal)

On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001issued a temporary restraining order against herein appellees enjoining themfrom conducting the election scheduled on 05 October 1996.

Also on 04 October 1996, and as earlier announced by the USTsecretary general, the general faculty assembly was held as scheduled. The general assembly was attended by membersof the USTFU and, as admitted by the appellants, also by 'non-USTFU members[who] are members in good standing of the UST Academic Community CollectiveBargaining Unit' (See paragraph XI, Respondents Comment and Motion

toDismiss). On this occasion, appellantswere elected as USTFUs new set of officers by acclamation and clapping ofhands (See paragraphs 40 to 50, Annex '12', Appeal).

The election of the appellants came about upon a motion of oneAtty. Lopez, admittedly not a member of USTFU, that the USTFU CBL and 'therules of the election be suspended and that the election be held [on] that day'(See --paragraph 39, Idem.)

On 11 October 1996, appellees filed the instant petition seekinginjunctive reliefs and the nullification of the results of the 04 October 1996 election. Appellees alleged that the holding of the same violated the temporary restraining order issued in Case No. NCR-OD-M-9610-001. Accusing appellants of usurpation, appellees characterized the election as spurious for being violative of USTFUs CBL, specifically because the general assembly resulting in the election of appellants was not called by the Board of Officers of the USTFU; there was no compliance with the ten-day notice rule required by Section 1, Article VIII of the CBL; the supposed elections were conducted without a COMELEC being constituted by the Board of Officers in accordance with Section 1, Article IX of the CBL; the elections were not by secret balloting as required by Section 1, Article V and Section 6, Article IX of the CBL, and, the general assembly was convened by faculty members some of whom were not members of USTFU, so much so that non-USTFU members were allowed to vote in violation of Section 1, Article V of the CBL.

On 24 October 1996, appellees filed another urgent ex-parte motion for a temporary restraining order, this time alleging that appellants had served the former a notice to vacate the union office. For their part, appellants moved to dismiss the original petition and the subsequent motion on jurisdictional grounds. Both the petition and the motion were captioned to be for Prohibition, Injunction with Prayer for Preliminary Injunction and Temporary Restraining Order. According to the appellants, the med-arbiter has no jurisdiction over petitions for prohibition, 'including the ancillary remedies of restraining order and/or preliminary injunction, which are merely incidental to the main petition for PROHIBITION' (Paragraph XVIII3, Respondents Comment and Motion to Dismiss). Appellants also averred that they now constituted the new set of union officers having been elected in accordance with law after the term of office of appellees had expired. They further maintained that appellees scheduling of the 5 October 1996 elections was illegal because no rules and regulations governing the elections were promulgated as required by USTFUs CBL and that one of the members of the COMELEC was not a

registered member of USTFU. Appellants likewise noted that the elections called by the appellees should have been postponed to allow the promulgation of rules and regulations and to 'insure a free, clean, honest and orderly elections and to afford at the same time the greater majority of the general membership to participate' (See paragraph V, Idem). Finally, appellants contended that the holding of the general faculty assembly on 04 October 1996 was under the control of the Council of College/Faculty Club Presidents in cooperation with the USTFU Reformist Alliance and that they received the Temporary Restraining Order issued in Case No. NCR-OD-M9610-001 only on 07 October 1996 and were not aware of the same on 04 October 1996.

On 03 December 1996, appellants and UST allegedly entered into another CBA covering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants Rejoinder to the Reply and Opposition).

Consequently, appellees again moved for the issuance of a temporary restrain ing order to prevent appellants from making further representations that [they] had entered into a new agreement with UST. Appellees also reiterated their earlier stand that appellants were usurping the formers duties and functions and should be stopped from continuing such acts.

On 11 December 1996, over appellants insistence that the issue of jurisdiction should first be resolved, the med-arbiter issued a temporary restraining order directing the respondents to cease and desist from performing any and all acts pertaining to the duties and functions of the officers and directors of USTFU.

In the meantime, appellants claimed that the new CBA was purportedly ratified by an overwhelming majority of USTs academic community on 12 December 1996 (Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what it denominated as appellees petition for prohibition on the ground that this had become moot and academic.[5]

Petitioners appealed the med-arbiters Decision to the labor secretary,[6] who transmitted the records of the case to the Bureau of Labor Relations which, under Department Order No. 9, was authorized to resolve appeals of intra-union cases, consistent with the last paragraph of Article 241 of the Labor Code.[7]

The Assailed Ruling

Agreeing with the med-arbiter that the USTFU officers purported election held on October 4, 1994 was void for having been conducted in violation of the unions Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners contention that it was a legitimate exercise of their right to self-organization. He ruled that the CBL, which constituted the covenant between the union and its members, could not be suspended during the October 4, 1996 general assembly of all faculty members, since that assembly had not been convened or authorized by the USTFU.

Director Bitonio likewise held that the October 4, 1996 election could not be legitimized by the recognition of the newly elected set of officers by UST or by the alleged ratification of the new CBA by the general membership of the USTFU. Ruled Respondent Bitonio:

"This submission is flawed. The issue at hand is not collective bargaining representation but union leadership, a matter that should concern only the members of USTFU. As pointed out by the appellees, the privilege of determining who the union officers will be belongs exclusively to the members of the union. Said privilege is exercised in an election proceeding in accordance with the union's CBL and applicable law.

To accept appellants' claim to legitimacy on the foregoing grounds is to invest in appellants the position, duties, responsibilities, rights and privileges of USTFU officers without the benefit of a lawful electoral exercise as defined in USTFU's CBL and Article 241(c) of the Labor Code. Not to mention the fact that labor laws prohibit the employer from interfering with the employees in the latter' exercise of their right to selforganization. To allow appellants to become USTFU officers on the strength of

management's recognition of them is to concede to the employer the power of determining who should be USTFU's leaders. This is a clear case of interference in the exercise by USTFU members of their right to self-organization.[8]

Hence, this Petition.[9]

The Issues

The main issue in this case is whether the public respondent committed grave abuse of discretion in refusing to recognize the officers elected during the October 4, 1996 general assembly. Specifically, petitioners in their Memorandum urge the Court to resolve the following questions:[10]

(1) Whether the Collective Bargaining Unit of all the faculty members in that General Faculty Assembly had the right in that General Faculty Assembly to suspend the provisions of the Constitution and By-Laws of the USTFU regarding the elections of officers of the union[.]

(2) Whether the suspension of the provisions of the Constitution and By -Laws of the USTFU in that General Faculty Assembly is valid pursuant to the constitutional right of the Collective Bargaining Unit to engage in peaceful concerted activities for the purpose of ousting the corrupt regime of the private respondents[.]

(3) Whether the overwhelming ratification of the Collective Bargaining Agreement executed by the petitioners in behalf of the USTFU with the University of Santo Tomas has rendered moot and academic the issue as to the validity of the suspension of the Constitution and By-Laws and the elections of October 4, 1996 in the General Faculty Assembly[.]

The Courts Ruling

The petition is not meritorious. Petitioners fail to convince this Court that Director Bitonio gravely abused his discretion in affirming the med-arbiter and in refusing to recognize the binding effect of the October 4, 1996 general assembly called by the UST administration.

First Issue: Right to Self-Organization and Union Membership

At the outset, the Court stresses that National Federation of Labor (NFL) v. Laguesma[11] has held that challenges against rulings of the labor secretary and those acting on his behalf, like the director of labor relations, shall be acted upon by the Court of Appeals, which has concurrent jurisdiction with this Court over petitions for certiorari. However, inasmuch as the memoranda in the instant case have been filed prior to the promulgation and finality of our Decision in NFL, we deem it proper to resolve the present controversy directly, instead of remanding it to the Court of Appeals. Having disposed of the foregoing procedural matter, we now tackle the issues in the present case seriatim.

Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection.[12] Whether employed for a definite period or not, any employee shall be considered as such, beginning on his first day of service, for purposes of membership in a labor union.[13]

Corollary to this right is the prerogative not to join, affiliate with or assist a labor union.[14] Therefore, to become a union member, an employee must, as a rule, not only signify the intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the unions constitution and bylaws.[15] An employee who becomes a union member acquires the rights and the concomitant obligations that go with this new status and becomes bound by the unions rules and regulations.

When a man joins a labor union (or almost any other democratically controlled group), necessarily a portion of his individual freedom is surrendered for the benefit of all members. He accepts the will of the majority of the members in order that he may derive the advantages to be gained from the concerted action of all. Just as the enactments of the legislature bind all of us, to the constitution and by-laws of the union (unless contrary to good morals or public policy, or otherwise illegal), which are duly enacted through democratic processes, bind all of the members. If a member of a union dislikes the provisions of the by-laws, he may seek to have them amended or may withdraw from the union; otherwise, he must abide by them. It is not the function of courts to decide the wisdom or propriety of legitimate by-laws of a trade union.

On joining a labor union, the constitution and by-laws become a part of the members contract of membership under which he agrees to become bound by the constitution and governing rules of the union so far as it is not inconsistent with controlling principles of law. The constitution and by-laws of an unincorporated trade union express the terms of a contract, which define the privileges and rights secured to, and duties assumed by, those who have become members. The agreement of a member on joining a union to abide by its laws and comply with the will of the lawfully constituted majority does not require a member to submit to the determination of the union any question involving his personal rights.[16]

Petitioners claim that the numerous anomalies allegedly committed by the private respondents during the latters incumbency impelled the October 4, 1996 election of the new set of USTFU officers. They assert that such exercise was pursuant to their right to self-organization.

Petitioners frustration over the performance of private respondents, as well as their fears of a fraudulent election to be held under the latters supervision, could not justify the method they chose to impose their will on the union. Director Bitonio aptly elucidated:[17]

The constitutional right to self-organization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is signatory. Article 3 of the Convention provides that workers

organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom, free from any interference from public authorities. The freedom conferred by the provision is expansive; the responsibility imposed on union members to respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the unions CBL is the fundamental law that governs the relationship between and among the members of the union. It is where the rights, duties and obligations, powers, functions and authority of the officers as well as the members are defined. It is the organic law that determines the validity of acts done by any officer or member of the union. Without respect for the CBL, a union as a democratic institution degenerates into nothing more than a group of individuals governed by mob rule.

Union Election vs. Certification Election

A union election is held pursuant to the unions constitution and bylaws, and the right to vote in it is enjoyed only by union members. A union election should be distinguished from a certification election, which is the process of determining, through secret ballot, the sole and exclusive bargaining agent of the employees in the appropriate bargaining unit, for purposes of collective bargaining.[18] Specifically, the purpose of a certification election is to ascertain whether or not a majority of the employees wish to be represented by a labor organization and, in the affirmative case, by which particular labor organization.[19]

In a certification election, all employees belonging to the appropriate bargaining unit can vote.[20] Therefore, a union member who likewise belongs to the appropriate bargaining unit is entitled to vote in said election. However, the reverse is not always true; an employee belonging to the appropriate bargaining unit but who is not a member of the union cannot vote in the union election, unless otherwise authorized by the constitution and bylaws of the union. Verily, union affairs and elections cannot be decided in a non-union activity.

In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot properly be called a union election, because the procedure laid down in the USTFUs CBL for the election of officers was not followed. It could not have been a

certification election either, because representation was not the issue, and the proper procedure for such election was not followed. The participation of non-union members in the election aggravated its irregularity.

Second Issue: USTFUs Constitution and ByLaws Violated

The importance of a unions constitution and bylaws cannot be overemphasized. They embody a covenant between a union and its members and constitute the fundamental law governing the members rights and obligations.[21] As such, the unions constitution and bylaws should be upheld, as long as they are not contrary to law, good morals or public policy.

We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the October 4, 1996 election was tainted with irregularities because of the following reasons.

First, the October 4, 1996 assembly was not called by the USTFU. It was merely a convocation of faculty clubs, as indicated in the memorandum sent to all faculty members by Fr. Rodel Aligan, OP, the secretary general of the University of Santo Tomas.[22] It was not convened in accordance with the provision on general membership meetings as found in the USTFUs CBL, which reads:

ARTICLE VIII-MEETINGS OF THE UNION

Section 1. The Union shall hold regular general membership meetings at least once every three (3) months. Notices of the meeting shall be sent out by the SecretaryGeneral at least ten (10) days prior to such meetings by posting in conspicuous places, preferably inside Company premises, said notices. The date, time and place for the meetings shall be determined by the Board of Officers.[23]

Unquestionably, the assembly was not a union meeting. It was in fact a gathering that was called and participated in by management and non-union members. By no legal fiat was such assembly transformed into a union activity by the participation of some union members.

Second, there was no commission on elections to oversee the election, as mandated by Sections 1 and 2 of Article IX of the USTFUs CBL, which provide:

ARTICLE IX - UNION ELECTION

Section 1. There shall be a Committee on Election (COMELEC) to be created by the Board of Officers at least thirty (30) days before any regular or special election. The functions of the COMELEC include the following:

a) Adopt and promulgate rules and regulations that will ensure a free, clean, honest and orderly election, whether regular or special;

b)

Pass upon qualifications of candidates;

c) Rule on any question or protest regarding the conduct of the election subject to the procedure that may be promulgated by the Board of Officers; and

d)

Proclaim duly elected officers.

Section 2. The COMELEC shall be composed of a chairman and two members all of whom shall be appointed by the Board of Officers.

xxx xxx

xxx[24]

Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX of the USTFUs CBL, as well as Article 241 (c) of the Labor Code.

The foregoing infirmities considered, we cannot attribute grave abuse of discretion to Director Bitonios finding and conclusion. In Rodriguez v. Director, Bureau of Labor Relations,[25] we invalidated the local union elections held at the wrong date without prior notice to members and conducted without regard for duly prescribed ground rules. We held that the proceedings were rendered void by the lack of due process -- undue haste, lack of adequate safeguards to ensure integrity of the voting, and the absence of the notice of the dates of balloting.

Third Issue: Suspension of USTFUs CBL

Petitioners contend that the October 4, 1996 assembly suspended the unions CBL. They aver that the suspension and the election that followed were in accordance with their constituent and residual powers as members of the collective bargaining unit to choose their representatives for purposes of collective bargaining. Again they cite the numerous anomalies allegedly committed by the private respondents as USTFU officers. This argument does not persuade.

First, as has been discussed, the general faculty assembly was not the proper forum to conduct the election of USTFU officers. Not all who attended the assembly were members of the union; some, apparently, were even disqualified from becoming union members, since they represented management. Thus, Director Bitonio correctly observed:

Further, appellants cannot be heard to say that the CBL was effectively suspended during the 04 October 1996 general assembly. A union CBL is a covenant between the union and its members and among members (Johnson and Johnson Labor Union-FFW, et al. v. Director of Labor Relations, 170 SCRA 469). Where ILO Convention No. 87 speaks of a unions full freedom to draw up its constitution and rules, it includes

freedom from interference by persons who are not members of the union. The democratic principle that governance is a matter for the governed to decide upon applies to the labor movement which, by law and constitutional mandate, must be assiduously insulated against intrusions coming from both the employer and complete strangers if the 'protection to labor clause' of the constitution is to be guaranteed. By appellants own evidence, the general faculty assembly of 04 October 1996 w as not a meeting of USTFU. It was attended by members and non-members alike, and therefore was not a forum appropriate for transacting union matters. The person who moved for the suspension of USTFUs CBL was not a member of USTFU. Allowing a non -union member to initiate the suspension of a unions CBL, and non-union members to participate in a union election on the premise that the unions CBL had been suspended in the meantime, is incompatible with the freedom of association and protection of the right to organize.

If there are members of the so-called academic community collective bargaining unit who are not USTFU members but who would nevertheless want to have a hand in USTFUs affairs, the appropriate procedure would have been for them to become members of USTFU first. The procedure for membership is very clearly spelled out in Article IV of USTFUs CBL. Having become members, they could then draw guidance from Ang Malayang Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil. 669. Therein the Supreme Court held that if a member of the union dislikes the provisions of the by laws he may seek to have them amended or may withdraw from the union; otherwise he must abide by them. Under Article XVII of USTFUs CBL, there is also a specific provision for constitutional amendments. What is clear therefore is that USTFUs CBL provides for orderly procedures and remedies which appellants could have easily availed [themselves] of instead of resorting to an exercise of their so-called residual power'.[26]

Second, the grievances of the petitioners could have been brought up and resolved in accordance with the procedure laid down by the unions CBL[27]and by the Labor Code.[28] They contend that their sense of desperation and helplessness led to the October 4, 1996 election. However, we cannot agree with the method they used to rectify years of inaction on their part and thereby ease bottled-up frustrations, as such method was in total disregard of the USTFUs CBL and of due process. The end never justifies the means.

We agree with the solicitor generals observation that the act of suspending the constitution when the questioned election was held is an implied admission that the election held on that date [October 4, 1996] could not be considered valid under the existing USTFU constitution xxx.[29]

The ratification of the new CBA executed between the petitioners and the University of Santo Tomas management did not validate the void October 4, 1996 election. Ratified were the terms of the new CBA, not the issue of union leadership -- a matter that should be decided only by union members in the proper forum at the proper time and after observance of proper procedures.

Epilogue

In dismissing this Petition, we are not passing upon the merits of the mismanagement allegations imputed by the petitioners to the private respondents; these are not at issue in the present case. Petitioners can bring their grievances and resolve their differences with private respondents in timely and appropriate proceedings. Courts will not tolerate the unfair treatment of union members by their own leaders. When the latter abuse and violate the rights of the former, they shall be dealt with accordingly in the proper forum after the observance of due process.

WHEREFORE, the Petition is hereby DISMISSED and the assailed Resolutions AFFIRMED. Costs against petitioners.

SO ORDERED.

Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur

Republic of the Philippines SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 84433

June 2, 1992

ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138 others, petitioners, vs. CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor Relations, Med. Arbiter PATERNO ADAP, and TRI-UNION EMPLOYEES UNION, et al., respondent.

NARVASA, C.J.:

The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano Trajano) sustained the denial by the Med Arbiter of the right to vote of one hundred forty-one (141) members of the "Iglesia ni Kristo" (INK), all employed in the same company, at a certification election at which two (2) labor organizations were contesting the right to be the exclusive representative of the employees in the bargaining unit. That denial is assailed as having been done with grave abuse of discretion in the special civil action of certiorari at bar, commenced by the INK members adversely affected thereby.

The certification election was authorized to be conducted by the Bureau of Labor Relations among the employees of Tri-Union Industries Corporation on October 20,

1987. The competing unions were Tri-Union Employees Union-Organized Labor Association in Line Industries and Agriculture (TUEU-OLALIA), and Trade Union of the Philippines and Allied Services (TUPAS). Of the 348 workers initially deemed to be qualified voters, only 240 actually took part in the election, conducted under the provision of the Bureau of Labor Relations. Among the 240 employees who cast their votes were 141 members of the INK.

The ballots provided for three (3) choices. They provided for votes to be cast, of course, for either of the two (2) contending labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and, conformably with established rule and practice, 1 for (c) a third choice: "NO UNION."

The final tally of the votes showed the following results:

TUPAS 1

TUEU-OLALIA

95

NO UNION

SPOILED

CHALLENGED

141

The challenged votes were those cast by the 141 INK members. They were segregated and excluded from the final count in virtue of an agreement between the competing unions, reached at the pre-election conference, that the INK members should not be allowed to vote "because they are not members of any union and refused to participate in the previous certification elections."

The INK employees promptly made known their protest to the exclusion of their votes. They filed f a petition to cancel the election alleging that it "was not fair" and the result thereof did "not reflect the true sentiments of the majority of the employees." TUEUOLALIA opposed the petition. It contended that the petitioners "do not have legal personality to protest the results of the election," because "they are not members of either contending unit, but . . . of the INK" which prohibits its followers, on religious grounds, from joining or forming any labor organization . . . ."

The Med-Arbiter saw no merit in the INK employees 1 petition. By Order dated December 21, 1987, he certified the TUEU-OLALIA as the sole and exclusive bargaining agent of the rank-and-file employees. In that Order he decided the fact that "religious belief was (being) utilized to render meaningless the rights of the non-members of the Iglesia ni Kristo to exercise the rights to be represented by a labor organization as the bargaining agent," and declared the petitioners as "not possessed of any legal personality to institute this present cause of action" since they were not parties to the petition for certification election.

The petitioners brought the matter up on appeal to the Bureau of Labor Relations. There they argued that the Med-Arbiter had "practically disenfranchised petitioners who had an overwhelming majority," and "the TUEU-OLALIA certified union cannot be legally said to have been the result of a valid election where at least fifty-one percent of all eligible voters in the appropriate bargaining unit shall have cast their votes." Assistant Labor Secretary Cresenciano B. Trajano, then Officer-in-Charge of the Bureau of Labor Relations, denied the appeal in his Decision of July 22, 1988. He opined that the petitioners are "bereft of legal personality to protest their alleged disenfrachisement" since they "are not constituted into a duly organized labor union, hence, not one of the unions which vied for certification as sole and exclusive bargaining representative." He also pointed out that the petitioners "did not participate in previous certification elections in the company for the reason that their religious beliefs do not allow them to form, join or assist labor organizations."

It is this Decision of July 22, 1988 that the petitioners would have this Court annul and set aside in the present special civil action of certiorari.

The Solicitor General having expressed concurrence with the position taken by the petitioners, public respondent NLRC was consequently required to file, and did thereafter file, its own comment on the petition. In that comment it insists that "if the workers who are members of the Iglesia ni Kristo in the exercise of their religious belief opted not to join any labor organization as a consequence of which they themselves can not have a bargaining representative, then the right to be representative by a bargaining agent should not be denied to other members of the bargaining unit."

Guaranteed to all employees or workers is the "right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining." This is made plain by no less than three provisions of the Labor Code of the Philippines. 2 Article 243 of the Code provides as follows: 3

ART. 243. Coverage and employees right to self-organization. All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes or collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection.

Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to "interfere with, restrain or coerce employees in the exercise of their right to selforganization." Similarly, Article 249 (a) makes it an unfair labor practice for a labor organization to "restrain or coerce employees in the exercise of their rights to selforganization . . . "

The same legal proposition is set out in the Omnibus Rules Implementing the Labor Code, as amended, as might be expected Section 1, Rule II (Registration of Unions), Book V (Labor Relations) of the Omnibus Rules provides as follows; 4

Sec. 1. Who may join unions; exception. All persons employed in commercial, industrial and agricultural enterprises, including employees of government corporations established under the Corporation Code as well as employees of religious, medical or educational institutions, whether operating for profit or not, except managerial employees, shall have the right to self-organization and to form, join or assist labor organizations for purposes of collective bargaining. Ambulant, intermittent and without any definite employers people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection.

xxx

xxx

xxx

The right of self-organization includes the right to organize or affiliate with a labor union or determine which of two or more unions in an establishment to join, and to engage in concerted activities with co-workers for purposes of collective bargaining through representatives of their own choosing, or for their mutual aid and protection, i.e., the protection, promotion, or enhancement of their rights and interests. 5

Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a labor organization, is subsumed in the right to join, affiliate with, or assist any union, and to maintain membership therein. The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising said right. It is self-evident that just as no one should be denied the exercise of a right granted by law, so also, no one should be compelled to exercise such a conferred right. The fact that a person has opted to acquire membership in a labor union does not preclude his subsequently opting to renounce such membership. 6

As early as 1974 this Court had occasion to expatiate on these self-evident propositions in Victoriano v. Elizalde Rope Workers' Union, et al., 7 viz.:

. . .What the Constitution and Industrial Peace Act recognize and guarantee is the "right" to form or join associations. Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a "right," it can be safely said that whatever theory one subscribes to, a right comprehends at

least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself being prevented by law; second, power, whereby an employee may, as he pleases, join or refrain from joining an association. It is therefore the employee who should decide for himself whether he should join or not an association; and should he choose to join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said organization at any time (Pagkakaisa Samahang Manggagawa ng San Miguel Brewery vs. Enriquez, et al., 108 Phil. 1010, 1019). It is clear, therefore, that the right to join a union includes the right to abstain from joining any union (Abo, et al. vs. PHILAME [KG] Employees Union, et al., L-19912, January 20, 1965, 13 SCRA 120, 123, quoting Rothenberg, Labor Relations). Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, the guaranteed to the employee, is the "right" to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The law does not enjoin an employee to sign up with any association.

The right to refuse to join or be represented by any labor organization is recognized not only by law but also in the rules drawn up for implementation thereof. The original Rules on Certification promulgated by the defunct Court of Industrial Relations required that the ballots to be used at a certification election to determine which of two or more competing labor unions would represent the employees in the appropriate bargaining unit should contain, aside from the names of each union, an alternative choice of the employee voting, to the effect that he desires not to which of two or more competing labor unions would represent the employees in the appropriate bargaining unit should contain, aside from the names of each union, an alternative choice of the employee voting, to the effect that he desires not to be represented by any union. 8 And where only one union was involved, the ballots were required to state the question "Do you desire to be represented by said union?" as regards which the employees voting would mark an appropriate square, one indicating the answer, "Yes" the other, "No."

To be sure, the present implementing rules no longer explicitly impose the requirement that the ballots at a certification election include a choice for "NO UNION" Section 8 (rule VI, Book V of the Omnibus Rules) entitled "Marketing and canvassing of votes," pertinently provides that:

. . . (a) The voter must write a cross (X) or a check (/) in the square opposite the union of his choice. If only one union is involved, the voter shall make his cross or check in the square indicating "YES" or "NO."

xxx

xxx

xxx

Withal, neither the quoted provision nor any other in the Omnibus Implementing Rules expressly bars the inclusion of the choice of "NO UNION" in the ballots. Indeed it is doubtful if the employee's alternative right NOT to form, join or assist any labor organization or withdraw or resign from one may be validly eliminated and he be consequently coerced to vote for one or another of the competing unions and be represented by one of them. Besides, the statement in the quoted provision that "(i)f only one union is involved, the voter shall make his cross or check in the square indicating "YES" or "NO," is quite clear acknowledgment of the alternative possibility that the "NO" votes may outnumber the "YES" votes indicating that the majority of the employees in the company do not wish to be represented by any union in which case, no union can represent the employees in collective bargaining. And whether the prevailing "NO" votes are inspired by considerations of religious belief or discipline or not is beside the point, and may not be inquired into at all.

The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the employees in the appropriate bargaining unit: to be or not to be represented by a labor organization, and in the affirmative case, by which particular labor organization. If the results of the election should disclose that the majority of the workers do not wish to be represented by any union, then their wishes must be respected, and no union may properly be certified as the exclusive representative of the workers in the bargaining unit in dealing with the employer regarding wages, hours and other terms and conditions of employment. The minority employees who wish to have a union represent them in collective bargaining can do nothing but wait for another suitable occasion to petition for a certification election and hope that the results will be different. They may not and should not be permitted, however, to impose their will on the majority who do not desire to have a union certified as the exclusive workers' benefit in the bargaining unit upon the plea that they, the minority workers, are being denied the right of self-organization and collective bargaining. As repeatedly stated, the right of self-organization embraces not only the right to form, join or assist

labor organizations, but the concomitant, converse right NOT to form, join or assist any labor union.

That the INK employees, as employees in the same bargaining unit in the true sense of the term, do have the right of self-organization, is also in truth beyond question, as well as the fact that when they voted that the employees in their bargaining unit should be represented by "NO UNION," they were simply exercising that right of self-organization, albeit in its negative aspect.

The respondents' argument that the petitioners are disqualified to vote because they "are not constituted into a duly organized labor union" "but members of the INK which prohibits its followers, on religious grounds, from joining or forming any labor organization" and "hence, not one of the unions which vied for certification as sole and exclusive bargaining representative," is specious. Neither law, administrative rule nor jurisprudence requires that only employees affiliated with any labor organization may take part in a certification election. On the contrary, the plainly discernible intendment of the law is to grant the right to vote to all bona fide employees in the bargaining unit, whether they are members of a labor organization or not. As held in Airtime Specialists, Inc. v. Ferrer-Calleja: 9

In a certification election all rank-and-file employees in the appropriate bargaining unit 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 the purpose 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 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".

Neither does the contention that petitioners should be denied the right to vote because they "did not participate in previous certification elections in the company for the

reason that their religious beliefs do not allow them to form, join or assist labor organizations," persuade acceptance. No law, administrative rule or precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past certification elections. In denying the petitioners' right to vote upon these egregiously fallacious grounds, the public respondents exercised their discretion whimsically, capriciously and oppressively and gravely abused the same.

WHEREFORE, the petition for certiorari is GRANTED; the Decision of the then Officer-inCharge of the Bureau of Labor Relations dated December 21, 1987 (affirming the Order of the Med-Arbiter dated July 22, 1988) is ANNULLED and SET ASIDE; and the petitioners are DECLARED to have legally exercised their right to vote, and their ballots should be canvassed and, if validly and properly made out, counted and tallied for the choices written therein. Costs against private respondents.

SO ORDERED.

SECOND DIVISION

G.R. No. 94045

September 13, 1991

CENTRAL NEGROS ELECTRIC COOPERATIVE, INC. (CENECO), petitioner, vs. HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, and CENECO UNION OF RATIONAL EMPLOYEES (CURE), respondents.

Enrique S. Tabino for petitioner.

Edmundo G. Manlapao for private respondent.

REGALADO, J.:p

In this special civil action for certiorari, petitioner Central Negros Electric Cooperative, Inc. (CENECO) seeks to annul the order 1 issued by then Acting Secretary of Labor Bienvenido E. Laguesma on June 6, 1990, declaring the projected certification election unnecessary and directing petitioner CENECO to continue recognizing private respondent CENECO Union of Rational Employees (CURE) as the sole and exclusive bargaining representative of all the rank-and-file employees of petitioner's electric cooperative for purposes of collective bargaining.

It appears from the records that on August 15, 1987, CENECO entered into a collective bargaining agreement with CURE, a labor union representing its rank-and-file employees, providing for a term of three years retroactive to April 1, 1987 and extending up to March 31, 1990. On December 28, 1989, CURE wrote CENECO proposing that negotiations be conducted for a new collective bargaining agreement (CBA).

On January 18, 1990, CENECO denied CURE's request on the ground that, under applicable decisions of the Supreme Court, employees who at the same time are members of an electric cooperative are not entitled to form or join a union. 2

Prior to the submission of the proposal for CBA renegotiation, CURE members, in a general assembly held on December 9, 1989, approved Resolution No. 35 whereby it was agreed that 'tall union members shall withdraw, retract, or recall the union members' membership from Central Negros Electric Cooperative, Inc. in order to avail (of) the full benefits under the existing Collective Bargaining Agreement entered into by and between CENECO and CURE, and the supposed benefits that our union may avail (of) under the renewed CBA. 3 This was ratified by 259 of the 362 union members.

CENECO and the Department of Labor and Employment, Bacolod District, were furnished copies of this resolution.

However, the withdrawal from membership was denied by CENECO on February 27, 1990 under Resolution No. 90 "for the reason that the basis of withdrawal is not among the grounds covered by Board Resolution No. 5023, dated November 22, 1989 and that said request is contrary to Board Resolution No. 5033 dated December 13, 1989, ..." 4

By reason of CENECO's refusal to renegotiate a new CBA, CURE filed a petition for direct recognition or for certification election, supported by 282 or 72% of the 388 rankand-file employees in the bargaining unit of CENECO.

CENECO filed a motion to dismiss on the ground that there are legal constraints to the filing of the certification election, citing the ruling laid down by this Court in Batangas I Electric Cooperative Labor Union vs. Romeo A. Young, 5 (BATANGAS case) to the effect that "employees who at the same time are members of an electric cooperative are not entitled to form or join unions for purposes of collective bargaining agreement, for certainly an owner cannot bargain with himself or his co-owners."

Med-Arbiter Felizardo T. Serapio issued an order, 6 granting the petition for certification election which, in effect, was a denial of CENECO's motion to dismiss, and directing the holding of a certification election between CURE and No Union.

CENECO appealed to the Department of Labor and Employment which issued the questioned order modifying the aforestated order of the med-arbiter by directly certifying CURE as the exclusive bargaining representative of the rank-and-file employees of CURE.

Hence, this petition.

Petitioner CENECO argues that respondent Secretary committed a grave abuse of discretion in not applying to the present case the doctrine enunciated in the BATANGAS case that employees of an electric cooperative who at the same time are members of the electric cooperative are prohibited from forming or joining labor unions for purposes of a collective bargaining agreement. While CENECO recognizes the employees' right to self-organization, it avers that this is not absolute. Thus, it opines that employees of an electric cooperative who at the same time are members thereof are not allowed to form or join labor unions for purposes of collective bargaining. However, petitioner does not hesitate to admit that the prohibition does not extend to employees of an electric cooperative who are not members of the cooperative.

The issue, therefore, actually involves a determination of whether or not the employees of CENECO who withdrew their membership from the cooperative are entitled to form or join CURE for purposes of the negotiations for a collective bargaining agreement proposed by the latter.

As culled from the records, it is the submission of CENECO that the withdrawal from membership in the cooperative and, as a consequence, the employees' acquisition of membership in the union cannot be allowed for the following reasons:

1.

It was made as a subterfuge or to subvert the ruling in the BATANGAS case:

2. To allow the withdrawal of the members of CENECO from the cooperative without justifiable reason would greatly affect the objectives and goals of petitioner as an electric cooperative;

3. The Secretary of Labor, as well as the Med-Arbiter, has no jurisdiction over the issue of the withdrawal from membership which is vested in the National Electrification Administration (NEA) which has direct control and supervision over the operations of electric cooperatives; and

4. Assuming that the Secretary has jurisdiction, CURE failed to exhaust administrative remedies by not referring the matter of membership withdrawal to the NEA.

The petition is destitute of merit; certiorari will not lie.

We first rule on the alleged procedural infirmities affecting the instant case. CENECO avers that the med-arbiter has no jurisdiction to rule on the issue of withdrawal from membership of its employees in the cooperative which, it claims, is properly vested in the NEA which has control and supervision over all electric cooperatives.

From a perusal of petitioner's motion to dismiss filed with the med-arbiter, it becomes readily apparent that the sole basis for petitioner's motion is the illegality of the employees' membership in respondent union despite the fact that they allegedly are still members of the cooperative. Petitioner itself adopted the aforesaid argument in seeking the dismissal of the petition for certification election filed with the med-arbiter, and the finding made by the latter was merely in answer to the arguments advanced by petitioner. Hence, petitioner is deemed to have submitted the issue of membership withdrawal from the cooperative to the jurisdiction of the med-arbiter and it is now estopped from questioning that same jurisdiction which it invoked in its motion to dismiss after obtaining an adverse ruling thereon.

Under Article 256 of the Labor Code, to have a valid certification election at least a majority of all eligible voters in the unit must have cast their votes. It is apparent that incidental to the power of the med-arbiter to hear and decide representation cases is the power to determine who the eligible voters are. In so doing, it is axiomatic that the med-arbiter should determine the legality of the employees' membership in the union. In the case at bar, it obviously becomes necessary to consider first the propriety of the employees' membership withdrawal from the cooperative before a certification election can be had.

Lastly, it is petitioner herein who is actually questioning the propriety of the withdrawal of its members from the cooperative. Petitioner could have brought the matter before

the NEA if it wanted to and. if such remedy had really been available, and there is nothing to prevent it from doing so. It would be absurd to fault the employees for the neglect or laxity of petitioner in protecting its own interests.

The argument of CENECO that the withdrawal was merely to subvert the ruling of this Court in the BATANGAS case is without merit. The case referred to merely declared that employees who are at the same time members of the cooperative cannot join labor unions for purposes of collective bargaining. However, nowhere in said case is it stated that member-employees are prohibited from withdrawing their membership in the cooperative in order to join a labor union.

As discussed by the Solicitor General, Article I, Section 9 of the Articles of Incorporation and By- Laws of CENECO provides that "any member may withdraw from membership upon compliance with such uniform terms and conditions as the Board may prescribe." The same section provides that upon withdrawal, the member is merely required to surrender his membership certificate and he is to be refunded his membership fee less any obligation that he has with the cooperative. There appears to be no other condition or requirement imposed upon a withdrawing member. Hence, there is no just cause for petitioner's denial of the withdrawal from membership of its employees who are also members of the union. 7

The alleged board resolutions relied upon by petitioner in denying the withdrawal of the members concerned were never presented nor their contents disclosed either before the med-arbiter or the Secretary of Labor if only to prove the ratiocination for said denial. Furthermore, CENECO never averred non-compliance with the terms and conditions for withdrawal, if any. It appears that the Articles of Incorporation of CENECO do not provide any ground for withdrawal from membership which accordingly gives rise to the presumption that the same may be done at any time and for whatever reason. In addition, membership in the cooperative is on a voluntary basis. Hence, withdrawal therefrom cannot be restricted unnecessarily. The right to join an organization necessarily includes the equivalent right not to join the same.

The right of the employees to self-organization is a compelling reason why their withdrawal from the cooperative must be allowed. As pointed out by CURE, the

resignation of the member- employees is an expression of their preference for union membership over that of membership in the cooperative. The avowed policy of the State to afford fall protection to labor and to promote the primacy of free collective bargaining mandates that the employees' right to form and join unions for purposes of collective bargaining be accorded the highest consideration.

Membership in an electric cooperative which merely vests in the member a right to vote during the annual meeting becomes too trivial and insubstantial vis-a-vis the primordial and more important constitutional right of an employee to join a union of his choice. Besides, the 390 employees of CENECO, some of whom have never been members of the cooperative, represent a very small percentage of the cooperative's total membership of 44,000. It is inconceivable how the withdrawal of a negligible number of members could adversely affect the business concerns and operations of CENECO.

We rule, however, that the direct certification ordered by respondent Secretary is not proper. By virtue of Executive Order No. 111, which became effective on March 4, 1987, the direct certification originally allowed under Article 257 of the Labor Code has apparently been discontinued as a method of selecting the exclusive bargaining agent of the workers. This amendment affirms the superiority of the certification election over the direct certification which is no longer available now under the change in said provision. 8

We have said that where a union has filed a petition for certification election, the mere fact that no opposition is made does not warrant a direct certification. 9 In said case which has similar features to that at bar, wherein the respondent Minister directly certified the union, we held that:

... As pointed out by petitioner in its petition, what the respondent Minister achieved in rendering the assailed orders was to make a mockery of the procedure provided under the law for representation cases because: ... (c) By directly certifying a Union without sufficient proof of majority representation, he has in effect arrogated unto himself the right, vested naturally in the employee's to choose their collective bargaining representative. (d) He has in effect imposed upon the petitioner the obligation to negotiate with a union whose majority representation is under serious question. This is

highly irregular because while the Union enjoys the blessing of the Minister, it does not enjoy the blessing of the employees. Petitioner is therefore under threat of being held liable for refusing to negotiate with a union whose right to bargaining status has not been legally established.

While there may be some factual variances, the rationale therein is applicable to the present case in the sense that it is not alone sufficient that a union has the support of the majority. What is equally important is that everyone be given a democratic space in the bargaining unit concerned. The most effective way of determining which labor organization can truly represent the working force is by certification election. 10

WHEREFORE, the questioned order for the direct certification of respondent CURE as the bargaining representative of the employees of petitioner CENECO is hereby ANNULLED and SET ASIDE. The med-arbiter is hereby ordered to conduct a certification election among the rank-and- file employees of CENECO with CURE and No Union as the choices therein.

G.R. No. 76273

July 31, 1987

FEU-DR. NICANOR REYES MEDICAL FOUNDATION, INC., petitioner, vs. HON. CRESENCIANO TRAJANO and RICARDO C. CASTRO, FAR EASTERN UNIVERSITY DR. NICANOR REYES MEDICAL FOUNDATION, INC. ALLIANCE OF FILIPINO WORKERS (AFW), respondents.

PARAS, J.:

This is a petition for certiorari seeking to annul and set aside the decision of the respondent Director which affirmed the Order of the Med-Arbiter in the petition for

certification election (NCR-LRD-N-2-050-86) filed by private respondent, thus ordering the holding of a certification election among the rank and file employees of the herein petitioner.

The facts of the case are as follows:

The petitioner, Far Eastern University-Dr. Nicanor Reyes Memorial Foundation, Inc., has a work force of about 350 rank and file employees, majority of whom are members of private respondent Alliance of Filipino Workers.

On February 13, 1986, private respondent filed a Petition for Consent and/or Certification Election with The Ministry of Labor and Employment. The petitioner opposed the petition on the ground that a similar petition involving the same issues and the same parties is pending resolution before the Supreme Court, docketed as G.R. No. L-49771.

In its position paper, private respondent admitted: that as early as May 10, 1976, private respondent filed a similar petition for certification election with the Ministry of Labor and Employment but the petition was denied by the MED Arbiter and the Secretary of Labor on appeal, on the ground that the petitioner was a non-stock, nonprofit medical institution, therefore, its employees may not form, join, or organize a union pursuant to Article 244 of the Labor Code; that private respondent filed a petition for certiorari with the Supreme Court (docketed as G.R. No. L-49771) assailing the constitutionality of Article 244 of the Labor Code; that pending resolution of the aforesaid petition, or on May 1, 1980, Batas Pambansa Bilang 70 was enacted amending Article 244 of the Labor Code, thus granting even employees of non-stock, non-profit institutions the right to form, join and organize labor unions of their choice; and that in the exercise of such right, private respondent filed another petition for certification election with the Ministry of Labor and Employment (NCR-LRD-N-2-05086).

On April 17, 1986, the Med Arbiter issued an Order granting the petition, declaring that a certification election be conducted to determine the exclusive bargaining representative of all the rank and file employees of the petitioner (p. 4, Rollo).

Respondent Director affirmed said Order on appeal. In dismissing the appeal, however, respondent Director said that:

... respondent's (petitioner herein, reliance on the petition with the Supreme Court involving as it does the provisions of Article 244 of the Labor Code vis-a-vis the character of the hospital, which has been alleged as a non-profit medical foundation, has been rendered moot and academic by virtue of the amendatory BP #70, which allows employees of non-profit medical institutions to unionize.

Whatever doubt there may be on the right of the workers in a medical institution has been laid to rest by BP#70.

WHEREFORE, premises considered, the present appeal is hereby dismissed for lack of merit and the Order of the Med-Arbiter dated 17 April 1986 affirmed. ... (p. 19, Rollo)

Hence, this petition, raising the issue of whether or not respondent Director gravely abused his discretion in granting the petition for certification election, despite the pendency of a similar petition before the Supreme Court (G.R. No. 49771) which involves the same parties for the same cause.

The Petition is devoid of merit.

At the time private respondent filed its petition for certification election on February 13, 1986, Article 244 of the Labor Code was already amended by Batas Pambansa Bilang 70, to wit:

Art. 244. Coverage and employees' right to self-organization. All persons employed in commercial, industrial and charitable, medical or educational institutions whether operating for profit or not, shall have the right to self-organizations of their own choosing for purposes of collective bargaining. Ambulant intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for the purpose of enhancing and defending their interests and for their mutual aid and protection. (underscoring supplied).

Under the aforequoted provision, there is no doubt that rank and file employees of nonprofit medical institutions (as herein petitioner) are now permitted to form, organize or join labor unions of their choice for purposes of collective bargaining. Since private respondent had complied with the requisites provided by law for calling a certification election (p. 15, Rollo), it was incumbent upon respondent Director to conduct such certification election to ascertain the bargaining representative of petitioner's employees (Samahang Manggagawa Ng Pacific Mills, Inc. vs. Noriel, 134 SCRA 152).

As held in Quimpo v. Dela Victoria, 46 SCRA 139, in order that the pendency of another action between the same parties for the same cause may be availed of as a ground to dismiss a case, there must be, between the action under consideration and the other action: (1) Identity of parties, or at least such as representing the same interest in both actions; (2) Identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (3) the Identity on the two preceding particulars should be such that any judgment which may be rendered on the other action wig, regardless of which party is successful, amount to res judicata in the action under consideration.1avvphi1

In the instant case, any judgment which may be rendered in the petition for certiorari pending before the Supreme Court (G. R. No. L-49771) wig not constitute res judicata in the petition for certification election under consideration, for while in the former, private respondent questioned the constitutionality of Article 244 of the Labor Code before its amendment, in the latter, private respondent invokes the same article as already amended.

Petitioner, however, has pointed out that respondent Director should not have arrogated upon himself the power to declare the aforesaid petition for certiorari (G.R.

No. L-49771) moot and academic, as the same is sub-judice and only the Supreme Court can decide the matter. The Director cannot be faulted for he had to make a decision.

WHEREFORE, this petition is DISMISSED, and the decision appealed from is hereby AFFIRMED.

SECOND DIVISION

G.R. No. L-25246

September 12, 1974

BENJAMIN VICTORIANO, plaintiff-appellee, vs. ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC., defendants, ELIZALDE ROPE WORKERS' UNION, defendant-appellant.

Salonga, Ordonez, Yap, Sicat & Associates for plaintiff-appellee.

Cipriano Cid & Associates for defendant-appellant.

ZALDIVAR, J.:p

Appeal to this Court on purely questions of law from the decision of the Court of First Instance of Manila in its Civil Case No. 58894.

The undisputed facts that spawned the instant case follow:

Benjamin Victoriano (hereinafter referred to as Appellee), a member of the religious sect known as the "Iglesia ni Cristo", had been in the employ of the Elizalde Rope Factory, Inc. (hereinafter referred to as Company) since 1958. As such employee, he was a member of the Elizalde Rope Workers' Union (hereinafter referred to as Union) which had with the Company a collective bargaining agreement containing a closed shop provision which reads as follows:

Membership in the Union shall be required as a condition of employment for all permanent employees workers covered by this Agreement.

The collective bargaining agreement expired on March 3, 1964 but was renewed the following day, March 4, 1964.

Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its amendment by Republic Act No. 3350, the employer was not precluded "from making an agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the employees." On June 18, 1961, however, Republic Act No. 3350 was enacted, introducing an amendment to paragraph (4) subsection (a) of section 4 of Republic Act No. 875, as follows: ... "but such agreement shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization".

Being a member of a religious sect that prohibits the affiliation of its members with any labor organization, Appellee presented his resignation to appellant Union in 1962, and when no action was taken thereon, he reiterated his resignation on September 3, 1974. Thereupon, the Union wrote a formal letter to the Company asking the latter to separate Appellee from the service in view of the fact that he was resigning from the Union as a member. The management of the Company in turn notified Appellee and his counsel that unless the Appellee could achieve a satisfactory arrangement with the

Union, the Company would be constrained to dismiss him from the service. This prompted Appellee to file an action for injunction, docketed as Civil Case No. 58894 in the Court of First Instance of Manila to enjoin the Company and the Union from dismissing Appellee. 1 In its answer, the Union invoked the "union security clause" of the collective bargaining agreement; assailed the constitutionality of Republic Act No. 3350; and contended that the Court had no jurisdiction over the case, pursuant to Republic Act No. 875, Sections 24 and 9 (d) and (e). 2 Upon the facts agreed upon by the parties during the pre-trial conference, the Court a quo rendered its decision on August 26, 1965, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, judgment is rendered enjoining the defendant Elizalde Rope Factory, Inc. from dismissing the plaintiff from his present employment and sentencing the defendant Elizalde Rope Workers' Union to pay the plaintiff P500 for attorney's fees and the costs of this action. 3

From this decision, the Union appealed directly to this Court on purely questions of law, assigning the following errors:

I. That the lower court erred when it did not rule that Republic Act No. 3350 is unconstitutional.

II. That the lower court erred when it sentenced appellant herein to pay plaintiff the sum of P500 as attorney's fees and the cost thereof.

In support of the alleged unconstitutionality of Republic Act No. 3350, the Union contented, firstly, that the Act infringes on the fundamental right to form lawful associations; that "the very phraseology of said Republic Act 3350, that membership in a labor organization is banned to all those belonging to such religious sect prohibiting affiliation with any labor organization" 4 , "prohibits all the members of a given religious sect from joining any labor union if such sect prohibits affiliations of their members thereto" 5 ; and, consequently, deprives said members of their constitutional right to form or join lawful associations or organizations guaranteed by the Bill of Rights, and thus becomes obnoxious to Article III, Section 1 (6) of the 1935 Constitution. 6

Secondly, the Union contended that Republic Act No. 3350 is unconstitutional for impairing the obligation of contracts in that, while the Union is obliged to comply with its collective bargaining agreement containing a "closed shop provision," the Act relieves the employer from its reciprocal obligation of cooperating in the maintenance of union membership as a condition of employment; and that said Act, furthermore, impairs the Union's rights as it deprives the union of dues from members who, under the Act, are relieved from the obligation to continue as such members. 7

Thirdly, the Union contended that Republic Act No. 3350 discriminatorily favors those religious sects which ban their members from joining labor unions, in violation of Article Ill, Section 1 (7) of the 1935 Constitution; and while said Act unduly protects certain religious sects, it leaves no rights or protection to labor organizations. 8

Fourthly, Republic Act No. 3350, asserted the Union, violates the constitutional provision that "no religious test shall be required for the exercise of a civil right," in that the laborer's exercise of his civil right to join associations for purposes not contrary to law has to be determined under the Act by his affiliation with a religious sect; that conversely, if a worker has to sever his religious connection with a sect that prohibits membership in a labor organization in order to be able to join a labor organization, said Act would violate religious freedom. 9

Fifthly, the Union contended that Republic Act No. 3350, violates the "equal protection of laws" clause of the Constitution, it being a discriminately legislation, inasmuch as by exempting from the operation of closed shop agreement the members of the "Iglesia ni Cristo", it has granted said members undue advantages over their fellow workers, for while the Act exempts them from union obligation and liability, it nevertheless entitles them at the same time to the enjoyment of all concessions, benefits and other emoluments that the union might secure from the employer. 10

Sixthly, the Union contended that Republic Act No. 3350 violates the constitutional provision regarding the promotion of social justice. 11

Appellant Union, furthermore, asserted that a "closed shop provision" in a collective bargaining agreement cannot be considered violative of religious freedom, as to call for the amendment introduced by Republic Act No. 3350; 12 and that unless Republic Act No. 3350 is declared unconstitutional, trade unionism in this country would be wiped out as employers would prefer to hire or employ members of the Iglesia ni Cristo in order to do away with labor organizations. 13

Appellee, assailing appellant's arguments, contended that Republic Act No. 3350 does not violate the right to form lawful associations, for the right to join associations includes the right not to join or to resign from a labor organization, if one's conscience does not allow his membership therein, and the Act has given substance to such right by prohibiting the compulsion of workers to join labor organizations; 14 that said Act does not impair the obligation of contracts for said law formed part of, and was incorporated into, the terms of the closed shop agreement; 15 that the Act does not violate the establishment of religion clause or separation of Church and State, for Congress, in enacting said law, merely accommodated the religious needs of those workers whose religion prohibits its members from joining labor unions, and balanced the collective rights of organized labor with the constitutional right of an individual to freely exercise his chosen religion; that the constitutional right to the free exercise of one's religion has primacy and preference over union security measures which are merely contractual 16 ; that said Act does not violate the constitutional provision of equal protection, for the classification of workers under the Act depending on their religious tenets is based on substantial distinction, is germane to the purpose of the law, and applies to all the members of a given class; 17 that said Act, finally, does not violate the social justice policy of the Constitution, for said Act was enacted precisely to equalize employment opportunities for all citizens in the midst of the diversities of their religious beliefs." 18

I. Before We proceed to the discussion of the first assigned error, it is necessary to premise that there are some thoroughly established principles which must be followed in all cases where questions of constitutionality as obtains in the instant case are involved. All presumptions are indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must prove its invalidity beyond a reasonable doubt, that a law may work hardship does not render it unconstitutional; that if any reasonable basis may be conceived which supports the statute, it will be upheld, and the challenger must negate all possible bases; that the courts are not concerned with the wisdom,

justice, policy, or expediency of a statute; and that a liberal interpretation of the constitution in favor of the constitutionality of legislation should be adopted. 19

1. Appellant Union's contention that Republic Act No. 3350 prohibits and bans the members of such religious sects that forbid affiliation of their members with labor unions from joining labor unions appears nowhere in the wording of Republic Act No. 3350; neither can the same be deduced by necessary implication therefrom. It is not surprising, therefore, that appellant, having thus misread the Act, committed the error of contending that said Act is obnoxious to the constitutional provision on freedom of association.

Both the Constitution and Republic Act No. 875 recognize freedom of association. Section 1 (6) of Article III of the Constitution of 1935, as well as Section 7 of Article IV of the Constitution of 1973, provide that the right to form associations or societies for purposes not contrary to law shall not be abridged. Section 3 of Republic Act No. 875 provides that employees shall have the right to self-organization and to form, join of assist labor organizations of their own choosing for the purpose of collective bargaining and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. What the Constitution and the Industrial Peace Act recognize and guarantee is the "right" to form or join associations. Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a "right", it can be safely said that whatever theory one subscribes to, a right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself without being prevented by law; and second, power, whereby an employee may, as he pleases, join or refrain from Joining an association. It is, therefore, the employee who should decide for himself whether he should join or not an association; and should he choose to join, he himself makes up his mind as to which association he would join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said organization at any time. 20 It is clear, therefore, that the right to join a union includes the right to abstain from joining any union. 21 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, and guaranteed to the employee, is the "right" to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The law does not enjoin an employee to sign up with any association.

The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only member of the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs. Thus Section 4 (a) (4) of the Industrial Peace Act, before its amendment by Republic Act No. 3350, provides that although it would be an unfair labor practice for an employer "to discriminate in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization" the employer is, however, not precluded "from making an agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the employees". By virtue, therefore, of a closed shop agreement, before the enactment of Republic Act No. 3350, if any person, regardless of his religious beliefs, wishes to be employed or to keep his employment, he must become a member of the collective bargaining union. Hence, the right of said employee not to join the labor union is curtailed and withdrawn.

To that all-embracing coverage of the closed shop arrangement, Republic Act No. 3350 introduced an exception, when it added to Section 4 (a) (4) of the Industrial Peace Act the following proviso: "but such agreement shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization". Republic Act No. 3350 merely excludes ipso jure from the application and coverage of the closed shop agreement the employees belonging to any religious sects which prohibit affiliation of their members with any labor organization. What the exception provides, therefore, is that members of said religious sects cannot be compelled or coerced to join labor unions even when said unions have closed shop agreements with the employers; that in spite of any closed shop agreement, members of said religious sects cannot be refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union. It is clear, therefore, that the assailed Act, far from infringing the constitutional provision on freedom of association, upholds and reinforces it. It does not prohibit the members of said religious sects from affiliating with labor unions. It still leaves to said members the liberty and the power to affiliate, or not to affiliate, with labor unions. If, notwithstanding their religious beliefs, the members of said religious sects prefer to sign up with the labor union, they can do so. If in deference and fealty to their religious faith, they refuse to sign up, they can do so; the law does not coerce them to join; neither does the law

prohibit them from joining; and neither may the employer or labor union compel them to join. Republic Act No. 3350, therefore, does not violate the constitutional provision on freedom of association.

2. Appellant Union also contends that the Act is unconstitutional for impairing the obligation of its contract, specifically, the "union security clause" embodied in its Collective Bargaining Agreement with the Company, by virtue of which "membership in the union was required as a condition for employment for all permanent employees workers". This agreement was already in existence at the time Republic Act No. 3350 was enacted on June 18, 1961, and it cannot, therefore, be deemed to have been incorporated into the agreement. But by reason of this amendment, Appellee, as well as others similarly situated, could no longer be dismissed from his job even if he should cease to be a member, or disaffiliate from the Union, and the Company could continue employing him notwithstanding his disaffiliation from the Union. The Act, therefore, introduced a change into the express terms of the union security clause; the Company was partly absolved by law from the contractual obligation it had with the Union of employing only Union members in permanent positions, It cannot be denied, therefore, that there was indeed an impairment of said union security clause.

According to Black, any statute which introduces a change into the express terms of the contract, or its legal construction, or its validity, or its discharge, or the remedy for its enforcement, impairs the contract. The extent of the change is not material. It is not a question of degree or manner or cause, but of encroaching in any respect on its obligation or dispensing with any part of its force. There is an impairment of the contract if either party is absolved by law from its performance. 22 Impairment has also been predicated on laws which, without destroying contracts, derogate from substantial contractual rights. 23

It should not be overlooked, however, that the prohibition to impair the obligation of contracts is not absolute and unqualified. The prohibition is general, affording a broad outline and requiring construction to fill in the details. The prohibition is not to be read with literal exactness like a mathematical formula, for it prohibits unreasonable impairment only. 24 In spite of the constitutional prohibition, the State continues to possess authority to safeguard the vital interests of its people. Legislation appropriate to safeguarding said interests may modify or abrogate contracts already in effect. 25

For not only are existing laws read into contracts in order to fix the obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. All contracts made with reference to any matter that is subject to regulation under the police power must be understood as made in reference to the possible exercise of that power. 26 Otherwise, important and valuable reforms may be precluded by the simple device of entering into contracts for the purpose of doing that which otherwise may be prohibited. The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worthwhile a government which retains adequate authority to secure the peace and good order of society. The contract clause of the Constitution must, therefore, be not only in harmony with, but also in subordination to, in appropriate instances, the reserved power of the state to safeguard the vital interests of the people. It follows that not all legislations, which have the effect of impairing a contract, are obnoxious to the constitutional prohibition as to impairment, and a statute passed in the legitimate exercise of police power, although it incidentally destroys existing contract rights, must be upheld by the courts. This has special application to contracts regulating relations between capital and labor which are not merely contractual, and said labor contracts, for being impressed with public interest, must yield to the common good. 27

In several occasions this Court declared that the prohibition against impairing the obligations of contracts has no application to statutes relating to public subjects within the domain of the general legislative powers of the state involving public welfare. 28 Thus, this Court also held that the Blue Sunday Law was not an infringement of the obligation of a contract that required the employer to furnish work on Sundays to his employees, the law having been enacted to secure the well-being and happiness of the laboring class, and being, furthermore, a legitimate exercise of the police power. 29

In order to determine whether legislation unconstitutionally impairs contract obligations, no unchanging yardstick, applicable at all times and under all circumstances, by which the validity of each statute may be measured or determined, has been fashioned, but every case must be determined upon its own circumstances. Legislation impairing the obligation of contracts can be sustained when it is enacted for the promotion of the general good of the people, and when the means adopted to secure that end are reasonable. Both the end sought and the means adopted must be legitimate, i.e., within

the scope of the reserved power of the state construed in harmony with the constitutional limitation of that power. 30

What then was the purpose sought to be achieved by Republic Act No. 3350? Its purpose was to insure freedom of belief and religion, and to promote the general welfare by preventing discrimination against those members of religious sects which prohibit their members from joining labor unions, confirming thereby their natural, statutory and constitutional right to work, the fruits of which work are usually the only means whereby they can maintain their own life and the life of their dependents. It cannot be gainsaid that said purpose is legitimate.

The questioned Act also provides protection to members of said religious sects against two aggregates of group strength from which the individual needs protection. The individual employee, at various times in his working life, is confronted by two aggregates of power collective labor, directed by a union, and collective capital, directed by management. The union, an institution developed to organize labor into a collective force and thus protect the individual employee from the power of collective capital, is, paradoxically, both the champion of employee rights, and a new source of their frustration. Moreover, when the Union interacts with management, it produces yet a third aggregate of group strength from which the individual also needs protection the collective bargaining relationship. 31

The aforementioned purpose of the amendatory law is clearly seen in the Explanatory Note to House Bill No. 5859, which later became Republic Act No. 3350, as follows:

It would be unthinkable indeed to refuse employing a person who, on account of his religious beliefs and convictions, cannot accept membership in a labor organization although he possesses all the qualifications for the job. This is tantamount to punishing such person for believing in a doctrine he has a right under the law to believe in. The law would not allow discrimination to flourish to the detriment of those whose religion discards membership in any labor organization. Likewise, the law would not commend the deprivation of their right to work and pursue a modest means of livelihood, without in any manner violating their religious faith and/or belief. 32

It cannot be denied, furthermore, that the means adopted by the Act to achieve that purpose exempting the members of said religious sects from coverage of union security agreements is reasonable.

It may not be amiss to point out here that the free exercise of religious profession or belief is superior to contract rights. In case of conflict, the latter must, therefore, yield to the former. The Supreme Court of the United States has also declared on several occasions that the rights in the First Amendment, which include freedom of religion, enjoy a preferred position in the constitutional system. 33 Religious freedom, although not unlimited, is a fundamental personal right and liberty, 34 and has a preferred position in the hierarchy of values. Contractual rights, therefore, must yield to freedom of religion. It is only where unavoidably necessary to prevent an immediate and grave danger to the security and welfare of the community that infringement of religious freedom may be justified, and only to the smallest extent necessary to avoid the danger.

3. In further support of its contention that Republic Act No. 3350 is unconstitutional, appellant Union averred that said Act discriminates in favor of members of said religious sects in violation of Section 1 (7) of Article Ill of the 1935 Constitution, and which is now Section 8 of Article IV of the 1973 Constitution, which provides:

No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof, and the free exercise and enjoyment of religious profession and worship, without discrimination and preference, shall forever be allowed. No religious test shall be required for the exercise of civil or political rights.

The constitutional provision into only prohibits legislation for the support of any religious tenets or the modes of worship of any sect, thus forestalling compulsion by law of the acceptance of any creed or the practice of any form of worship, 35 but also assures the free exercise of one's chosen form of religion within limits of utmost amplitude. It has been said that the religion clauses of the Constitution are all designed to protect the broadest possible liberty of conscience, to allow each man to believe as

his conscience directs, to profess his beliefs, and to live as he believes he ought to live, consistent with the liberty of others and with the common good. 36 Any legislation whose effect or purpose is to impede the observance of one or all religions, or to discriminate invidiously between the religions, is invalid, even though the burden may be characterized as being only indirect. 37 But if the stage regulates conduct by enacting, within its power, a general law which has for its purpose and effect to advance the state's secular goals, the statute is valid despite its indirect burden on religious observance, unless the state can accomplish its purpose without imposing such burden. 38

In Aglipay v. Ruiz 39 , this Court had occasion to state that the government should not be precluded from pursuing valid objectives secular in character even if the incidental result would be favorable to a religion or sect. It has likewise been held that the statute, in order to withstand the strictures of constitutional prohibition, must have a secular legislative purpose and a primary effect that neither advances nor inhibits religion. 40 Assessed by these criteria, Republic Act No. 3350 cannot be said to violate the constitutional inhibition of the "no-establishment" (of religion) clause of the Constitution.

The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not spiritual or religious or holy and eternal. It was intended to serve the secular purpose of advancing the constitutional right to the free exercise of religion, by averting that certain persons be refused work, or be dismissed from work, or be dispossessed of their right to work and of being impeded to pursue a modest means of livelihood, by reason of union security agreements. To help its citizens to find gainful employment whereby they can make a living to support themselves and their families is a valid objective of the state. In fact, the state is enjoined, in the 1935 Constitution, to afford protection to labor, and regulate the relations between labor and capital and industry. 41 More so now in the 1973 Constitution where it is mandated that "the State shall afford protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relation between workers and employers. 42

The primary effects of the exemption from closed shop agreements in favor of members of religious sects that prohibit their members from affiliating with a labor

organization, is the protection of said employees against the aggregate force of the collective bargaining agreement, and relieving certain citizens of a burden on their religious beliefs; and by eliminating to a certain extent economic insecurity due to unemployment, which is a serious menace to the health, morals, and welfare of the people of the State, the Act also promotes the well-being of society. It is our view that the exemption from the effects of closed shop agreement does not directly advance, or diminish, the interests of any particular religion. Although the exemption may benefit those who are members of religious sects that prohibit their members from joining labor unions, the benefit upon the religious sects is merely incidental and indirect. The "establishment clause" (of religion) does not ban regulation on conduct whose reason or effect merely happens to coincide or harmonize with the tenets of some or all religions. 43 The free exercise clause of the Constitution has been interpreted to require that religious exercise be preferentially aided. 44

We believe that in enacting Republic Act No. 3350, Congress acted consistently with the spirit of the constitutional provision. It acted merely to relieve the exercise of religion, by certain persons, of a burden that is imposed by union security agreements. It was Congress itself that imposed that burden when it enacted the Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it so deems advisable, could take away the same burden. It is certain that not every conscience can be accommodated by all the laws of the land; but when general laws conflict with scrupples of conscience, exemptions ought to be granted unless some "compelling state interest" intervenes. 45 In the instant case, We see no such compelling state interest to withhold exemption.

Appellant bewails that while Republic Act No. 3350 protects members of certain religious sects, it leaves no right to, and is silent as to the protection of, labor organizations. The purpose of Republic Act No. 3350 was not to grant rights to labor unions. The rights of labor unions are amply provided for in Republic Act No. 875 and the new Labor Code. As to the lamented silence of the Act regarding the rights and protection of labor unions, suffice it to say, first, that the validity of a statute is determined by its provisions, not by its silence 46 ; and, second, the fact that the law may work hardship does not render it unconstitutional. 47

It would not be amiss to state, regarding this matter, that to compel persons to join and remain members of a union to keep their jobs in violation of their religious

scrupples, would hurt, rather than help, labor unions, Congress has seen it fit to exempt religious objectors lest their resistance spread to other workers, for religious objections have contagious potentialities more than political and philosophic objections.

Furthermore, let it be noted that coerced unity and loyalty even to the country, and a fortiori to a labor union assuming that such unity and loyalty can be attained through coercion is not a goal that is constitutionally obtainable at the expense of religious liberty. 48 A desirable end cannot be promoted by prohibited means.

4. Appellants' fourth contention, that Republic Act No. 3350 violates the constitutional prohibition against requiring a religious test for the exercise of a civil right or a political right, is not well taken. The Act does not require as a qualification, or condition, for joining any lawful association membership in any particular religion or in any religious sect; neither does the Act require affiliation with a religious sect that prohibits its members from joining a labor union as a condition or qualification for withdrawing from a labor union. Joining or withdrawing from a labor union requires a positive act. Republic Act No. 3350 only exempts members with such religious affiliation from the coverage of closed shop agreements. So, under this Act, a religious objector is not required to do a positive act to exercise the right to join or to resign from the union. He is exempted ipso jure without need of any positive act on his part. A conscientious religious objector need not perform a positive act or exercise the right of resigning from the labor union he is exempted from the coverage of any closed shop agreement that a labor union may have entered into. How then can there be a religious test required for the exercise of a right when no right need be exercised?

We have said that it was within the police power of the State to enact Republic Act No. 3350, and that its purpose was legal and in consonance with the Constitution. It is never an illegal evasion of a constitutional provision or prohibition to accomplish a desired result, which is lawful in itself, by discovering or following a legal way to do it. 49

5. Appellant avers as its fifth ground that Republic Act No. 3350 is a discriminatory legislation, inasmuch as it grants to the members of certain religious sects undue advantages over other workers, thus violating Section 1 of Article III of the 1935

Constitution which forbids the denial to any person of the equal protection of the laws. 50

The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity of rights. The Constitution does not require that things which are different in fact be treated in law as though they were the same. The equal protection clause does not forbid discrimination as to things that are different. 51 It does not prohibit legislation which is limited either in the object to which it is directed or by the territory within which it is to operate.

The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars. A law is not invalid because of simple inequality. 52 The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. 53 All that is required of a valid classification is that it be reasonable, which means that the classification should be based on substantial distinctions which make for real differences; that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it must apply equally to each member of the class. 54 This Court has held that the standard is satisfied if the classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary. 55

In the exercise of its power to make classifications for the purpose of enacting laws over matters within its jurisdiction, the state is recognized as enjoying a wide range of discretion. 56 It is not necessary that the classification be based on scientific or marked differences of things or in their relation. 57 Neither is it necessary that the classification be made with mathematical nicety. 58 Hence legislative classification may in many cases properly rest on narrow distinctions, 59 for the equal protection guaranty does

not preclude the legislature from recognizing degrees of evil or harm, and legislation is addressed to evils as they may appear.

We believe that Republic Act No. 3350 satisfies the aforementioned requirements. The Act classifies employees and workers, as to the effect and coverage of union shop security agreements, into those who by reason of their religious beliefs and convictions cannot sign up with a labor union, and those whose religion does not prohibit membership in labor unions. Tile classification rests on real or substantial, not merely imaginary or whimsical, distinctions. There is such real distinction in the beliefs, feelings and sentiments of employees. Employees do not believe in the same religious faith and different religions differ in their dogmas and cannons. Religious beliefs, manifestations and practices, though they are found in all places, and in all times, take so many varied forms as to be almost beyond imagination. There are many views that comprise the broad spectrum of religious beliefs among the people. There are diverse manners in which beliefs, equally paramount in the lives of their possessors, may be articulated. Today the country is far more heterogenous in religion than before, differences in religion do exist, and these differences are important and should not be ignored.

Even from the phychological point of view, the classification is based on real and important differences. Religious beliefs are not mere beliefs, mere ideas existing only in the mind, for they carry with them practical consequences and are the motives of certain rules. of human conduct and the justification of certain acts. 60 Religious sentiment makes a man view things and events in their relation to his God. It gives to human life its distinctive character, its tone, its happiness or unhappiness its enjoyment or irksomeness. Usually, a strong and passionate desire is involved in a religious belief. To certain persons, no single factor of their experience is more important to them than their religion, or their not having any religion. Because of differences in religious belief and sentiments, a very poor person may consider himself better than the rich, and the man who even lacks the necessities of life may be more cheerful than the one who has all possible luxuries. Due to their religious beliefs people, like the martyrs, became resigned to the inevitable and accepted cheerfully even the most painful and excruciating pains. Because of differences in religious beliefs, the world has witnessed turmoil, civil strife, persecution, hatred, bloodshed and war, generated to a large extent by members of sects who were intolerant of other religious beliefs. The classification, introduced by Republic Act No. 3350, therefore, rests on substantial distinctions.

The classification introduced by said Act is also germane to its purpose. The purpose of the law is precisely to avoid those who cannot, because of their religious belief, join labor unions, from being deprived of their right to work and from being dismissed from their work because of union shop security agreements.

Republic Act No. 3350, furthermore, is not limited in its application to conditions existing at the time of its enactment. The law does not provide that it is to be effective for a certain period of time only. It is intended to apply for all times as long as the conditions to which the law is applicable exist. As long as there are closed shop agreements between an employer and a labor union, and there are employees who are prohibited by their religion from affiliating with labor unions, their exemption from the coverage of said agreements continues.

Finally, the Act applies equally to all members of said religious sects; this is evident from its provision. The fact that the law grants a privilege to members of said religious sects cannot by itself render the Act unconstitutional, for as We have adverted to, the Act only restores to them their freedom of association which closed shop agreements have taken away, and puts them in the same plane as the other workers who are not prohibited by their religion from joining labor unions. The circumstance, that the other employees, because they are differently situated, are not granted the same privilege, does not render the law unconstitutional, for every classification allowed by the Constitution by its nature involves inequality.

The mere fact that the legislative classification may result in actual inequality is not violative of the right to equal protection, for every classification of persons or things for regulation by law produces inequality in some degree, but the law is not thereby rendered invalid. A classification otherwise reasonable does not offend the constitution simply because in practice it results in some inequality. 61 Anent this matter, it has been said that whenever it is apparent from the scope of the law that its object is for the benefit of the public and the means by which the benefit is to be obtained are of public character, the law will be upheld even though incidental advantage may occur to individuals beyond those enjoyed by the general public. 62

6. Appellant's further contention that Republic Act No. 3350 violates the constitutional provision on social justice is also baseless. Social justice is intended to promote the welfare of all the people. 63 Republic Act No. 3350 promotes that welfare insofar as it looks after the welfare of those who, because of their religious belief, cannot join labor unions; the Act prevents their being deprived of work and of the means of livelihood. In determining whether any particular measure is for public advantage, it is not necessary that the entire state be directly benefited it is sufficient that a portion of the state be benefited thereby.

Social justice also means the adoption by the Government of measures calculated to insure economic stability of all component elements of society, through the maintenance of a proper economic and social equilibrium in the inter-relations of the members of the community. 64 Republic Act No. 3350 insures economic stability to the members of a religious sect, like the Iglesia ni Cristo, who are also component elements of society, for it insures security in their employment, notwithstanding their failure to join a labor union having a closed shop agreement with the employer. The Act also advances the proper economic and social equilibrium between labor unions and employees who cannot join labor unions, for it exempts the latter from the compelling necessity of joining labor unions that have closed shop agreements and equalizes, in so far as opportunity to work is concerned, those whose religion prohibits membership in labor unions with those whose religion does not prohibit said membership. Social justice does not imply social equality, because social inequality will always exist as long as social relations depend on personal or subjective proclivities. Social justice does not require legal equality because legal equality, being a relative term, is necessarily premised on differentiations based on personal or natural conditions. 65 Social justice guarantees equality of opportunity 66 , and this is precisely what Republic Act No. 3350 proposes to accomplish it gives laborers, irrespective of their religious scrupples, equal opportunity for work.

7. As its last ground, appellant contends that the amendment introduced by Republic Act No. 3350 is not called for in other words, the Act is not proper, necessary or desirable. Anent this matter, it has been held that a statute which is not necessary is not, for that reason, unconstitutional; that in determining the constitutional validity of legislation, the courts are unconcerned with issues as to the necessity for the enactment of the legislation in question. 67 Courts do inquire into the wisdom of laws. 68 Moreover, legislatures, being chosen by the people, are presumed to understand

and correctly appreciate the needs of the people, and it may change the laws accordingly. 69 The fear is entertained by appellant that unless the Act is declared unconstitutional, employers will prefer employing members of religious sects that prohibit their members from joining labor unions, and thus be a fatal blow to unionism. We do not agree. The threat to unionism will depend on the number of employees who are members of the religious sects that control the demands of the labor market. But there is really no occasion now to go further and anticipate problems We cannot judge with the material now before Us. At any rate, the validity of a statute is to be determined from its general purpose and its efficacy to accomplish the end desired, not from its effects on a particular case. 70 The essential basis for the exercise of power, and not a mere incidental result arising from its exertion, is the criterion by which the validity of a statute is to be measured. 71

II. We now pass on the second assignment of error, in support of which the Union argued that the decision of the trial court ordering the Union to pay P500 for attorney's fees directly contravenes Section 24 of Republic Act No. 875, for the instant action involves an industrial dispute wherein the Union was a party, and said Union merely acted in the exercise of its rights under the union shop provision of its existing collective bargaining contract with the Company; that said order also contravenes Article 2208 of the Civil Code; that, furthermore, Appellee was never actually dismissed by the defendant Company and did not therefore suffer any damage at all . 72

In refuting appellant Union's arguments, Appellee claimed that in the instant case there was really no industrial dispute involved in the attempt to compel Appellee to maintain its membership in the union under pain of dismissal, and that the Union, by its act, inflicted intentional harm on Appellee; that since Appellee was compelled to institute an action to protect his right to work, appellant could legally be ordered to pay attorney's fees under Articles 1704 and 2208 of the Civil Code. 73

The second paragraph of Section 24 of Republic Act No. 875 which is relied upon by appellant provides that:

No suit, action or other proceedings shall be maintainable in any court against a labor organization or any officer or member thereof for any act done by or on behalf of such

organization in furtherance of an industrial dispute to which it is a party, on the ground only that such act induces some other person to break a contract of employment or that it is in restraint of trade or interferes with the trade, business or employment of some other person or with the right of some other person to dispose of his capital or labor. (Emphasis supplied)

That there was a labor dispute in the instant case cannot be disputed for appellant sought the discharge of respondent by virtue of the closed shop agreement and under Section 2 (j) of Republic Act No. 875 a question involving tenure of employment is included in the term "labor dispute". 74 The discharge or the act of seeking it is the labor dispute itself. It being the labor dispute itself, that very same act of the Union in asking the employer to dismiss Appellee cannot be "an act done ... in furtherance of an industrial dispute". The mere fact that appellant is a labor union does not necessarily mean that all its acts are in furtherance of an industrial dispute. 75 Appellant Union, therefore, cannot invoke in its favor Section 24 of Republic Act No. 875. This case is not intertwined with any unfair labor practice case existing at the time when Appellee filed his complaint before the lower court.

Neither does Article 2208 of the Civil Code, invoked by the Union, serve as its shield. The article provides that attorney's fees and expenses of litigation may be awarded "when the defendant's act or omission has compelled the plaintiff ... to incur expenses to protect his interest"; and "in any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered". In the instant case, it cannot be gainsaid that appellant Union's act in demanding Appellee's dismissal caused Appellee to incur expenses to prevent his being dismissed from his job. Costs according to Section 1, Rule 142, of the Rules of Court, shall be allowed as a matter of course to the prevailing party.

WHEREFORE, the instant appeal is dismissed, and the decision, dated August 26, 1965, of the Court of First Instance of Manila, in its Civil Case No. 58894, appealed from is affirmed, with costs against appellant Union. It is so ordered.

Makalintal, C.J, Castro, Teehankee, Barredo, Makasiar, Antonio, Esguerra, Muoz Palma and Aquino, JJ., concur.

G.R. No. L-26736

August 18, 1972

FILOIL REFINERY CORPORATION, petitioner, vs. FILOIL SUPERVISORY & CONFIDENTIAL EMPLOYEES ASSOCIATION AND COURT OF INDUSTRIAL RELATIONS, respondents.

Beltran, Lacson & Associates for petitioner.

Lanting, Morabe Law Offices for private respondent.

TEEHANKEE, J.:p

The present appeal questions the right of supervisors and confidential employees to organize the respondent labor association and to bargain collectively with their employer, petitioner corporation herein, as upheld by respondent court of industrial relations in its appealed orders and resolution.

Respondent association is a labor organization duly registered with the Department of Labor. It is composed exclusively of the supervisory and confidential employees of petitioner corporation. There exists another entirely distinct labor association composed of the corporation's rank-and-file employees, the Filoil Employees & Workers

Association (FEWA) with which petitioner executed a collective bargaining agreement. This collective bargaining agreement expressly excluded from its coverage petitioner's supervisory and confidential employees, who in turn organized their own labor association, respondent herein.

Respondent association filed on February 18, 1965 with the industrial court its petition for certification as the sole and exclusive collective bargaining agent of all of petitioner's supervisory and confidential employees working at its refinery in Rosario, Cavite.

Petitioner corporation filed a motion to dismiss the petition on the grounds of lack of cause of action and of respondent court's lack of jurisdiction over the subject-matter, under its claim that supervisors are not employees within the meaning of Republic Act 875, the Industrial Peace Act, and that since they are part of management, they do not have the right to bargain collectively although they may organize an organization of their own.

Respondent court in its order of May 26, 1965 denied the dismissal motion. It ruled that under the express provisions of section 3 of the Industrial Peace Act, "(I)ndividuals employed as supervisors shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations their own." 1

It rejected petitioner's claim against respondent association's right to bargain collectively, holding that such was expressly granted under section 24 of the Industrial Peace Act, and asserting that "if Congress deemed it wise for supervisors not to have the right to strike, then it should have been so expressly stated as in the case of government employees. Section 11 of the Industrial Peace Act gives government employees the right to belong to any labor organization provided no obligation to strike or join a strike is imposed by such labor organization. The denial to government employees of the right to strike is significant in the controversy before this Court because it manifests to all that Congress in enacting Republic Act No. 875 was aware of the implications that when supervisors were given the right to organize themselves into a labor organization, they have correlative right to declare a strike. In the case of supervisors, they were enfranchised by Congress to organize themselves into a labor organization and were denied the right to strike. This means that the right to strike was

not denied them since no special reason obtains among the supervisors as it does obtain among government employees." 2

The industrial court likewise dismissed petitioner's objection against the composition of respondent association in that it included as members technical men and confidential employees in this wise: "(A)t this point, it may be stressed that supervisors as a general rule should form an association of their own and should exclude all other types of personnel unless a special consideration exists, like example, that they are so few in number and that there are other technical men or confidential men equally few in number. In the latter case, the supervisors, technical men and confidential employees may be constituted into one unit." 3

Petitioner's motion for reconsideration of said order of May 26, 1965 was denied by respondent court en banc per its resolution dated September 7, 1965 which affirmed the said order. No appeal having been taken from the resolution, the petition was accordingly set for hearing and the parties submitted their stipulation of facts, stipulating inter alia that respondent association "has forty-seven (47) members among the supervisory, technical men and confidential employees of the company" and that "all the forty seven (47) members of the (respondent association) are being checked-off by the company for union dues pursuant to the individual check-off authorization submitted to the company."

The parties could not agree, however, on the composition of the appropriate bargaining unit with petitioner corporation proposing that the 47 members of respondent association should be broken up into five (5) separate collective bargaining units, viz, the supervisors should form a distinct unit separate from the rest of the personnel who in turn would be divided into separate and independent units or confidential employees, professional personnel, "fringe" employees consisting of five firemen, and twelve (12) office and clerical employees.

Evidence was received by respondent court and it was satisfied that executive personnel handling personnel matters for the employer were duly excluded from respondent association. Thus, per respondent court's order of July 23, 1966, it is noted that "not one of the employees listed under Groups I and II including (their supervisor)

Leonardo R. Santos under Group III, is a member of (respondent association)", since "(I)t appears that the personnel listed under Groups I and Group II ... are in the category of executives who have supervision over the supervisors who are members of (respondent association) and that Marcelo Bernardo handles personnel matters of the employer ... All of them should, therefore, be excluded from the appropriate bargaining unit. 4

Respondent court in its said order of July 23, 1966 consequently cast aside petitioner's sedulous objections against the inclusion of the confidential employees in the supervisors respondent association, thus: "(F)rom the memorandum and manifestation of the company, a persistent assault against the inclusion of the confidential emloyees with supervisors under one bargaining unit would seem to be evident. Although this inclusion has already been raised in the motion to dismiss filed by the company and has already been resolved by the Court en banc, with no appeal to the Supreme Court having been taken by the company, we shall try once more to show why such inclusion. It is admitted by the company that confidential employees are outside the coverage of the existing collective bargaining agreement between the respondent company and the rank and file union (FEWA) by specific agreement. Since the confidential employees are very few and are, by practice and tradition, identified with management, the NLRB, because of such "identity of interest" (Wilson & Co., 68 NLRB 84), has allowed their inclusion in the bargaining unit of supervisors who are likewise identified with management. This Court, a counterpart of the NLRB, for same reason, should also allow the inclusion of the confedential employees in the bargaining unit of supervisor except of course Marcelo Bernardo who, pursuant to Order of May 26, 1965, as affirmed by the Court en banc, should be excluded because he handles personnel matters for the employer." 5

Respondent court pointed out that "in fact, out of forty-three (43), excluding the twelve (12) executive personnel under Groups I and II, the company proposes five (5) bargaining units or eight (8) employees per unit. This Court will be creating fragmentary units which would not serve the interest of industrial peace, much less in an industry indispensable to the national interest like the one at bar, as is now obtaining in the Philippine National Railways, also an industry indispensable to the national interest (Union de Maquinistas, Fogoneros y Motormen vs. Philippine National Railways, Case No. 67-IPA), with thirteen (13) unions, if it breaks up the petitioner union into five (5) bargaining units. The Court is likewise aware of the ineffectiveness of

a small union with a scanty members as bargaining unit. The breaking up of bargaining agents into tiny units will greatly impair their organizational value. It has always been the policy of the United States National Labor Relations Board that, in deciding upon whether to include or exclude a group of employees from a bargaining unit, the Board has always allowed itself to be guided by the determination as to whether its action "will insure to the employees of the Company the full benefit of their right to selforganization and to collective bargaining and otherwise effectuate the policies of the Act" (20 NLRB 705). We see no reason why this Tribunal whose basic functions are the same as that of the NLRB, should do less or otherwise depart from this sound policy." 6

Since respondent association "clearly represents the majority of the employees in the appropriate bargaining unit," respondent court therefore certified it as the sole and exclusive bargaining agent for all the employees in the unit.

Respondent court per its resolution en banc dated September 15, 1966 dismissed petitioner's motion for reconsideration, holding that "as to the question of the right of supervisors and confidential employees to compel their employer to bargain collectively, this has already been passed upon by the Trial Court in its Order dated May 26, 1965 which Order was affirmed by the Court en banc in a resolution dated September 7, 1965. The Company did not appeal this resolution to the Supreme Court. Hence, this matter, as far as we are concerned, has already been resolved. We find it, therefore, unnecessary to pass upon the same again," and that it found no sufficient justification to alter or modify the trial court's order upholding the appropriateness of the bargaining unit. On this latter point, Judge Salvador, while concurring with the supervisors' right of self-organization and collective bargaining, cast a dissenting vote on the ground that the Industrial Peace Act did not contemplate nor provide for supervisors and confidential employees to be under one bargaining unit and as to "executive personnel" who have supervision over the supervisors being excluded from any representation, urged that "another supervisors' unit must be created for these executive personnel." The second point is not in contention at bar since the "executive personnel" concerned have not appealed their exclusion.

In this appeal, petitioner pursues anew its contention that supervisors form part of management and are not considered as employees entitled to bargain collectively, arguing that "as supervisors form part and parcel of management, it is absurd for

management to bargain collectively with itself." Petitioner further argues that under the American concept, supervisors are not considered employees and that since our Congress copied verbatim the Taft-Hartley Act's definition of supervisor, 7 its act of "incorporating the definition in the Taft-Hartley Act" must be deemed an expression of its intention "to follow the intendment of said Act."

Petitioner's contentions are untenable, prescinding from the fact of its failure to appeal in due course respondent court's en banc resolution of September 7, 1965 upholding the right of the supervisors and confidential employees to organize respondent association and to compel petitioner to negotiate and bargain collectively with it. Petitioner's argument that since supervisors form part of management, to allow them to bargain collectively would be tantamount to management bargaining with itself may be a well-turned phrase but ignores the dual status of a supervisor as a representative of management and as an employee.

If indeed the supervisor is absolutely undistinguishable from management, then he would be beyond removal or dismissal, for as respondent association counters, "how can management remove or dismiss itself?"

As stated for the Court by the now Chief Justice in AG & P Co. of Manila, Inc. vs. C.I.R., 8 section 3 of the Industrial Peace Act "explicitly provides that "employees" and this term includes supervisors "shall have the right to self-organization, and to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining through representations of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection" and that "individuals employed as supervisors ... may form separate organizations of their own". Indeed, it is well settled that "in relation to his employer," a foreman or supervisor "is an employee within the meaning of the Act" ... For this reason, supervisors are entitled to engage in union activities and any discrimination against them by reason thereof constitutes an unfair labor practice."

Petitioner's arguments go in reality to the wisdom and policy of the Industrial Peace Act which expressly grants supervisors the right to organize and bargain collectively, which are beyond the Court's power of review. Thus, the argument that "it is axiomatic in the

law of self-interest that an employer must give a "better deal" to those who act in his interest and in whom he has trust and confidence. These are the supervisors and confidential employees" 9 and that "In the United States there was a move to have a part of the supervisory group to be aligned with labor. But the enactment of the TaftHartley Act put an end to this move." 10

So with petitioner's thesis that "(T)o then give supervisors the right to compel employers to bargain would in effect align labor and management together against stockholders and bondholders (capital) and inexorably tilt the balance of power in favor of these hitherto confliction forces. This is contrary to the nature and philosophy of free enterprise." 11 This further serves to point up the validity and rationale of the Industrial Peace Act's provision, since the supervisors and confidential employees, even though they may exercise the prerogatives of management as regards the rank and file employees are indeed employees in relation to their employer, the company which is owned by the "stockholders and bondholders (capital)" in petitioner's own words, and should therefore be entitled under the law to bargain collectively with the top management with respect to their terms and conditions of employment.

Petitioner's argument that the express provisions of section 3 of our Industrial Peace Act must give way to the intendment of the Taft-Hartley Act which exempts employers from the legal obligation to recognize and negotiate with supervisors is tenuous and groundless. The language of our own statute is plain and unambiguous and admits of no other interpretation.

The other principal ground of petitioner's appeal questioning the confidential employees' inclusion in the supevisors bargaining unit is equally untenable. Respondent court correctly held that since the confidential employee are very few in number and are by practice and tradition identified with the supervisors in their role as representives of management vis-a-vis the rank and file employee such identity of interest has allowed their inclusion in the bargaining unit of supervisors-managers for purposes of collective bargaining in turn as employees in relation to the company as their employer.

No arbitrariness or grave abuse of discretion can be attributed against respondent court's allowing the inclusion of the confidential employees in the supervisors'

association for as admitted by petitioner itself, supra, the supervisors and confidential emplyees enjoy its trust and confidence. Thisidentity of interest logically calls for their inclusion in the same bargaining unit and at the same time fulfills the law's objective of insuring to them the full benefit of their right to self-organization and to collective bargaining, which could hardly be accomplished if the respondent association's membership were to be broken up into five separate ineffective tiny units, as urged by petitioner.

Respondent court's action not being vulnerable to challenge as being arbitrary or capricious is therefore sustained, in line with the Court's consistent rulings that the industrial court "enjoys a wide discretion in determining the procedure necessary to insure the fair and free choice of bargaining representations by employees," and that its action "in deciding upon an appropriate unit for collective bargaining purposes is discretionary ... and (that) its judgment in this respect is entitled to almost complete finality, unless its action is arbitrary or capricious" 12 and that absent any grave abuse of discretion as to justify the Court's intervention, "this Court has repeatedly upheld the exercise of the Court of Industrial Relations in matters concerning the representation of employee groups." 13

ACCORDINGLY, the orders and resolution appealed from are hereby affirmed and the petition at bar is dismissed. No pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

Castro, J., concurs in the result.

G.R. No. 110399

August 15, 1997

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President, petitioners, vs. HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION, respondents.

ROMERO, J.:

This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the Order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91 1 entitled "In Re: Petition for Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt Union, Petitioner." The Order excluded the employees under supervisory levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the certification election.

The antecedent facts are undisputed:

On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Direct Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.

On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election among the supervisors and exempt employees of the

SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit.

On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiter's error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.

On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent company's Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit.

Upon petitioner-union's motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis.

On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings.

On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC 2 case. Said Order reads in part:

. . . Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining.

In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above court's ruling. Consequently, they are not allowed to participate in the certification election.

WHEREFORE, the Motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt employees are not allowed to join the proposed bargaining unit and are therefore excluded from those who could participate in the certification election. 3

Hence this petition.

For resolution in this case are the following issues:

1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit.

On the first issue, this Court rules that said employees do not fall within the term "confidential employees" who may be prohibited from joining a union.

There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245 4 of the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not allowed membership in a labor

organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not.

Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. 5 The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. 6

The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the ''confidential employee rule." The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests. 7 "Management should not be required to handle labor relations matters through employees who are represented by the union with which the company is required to deal and who in the normal performance of their duties may obtain advance information of the company's position with regard to contract negotiations, the disposition of grievances, or other labor relations matters." 8

There have been precedents in this regards, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez, 9 the Court held that "if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also become companydominated with the presence of managerial employees in Union membership." The same rationale was applied to confidential employees in "Golden Farms, Inc. v. FerrerCalleja" 10 and in the more recent case of "Philips Industrial Development, Inc. v. NLRC" 11 which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to them. 12

An important element of the "confidential employee rule" is the employee's need to use labor relations information. Thus, in determining the confidentiality of certain employees, a key question frequently considered is the employee's necessary access to confidential labor relations information. 13

It is the contention of respondent corporation that Supervisor employees 3 and 4 and the exempt employees come within the meaning of the term "confidential employees" primarily because they answered in the affirmative when asked "Do you handle confidential data or documents?" in the Position Questionnaires submitted by the Union. 14 In the same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to "labor relations." 15

Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee. 16 "If access to confidential labor relations information is to be a factor in the determination of an employee's confidential status, such information must relate to the employer's labor relations policies. Thus, an employee of a labor union, or of a management association, must have access to confidential labor relations information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not cause an employee to be excluded from the bargaining unit representing employees of the union or association." 17 "Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information 18 or technical trade secrets, will not render an employee a confidential employee." 19

Herein listed are the functions of supervisors 3 and higher:

1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.

2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products.

3.

To administer efficient system of evaluation of products in the outlets.

4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials.

5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant. 20

It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the employer's internal business operations. As held in Westinghouse Electric Corporation v. National Labor Relations Board, 21 "an employee may not be excluded from appropriate bargaining unit merely because he has access to confidential information concerning employer's internal business operations and which is not related to the field of labor relations."

It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to "all" workers the right to self-organization. Hence, confidential employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right to bargain collectively through representatives of their choosing. 22

In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle "confidential data" as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to our mind, has no relevance to negotiations and settlement of

grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. 23

In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out.

It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao, Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests.

This Court finds the contention of the petitioner meritorious.

An appropriate bargaining unit may be defined as "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." 24

A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining. 25

It is readily seen that the employees in the instant case have "community or mutuality of interests," which is the standard in determining the proper constituency of a collective bargaining unit. 26 It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.

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

The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v. CallejaFerrer where all non-academic rank and file employee of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative.

WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the Med-Arbiter on December 19, 1990 is REINSTATED under which a certification election among the supervisors (level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.

SO ORDERED.

[G.R. No. 115077. April 18, 1997]

PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT, petitioner, vs. HON. BIENVENIDO LAGUESMA, in his capacity as Undersecretary of Labor, and NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-KATIPUNAN, respondents. DECISION KAPUNAN, J.:

On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent Union) filed a petition for certification election with the Department of Labor (National Capital Region) in behalf of the rank and file employees of the Progressive Development Corporation (Pizza Hut) docketed as NCR Case No. NCR-OD-M-9307-020.[1]

Petitioner filed on August 20, 1993, a verified Motion to Dismiss the petition alleging fraud, falsification and misrepresentation in the respondent Union's registration making it void and invalid. The motion specifically alleged that: a) respondent Union's registration was tainted with false, forged, double or multiple signatures of those who allegedly took part in the ratification of the respondent Union's constitution and by-laws and inthe election of its officers that there were two sets of supposed attendees tothe alleged organizational meeting that was alleged to have taken place on June26, 1993; that the alleged chapter is claimed to have been supported by 318members when in fact the persons who actually signed their names were muchless; and b) while the application for registration of the charter was supposedto have been approved in the organizational meeting held on June 27, 1993,the charter certification issued by the federation KATIPUNAN was dated June26, 1993 or one (1) day prior to the formation of the chapter, thus, therewere serious falsities in the dates of the issuance of the chartercertification and the organization meeting of the alleged chapter.

Citing other instances of misrepresentation and fraud, petitioner,on August 29, 1993, filed a Supplement to its Motion to Dismiss,[2] claiming that:

1) Respondent Union allegedthat the election of its officers was held on June 27, 1993; however, itappears from the documents submitted by respondent union to the BIRDOLE thatthe Union's constitution and by-laws were adopted only on July 7, 1993, hence,there was no bases for the supposed election of officers on June 27, 1993because as of this date, there existed no positions to which the officers couldbe validly elected;

2) Voting was not conductedby secret ballot in violation of Article 241, section (c) of the Labor Code;

3) The Constitution and byLaws submitted in support of its petition were not properly acknowledged andnotarized.[3]

On August 30, 1993, petitioner filed a Petition[4]seeking the cancellation of the Union'sregistration on the grounds of fraud and falsification, docketed as BIR CaseNo. 8-21-83.[5] Motion was likewise filed by petitioner withthe Med-Arbiter requesting suspension of proceedings in the certificationelection case until after the prejudicial question of the Union's legalpersonality is determined in the proceedings for cancellation of registration.

However, in an Order dated September 29, 1993,[6] Med-Arbiter Rasidali C. Abdullah directedthe holding of a certification election among petitioner's rank and fileemployees. The Order explained:

x x x Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labororganization in contemplation of law and shall remain as such until its verycharter certificate is canceled or otherwise revoked by competentauthority. The allegedmisrepresentation,

fraud and false statement in connection with the issuance ofthe charter certificate are collateral issues which could be properlyventilated in the cancellation proceedings.[7]

On appeal to the office of the Secretary of Labor, LaborUndersecretary Bienvenido E. Laguesma in a Resolution dated December 29, 1993[8]denied the same.

A motion for reconsideration of the public respondent's resolution was denied in his Order[9] dated January 27, 1994, hence, this special civil action for certiorari under Rule 65 of the Revised Rules of Court where the principal issue raised is whether or not the public respondent committed grave abuse of discretion in affirming the MedArbiter's order to conduct a certification election among petitioner's rank and file employees, considering that: (1) respondent Union's legal personality was squarely put in issue; (2) allegations of fraud and falsification, supported by documentary evidence were made; and (3) a petition to cancel respondent Union's registration is pending with the regional office of the Department of Labor and Employment.[10]

We grant the petition.

In the public respondent's assailed Resolution dated December 29, 1993, the suggestion is made that once a labor organization has filed the necessary documents and papers and the same have been certified under oath and attested to, said organization necessarily becomes clothed with the character of a legitimate labor organization. The resolution declares:

Records show that at the time of the filing of the subject petition on 9 July 1993 by the petitioner NLM-KATIPUNAN, for and in behalf of its local affiliate Sumasaklaw sa Manggagawa ng Pizza Hut, the latter has been clothed with the status and/or character of a legitimate labor organization. This is so, because on 8 July 1993, petitioner submitted to the Bureau of Labor Relations (BLR), this Department, the following documents: Charter Certificate, Minutes of the Organizational Meeting, List of Officers, and their respective addresses, financial statement, Constitution and By-Laws (CBL, and the minutes of the ratification of the CBL). Said documents (except the charter

certificate) are certified under oath and attested Secretary/Treasurer and President, respectively.

to

by

the

local

union's

As to the contention that the certification election proceedings should be suspended in view of the pending case for the cancellation of the petitioner's certificate of registration, let it be stressed that the pendency of a cancellation case is not a ground for the dismissal or suspension of a representation proceedings considering that a registered labor organization continues to be a legitimate one entitled to all the rights appurtenant thereto until a final valid order is issued canceling such registration.[11]

In essence, therefore, the real controversy in this case centers on the question of whether or not, after the necessary papers and documents have been filed by a labor organization, recognition by the Bureau of Labor Relations merely becomes a ministerial function.

We do not agree.

In the first place, the public respondent's views as expressed in his December 29, 1993 Resolution miss the entire point behind the nature and purpose of proceedings leading to the recognition of unions as legitimate labor organizations. Article 234 of the Labor Code provides:

Art. 234. Requirements of registration. - Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and

(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it.

A more than cursory reading of the aforecited provisions clearly indicates that the requirements embodied therein are intended as preventive measures against the commission of fraud. After a labor organization has filed the necessary papers and documents for registration, it becomes mandatory for the Bureau of Labor Relations to check if the requirements under Article 234 have been sedulously complied with. If its application for registration is vitiated by falsification and serious irregularities, especially those appearing on the face of the application and the supporting documents, a labor organization should be denied recognition as a legitimate labor organization. And if a certificate of recognition has been issued, the propriety of the labor organization's registration could be assailed directly through cancellation of registration proceedings in accordance with Articles 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the issuance of an order for certification election.

These measures are necessary - and may be undertaken simultaneously - if the spirit behind the Labor Code's requirements for registration are to be given flesh and blood. Registration requirements specifically afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate ends.[12] Such requirements are a valid exercise of the police power, because the

activities in which labor organizations, associations and unions of workers are engaged directly affect the public interest and should be protected.[13]

Thus, in Progressive Development Employment,[14] we held:

Corporation

vs.

Secretary

of

Labor

and

The controversy in this case centers on the requirements before a local or chapter of a federation may file a petition for certification election and be certified as the sole and exclusive bargaining agent of the petitioner's employees.

xxx

But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification election in an unorganized establishment, it also requires that the petition for certification election must be filed by a legitimate labor organization. xxx

xxx

xxx. The employer naturally needs assurance that the union it is dealing with is a bonafide organization, one which has not submitted false statements or misrepresentations to the Bureau. The inclusion of the certification and attestation requirements will in a marked degree allay these apprehensions of management. Not only is the issuance of any false statement and misrepresentation or ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is also a ground for a criminal charge of perjury.

The certification and attestation requirements are preventive measures against the commission of fraud. They likewise afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or to use the union for dubious ends.

xxx

xxx. It is not this Court's function to augment the requirements prescribed by law in order to make them wiser or to allow greater protection to the workers and even their employer. Our only recourse is, as earlier discussed, to exact strict compliance with what the law provides as requisites for local or chapter formation.

xxx

The Court's conclusion should not be misconstrued as impairing the local union's right to be certified as the employees' bargaining agent in the petitioner's establishment. We are merely saying that the local union must first comply with the statutory requirements in order to exercise this right. Big federations and national unions of workers should take the lead in requiring their locals and chapters to faithfully comply with the law and the rules instead of merely snapping union after union into their folds in a furious bid with rival federations to get the most number of members.

Furthermore, the Labor Code itself grants the Bureau of Labor Relations a period of thirty (30) days within which to review all applications for registration. Article 235 provides:

"Art. 235. Action on application. - The Bureau shall act on all applications for registration within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president."

The thirty-day period in the aforecited provision ensures that any action taken by the Bureau of Labor Relations is made in consonance with the mandate of the Labor Code, which, it bears emphasis, specifically requires that the basis for the issuance of a

certificate of registration should be compliance with the requirements for recognition under Article 234. Since, obviously, recognition of a labor union or labor organization is not merely a ministerial function, the question now arises as to whether or not the public respondent committed grave abuse of discretion in affirming the Med-Arbiter's order in spite of the fact that the question of the Union's legitimacy was squarely put in issue and that the allegations of fraud and falsification were adequately supported by documentary evidence.

The Labor Code requires that in organized and unorganized[15] establishments, a petition for certification election must be filed by a legitimate labor organization. The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization.

In the case before us, the Med-Arbiter summarily disregarded the petitioner's prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that "for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate labor organization."[16] Glossing over the transcendental issue of fraud and misrepresentation raised by herein petitioner, Med-Arbiter Rasidali Abdullah held that:

The alleged misrepresentation, fraud and false statement in connection with the issuance of the charter certificate are collateral issues which could be ventilated in the cancellation proceedings.[17]

It cannot be denied that the grounds invoked by petitioner for the cancellation of respondent Union's registration fall under paragraph (a) and (c) of Article 239 of the Labor Code. to wit:

(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, the list of members who took part in the ratification of the constitution and

by-laws or amendments thereto, the minutes of ratification, the list of members who took part in the ratification;

xxx

(c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected-appointed officers and their postal addresses within thirty (30) days from election

xxx

The grounds ventilated in cancellation proceedings in accordance with Article 239 of the Labor Code constitute a grave challenge to the right of respondent Union to ask for certification election. The Med-Arbiter should have looked into the merits of the petition for cancellation before issuing an order calling for certification election. Registration based on false and fraudulent statements and documents confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper. Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no rights, particularly the right to ask for certification election in a bargaining unit.

As we laid emphasis in Progressive Development Corporation Labor,[18] "[t]he employer needs the assurance that the union it is dealing with is a bona fide organization, one which has not submitted false statements or misrepresentations to the Bureau." Clearly, fraud, falsification and misrepresentation in obtaining recognition as a legitimate labor organization are contrary to the Med-Arbiter's conclusion not merely collateral issues. The invalidity of respondent Union's registration would negate its legal personality to participate in certification election.

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

Inasmuch as the legal personality of respondent Union had been seriously challenged, it would have been more prudent for the Med-Arbiter and public respondent to have granted petitioner's request for the suspension of proceedings in the certification election case, until the issue of the legality of the Union's registration shall have been resolved. Failure of the Med-Arbiter and public respondent to heed the request constituted a grave abuse of discretion.

WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED and the Resolution and Order of the public respondent dated December 29, 1993 and January 24, 1994, respectively, are hereby SET ASIDE.

The case is REMANDED to the Med-Arbiter to resolve with reasonable dispatch petitioner's petition for cancellation of respondent Union's registration

SO ORDERED.

G.R. No. 152356. August 16, 2005

SAN MIGUEL CORPORATION (MANDAUE PACKAGING PRODUCTS PLANTS), Petitioners, vs.

MANDAUE PACKING PRODUCTS PLANTS-SAN PACKAGING PRODUCTS SAN MIGUEL CORPORATION MONTHLIES RANK-AND-FILE UNION FFW (MPPP-SMPP-SMAMRFUFFW), Respondent.

DECISION

TINGA, J.:

The central question in this Petition for Review is on what date did respondent Mandaue Packing Products Plants-San Miguel Packaging ProductsSan Miguel Corporation Monthlies Rank-And-File UnionFFW acquire legal personality in accordance with the Implementing Rules of the Labor Code. The matter is crucial since respondent filed a petition for certification election at a date when, it is argued, it had yet to acquire the requisite legal personality. The Department of Labor and Employment (DOLE) and the Court of Appeals both ruled that respondent had acquired legal personality on the same day it filed the petition for certification election. The procedure employed by the respondent did not strictly conform with the relevant provisions of law. But rather than insist on an overly literal reading of the law that senselessly suffocates the constitutionally guaranteed right to self-organization, we uphold the assailed decisions and the liberal spirit that animates them.

Antecedent Facts

The present petition assailed the Decision dated 7 June 2001 rendered by the Court of Appeals Eighth Division1 which in turn affirmed a Decision dated 22 Feburary 1999 by the DOLE Undersecretary for Labor Relations, Rosalinda Dimapilis-Baldoz, ordering the immediate conduct of a certification election among the petitioners rank -and-file employees, as prayed for by respondent. The following facts are culled from the records.

On 15 June 1998, respondent, identifying itself as an affiliate of Federation of Free Workers (FFW), filed a petition for certification election with the DOLE Regional Office No. VII. In the petition, respondent stated that it sought to be certified and to represent the permanent rank-and-file monthly paid employees of the petitioner.2 The following documents were attached to the petition: (1) a Charter Certificate issued by FFW on 5 June 1998 certifying that respondent as of that date was duly certified as a local or chapter of FFW; (2) a copy of the constitution of respondent prepared by its Secretary, Noel T. Bathan and attested by its President, Wilfred V. Sagun; (3) a list of respondents officers and their respective addresses, again prepared by Bathan and attested by Sagun; (4) a certification signifying that respondent had just been organized and no amount had yet been collected from its members, signed by respondents treasurer Chita D. Rodriguez and attested by Sagun; and (5) a list of all the rank-and-file monthly paid employees of the Mandaue Packaging Products Plants and Mandaue Glass Plant prepared by Bathan and attested by Sagun.3

The petition was assigned to Mediator-Arbiter Achilles V. Manit of the DOLE Regional Office No. VII, and docketed as Case No. R0700-9806-RU-013.4

On 27 July 1998, petitioner filed a motion to dismiss the petition for certification election on the sole ground that herein respondent is not listed or included in the roster of legitimate labor organizations based on the certification issued by the Officer-InCharge, Regional Director of the DOLE Regional Office No. VII, Atty. Jesus B. Gabor, on 24 July 1998.

On 29 July 1998, respondent submitted to the Bureau of Labor Relations the same documents earlier attached to its petition for certification. The accompanying letter, signed by respondents president Sagun, stated that such documents were submitted in compliance with the requirements for the creation of a local/chapter pursuant to the Labor Code and its Implementing Rules; and it was hoped that the submissions would facilitate the listing of respondent under the roster of legitimate labor organizations.5 On 3 August 1998, the Chief of Labor Relations Division of DOLE Regional Office No. VII issued a Certificate of Creation of Local/Chapter No. ITD. I-ARFBT-058/98, certifying that from 30 July 1998, respondent has acquired legal personality as a labor organization/workers association, it having submitted all the required documents.6

Opting not to file a comment on the Motion to Dismiss,7 respondent instead filed a Position Paper wherein it asserted that it had complied with all the necessary requirements for the conduct of a certification election, and that the ground relied upon in the Motion to Dismiss was a mere technicality.8

In turn, petitioner filed a Comment, wherein it reiterated that respondent was not a legitimate labor organization at the time of the filing of the petition. Petitioner also propounded that contrary to respondents objectives of establishing an organization representing rank-and-file employees, two of respondents officers, namely VicePresident Emannuel L. Rosell and Secretary Bathan, were actually supervisory employees. In support of this allegation, petitioner attached various documents evidencing the designation of these two officers in supervisory roles, as well as their exercise of various supervisory functions.9 Petitioner cited Article 245 of the Labor Code, which provides that supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees.10

On 20 August 1998, petitioner filed a petition to cancel the union registration of respondent. However, this petition was denied, and such denial was subsequently affirmed by the Court of Appeals in a decision that has since become final.11

In the meantime, on 15 September 1998, Med-Arbiter Manit issued an Order dismissing respondents petition for certification election. The sole ground relied upon for the dismissal was the Med-Arbiters Opinion that as of the date of filing of the petition on 15 June 1998, respondent did not have the legal personality to file the said petition for certification election.12 No discussion was adduced on petitioners claims that some of respondents officers were actually supervisory employees.

Respondent promptly appealed the 15 September 1998 Order to the DOLE. On 22 February 1999, DOLE Undersecretary Rosalinda Dimapilis-Baldoz rendered a Decision reversing the Order. Undersecretary Baldoz concluded that respondent acquired legal personality as early as 15 June 1998, the date it submitted the required documents, citing Section 3, Rule VI of the New Rules Implementing the Labor Code (Implementing

Rules) which deems that a local/chapter acquires legal personality from the date of filing of the complete documentary requirements as mandated in the Implementing Rules. The DOLE also ruled that the contention that two of respondents officers were actually supervisors can be threshed out in the pre-election conferences where the list of qualified voters is to be determined. The dispositive portion of the DOLE Decision stated:

WHEREFORE, the appeal is GRANTED. The order dated 15 September 1999 of the MedArbiter is REVERSED and SET ASIDE. Accordingly, let the records of the case be remanded to the office of origin for the immediate conduct of certification election, subject to the usual pre-election conference, among the monthly-paid rank-and-file employees of the Mandaue Packaging Products Plant San Miguel Corporation, with the following choices:

1. MANDAUE PACKAGING PRODUCT PLANT SAN MIGUEL PACKAGING PRODUCTS SAN MIGUEL CORPORATION MONTHLIES RANK AND FILE UNIONFFW (MPPP-SMPPSMCMRFUFFW),

2. NO UNION.

Pursuant to Rule XI, Section 11.1 of the New Implementing Rules, the company is hereby directed to submit to the office of origin the certified list of current employees in the bargaining unit, along with the payrolls covering the members of the bargaining unit for the last three months prior to the issuance of this decision.

SO DECIDED.13

These two conclusions of the DOLE were affirmed in the assailed Decision of the Court of Appeals. It is now our task to review whether these conclusions are warranted under law and jurisprudence. First, we shall discuss the aspect of respondents legal personality in filing the petition for certification election.

First Issue: On the Acquisition of

Legal Personality by Respondent

Statutory Provisions for Registration Of

Local/Chapter of Federation or National Union

Before we proceed to evaluate the particular facts of this case, it would be useful to review the statutory paradigm that governs the establishment and acquisition of legal personality by a local/chapter of a labor organization. The applicable rules have undergone significant amendments in the last decade, thus a recapitulation of the framework is in order.

The Labor Code defines a labor organization as any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment,14 and a "legitimate labor organization" as any labor organization duly registered with the DOLE, including any branch or local thereof.15 Only legitimate labor organizations may file a petition for certification election.16

Article 234 of the Labor Code enumerates the requirements for registration of an applicant labor organization, association, or group of unions or workers in order that such entity could acquire legal personality and entitlement to the rights and privileges granted by law to legitimate labor organizations. These include a registration fee of fifty pesos (P50.00); a list of the names of the members and officers, and copies of the constitution and by-laws of the applicant union.17

However, the Labor Code itself does not lay down the procedure for the registration of a local or chapter of a labor organization. Such has been traditionally provided instead in the Implementing Rules, particularly in Book V thereof. However, in the last decade or so, significant amendments have been introduced to Book V, first by Department Order No. 9 which took effect on 21 June 1997, and again by Department Order No. 40 dated 17 February 2003. The differences in the procedures laid down in these various versions are significant. However, since the instant petition for certification was filed in 1998, the Implementing Rules, as amended by Department Order No. 9, should govern the resolution of this petition.18

Preliminarily, we should note that a less stringent procedure obtains in the registration of a local or chapter than that of a labor organization. Undoubtedly, the intent of the law in imposing lesser requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local union's bargaining powers respecting terms and conditions of labor.19 This policy has remained consistent despite the succeeding amendments to Book V of the Omnibus Implementing Rules, as contained in Department Orders Nos. 9 and 40.

The case of Progressive Development Corp. v. Secretary of Labor,20 applying Section 3, Rule II, Book V of the Implementing Rules, in force before 1997, ruled that "a local or chapter therefore becomes a legitimate labor organization only upon submission of the following to the BLR: (1) a charter certificate, within thirty (30) days from its issuance by the labor federation or national union; and (2) The constitution and by-laws, a statement of the set of officers, and the books of accounts all of which are certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by its president."21 The submission by the local/chapter of duly certified books of accounts as a prerequisite for registration of the local/chapter was dropped in Department Order No. 9,22 a development noted by the Court in Pagpalain Haulers v. Hon. Trajano,23 wherein it was held that the previous doctrines requiring the submission of books of accounts as a prerequisite for the registration of a local/chapter "are already pass and therefore, no longer applicable."24

Department Order No. 40, now in effect, has eased the requirements by which a local/chapter may acquire legal personality. Interestingly, Department Order No. 40 no

longer uses the term "local/chapter," utilizing instead "chartered local," which is defined as a "labor organization in the private sector operating at the enterprise level that acquired legal personality through the issuance of a charter certificate by a duly registered federation or national union, and reported to the Regional Office."25 Clearly under the present rules, the first step to be undertaken in the creation of a chartered local is the issuance of a charter certificate by the duly registered federation or national union. Said federation or national union is then obligated to report to the Regional Office the creation of such chartered local, attaching thereto the charter certificate it had earlier issued.26

But as stated earlier, it is Department Order No. 9 that governs in this case. Section 1, Rule VI thereof prescribes the documentary requirements for the creation of a local/chapter. It states:

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;

(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 Treasurer of the local/chapter and attested by its President.

In contrast, an independent union seeking registration is further required under Dept. Order No. 90 to submit the number and names of the members, and annual financial reports.27

Section 3, Rule VI of Department Order No. 9 provides when the local/chapter acquires legal personality.

Section 3. Acquisition of legal personality by local chapter. A local/chapter constituted in accordance with Section 1 of this Rule shall acquire legal personality from the date of filing of the complete documents enumerated therein. Upon compliance with all the documentary requirements, the Regional Office or Bureau shall issue in favor of the local/chapter a certificate indicating that it is included in the roster of legitimate labor organizations.

It is evident based on this rule that the local/chapter acquires legal personality from the date of the filing of the complete documentary requirements, and not from the issuance of a certification to such effect by the Regional Office or Bureau. On the other hand, a labor organization is deemed to have acquired legal personality only on the date of issuance of its certificate of registration,28 which takes place only after the Bureau of Labor Relations or its Regional Offices has undertaken an evaluation process lasting up until thirty (30) days, within which period it approves or denies the application.29 In contrast, no such period of evaluation is provided in Department Order No. 9 for the application of a local/chapter, and more importantly, under it such local/chapter is deemed to acquire legal personality "from the date of filing" of the documents enumerated under Section 1, Rule VI, Book V.

Apart from promoting a policy of affiliation of local unions with national unions,30 there is a practical reason for sanctioning a less onerous procedure for the registration of a local/chapter, as compared to the national union. The local/chapter relies in part on the legal personality of the federation or national union, which in turn, had already undergone evaluation and approval from the Bureau of Legal Relations or Regional Office. In fact, a federation or national union is required, upon registration, to establish proof of affiliation of at least ten (10) locals or chapters which are duly recognized as the collective bargaining agent in the establishment or industry in which they operate;

and the names and addresses of the companies where the locals or chapters operate and the list of all the members in each of the companies.31 Once the national union or federation acquires legal personality upon the issuance of its certificate or registration,32 its legal personality cannot be subject to collateral attack.33

The fact that the local/chapter acquires legal personality from the moment the complete documentary requirements are submitted seems to imply that the duty of the Bureau or Regional Office to register the local/chapter is merely ministerial. However, in Progressive Development Corporation v. Laguesma,34 the Court, in ruling against a petition for certification filed by a chapter, held that the mere submission of the documentary requirements does not render ministerial the function of the Bureau of Labor Relations in according due recognition to the labor organization.35 Still, that case was decided before the enactment of Department Order No. 9, including the aforestated Section 3. Should we consider the said 1997 amendments as having obviated our characterization in Progressive of the Bureaus duty as non-ministerial?

Notwithstanding the amendments, it still is good policy to maintain that per Department Order No. 9, the duty of the Bureau of Labor Relations to recognize the local/chapter upon the submission of the documentary requirements is not ministerial, insofar as the Bureau is obliged to adjudge the authenticity of the documents required to be submitted. For example, the Bureau is not mandated to accept just any purported charter certificate matter how spurious it is in appearance. It is empowered to ascertain whether the submitted charter certificate is genuine, and if finding that said certificate is fake, deny recognition to the local/chapter.

However, in ascertaining whether or not to recognize and register the local/chapter, the Bureau or Regional Office should not look beyond the authenticity and due execution of the documentary requirements for the creation of the local/chapter as enumerated under Section 1, Rule VI, Book V of Department Order No. 9. Since the proper submission of these documentary requirements is all that is necessary to recognize a local/chapter, it is beyond the province of the Bureau or Regional Offices to resort to other grounds as basis for denying legal recognition of the local/chapter. For example, Department Order No. 9 does not require the local/chapter to submit the names of its members as a condition precedent to its registration.36 It therefore would be improper to deny legal recognition to a local/chapter owing to questions pertaining to its

individual members since the local/chapter is not even obliged to submit the names of its individual members prior to registration.

Certainly, when a local/chapter applies for registration, matters raised against the personality of the federation or national union itself should not be acted upon by the Bureau or Regional Office, owing to the preclusion of collateral attack. Instead, the proper matter for evaluation by the Bureau or Regional Office should be limited to whether the local/chapter is indeed a duly created affiliate of the national union or federation.

Parenthetically, under the present Implementing Rules as amended by Department Order No. 40, it appears that the local/chapter (or now, "chartered local") acquires legal personality upon the issuance of the charter certificate by the duly registered federation or national union.37 This might signify that the creation of the chartered local is within the sole discretion of the federation or national union and thus beyond the review or interference of the Bureau of Labor Relations or its Regional Offices. However, Department Order No. 40 also requires that the federation or national union report the creation of the chartered local to the Regional Office.

Acquisition by Respondent of Legal Personality

We now proceed to determine if and when the respondent acquired legal personality under the procedure laid down by the rules then in effect, Department Order No. 9, that is.

At the onset, the arguments raised by petitioner on this point are plainly erroneous. Petitioner cites the case of Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union,38 and the purported holding therein that "[if] it is true that at the time of the filing of the petition, the said registration certificate has not been approved yet, then, petitioner lacks the legal personality to file the petition."39 However, an examination of the case actually reveals that the cited portion was lifted from one of the antecedent rulings of the Med-Arbiter in that case which had not even been affirmed or reinstated by the Court on review.40 Moreover, such pronouncement

made prior to the enactment of Department Order No. 9 squarely contradicts Section 3, Rule VI thereof, which provides that legal personality of the local/chapter is vested upon the submission of the complete documentary requirements.

It is also worth noting that petitioner union in Toyota was an independent labor union, and not a local/chapter, and under Department Order No. 9, independent labor unions, unlike local/chapters, acquire legal personality only upon issuance of the certificate of registration by the Bureau or Regional Office. Still, petitioner cites in its favor Section 5, Rule V of Dept. Order No. 9, which states that "the labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration." Again, the citation is obviously misplaced, as respondent herein is a local/chapter, the acquisition of its legal personality being governed instead by Section 3, Rule VI.

It is thus very clear that the issuance of the certificate of registration by the Bureau or Regional Office is not the operative act that vests legal personality upon a local/chapter under Department Order No. 9. Such legal personality is acquired from the filing of the complete documentary requirements enumerated in Section 1, Rule VI. Admittedly, the manner by which respondent was deemed to have acquired legal personality by the DOLE and the Court of Appeals was not in strict conformity with the provisions of Department Order No. 9. Nonetheless, are the deviations significant enough for the Court to achieve a different conclusion from that made by the DOLE and the Court of Appeals?

In regular order, it is the federation or national union, already in possession of legal personality, which initiates the creation of the local/chapter. It issues a charter certificate indicating the creation or establishment of the local/chapter. It then submits this charter certificate, along with the names of the local/chapters officers, constitution and by-laws to the Regional Office or Bureau. It is the submission of these documents, certified under oath by the Secretary or Treasurer of the local/chapter and attested by the President, which vests legal personality in the local/chapter, which is then free to file on its own a petition for certification election.

In this case, the federation in question, the FFW, did not submit any of these documentary requirements to the Regional Office or Bureau. It did however issue a charter certificate to the putative local/chapter (herein respondent). Respondent then submitted the charter certificate along with the other documentary requirements to the Regional Office, but not for the specific purpose of creating the local/chapter, but for filing the petition for certification election.

It could be properly said that at the exact moment respondent was filing the petition for certification, it did not yet possess any legal personality, since the requisites for acquisition of legal personality under Section 3, Rule VI of Department Order No. 9 had not yet been complied with. It could also be discerned that the intention of the Labor Code and its Implementing Rules that only those labor organizations that have acquired legal personality are capacitated to file petitions for certification elections. Such is the general rule.

Yet there are peculiar circumstances in this case that allow the Court to rule that respondent acquired the requisite legal personality at the same time it filed the petition for certification election. In doing so, the Court acknowledges that the strict letter of the procedural rule was not complied with. However, labor laws are generally construed liberally in favor of labor, especially if doing so affirms the constitutionally guaranteed right to self-organization.

True enough, there was no attempt made by the national federation, or the local/chapter for that matter, to submit the enumerated documentary requirements to the Regional Office or Bureau for the specific purpose of creating the local/chapter. However, these same documents were submitted by the local/chapter to the Regional Office as attachments to its petition for certification election. Under Section 3, Rule VI of Department Order No. 9, it is the submission of these same documents to the Regional Office or Bureau that operates to vest legal personality on the local/chapter.

Thus, in order to ascertain when respondent acquired legal personality, we only need to determine on what date the Regional Office or Bureau received the complete documentary requirements enumerated under Section 1, Rule VI of Department Order No. 9. There is no doubt that on 15 June 1998, or the date respondent filed its petition

for certification election, attached thereto were respondents constitution, the names and addresses of its officers, and the charter certificate issued by the national union FFW. The first two of these documents were duly certified under oath by respondents secretary Bathan and attested to by president Sagun.41

It may be noted though that respondent never submitted a separate by-laws, nor does it appear that respondent ever intended to prepare a set thereof. Section 1(c), Rule VI, Book V of Department Order No. 9 provides that the submission of both a constitution and a set of by-laws is required, or at least an indication that the local/chapter is adopting the constitution and by-laws of the federation or national union. A literal reading of the provision might indicate that the failure to submit a specific set of bylaws is fatal to the recognition of the local/chapter. A more critical analysis of this requirement though is in order, especially as it should apply to this petition.

By-laws has traditionally been defined as regulations, ordinances, rules or laws adopted by an association or corporation or the like for its internal governance, including rules for routine matters such as calling meetings and the like.42 The importance of by-laws to a labor organization cannot be gainsaid. Without such provisions governing the internal governance of the organization, such as rules on meetings and quorum requirements, there would be no apparent basis on how the union could operate. Without a set of by-laws which provides how the local/chapter arrives at its decisions or otherwise wields its attributes of legal personality, then every action of the local/chapter may be put into legal controversy.

However, if those key by-law provisions on matters such as quorum requirements, meetings, or on the internal governance of the local/chapter are themselves already provided for in the constitution, then it would be feasible to overlook the requirement for by-laws. Indeed in such an event, to insist on the submission of a separate document denominated as "By-Laws" would be an undue technicality, as well as a redundancy.

An examination of respondents constitution reveals it sufficiently comprehensive in establishing the necessary rules for its operation. Article IV establishes the requisites for membership in the local/chapter. Articles V and VI name the various officers and what

their respective functions are. The procedure for election of these officers, including the necessary vote requirements, is provided for in Article IX, while Article XV delineates the procedure for the impeachment of these officers. Article VII establishes the standing committees of the local/chapter and how their members are appointed. Article VIII lays down the rules for meetings of the union, including the notice and quorum requirements thereof. Article X enumerates with particularity the rules for union dues, special assessments, fines, and other payments. Article XII provides the general rule for quorum in meetings of the Board of Directors and of the members of the local/chapter, and cites the applicability of the Roberts Rules of Order43 in its meetings. An d finally, Article XVI governs and institutes the requisites for the amendment of the constitution.

Indeed, it is difficult to see in this case what a set of by-laws separate from the constitution for respondent could provide that is not already provided for by the Constitution. These premises considered, there is clearly no need for a separate set of by-laws to be submitted by respondent.

The Court likewise sees no impediment in deeming respondent as having acquired legal personality as of 15 June 1998, the fact that it was the local/chapter itself, and not the FFW, which submitted the documents required under Section 1, Rule VI of Department Order No. 9. The evident rationale why the rule states that it is the federation or national union that submits said documents to the Bureau or Regional Office is that the creation of the local/chapter is the sole prerogative of the federation or national union, and not of any other entity. Certainly, a putative local/chapter cannot, without the imprimatur of the federation or national union, claim affiliation with the larger unit or source its legal personality therefrom.

In the ordinary course, it should have been FFW, and not respondent, which should have submitted the subject documents to the Regional Office. Nonetheless, there is no good reason to deny legal personality or defer its conferral to the local/chapter if it is evident at the onset that the federation or national union itself has already through its own means established the local/chapter. In this case, such is evidenced by the Charter Certificate dated 9 June 1998, issued by FFW, and attached to the petition for certification election. The Charter Certificate expressly states that respondent has been issued the said certificate "to operate as a local or chapter of the [FFW]". The Charter Certificate expressly acknowledges FFWs intent to establish respondent as of 9 June

1998.44 This being the case, we consider it permissible for respondent to have submitted the required documents itself to the Regional Office, and proper that respondents legal personality be deemed existent as of 15 June 1998, the date the complete documents were submitted.

Second Issue: On the Alleged Presence

Of Supervisory Employees as

Officers of the Respondent

The second issue hinges on a point of some controversy and frequent discussion in recent years. Petitioner claims error in the common pronouncement in the assailed decisions that the matter concerning the two officers who are allegedly supervisory employees may be threshed out during pre-election conferences. Petitioner cites the cases of Toyota Motors and Progressive Development Corporation-Pizza Hut v. Ledesma45 wherein the Court ruled that the question of prohibited membership of both supervisory and rank-and-file employees in the same union must be inquired into anterior to the granting of an order allowing a certification election; and that a union composed of both of these kinds of employees does not possess the requisite personality to file for recognition as a legitimate labor organization. It should be noted though that in the more recent case of Tagaytay Highlands International Golf Club v. Tagaytay Highlands Employees Union,46 the Court, notwithstanding Toyota and Progressive, ruled that after a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack, but questioned only in an independent petition for cancellation.47

There is no need to apply any of the above cases at present because the question raised by petitioner on this point is already settled law, as a result of the denial of the independent petition for cancellation filed by petitioner against respondent on 20 August 1998. The ground relied upon therein was the alleged fraud, misrepresentation and false statement in describing itself as a union of rank and file employees when in fact, two of its officers, Emmanuel Rosell and Noel Bathan, were occupying supervisory

positions.48 Said petition was denied by the Regional Director, this action was affirmed by the DOLE, the Court of Appeals, and the Supreme Court.49 The denial made by the Court of Appeals and the Supreme Court may have been based on procedural grounds,50 but the prior decisions of the Regional Director and the DOLE ruled squarely on the same issue now raised by the petitioner. We quote from the Resolution of the DOLE dated 29 December 1998:

. . . . [The] substantive issue that is now before us is whether or not the inclusion of the two alleged supervisory employees in appellee unions membership amounts to fraud, misrepresentation, or false statement within the meaning of Article 239(a) and (c) of the Labor Code.

We rule in the negative.

Under the law, a managerial employee is "one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees." A supervisory employee is "one who, in the interest of the employer, effectively recommends managerial actions if the exercise of such recommendatory authority is not merely routinary or clerical in nature but requires the use of independent judgment." Finally, "all employees not falling within the definition of managerial or supervisory employee are considered rank-and-file employees". It is also well-settled that the actual functions of an employee, not merely his job title, are determinative in classifying such employee as managerial, supervisory or rank and file.

In the case of Emmanuel Rossell, appellants evidence shows that he undert akes the filling out of evaluation reports on the performance of mechanics, which in turn are used as basis for reclassification. Given a ready and standard form to accomplish, coupled with the nature of the evaluation, it would appear that his functions are more routinary than recommendatory and hardly leave room for independent judgment. In the case of Noel Bathan, appellants evidence does not show his job title although it shows that his recommendations on disciplinary actions appear to have carried some weight on higher management. On this limited point, he may qualify as a supervisory

employee within the meaning of the law. This may, however, be outweighed by his other functions which are not specified in the evidence.

Assuming that Bathan is a supervisory employee, this does not prove the existence of fraud, false statement or misrepresentation. Because good faith is presumed in all representations, an essential element of fraud, false statement and misrepresentation in order for these to be actionable is intent to mislead by the party making the representation. In this case, there is no proof to show that Bathan, or appellee union for that matter, intended to mislead anyone. If this was appellee unions intention, it would have refrained from using a more precise description of the organization instead of declaring that the organization is composed of rank and file monthlies. Hence, the charge of fraud, false statement or misrepresentation cannot be sustained.

Appellants reliance on the Toyota case must be tempered by the peculiar circumstances of the case. Even assuming that Bathan, or Rossel for that matter, are supervisory employees, the Toyota case cannot certainly be given an interpretation that emasculates the right to self-organization and the promotion of free trade unionism. We take administrative notice of the realities in union organizing, during which the organizers must take their chances, oftentimes unaware of the fine distinctions between managerial, supervisory and rank and file employees. The grounds for cancellation of union registration are not meant to be applied automatically, but indeed with utmost discretion. Where a remedy short of cancellation is available, that remedy should be preferred. In this case, no party will be prejudiced if Bathan were to be excluded from membership in the union. The vacancy he will thus create can then be easily filled up through the succession provision of appellee unions constitution and by-laws. What is important is that there is an unmistakeable intent of the members of appellee union to exercise their right to organize. We cannot impose rigorous restraints on such right if we are to give meaning to the protection to labor and social justice clauses of the Constitution.51

The above-cited pronouncement by Bureau of Labor Relations Director Benedicto Ernesto R. Bitonio, Jr. in BLR-A-C-41-11-11-98 was affirmed by the Court of Appeals and the Supreme Court. Hence, its pronouncement affirming, notwithstanding the questions on the employment status of Rossell and Bathan, the legitimacy of the respondent, stands as a final ruling beyond the ambit of review, thus warranting the

Courts respect. There may be a difference between this case, which involves a petition for certification election, and the other case, which concerns a petition for cancellation. However, petitioner opposes the petition for certification election on the ground of the illegitimacy of respondent, owing to the alleged supervisory nature of the duties of Rossell and Bathan. That matter has already been settled in the final disposition of the petition for cancellation, and thus cannot be unsettled by reason of this present petition.

Effect of Respondents Manifestation

Of Subsequent Developments

A final note. In its Memorandum, petitioner alleges that the bargaining unit that respondent sought to represent is no longer the same because of the dynamic nature of petitioners business, a lot of changes having occurred in the work environment, and that four of respondents officers are no longer connected with petitioner.52 Assuming that these manifestations are true, they have no effect on the Courts ruling that a certification election should be immediately conducted with respondent as one of the available choices. Petitioners bare manifestations adduce no reason why the certification election should not be conducted forthwith. If there are matters that have arisen since the filing of the petition that serve to delay or cancel the election, these can be threshed out during the pre-election conferences. Neither is the fact that some of respondents officers have since resigned from petitioner of any moment. The local/chapter retains a separate legal personality from that of its officers or members that remains viable notwithstanding any turnover in its officers or members.

WHEREFORE, the Petition is DENIED. Costs against petitioner.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur