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G.R. No.

146206 August 1, 2011SAN MIGUEL FOODS, INCORPORATED, -vs- SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT UNION, DECISION PERALTA, J.: The issues in the present case, relating to the inclusion of employees in supervisor levels 3 and 4 and the exempt employees in the proposed bargaining unit, thereby allowing their participation in the certification election; the application of the ―community or mutuality of interests‖ test; and the determination of the employees who belong to the category of confidential employees, are not novel. In G.R. No. 110399, entitled San Miguel Corporation [1] Supervisors and Exempt Union v. Laguesma, the Court held that even if they handle confidential data regarding technical and internal business operations, supervisory employees 3 and 4 and the exempt employees of petitioner San Miguel Foods, Inc. (SMFI) are not to be considered confidential employees, because the same do not pertain to labor relations, particularly, negotiation and settlement of grievances. Consequently, they were allowed to form an appropriate bargaining unit for the purpose of collective bargaining. The Court also declared that the employees belonging to the three different plants of San Miguel Corporation Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis, having ―community or mutuality of interests,‖ constitute a single bargaining unit. They perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities. It was immaterial that the three plants have different locations as they did not impede the [2] operations of a single bargaining representative. Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and Employment – National Capital Region [3] (DOLE-NCR) conducted pre-election conferences. However, there was a discrepancy in the list of eligible voters, i.e., petitioner submitted a list of 23 employees for the San Fernando plant and 33 for the Cabuyao plant, while respondent listed 60 and 82, [4] respectively. On August 31, 1998, Med-Arbiter Agatha Ann L. [5] Daquigan issued an Order directing Election Officer Cynthia Tolentino to proceed with the conduct of certification election in accordance with Section 2, Rule XII of Department Order No. 9. On September 30, 1998, a certification election was [6] conducted and it yielded the following results, thus: Cabuyao Plant 23 0 2 41 San Fernando Plant 23 0 0 35 Total

(5) non-SMFI employees; and (6) employees who are members of other unions. On October 21, 1998, the Med-Arbiter issued an Order directing respondent to submit proof showing that the employees in the submitted list are covered by the original petition for certification election and belong to the bargaining unit it seeks to represent and, likewise, directing petitioner to substantiate the allegations contained in its Omnibus Objections and Challenge to [8] Voters. In compliance thereto, respondent averred that (1) the bargaining unit contemplated in the original petition is the Poultry Division of San Miguel Corporation, now known as San Miguel Foods, Inc.; (2) it covered the operations in Calamba, Laguna, Cavite, and Batangas and its home base is either in Cabuyao, Laguna or San Fernando, Pampanga; and (3) it submitted individual and separate declarations of the employees whose [9] votes were challenged in the election. Adding the results to the number of votes canvassed during the September 30, 1998 certification election, the final tally showed that: number of eligible voters – 149; number of valid votes cast – 121; number of spoiled ballots - 3; total number of votes cast – 124, with 118 (i.e., 46 + 72 = 118 ) ―Yes‖ votes and 3 [10] ―No‖ votes. The Med-Arbiter issued the Resolution dated February 17, 1999 directing the parties to appear before the Election Officer of the Labor Relations Division on March 9, 1999, 10:00 a.m., for the opening of the segregated ballots. Thereafter, on April 12, 1999, the segregated ballots were opened, showing that out of the 76 segregated votes, 72 were cast for ―Yes‖ and 3 for ―No,‖ with one ―spoiled‖ [12] ballot. Based on the results, the Med-Arbiter issued the [13] Order dated April 13, 1999, stating that since the ―Yes‖ vote received 97% of the valid votes cast, respondent is certified to be the exclusive bargaining agent of the supervisors and exempt employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis. On appeal, the then Acting DOLE Undersecretary, in the [14] Resolution dated July 30, 1999, in OS-A-2-70-91 (NCR-OD-M9010-017), affirmed the Order dated April 13, 1999, with modification that George C. Matias, Alma Maria M. Lozano, Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from the bargaining unit which respondent seeks to represent. She opined that the challenged voters should be excluded from the bargaining unit, because Matias and Lozano are members of Magnolia Poultry Processing Plants Monthly Employees Union, while Delos Reyes and Pajaron are employees of San Miguel Corporation, which is a separate and distinct entity from petitioner. Petitioner‘s Partial Motion for Reconsideration dated August 14, 1999 was denied by the then Acting DOLE [16] Undersecretary in the Order dated August 27, 1999.
[15] [11]

Yes 46 No 0 Spoiled 2

Segregated 76 Total Votes Cast 24

66

58

1

On the date of the election, September 30, 1998, petitioner filed the Omnibus Objections and Challenge to [7] Voters, questioning the eligibility to vote by some of its employees on the grounds that some employees do not belong to the bargaining unit which respondent seeks to represent or that there is no existence of employer-employee relationship with petitioner. Specifically, it argued that certain employees should not be allowed to vote as they are: (1) confidential employees; (2) employees assigned to the live chicken operations, which are not covered by the bargaining unit; (3) employees whose job grade is level 4, but are performing managerial work and scheduled to be promoted; (4) employees who belong to the Barrio Ugong plant;

In the Decision dated April 28, 2000, in CA-G.R. SP No. 55510, entitled San Miguel Foods, Inc. v. The Honorable Office of the Secretary of Labor, Bureau of Labor Relations, and San Miguel Corporation Supervisors and Exempt Union, the Court of Appeals (CA) affirmed with modification the Resolution dated July 30, 1999 of the DOLE Undersecretary, stating that those holding the positions of Human Resource Assistant and Personnel Assistant are excluded from the bargaining unit. [18] Petitioner‘s Motion for Partial Reconsideration dated [19] May 23, 2000 was denied by the CA in the Resolution dated November 28, 2000.

[17]

jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner [30] III. 110399.. which the collective interest of all the employees. NO. Their functions mesh with one another. mode of compensation. and effectuate [26] management policies in the field of labor relations. and both must be met if an employee is to be considered a confidential employee . Other factors must be considered. as stated in G. petitioner filed this present petition raising the following issues: I. there is a mutuality of interest among the employees of the Sawmill Division and the Logging Division. taking into account the ―community or mutuality of interests‖ test. In G. The two criteria are cumulative. No. 110399.. [20] 110399 identifying the specific employees who can participate in the certification election. and Otis of Magnolia Poultry Products Plant involved in ―dressed‖ chicken processing and Magnolia Poultry Farms engaged in ―live‖ chicken operations. NO. and the supervisor must handle the prescribed responsibilities relating to labor relations. in the normal course of their duties. and Otis. This argument must fail. i. An appropriate bargaining unit is defined as a group of employees of a given employer. WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE SPECIFICALLY. San Miguel Corporation. One group needs the other in the same way that the company needs them both. The test of grouping is community or mutuality of interest. San Fernando. AS ARGUED BY PRIVATE RESPONDENT. prays that the said position and all other positions with access to salary and compensation data be excluded from the bargaining unit. or with the custody. indicate to be best suited to serve the reciprocal rights and duties of the parties under the [21] collective bargaining provisions of the law. Mainit Lumber Development Company Workers Union – United Lumber [22] and General Workers of the Phils. working conditions. has access to salary and compensation data. the specific tasks of each division are actually interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit. San Fernando. 110399. comprised of all or less than all of the entire body of employees. as their access to confidential information may become the [29] source of undue advantage. as perceived by petitioner. and other relevant conditions do not affect or impede their commonality of interest.that is. In National Association of Free Trade Unions v.R. handling and packaging of chicken meat.. wherein respondent won with 97% votes. while the new bargaining unit. 110399. in regard (2) to persons who formulate. and Otis constitute a single bargaining unit. appropriate bargaining unit. those who breed chicks and grow chickens. This is so because the basic test of an asserted bargaining unit‘s acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining [23] rights.R. II. No. such fact does not apply to the position of Payroll Master and the whole gamut of employees who. Since the nature of his work does not pertain to company rules and regulations and confidential labor relations. the Court affirms the finding of the CA that there should be only one bargaining unit for [25] the employees in Cabuyao. San Fernando. as defined by the CA in the present case. although Article 245 of the Labor Code limits the ineligibility to join. Petitioner contends that with the Court's ruling in G. Petitioner‘s contentions are erroneous. applying the ruling to the present case. Kitcharao. It held that while the existence of a bargaining history is a factor that may be reckoned with in determining the . There may be differences as to the nature of their individual assignments. Agusan [Del] Norte of the Mainit Lumber Development Company. i.‖ A confidential employee is one entrusted with confidence on delicate. form and assist any labor organization to managerial employees. the Court explained that the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao. 110399. one-union policy. it follows that he cannot be excluded from the subject bargaining unit. which is not contrary to the one-company. The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. consistent with equity to the employer. WHETHER THIS PETITION IS A ―REHASH‖ OR A ―RESURRECTION‖ OF THE ISSUES RAISED IN G. 1998. Respondent counters that petitioner‘s proposed exclusion of certain employees from the bargaining unit was a rehashed issue which was already settled in G.e. Although they seem separate and distinct from each other. San Fernando.Hence. the supervisors (levels 1 to 4) and exempt employees of San Miguel Poultry Products Plants in Cabuyao. but the distinctions are not enough to warrant the formation of a separate [24] bargaining unit. location of work.R. No. the Court. However. ordered the formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the Logging Division in Zapanta Valley.e. determine.WHEN IT RULED FOR THE INCLUSION OF THE ―PAYROLL MASTER‖ POSITION IN THE BARGAINING UNIT. Confidential employees. i. It maintains that the issue of union membership coverage should no longer be raised as a certification election already took place on September 30.R. become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the ―confidential [27] employee rule. and Otis plants of petitioner‘s predecessor. such as specific line of work. No. should be excluded from the bargaining unit. Certain factors. the CA erred in expanding the scope of the bargaining unit so as to include employees who do not belong to or who are not based in its Cabuyao or San Fernando plants. Corollarily. the same is not decisive or conclusive. the confidential relationship must exist between the employee and his supervisor. includes employees engaged in ―live‖ chicken operations.R. Thus. Confidential employees are defined as those who (1) assist or act in a confidential capacity.e. handling or care and protection of [28] the employer‘s property. such as accounting personnel. thus. were engaged in ―dressed‖ chicken processing. It also alleges that the employees of the Cabuyao.R. The exclusion from bargaining units of employees who. Certainly. WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE WHEN IT EXPANDED THE SCOPE OF THE BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G. THIS COURT'S DEFINITION OF A ―CONFIDENTIAL EMPLOYEE‖ . Petitioner asserts that the CA erred in not excluding the position of Payroll Master in the definition of a confidential employee and.

it Court of Appeals.versus . Petitioner prayed that respondent‘s Certificate of Creation of Local/Chapter be cancelled and its name be deleted from the list of legitimate labor organizations. GRAND certification of the managerial employees. Petitioner filed a motion for reconsideration. once respondent‘s registration is cancelled. both gain access to vital labor relations information which outrightly disqualifies them from union membership. The general rule is that an employer has no standing to question the process of certification election. The preelection conference was not held as initially scheduled. As regards a Personnel Assistant. the scope of one‘s work necessarily involves labor relations. The assailed Decision affirmed the dismissal of a petition for cancellation of union registration filed by petitioner. petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations (BLR) its annual financial report for several years and the list of its members since it filed its registration papers in 1995. acting through thenowner. The proceedings for certification election are quasijudicial in nature and. The case stemmed from the following antecedents: On October 11. 1998. Law and policy demand that employers take a strict. With the foregoing disquisition. On appeal. The Med-Arbiter granted the petition on February 14. petitioner reiterated its request by filing a Motion to Dismiss or Suspend the [Certification Election] [5] Proceedings. hence. access to employees' personal files and compensation package. owner of Heritage Hotel Manila. stating that WHEREFORE. results and winner be deferred until the petition for HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC). assistance to management during grievance meetings and administrative investigations. In this regard. must owe its loyalty to [38] the employees alone and to no other. A labor bargaining representative. Before the Court is a petition for review on certiorari of the [1] Decision of the Court of Appeals (CA) dated May 30. to be effective. Confidential employees are thus excluded from the rank-and-file bargaining unit. claimed that some of respondent‘s members were not qualified to join the union because they were either confidential employees or G. Petitioner maintained that the resolution of the issue of whether respondent is a legitimate labor organization is crucial to the issue of whether it may exercise rights of a legitimate labor organization. 1997. petitioner filed a Petition for Cancellation of Registration of respondent. in a Resolution dated August 15. an employer lacks the personality to dispute the same. 2000. 2000. but it was denied on September 23. petitioner filed a Protest with Motion to [7] Defer Certification of Election Results and Winner. Subsequently. 1999 and August 27. the issue in the present case pertaining to the coverage of the employees who would constitute the bargaining unit is now a foregone conclusion. 1996. 178296 January 12. . affirmed the Med-Arbiter‘s order and remanded the case to the Med-Arbiter for the holding of a preelection conference on February 26. and that respondent‘s members who held confidential or managerial positions be excluded from the supervisors‘ bargaining unit. one's work includes the recording of minutes for management during collective bargaining negotiations. and implementation of company programs. arguing that the dismissal or suspension of the proceedings is warranted. The bargaining representative of employees should be chosen free from any extraneous influence of management. recruitment and selection of employees.to managerial employees and. hence. the Court writes finis to the issues raised so as to forestall future suits of similar nature. Petitioner also 1999 of the Secretary of Labor. 2000 of the futility because. 2007. It further requested [4] the suspension of the certification election proceedings. Consequently. considering their respective positions and job [34] descriptions. 2000. Said employees may act as a spy [33] or spies of either party to a collective bargaining agreement.R.: [8] Meanwhile. respondent filed its Answer to the petition for the cancellation of its registration. the certification election pushed through on [6] June 23.NATIONAL UNION OF WORKERS IN THE election RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL. bargaining agent of the supervisory employees. The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial employees. cancellation shall have been resolved. Nevertheless. It bears stressing that a certification election is the sole concern of the workers. 1996. 2000. because if allowed to be affiliated with a union. on May 19. 2000 was an exercise in April 28. It averred that the petition was . it was held a year later. SP No. The only exception is where the employer itself has to file the petition pursuant to Article [39] 258 of the Labor Code because of a request to bargain [40] collectively. 1995. It its prayed that the PLAZA HOTEL CORPORATION. which affirmed with would no longer be entitled to be certified as the exclusive modification the Resolutions dated July 30. Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of respondent. on the ground of the non-submission of the said documents. 1996 and ordered the holding [3] of a certification election. are excluded from the bargaining unit. against respondent. which include the right to be certified as the bargaining agent of the covered employees. The latter agreed to suspend proceedings until further notice. Having access to confidential information. respondent filed with the Department of Labor and Employment-National Capital Region [2] (DOLE-NCR) a petition for certification election. are likewise privy to [31] sensitive and highly confidential records. The Decision dated the certification election held on June 23. Respondent emerged as the winner. are AFFIRMED. confidential employees may also become the source of undue advantage. 55510. 2000 and Resolution dated November 28. National Union of Workers in the Hotel. 2000. the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to the category of confidential employees and. and human resource [35] management. As Human Resource Assistant. the DOLE Secretary. a labor organization of the supervisory employees of Heritage Hotel Manila. Grand Plaza Hotel Corporation. The preelection conference resumed on January 29. the petition is DENIED. Restaurant and Allied Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC). considering that the legitimacy of respondent is seriously being challenged in the petition for cancellation of registration. in CA-G. Applying the doctrine of res judicata. in the discharge of their functions. No. On June 1. J.R. On June 28. or on February 20. NACHURA. hands-off stance in certification elections. since this [37] is the sole concern of the workers. hence. Therefore. decisions rendered in such [36] proceedings can attain finality. 2011 THE HERITAGE HOTEL MANILA. 2005 and Resolution dated June 4. therefore. and securing legal advice for labor issues from the petitioner‘s team of lawyers. the latter might not be assured of their loyalty in view of evident conflict of interests and the union can also become company-denominated with the presence of managerial [32] employees in the union membership.

Tomas admitted that it was the BLR which had jurisdiction over the appeal. and its list of members for the years 1995. In view of Director Cacdac‘s inhibition. Thus. petitioner argues that: I. Respondent prayed for the dismissal of the petition for the following reasons: (a) petitioner is estopped from questioning respondent‘s status as a legitimate labor organization as it had already recognized respondent as such during the preelection conferences. Book V of the Omnibus Rules Implementing the Labor Code. 1998. she dismissed the appeal. and certified respondent as the sole and exclusive bargaining agent of all supervisory employees. and [22] Section 4. (d) the petition is already moot and academic. Maraan (Regional Director Maraan) of DOLE-NCR finally resolved the petition for cancellation of registration. and Samahan ng Manggagawa sa Pacific Plastic v. considering that the certification election had already been held. stating that the BLR Director‘s inhibition from the case was a peculiarity not present in the Abbott case. but the motion was also denied. in the absence of the BLR Director. These requirements. In a resolution dated February 21. [16] Aggrieved. 2002. v. Tomas) in [13] the Resolution of August 21. In its Resolution dated June 4. In the meantime. 2005. Such [23] [19] WHEREFORE. Restaurant and Allied Industries-Heritage Hotel Manila Supervisors Chapter from the roll of legitimate labor organizations is hereby DENIED. which categorically declared that the DOLE Secretary has no authority to review the decision of the Regional Director in a petition for cancellation of union registration. invoking this Court‘s ruling in Abbott Labs. A. Phils. Sto. The Court of Appeals seriously erred in ruling that the Labor Secretary properly assumed jurisdiction over Petitioner‘s appeal of the Regional Director‘s Decision in the Cancellation Petition x x x. 2001 reads: noncompliance with the statutory requirements to maintain its status as a legitimate labor organization. In order to maintain the integrity of the decision and of the BLR. [10] Hon. the respondent‘s certification as the exclusive bargaining representative of the supervisory employees. (b) petitioner is not the party-in-interest. The CA opined that the DOLE Secretary may legally assume jurisdiction over an appeal from the decision of the Regional Director in the event that the Director of the BLR inhibits himself from the case. should not be exploited to work against the workers‘ constitutionally protected right to self-organization. and that such inhibition justified the assumption of jurisdiction by the DOLE Secretary. Petitioner filed a motion for reconsideration. there is no person more competent to resolve the appeal than the DOLE Secretary. 1998. In a Decision dated May 30. the CA denied the petition. The Labor Secretary had no jurisdiction to review the decision of the Regional Director in a petition for cancellation. 1997. Petitioner filed a motion for reconsideration. the Med-Arbiter dismissed petitioner‘s protest. designed for the protection of workers against potential abuse by the union that recruits them. 2007. 1996. Regional Director Maraan—while emphasizing that the non-compliance with the law is not viewed with favor—considered the belated submission of the annual financial reports and the list of members as sufficient compliance thereof and considered them as having been submitted on time. the CA denied petitioner‘s motion. the CA held that the requirements of registration of labor organizations are an exercise of the overriding police power of the State. he. The CA also found that the DOLE Secretary did not commit grave abuse of discretion when she affirmed the dismissal of the petition for cancellation of respondent‘s registration as a labor organization. The appeal was later dismissed by DOLE Secretary Patricia A. the instant petition to delist the National Union of Workers in the Hotel. having submitted its financial statements for 1996. and the commencement of bargaining negotiations. as the union members are the ones who would be disadvantaged by the non-submission of financial reports. considering that such allegation was not supported by any evidence. Citing National Union of Bank Employees v. the CA opined. 1997. The CA brushed aside the allegation of bias and partiality on the part of the DOLE Secretary. Regional Director Alex E. Minister of [9] Labor. 2001. but the [20] motion was likewise denied in a resolution dated May 30. Inc. While finding that respondent had indeed failed to file financial reports and the list of its members for several years. [18] Tomas took cognizance of the appeal. In view of the foregoing. its updated list of officers. He took into account the fact that respondent won the certification election and that it had already been certified as the exclusive bargaining agent of the supervisory employees. Abbott Labs. 2003. nonetheless. she therefore accepted the motion to inhibit and took cognizance of the appeal. Petitioner filed a petition for certiorari with the CA. raising the issue of whether the DOLE Secretary acted with grave abuse of discretion in taking cognizance of the appeal and affirming the dismissal of its petition for cancellation of respondent‘s registration. denied the petition. premises considered. Tomas (DOLE Secretary Sto. Echoing the DOLE Secretary.filed primarily to delay the conduct of the certification election. and 1999. and 1999. the Med-Arbiter held that the pendency of a petition for cancellation of registration is not a bar to the holding of [11] a certification election. petitioner appealed the decision to the [17] BLR. According to the CA. and the members had manifested their will to be represented by respondent. but she pointed out that the BLR Director had voluntarily inhibited himself from the case because he used to appear as counsel for respondent. Petitioner moved for [14] reconsideration. Jurisdiction is conferred only by law. (c) it has already complied with the reportorial requirements. Laguesma. 2003. DOLE Secretary Sto. [21] Employees Union. holding that the constitutionally guaranteed freedom of association and right of workers to self-organization outweighed respondent‘s . DOLE Secretary Sto.. Petitioner subsequently appealed the said Order to the [12] DOLE Secretary. Rule VIII. [15] The dispositive portion of the decision dated December 29. BLR Director Hans Leo Cacdac inhibited himself from the case because he had been a former counsel of respondent. In this petition. et al. ratiocinating that freedom of association and the employees‘ right to self-organization are more substantive considerations. in an Order dated January 26. SO ORDERED.

the DOLE Secretary opted to resolve the appeal herself. The Court of Appeals gravely erred in affirming the dismissal of the Cancellation Petition despite the mandatory and unequivocal provisions of the [24] Labor Code and its Implementing Rules. Petitioner also insists that respondent‘s registration as a legitimate labor union should be cancelled. Thus. hence.‖ Petitioner points out that the Regional Director has admitted in its decision that respondent failed to submit the required documents for a number of years. B. would be meaningless if the ultimate decision would come from a partial and biased [33] judge. the Court. acquired jurisdiction over the case. v. jurisdiction remained with the BLR despite the BLR Director‘s inhibition. pronounced that. The following shall constitute grounds for cancellation of union registration: xxxx (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year and misrepresentation. It would be well to state that a critical component of due process is a hearing before an impartial and disinterested tribunal. he remained as head of the BLR. or. Such authority is subject to certain guidelines which are stated in Book IV. the BLR Director inhibited himself from the case because he was a former counsel of respondent. Chapter 8. it becomes the ministerial duty of the Regional Director to cancel the registration of the labor organization. as applied to administrative proceedings. This principle was incorporated in the Administrative Code of 1987. like notice and hearing. The unilateral inhibition by the BLR Director cannot justify the Labor Secretary‘s exercise of jurisdiction over the Appeal. ART. Hon. In this case. as the person exercising the power of supervision and control over the BLR. Expounding on the extent of the power of control. Petitioner posits that once it is determined that a ground enumerated in Article 239 of the Labor Code is present. xxxx OF . which. When the DOLE Secretary resolved the appeal. for all the elements of due process. to dispel any suspicion of bias. Jurisdiction to review the decision of the Regional Director lies with the BLR. the appeal was filed by petitioner with the BLR. false entries or fraud in the preparation of the financial report itself. M. the appeal from the Regional Director‘s decision was directly filed with the Office of the DOLE Secretary. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. [27] in Araneta.jurisdiction is conferred by law to the BLR. We are not persuaded. Articles 238 and 239 of the Labor Code read: ART. APPEAL The certificate of registration of any legitimate labor organization. Petitioner insists that the BLR Director‘s subordinates should have resolved the appeal. shall be canceled by the Bureau if it has reason to believe.‖ The provision clearly does not apply considering that the BLR Director was neither absent nor suffering from any disability. and we ruled that the latter has no appellate jurisdiction. Petitioner had the opportunity to question the BLR Director‘s inhibition and the DOLE Secretary‘s taking cognizance of the case when it filed a motion for reconsideration of the latter‘s decision. Section [29] 39(1)(a) of the Administrative Code of 1987. The petition has no merit. who exercises supervision and control over the departments. the DOLE Secretary‘s act of taking over the function of the BLR Director was warranted and necessitated by the latter‘s inhibition from the case and the objective to ―maintain the integrity [30] of the decision. ―in case of the absence or disability of the head of a bureau or office. Applying the foregoing to the present case. the use of the word ―shall. after due hearing. But as pointed out by the CA. 239. it is clear that the DOLE Secretary. Well-settled is the rule that the essence of due process is simply an opportunity to be heard. In the instant case. undisputedly. Once jurisdiction is acquired by the court. that the said labor organization no longer meets one or [34] more of the requirements herein prescribed. II. whether national or local. She did so pursuant to her power of supervision and control over the [26] BLR. cancellation of registration should follow. has the authority to directly exercise the quasi-judicial function entrusted by law to the BLR Director. et al. This is clearly provided in the Implementing Rules of the Labor Code and enunciated by the Court in Abbott. if a certain power or authority is vested by law upon the Department Secretary.‖ C. then such power or authority may be exercised directly by the President. Who. then. which defines ―supervision and control‖ as including the authority to act directly whenever a specific function is entrusted by law or regulation to a [28] subordinate. as well as the Bureau itself. shall resolve the case in his place? In Abbott. his duties shall be [31] performed by the assistant head. However. Petitioner was not denied the right to due process when it was not notified in advance of the BLR Director‘s inhibition and the DOLE Secretary‘s assumption of the case. CANCELLATION REGISTRATION. Thus. in the present case. et al.. It was precisely to ensure a fair trial that moved the BLR Director to inhibit himself from the case and the DOLE Secretary to take over his function. the present case involves a peculiar circumstance that was not present or covered by the ruling in Abbott. The Labor Secretary‘s assumption of jurisdiction over the Appeal without notice violated Petitioner‘s right to due process. it remains with it until the full [25] termination of the case. Gatmaitan. an opportunity to explain one‘s side or an opportunity to seek a [32] reconsideration of the action or ruling complained of. citing the provision under the Administrative Code of 1987 which states. 238. It is true that the power of control and supervision does not give the Department Secretary unbridled authority to take over the functions of his or her subordinate. cancellation of its registration should have followed as a matter of course. therefore. she merely stepped into the shoes of the BLR Director and performed a function that the latter could not himself perform.

No. R.— The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned: (a) Its constitution and by-laws. therefore.—The following may constitute grounds for cancellation of union registration: (a) Misrepresentation. Thus. Labor authorities should bear in mind that registration confers upon a union the status of legitimacy and the concomitant right and privileges granted by law to a legitimate labor organization. determining whether the union still meets the requirements prescribed by law.) No. 442. false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto. It has. minutes of the election of officers. and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto. Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension. it loses . is tantamount to dissolution of the organization by administrative authority when such measure would give rise to the loss of legal personality of the union or loss of advantages necessary for it to carry out its activities. the minutes of ratification. The aforesaid amendments and the ILO‘s opinion on this matter serve to fortify our ruling in this case. In resolving the petition.e. (b) Its list of officers. It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient compliance with the requirements of the law. 9481. consideration must be taken of the fundamental rights guaranteed by Article XIII. Reportorial Requirements.as a rule . it has nonetheless reminded its members that dissolution of a union. the minutes of ratification. (c) members.A. 2007. all the employees belonging to the appropriate bargaining unit should not be deprived of a bargaining agent. though belatedly. These provisions give the Regional Director ample discretion in dealing with a petition for cancellation of a union‘s registration. particularly. and the list of members who took part in the ratification. Amending for the Purpose Presidential Decree No. The union members and. and list of voters within thirty (30) days from election. We therefore quote with approval the DOLE Secretary‘s rationale for denying the petition. ILO Convention No. in fact.(i) Failure to submit list of individual members to the Bureau once a year or [35] whenever required by the Bureau. provided that judicial safeguards are in place. 239. We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the petition for cancellation of respondent‘s registration. expulsion from membership. 9481 also inserted in the Labor Code Article 242-A. act with circumspection in treating petitions for cancellation of union registration. indeed. Otherwise Known as the Labor Code of the Philippines. 2007 and became effective on June 14. the law requires the labor organization to submit the annual financial report and list of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the employer and employees from fraudulent or fly-by-night unions. provides that ―workers‘ and employers‘ organizations shall not be liable to be dissolved or suspended by administrative authority. thus: It is undisputed that appellee failed to submit its annual financial reports and list of individual members in accordance with Article . For without such registration. No. which provides: ART. 87. i.A.. 242-A. With the submission of the required documents by respondent. lest they be accused of interfering with union activities. Voluntary dissolution by the R. deemed it preferable if such actions were to be taken only as a last resort and after exhausting other possibilities with less serious effects on the [40] organization. The amendment sought to strengthen the workers‘ right to self-organization and enhance the Philippines‘ compliance with its international obligations as embodied in the International Labour Organization (ILO) Convention No. and cancellation of registration for that matter. [38] 87. and (d) Its list of members at least once a year or whenever required by the Bureau. which is true in our jurisdiction. After all. 9481 amended Article 239 to read: ART. Thus.‖ The ILO has expressed the opinion that the cancellation of union registration by the registrar of labor unions. i.A. merely because of the negligence of the union officers who were responsible for the submission of the documents to the BLR. involve serious consequences for occupational representation. or amendments thereto. particularly the right to participate in or ask for certification election in a bargaining [36] unit. Grounds for Cancellation of Union Registration. false statements or fraud in connection with the election of officers. pertaining to the non-dissolution of workers‘ organizations [39] by administrative authority. which we have ratified in 1953.. It is worth mentioning that the Labor Code‘s provisions on cancellation of union registration and on reportorial requirements have been recently amended by Republic Act (R. (b) Misrepresentation. Section 3 of the Constitution. the rights of all workers to self-organization. Although the ILO has allowed such measure to be taken. An Act Strengthening the Workers’ Constitutional Right to SelfOrganization. and peaceful concerted activities. which lapsed into law on May 25. the cancellation of a certificate of registration is the equivalent of snuffing out thelife of a labor organization. Labor authorities should.its rights under the [37] Labor Code. and the list of voters. the purpose of the law has been achieved. As Amended. the right to appeal to a judicial body. which in our case is the BLR. collective bargaining and negotiations. minutes of the election of officers.e. or any appropriate penalty. (c) Its annual financial report within thirty (30) days after the close of every fiscal year.

Yet there is more at stake in this case than merely monitoring union activities and requiring periodic documentation thereof. 110 SCRA 296. or the CBA.239 of the Labor Code. 14 December 1981. after having failed to meet its periodic obligations promptly.: In the present incident. appellee had submitted its financial statement for the years 1996-1999. who may hereafter be regularly employed by the Bank shall. the Court of Appeals Decision dated May 30. In National Union of Bank Employees vs. However. premises considered. from taking appropriate measures to correct its omissions. thus: ARTICLE II xxxx Section 2. It is understood that membership in good standing in the Union is a condition of their 3 continued employment with the Bank. BPI refused to accede to the Union‘s request.‖ At any rate. petitioner Bank of the Philippine Islands 1 (BPI) moves for reconsideration of our Decision dated August 10.) The bone of contention between the parties was whether or not the "absorbed" FEBTC employees fell within the definition of "new employees" under the Union Shop Clause. for reasons already extensively discussed in the August 10. Associate Justices Antonio T.New employees falling within the bargaining unit as defined in Article I of this Agreement. Petitioner. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK. For the record. From both dissenting opinions. 2010. 4 as the case may be. join the Union as a condition of their continued employment. Minister of Labor. Union Shop . the Supreme Court ruled: As aptly ruled by respondent Bureau of Labor Relations Director Noriel: ―The rights of workers to selforganization finds general and specific constitutional guarantees. WHEREFORE. Article 239 recognizes the regulatory authority of the State to exact compliance with reporting requirements. such that they may be required to join respondent union and if they fail to do so. Notwithstanding our affirmation of the applicability of the Union Shop Clause to former FEBTC employees. To recall. we do not view with favor appellee‘s late submission. (Emphases supplied. it would lead to an unconstitutional application of the statute and emasculation of public policy objectives. G. Also involved is the public policy to promote free trade unionism and collective bargaining as instruments of industrial peace and democracy. the Union may request BPI to terminate their employment. J. Needless to state. In seeking the reversal of our August 10. as the Union in fact did in the present case. Otherwise. Punctuality on the part of the union and its officers could have [41] prevented this petition. An overly stringent interpretation of the statute governing cancellation of union registration without regard to surrounding circumstances cannot be allowed. 164301 October 19. Worse. 2010 Decision. No. Carpio and Arturo D. Petitioner likewise relies heavily on the dissenting opinions of our respected colleagues. The more substantive considerations involve the constitutionally guaranteed freedom of association and right of workers to selforganization. within thirty (30) days after they become regular employees. FEBTC employees cannot be considered new employees as BPI merely stepped into the shoes of FEBTC as an employer purely as a consequence of the 5 merger. 2005 and Resolution dated June 4. vs. we upheld the appellate court‘s ruling and disposed of the case as follows: WHEREFORE. Although BPI won the initial battle at the Voluntary Arbitrator level. Former FEBTC employees who opt not to become union members but who qualify for retirement shall receive their retirement benefits in accordance with law. 2011 BANK OF THE PHILIPPINE ISLANDS. Brion. holding that former employees of the Far East Bank and Trust Company (FEBTC) "absorbed" by BPI pursuant to the two banks‘ merger in 2000 were covered by the Union Shop Clause in 2 the then existing collective bargaining agreement (CBA) of BPI with respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank (the Union).R. x x x Such constitutional guarantees should not be lightly taken much less nullified. Respondent. the existence of this ground should not necessarily lead to the cancellation of union registration. the applicable retirement plan. it can render nugatory the protection to labor and social justice clauses that pervades the Constitution and the Labor Code." Although petitioner admits that there are similarities between absorbed and new employees. Moreover. appellee has substantially complied with its duty to submit its financial report for the said period. petitioner insists that the parties to the CBA clearly intended to limit the application of the Union Shop Clause only to new employees who were hired as non-regular employees but later attained regular status at some point after hiring. the petition is hereby DENIED. With this submission. petitioner derives its contention that "the situation of absorbed employees can be likened to old employees of BPI. even now BPI continues to protest the inclusion of said employees in the Union Shop Clause. the Union Shop Clause involved in this long standing controversy provided. subject to the thirty (30) day notice requirement imposed herein. 2010 Decision. On review with this Court. we note that on 19 May 2000. A healthy respect for the freedom of association demands that acts imputable to officers or members be not easily visited with capital punishments against the association itself. 2007 are AFFIRMED. To rule differently would be to preclude the union. L-53406. BPI‘s position was rejected by the Court of Appeals which ruled that the Voluntary Arbitrator‘s interpretation of the Union Shop Clause was at war with the spirit and rationale why the Labor Code allows the existence of such provision. they insist there are . RESOLUTION LEONARDO-DE CASTRO. insofar as their full tenure with FEBTC was recognized by BPI and their salaries were maintained and safeguarded from diminution" but such absorbed employees "cannot and should not be treated in exactly the same way as old BPI employees for there are substantial differences between 6 them. It would be unreasonable for this Office to order the cancellation of the union and penalize the entire union membership on the basis of the negligence of its officers. 2003 of the Court of Appeals is AFFIRMED. and the Decision dated September 30. submission of the required documents is the duty of the officers of the union.

x x x Nonetheless. Hence. we already observed that the legal fiction in the law on mergers (that the surviving corporation continues the corporate existence of the non-surviving corporation) is mainly a tool to adjudicate the rights and obligations between and among the merged corporations and the persons that 14 deal with them. Such a legal fiction cannot be unduly extended to an interpretation of a Union Shop Clause so as to defeat its purpose under labor law. petitioner propounds that the Union Shop Clause should be strictly construed since it purportedly curtails the right of the absorbed 8 employees to abstain from joining labor organizations.e. labor and employment. subject to existing contractual obligations. and the consensual nature of employment contracts as valid bases for the conclusion that former FEBTC employees should be deemed new 10 employees. 9 Pursuant to our directive. In his dissenting opinion. even if they impinge upon the individual employee's right or freedom of association. be simply disregarded. meaning probationary status. in reality. operated and worked on the transferred assets and properties as their means of livelihood. Laws and jurisprudence promote unionism and afford certain protections to the certified bargaining agent in a unionized company because a strong and effective union presumably benefits all employees in the bargaining unit since such a union would be in a better position to demand improved benefits and conditions of work from the employer. as the surviving corporation has the legal obligation to assume all the obligations and liabilities of the merged constituent corporation. Even in our August 10. we find that a qualification of our ruling is in order only with respect to the interpretation of the provisions of the Articles of Merger and its implications on the former FEBTC employees‘ security of tenure. Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new employees who are "absorbed" as regular employees from the beginning of their employment. 2010 Decision. whether before or after the merger. the Union filed its Comment on the Motion for Reconsideration. they constituted a basic component of their corporation during its existence." Apparently borrowing from Justice Carpio. Not to be forgotten is that the affected employees managed. In the hierarchy of constitutional values. This fact would not remove them from the scope of the phrase "new employees" as contemplated in the Union Shop Clause of the CBA. petitioner contends that the absorbed FEBTC employees should be considered "a sui generis group of employees whose classification will not be duplicated until BPI has another merger where it would be the surviving 7 corporation. we have come to agree with Justice Brion‘s view that it is more in keeping with the dictates of social justice and the State policy of according full protection to labor to deem employment contracts as automatically assumed by the surviving corporation in a merger. its payment of their wages. Thus. even in the absence of an express stipulation in the articles of merger or the merger plan.. a merger with complete "body and soul" transfer of all that FEBTC embodied and possessed and where both participating banks were willing (albeit by deed. Although by virtue of the merger BPI steps into the shoes of FEBTC as a successor employer as if the former had been the employer of the latter‘s employees from the beginning it must be emphasized that. this Court has repeatedly held that the right to abstain from joining a labor organization is subordinate to the policy of encouraging unionism as an 12 instrument of social justice. The Union likewise points out that BPI failed to offer any counterargument to the Court‘s reasoning that: The rationale for upholding the validity of union shop clauses in a CBA. contrary to petitioner's insistence that the term "new employees" only refers to those who are initially hired as nonregular employees for possible regular employment. it is up to this Court to read and interpret the law so that they are treated in accordance with the legal requirements of mergers and consolidation. the latter should not be left in legal limbo and should be properly provided for. This is what Section 80 of the Corporation Code commands. BPI‘s selection and engagement of former FEBTC employees. it is of no moment that the former FEBTC employees retained the regular status that they possessed while working for their former employer upon their absorption by petitioner. Justice Brion‘s theory of automatic assumption may be reconciled with the majority‘s concerns with the successor employer‘s prerogative to choose its employees and the prohibition against involuntary servitude. or. and the specific FEBTC-BPI situation — i. is not to protect the union for the union's sake. worse. not by their written agreement) to provide for the affected human resources by recognizing continuity of employment — should point this Court to a declaration that in a complete merger situation where there is total takeover by one corporation over another and there is silence in the merger agreement on what the fate of the human resource complement shall be. In a merger and consolidation situation. x x x. There is nothing in the said clause that limits its application to only new employees who possess non-regular status. 2010 Decision regarding the voluntary nature of the merger between BPI and FEBTC. the Union. i. upon its effectivity which is the .1avvphi1 Notwithstanding this concession. due consideration of Section 80 of the Corporation Code. In this manner. after the Securities and Exchange Commission‘s (SEC) 11 approval of the merger. the legal consequences of the merger only occur at a specific date. By upholding the automatic assumption of the non-surviving corporation‘s existing employment contracts by the surviving corporation in a merger. at the start of their employment. or to be more precise. Justice Brion reasoned that: To my mind. economic and social provisions of our Constitution. adverts to our discussion in the August 10. the constitutionally declared policies on work. 2010 Decision.marked differences between them as well.e. in turn. power of dismissal and of control over the employees‘ conduct) occurred after the merger. by compelling the surviving entity to absorb these employees. the Court strengthens judicial protection of the right to security of tenure of employees affected by a merger and avoids confusion regarding the status of their various benefits which were among the chief objections of our dissenting colleagues.e. If they are so treated.. adopting Justice Brion‘s stance. petitioner's new regular employees (regardless of the manner by which they became employees of BPI) are required to join the 15 Union as a condition of their continued employment. read in light of the social justice. there is a need for the surviving corporation to take responsibility for the affected employees and to absorb them into its workforce where no appropriate provision for the merged corporation's human 13 resources component is made in the Merger Plan. Taking a second look on this point. nothing in this Resolution shall impair the right of an employer to terminate the employment of the absorbed employees for a lawful or authorized cause or the right of such an employee to resign. Hence. we find no reason to reverse our previous pronouncement that the absorbed FEBTC employees are covered by the Union Shop Clause. In opposition to petitioner‘s arguments. retire or otherwise sever his employment. While most of the arguments offered by BPI have already been thoroughly addressed in the August 10. in recognition that ultimately the individual employee will be benefited by that policy. the lack of an express stipulation in the Articles of Merger regarding the transfer of employment contracts to the surviving corporation. The Union Shop Clause in the CBA simply states that "new employees" who during the effectivity of the CBA "may be regularly employed" by the Bank must join the union within thirty (30) days from their regularization. However. settled jurisprudence has already swung the balance in favor of unionism. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA.. they cannot be treated without consideration of the applicable constitutional declarations and directives. we stated in the Decision that: In any event. The Union argues that the creation of employment relations between former FEBTC employees and BPI (i.

it covers employees who (a) enter the employ of BPI during the term of the CBA. The law requires the employer to furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel." (Emphasis supplied. Consequently. Article II of the 1973 Constitution). (b) are part of the bargaining unit (defined in the CBA as comprised of BPI‘s rank and file employees). due process requires that these union officers be accorded a separate hearing by respondent company. and (c) become regular employees without distinguishing as to the manner they acquire their regular status. and always with due process. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness. the CBA and the Union Shop Clause therein were already in effect and neither of them had the opportunity to express their preference for unionism or not. When they both entered the employ of BPI. as already amply explained in the Decision. or after the SEC 17 approved the merger. In the Decision. Even on the assumption that the federation had valid grounds to expel the union officers. This much we decreed in General Milling 25 Corporation v. We now come to the question: Does our affirmance of our ruling that former FEBTC employees absorbed by BPI are covered by the Union Shop Clause violate their right to security of tenure which we expressly upheld in this Resolution? We answer in the negative. the enforcement of a closed-shop or union security provision in the CBA as a ground for termination finds no extension within any of the provisions under Title I. the Union likewise could not prevent BPI from proceeding with the merger which undisputedly affected the number of employees in the bargaining unit that the Union represents and may negatively impact on the Union‘s majority status. they are both already regular rank and file employees of BPI. it is well-settled that termination of employment by virtue of a union security clause embodied in a CBA is 22 recognized in our jurisdiction. we explained the rationale for this policy in this wise: Article 279 of the Labor Code ordains that "in cases of regular employment. if he desires. as petitioner BPI repeatedly decries on their behalf. Book Six of the Labor Code]. Yet jurisprudence has consistently recognized. x x x (Emphasis supplied. In this instance. They belong to the same bargaining unit being represented by the Union. the number of such employees may adversely affect the majority status of the Union and even its existence itself. It bears reiterating here that these differences are too insubstantial to warrant the exclusion of the absorbed employees from the application of the Union Shop Clause. unbroken employment of workers who are absorbed into a new company pursuant to a merger. thus: "It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. Book Six of the Labor Code. We likewise previously noted that BPI made its assignments of the former FEBTC employees effective on April 10. For if the former FEBTC employees had no say in the merger of its former employer with another bank. it is worthwhile to highlight that a contrary interpretation of the Union Shop Clause would dilute its efficacy and put the certified union that is supposedly being protected thereby at the mercy of management. are absorbed from another company as regular and permanent from the beginning of their employment with the surviving corporation. and (2) a subsequent notice informing the employee of the employer's . it is but logical that their employment may be terminated for any causes provided for under the law or in jurisprudence without violating their right to security of tenure. Both employees were hired/employed only after the CBA was signed. the obligation of BPI to pay the salaries and benefits of the former FEBTC employees and its right of discipline and control over them only arose with the effectivity of the merger. v. They both enjoy benefits that the Union was able to secure for them under the CBA. National Labor Relations Commission. Concomitantly. At the time they are being required to join the Union. to wit: The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. giving due consideration to the context in which it is negotiated and purpose which it is intended to 19 serve. the law has allowed stipulations for 'union shop' and 'closed shop' as means of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis-a-vis the 24 employer. The guarantee is an act of social justice. they shall hold each other 16 blameless for the non-consummation of the merger. Sec. his job may possibly be his only possession or means of livelihood. Section 9. We see no cogent reason why the Union Shop Clause should not be applied equally to these two types of new employees. Ramos that: While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union. and (b) new employees who. Indeed. 20 In Rance v. As Justice Carpio discussed in his dissenting opinion. we held that: It is the policy of the state to assure the right of workers to "security of tenure" (Article XIII."Admittedly. we observed in the Decision that BPI and FEBTC stipulated in the Articles of Merger that they will both continue their respective business operations until the SEC issues the certificate of merger and in the event no such certificate is issued. Therefore. In Del Monte Philippines. jurisprudence dictates that such a dismissal must still be done in accordance with due process. the employer shall not terminate the services of an employee except for a just cause or when authorized by [Title I. From the plain. we noted that: Verily. for they are 18 undeniably similarly situated. 23 Saldivar. Even as we now recognize the right to continuous. 2000. we should be guided by the principle that courts must place a practical and realistic construction upon a CBA. self-organization and security of tenure.) We have also previously held that the fundamental guarantee of security of tenure and due process dictates that no worker shall be dismissed except for a just and authorized cause provided by law 21 and after due process is observed. In other words. ordinary meaning of the terms of the Union Shop Clause. this dismissal should not be done hastily and summarily thereby eroding the employees' right to due process. Thus. by virtue of a merger. the obligation of former FEBTC employees to render service to BPI and their right to receive benefits from the latter also arose upon the effectivity of the merger. What is material is that all of these legal consequences of the merger took place during the life of an existing and valid CBA between BPI and the Union wherein they have mutually consented to include a Union Shop Clause. Greenfield v.) Although it is accepted that non-compliance with a union security clause is a valid ground for an employee‘s dismissal. When a person has no property. Again. there are differences between (a) new employees who are hired as probationary or temporary but later regularized. Inc. The twin requirements of notice and hearing constitute the essential elements of procedural due process. for purposes of applying the Union Shop Clause. For this reason. Article 280 of the Labor Code has construed security of tenure as meaning that "the employer shall not terminate the services of an employee except for a just cause or when authorized by" the Code. Casio. he should be protected against any arbitrary deprivation of his job. 3 of the New Constitution. we agree with the Court of Appeals that there are no substantial differences between a newly hired non-regular employee who was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee pursuant to a merger.date of approval of the merger by the SEC.

we reiterate that our ruling presupposes there has been no material change in the situation of the parties in the interim. RO300-0105-UR-002 by the DOLE on May 18. WHEREFORE. the certified list of employees in the bargaining unit for the last three (3) months prior to the issuance of this decision. it held that Section 11. or were abroad. the Office of the Secretary of DOLE rendered its [6] Decision granting KML‘s appeal thereby reversing and setting aside the Med-Arbiter‘s Decision. The Decision dated August 10. KML claimed that it was issued its Certificate of Registration No. KML alleged that it is a legitimate labor organization of the rank and file employees of Legend International Resorts Limited (LEGEND). 2010 is AFFIRMED. x x x (Emphases supplied. The Med-Arbiter found that indeed there were several supervisory employees in KML‘s membership. Since Article 245 of the Labor Code expressly prohibits supervisory employees from joining the union of rank and file employees. the Motion for Reconsideration is DENIED. Finally. KML argued that even if 41 of its members are indeed supervisory employees and therefore excluded from its membership. RO300-0106-RU-001. the appeal is hereby GRANTED and the order of the Med-Arbiter dated 20 September 2001 is REVERSED and SET ASIDE. Pampanga. even without express stipulation in the Articles of Merger. let the entire record of the case be remanded to the regional office of origin for the immediate conduct of the certification election. No. 2011 LEGEND INTERNATIONAL RESORTS LIMITED. have already resigned as of March 2001. GMC cannot dispense with the requirements of notice and hearing before dismissing Casio. [4] [3] Pursuant to Rule XI. 9. Rule V of Department Order No. 2001. 2001. among the rank and file employees of LEGEND INTERNATIONAL RESORTS LIMITED with the following choices: 1.O.1 of D. LEGEND also claimed that KML committed acts of fraud and misrepresentation when it made it appear that certain employees attended its general membership meeting on April 5. 2001 when in reality some of them were either at work. said employees shall be accorded full procedural due process before their employment may be terminated. citing [7] Section 5. 2005 Resolution denying petitioner‘s motion for reconsideration. This procedure is mandatory and its absence taints the dismissal with illegality. KML also claimed that its legitimacy as a labor union could not be collaterally attacked in the certification election proceedings but only through a separate and independent action for cancellation of union registration. [2] In its Comment. Accordingly. vs KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT). given to former FEBTC employees to join the respondent. Ruling of the Office of the Secretary of DOLE On May 22. subject to the qualifications that: (a) Petitioner is deemed to have assumed the employment contracts of the Far East Bank and Trust Company (FEBTC) employees upon effectivity of the merger without break in the continuity of their employment. the employer is hereby directed to submit to the office of origin. 2001 when in fact they were either at work or elsewhere.decision to dismiss him. Section II. The dispositive portion of the Office of the Secretary of DOLE‘s Decision reads: WHEREFORE. 2010 Decision. KML filed with the Med-Arbitration Unit of the DOLE. Similar to our August 10. DECISION DEL CASTILLO. KML was also found to have fraudulently procured its registration certificate by misrepresenting that 70 employees were among those who attended its organizational meeting on April 5.) In light of the foregoing. J. the Med-Arbiter rendered [5] judgment dismissing for lack of merit the petition for certification election. Irrefragably. The Office of the Secretary of DOLE held that KML‘s legitimacy as a union could not be collaterally attacked. G. and 2. et al. 9. 169754 February 23. Factual Antecedents On June 6. 72848 which found no grave abuse of discretion on the part of the Office of the Secretary of the Department of Labor and Employment (DOLE) which ruled in favor of Kilusang Manggagawa ng Legenda (KML). we find it appropriate to state that.: This Petition for Review on Certiorari assails the September 18. apart from the fresh thirty (30)-day period from notice of finality of the Decision given to the affected FEBTC employees to join the Union before the latter can request petitioner to terminate the former‘s employment. SO ORDERED. [8] . the certification election could still proceed because the required number of the total rank and file employees necessary for certification purposes is still sustained. NO UNION. petitioner must still accord said employees the twin requirements of notice and hearing on the possibility that they may have other justifications for not joining the Union. The Office of the Secretary of DOLE also opined that Article 245 of the Labor Code merely provides for the prohibition on managerial employees to form or join a union and the ineligibility of supervisors to join the union of the rank and file employees andvice versa. as to the alleged acts of misrepresentation. even when said dismissal is pursuant to the closed shop provision in the CBA. Ruling of the Med-Arbiter On September 20. counted from notice of finality of the August 10. 2010 Decision. KML asserted that LEGEND failed to substantiate its claim. KML thus appealed to the Office of the Secretary of the DOLE. series of 1997. a Petition for Certification [1] Election docketed as Case No. SO DECIDED. 2002. San Fernando. Moreover. 2003 Decision of the Court of Appeals in CA-G. subject to the usual pre-election conference. and (b) Aside from the thirty (30) days. paragraph II of Rule XI which provides for the grounds for dismissal of a petition for certification election does not include mixed membership in one union. Also assailed is the September 14. SP No.R. It declared that any violation of the provision of Article 245 does not ipso facto render the existence of the labor organization illegal. 2001.R. KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT). LEGEND moved to dismiss the petition alleging that KML is not a legitimate labor organization because its membership is a mixture of rank and file and supervisory employees in violation of Article 245 of the Labor Code. The rights of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own union are not wiped away by a union security clause or a union shop clause in a collective 26 bargaining agreement. No. within ten days from receipt of the decision. the Med-Arbiter concluded that KML is not a legitimate labor organization.

in view of the foregoing. It thus claims that the petition for certification election and all of KML‘s activities should be nullified because it has no legal personality to file the same. the appellate court denied LEGEND‘s motion for reconsideration. Pampanga in its [12] Decision dated November 7. 2002 Decision of the Bureau of Labor Relations and reinstated the November 7. The March 26. the Office of the Secretary of DOLE stressed that LEGEND has no legal personality to participate in the certification election proceedings.R. 2002. 2002 Decision and August 20. that it has appealed to the Court of Appeals the March 26. entry of judgment having been made on August 21. much less [23] demand collective bargaining with LEGEND. 2002 Decision denying its Petition for Cancellation of KML‘s registration has already become final and executory. KML insists that the Decision of the Bureau of Labor Relations upholding its [25] legitimacy as a labor organization has already attained finality hence there was no more hindrance to the holding of a certification election. The Court of Appeals never bothered to look into this allegation and instead dismissed outright LEGEND‘s motion for reconsideration. III of San Fernando. In a Resolution dated August 20. By doing so. Our Ruling The petition is partly meritorious. The instant petition is DENIED due course and. SP No. Finally. [18] accordingly. on June 30. 2002 of the Bureau of Labor Relations in Case No. the Court of Appeals granted the petition. the Court of Appeals rendered its [17] Decision finding no grave abuse of discretion on the part of the Office of the Secretary of DOLE. Besides. In fact. It also alleged that on August 24. The dispositive portion of the Decision reads: WHEREFORE. Rule XI of Department Order No. Ruling of the Court of Appeals Undeterred.LEGEND filed its Motion for Reconsideration reiterating its earlier arguments. the Court of Appeals in effect maintained its earlier ruling that the March 26. viz: WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN THE APPLICATION OF LAW IN DENYING THE [20] PETITIONER‘S PETITION FOR CERTIORARI. LEGEND alleged that the Office of the Secretary of DOLE gravely abused its discretion in reversing and setting aside the Decision of the Med-Arbiter despite substantial and overwhelming evidence against KML. LEGEND has timely appealed the March 26.R. 2002 Resolution in Case No. 2005. Finally. We cannot understand why the Court of Appeals totally disregarded LEGEND‘s allegation in its Motion for Reconsideration that the March 26. the assailed May 22. and finding that no grave abuse of discretion amounting to lack or excess of jurisdiction has been committed by the Department of Labor and Employment. 2002 Decision of the Bureau of Labor Relations upholding the LEGEND filed a Motion for Reconsideration alleging. 2002 Decision of the Bureau of Labor Relations has not yet attained finality considering that it has timely appealed the same to the Court of Appeals and which at that time is still pending resolution. 2002 Decision of the Bureau of Labor Relations to the Court of Appeals. 2005. 2002. LEGEND posits that the cancellation of KML‘s certificate of [22] registration should retroact to the time of its issuance. KML alleged that the Decision dated March 26. this Petition for Review on Certiorari raising the lone assignment of error. 2002. reversed the March 26. SP No. 2001. Respondent’s Arguments In its Comment filed before this Court dated March 21. it filed a [10] Petition for Cancellation of Union Registration of KML docketed as [11] Case No. the Office of the Secretary of DOLE denied LEGEND‘s motion for reconsideration. 2001. having already been settled that KML is a legitimate labor organization. The Office of the Secretary of DOLE also filed its [16] Comment asserting that KML‘s legitimacy cannot be attacked collaterally. There was nothing left for the Office of the Secretary of DOLE to do but to order the holding of such certification election. 72659 assailing said Decision. For its part. 2002 Decision of the Bureau of Labor Relations upholding the legitimacy of KML as a labor organization had long become final and executory for failure of LEGEND to appeal the same. LEGEND filed a Petition for Certiorari with the Court of Appeals docketed as CA-G. Hence. 9 requires a final order of cancellation before a petition for certification election may be dismissed on the ground of lack of legal personality. [19] [14] [13] [9] On September 14. the latter could properly file a petition for certification election. 2006. 72848. III of San Fernando. it claims that the instant petition has become moot because the certification election sought to be prevented had already been conducted. RO300-0108-CP-001. LEGEND thus prays that the September 20. 2001 Decision of DOLE Regional Office No. RO300-0108-CP-001 was reversed by the Bureau of Labor Relations in a Decision dated March 26. Petitioner’s Arguments LEGEND submits that the Court of Appeals grievously erred in ruling that the March 26. Thus. It opined that Section 11. The appellate court held that the issue on the legitimacy of KML as a labor organization has already been settled with finality in Case No. among others. On September 18. Pampanga in Case No. RO300-0108-CP-001 denying LEGEND‘s petition for cancellation and upholding KML‘s legitimacy as a labor organization has already become final and [15] executory. 2001 Decision of the Med-Arbiter dismissing KML‘s petition for certification election be [24] reinstated. It asserts that it has seasonably filed a Petition [21] forCertiorari before the CA docketed as CA-G. . 2003. RO300106-RU-001 are UPHELD and AFFIRMED. 2002 Decision in Case No. DISMISSED for lack of merit. 2001 Decision of the DOLE Regional Office III ordering the cancellation of KML‘s registration. RO300-0108-CP-001 which was granted by the DOLE Regional Office No. paragraph II(a). RO300-0108-CP-001 denying its petition for cancellation and that it is still pending resolution. it noted that the November 7. Moreover.

Inc. Philippine Telegraph and Telephone Corporation v. This is inaccurate. There is therefore no basis for LEGEND‘s assertion that the cancellation of KML‘s certificate of registration should retroact to the time of its issuance or that it effectively . SP No. (Emphasis supplied. v. the Court applies the established rule correctly followed by the public respondent that an order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the respondent union. v. However. 2006. we cannot subscribe to LEGEND‘s proposition that the cancellation of KML‘s certificate of registration should retroact to the time of its issuance. SP No. In Pepsi-Cola Products [38] Philippines. it still had the legal personality to perform such act absent an order directing the [39] cancellation. the same was denied in a Resolution dated February 13. The rationale for this is that at the time the respondent union filed its petition. KML received a copy of said petition [27] on September 10. KML is still insisting that the Bureau of Labor Relations‘ Decision has become final and executory. x x x is in point. 2006.legitimacy of KML as a labor organization has long become final and executory for failure of LEGEND to appeal the same. Hon. Records show that (in the cancellation of registration case) LEGEND has timely filed on September 6. Inc. it still had the legal personality to perform such act absent an order directing its [48] cancellation. 2005. 2007 filed before us. At any rate. the following ruling in the case of Association of the Court of Appeals Employees (ACAE) v. 2006 for having been filed out of time. KML moved for [36] reconsideration but it was denied with finality in a Resolution dated June 7. 179 SCRA 127 In Association of Court of Appeals Employees v. the petitioning union is presumed to possess the legal personality to file the same. Laguesma where we declared that ―a certification election can be conducted despite pendency of a petition to cancel the union registration certificate. For the fact is that at the time the respondent union filed its petition for certification. the [31] Court of Appeals rendered its Decision in CA-G. it is clear that a certification election may be conducted during the pendency of the cancellation proceedings. 2001 Decision of the Med-Arbiter which [32] canceled the certificate of registration of KML. Our perusal of the records shows that on June 30. 2002 Decision of the Bureau of Labor Relations.‘ (Associated Labor Unions (ALU) v. Thereafter. (Emphasis supplied. this Court was tasked to resolve the issue of whether ―the certification proceedings should be suspended pending [the petitioner‘s] [44] [45] petition for the cancellation of union registration of the UCECA .‖ The Court resolved the issue in the negative holding that ―an order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the respondent union. 2002 Decision of the Bureau of Labor Relations and reinstating the November 7. Ferrer-Calleja. The rationale for this is that at the time the respondent union filed its petition. Hon. In fact.) [40] In Capitol Medical Center. but an investigation of a non-adversarial and fact finding character. the said Decision canceling the certificate of registration of KML as a labor organization became final and executory [37] and entry of judgment was made on July 18.R. This issue is not new or novel. 72659 reversing the March 26. Thus.‖ Citing the Secretary of Labor. 2005.‖ We reiterated this view in Samahan ng [47] Manggagawa sa Pacific Plastic v. 72659 assailing the March 26. 2006 that the Bureau of Labor Relations‘ Decision in the petition for cancellation case has already attained finality. the technical rules of evidence do not apply if the decision to grant it proceeds from an examination of the sufficiency of the petition as well as a careful look into the arguments contained in the position papers and other documents. Secretary of Labor. If a certification election may still be ordered despite the pendency of a petition to cancel the union’s registration certificate x x x more so should the collective bargaining process [42] continue despite its pendency.‖ Based on the foregoing jurisprudence. Hon.R. NLRC. The cancellation of KML’s certificate of registration should not retroact to the time of its issuance. On September 30. we held viz: That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the mechanics of collective bargaining. LEGEND claims that KML‘s petition for certification election filed during the pendency of the petition for cancellation and its demand to enter into collective bargaining agreement with LEGEND should be dismissed due to KML‘s lack of legal personality. 2005. [33] KML‘s motion for reconsideration was denied for lack of merit. [35] 169972. it still had the legal personality to perform such act absent an [46] order directing a cancellation. to wit: x x x It is well-settled rule that ‗a certification proceedings is not a litigation in the sense that the term is ordinarily understood. 2002.R. [1989].) Notwithstanding the finality of the Decision canceling the certificate of registration of KML. we find it quite interesting for KML to claim in its Comment (in the certification petition case) before this Court dated [29] March 21. Even in its [30] Memorandum dated March 13. Trajano. KML filed its Petition for Review [34] on Certiorari before this Court which was docketed as G. On November 25. Thus. 2002 and has filed its Comment thereto on [28] December 2. This is because at the time the petition for certification was filed. Ferrer[43] Calleja. we already ruled that: Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial question to the petition for certification election. 2002 a [26] petition for certiorari before the Court of Appeals which was docketed as CA-G. Pura FerrerCalleja. we also held that ―the pendency of a petition for cancellation of union registration does [41] not preclude collective bargaining. 183 SCRA 451 [1990]. No.

its legal personality cannot be subject to a collateral attack. The law is very clear on this matter.O. CHARTER CHEMICAL AND COATING CORPORATION. This is in consonance with our ruling in Laguna Autoparts Manufacturing Corporation v. [G. isREVERSED and SET ASIDE. the granting of its petition for certification [52] election is proper. DECISION DEL CASTILLO. ZACARRIAS JERRY VICTORIO . that the respondent union acquired a legal personality x x x cannot be challenged in a petition for certification election.‖ We further held therein that: This is categorically prescribed by Section 5. The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election. 2002 Decision of the Bureau of Labor Relations in Case No. 9 is instructive on the matter. and its legitimacy has not been revoked or cancelled with finality. The inclusion of supervisory employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization. which provides for the dismissal of a petition for certification election based on the lack of legal personality of a labor organization only in the following instances: (1) appellant is not listed by the Regional Office or the BLR in its registry of legitimate labor organizations. thus: . 110 SCRA 274 (1981). 5. 2003 in CA-G. labor organization. Section 5. RESPONDENT.O. The pronouncement of the Labor Relations Division Chief.VS. in view of the foregoing. We apply these principles We agree with the ruling of the Office of the Secretary of DOLE that the legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election proceeding. Once a certificate of registration is issued to a union. Minister of Labor.R. Such legal personality cannot thereafter be subject to collateral attack but may be questioned only in an independent petition for cancellation in accordance with these Rules. or (2) appellant‘s legal personality has been revoked or cancelled with finality. This has been the rule since NUBE v. 72848 insofar as it affirms the May 22. PETITIONER. RO300-0108-CP001 upholding that the legitimacy of KML as a labor organization has long become final and executory for failure of LEGEND to appeal the same. No. – The labor organization or worker‘s association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. but may be questioned only in an independent petition for cancellation of union registration. Rule V of D.R. 9. x x x The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. The Decision of the Court of Appeals datedSeptember 18. The discussion of the Secretary of Labor and Employment on this point is also enlightening. .nullified all of KML‘s activities. Rule V of the Implementing Rules of Book V. 169717. Office of the Secretary. which states as follows: SEC. Rule IX of D. The Decision of the Court of Appeals insofar as it declares that the March 26. the petition is PARTLY GRANTED. it continues as such until its certificate of registration is cancelled or revoked in an independent action for cancellation. Equally important is Section 11. 2002 Resolution of the Office of the Secretary of Department of Labor and Employment is AFFIRMED. What applies in this case is the principle that once a union acquires a legitimate status as a [51] . J. Book V of the [53] Implementing Rules. to raise the issue of the respondent union‘s legal personality is not proper in this case. including its filing of the petition for certification election and its demand to collectively bargain. ―[T]he legal personality of a legitimate labor organization x x x cannot be subject to a collateral attack. Paragraph II. In may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V. Since appellant is listed in the registry of legitimate labor organizations. Hence. SO ORDERED.‖ WHEREFORE. It provides that the legal personality of a union cannot be the subject of collateral attack in a petition for certification election. Effect of registration. 2011] SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER).: The right to file a petition for certification election is accorded to a labor organization provided that it complies with the requirements of law for proper registration. March 16.UNION PRESIDENT. . SP No. 2002 Decision and August 20. Department of Labor and [49] Employment that ―such legal personality may not be subject to a collateral attack but only through a separate action instituted particularly [50] for the purpose of assailing it.

which annulled and set aside the January 13. The Decision granting the said petition became final and executory on September 16. series of 1997. 2000 [2] Decision of the Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16. thus. and 2. considering that petitioner union is not a legitimate labor organization. This Petition for Review on Certiorari seeks to reverse and set [1] aside the Court of Appeal's March 15. Toyota Motor Philippines [11] Corporation Labor Union. 1999. the same was filed out of time. Although the DOLE ruled. It. 58203. fatally defective. a motion for intervention involving a certification election in an unorganized establishment should be filed prior to the finality of the decision calling for a certification election. petitioner union has no right to file a petition for certification election for the purpose of collective bargaining. Factual Antecedents On February 19. 9. Under Section 7. No Union. 1998. Med-Arbiter Tomas F.. Hence. Issues I Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in granting the respondent [company's] petition for certiorari (CA G. it has no legal right to file a petition for certification election. mill operator and leadman who performed supervisory functions. II Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-file and supervisory employee[s] of . subject to the usual pre-election conference. series of 1997. The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman. National Capital Region. likewise. the DOLE found that a review of the records indicates that no certification election was previously conducted in respondent company. SP No. On April 14. however. Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation. SP No. said supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-and-file employees of respondent company.to this case. the DOLE reversed its earlier ruling. and (2) the inclusion [5] of supervisory employees within petitioner union. 1998 and was remanded for immediate implementation. Rule XI of D. 1999. SO DECIDED.) No. 1999. On motion for reconsideration. the CA held that the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot be remedied through the exclusioninclusion proceedings in a pre-election conference pursuant to the ruling inToyota Motor Philippines v. 1999. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter Certificate.R. The union registration was. i. the appellate court gave credence to the findings of the Med-Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code. there was no obstacle to the grant of petitioner union's petition for certification election. previously filed a petition for certification election on January 16. not being a legitimate labor organization. Rule VI of Department Order (D. 2005. [10] In nullifying the decision of the DOLE. 2005 Decision in CA-G." and "Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under oath and certified by the union secretary and attested to by the union [7] president as required by Section 235 of the Labor Code in relation to Section 1. In its January 13. Thus. The assailed Decision and Resolution dated January 13. the petition is hereby GRANTED. denied by the Med-Arbiter and. respondent company filed an Answer with [4] Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law. the CA promulgated the assailed Decision.e. viz: WHEREFORE. As a result. 1999. that the charter certificate need not be verified and that there was no independent evidence presented to establish respondent company's claim that some members of petitioner union were holding supervisory positions. contrary to the findings of the Med-Arbiter. Let the records of this case be remanded to the Regional Office of origin for the immediate conduct of a certification election. [8] Considering that petitioner union filed its petition only on February 14. "Sama-samang Pahayag ng Pagsapi at Authorization. Department of Labor and Employment's Ruling On July 16. 2000 Decision. No. was dismissed by the DOLE for being filed out of time. upheld the Med-Arbiter's finding that petitioner union consisted of both rank-and-file and supervisory employees. 58203) in spite of the fact that the issues subject of the respondent company['s] petition was already settled with finality and barred from being re-litigated. likewise. Med-Arbiter's Ruling On April 30. 9. the DOLE sustained the dismissal of the petition for certification after it took judicial notice that another union. Falconitin issued a [6] Decision dismissing the petition for certification election.R. Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE. the prior certification election filed by Pinag-isang Lakas Manggagawa saCharter Chemical and Coating Corporation was. viz: WHEREFORE. No.O. 2000 are hereby [ANNULLED] and SET ASIDE. 2000 and February 17. the motion for reconsideration is hereby GRANTED and the decision of this Office dated 16 July 1999 is MODIFIED to allow the certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation with the following choices: 1. [3] 2005 Resolution denying petitioner union's motion for reconsideration. SO ORDERED. Moreover. on appeal. the DOLE initially issued a Decision in favor of respondent company dismissing petitioner union's appeal on the ground that the latter's petition for certification election was filed out of time. On the contrary. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the Philippines for Empowerment and Reform (SMCCSUPER).O. [9] Court of Appeal's Ruling On March 15. Under Article 245 of the Labor Code.

this issue must be deemed settled. No. Preliminarily. Nonetheless. The issue then as to the legal personality of petitioner union to file the certification election was properly raised before the DOLE. Thus. Rule VI of the Implementing Rules of Book V. Thus. Inc. thus. 1999 Decision of the DOLE. However. Tagaytay Highlands Empoyees Union-PTGWO. In the main. as amended by D. as amended. 9. series of 1997.) No.A. as amended by D. Rule VIII of said issuance. the DOLE ruled that petitioner union complied with all the documentation requirements and that there was no independent evidence presented to prove an illegal mixture of supervisory and rank-and-file employees in petitioner union.O. 9. series of 1997.A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau . After the promulgation of this Decision. the appellate court and now this Court. Finally. The issue as to the legal personality of petitioner union is not barred by the July 16. respondent company timely moved for reconsideration by reiterating its previous arguments before the Med-Arbiter that petitioner union has no legal personality to file the subject petition for certification election. Chartering and creation of a local chapter -. the petition for certification election was dismissed on the ground that another union had previously filed a petition for certification election seeking to represent the same bargaining unit in respondent company. Petitioner Union's Arguments Petitioner union claims that the litigation of the issue as to its legal personality to file the subject petition for certification election is barred by the July 16. It contends that what is required to be certified under oath by the local union's secretary or treasurer and attested to by the local union's president are limited to the union's constitution and by-laws. nor are they grounds for the cancellation of a union's registration under Section 3.A. R. Rule VI of the Implementing Rules of Book V. 1999 Decision of the DOLE. The then prevailing Section 1. 6715. and the books of accounts. The July 16. Petitioner union further argues that the lack of verification of its charter certificate and the alleged illegal composition of its membership are not grounds for the dismissal of a petition for certification election under Section 11. the illegal composition of petitioner union nullifies its legal personality to file the subject petition for certification election and its legal personality may be collaterally attacked in the proceedings for a petition for certification election as was done here. respondent company timely filed its motion for reconsideration. No. never attained finality because the parties timely moved for reconsideration. the DOLE reversed its previous ruling. The said decision did not attain finality because the DOLE subsequently reversed its earlier ruling and. Sama-samang Pahayag ng Pagsapi at Authorization. Kawashima [21] Textile Mfg.. On the issue of lack of verification of the charter certificate. the legal personality of petitioner union cannot be collaterally attacked but may be questioned only in an independent petition for cancellation pursuant to Section 5. Toyota Motor Philippines Labor [14] Union continues to be good case law. respondent company did not move for reconsideration. 1999 Decision. from this decision. This law introduced substantial amendments to the Labor Code. series of 1997) pursuant to our ruling in Republic v. III Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged failure to certify under oath the local charter certificate issued by its mother federation and list of the union membership attending the organizational meeting [is a ground] for the cancellation of petitioner [union's] legal personality as a labor organization and for the dismissal of the petition for certification [12] election. statement of the set of officers. 1999 Decision of the DOLE.e. therefore. and [19] the rules and regulations implementing R. we must note that Congress enacted Republic Act [16] [17] (R. 6715. CA and now this Court. From this adverse decision. No. It upheld the right of petitioner union to file the subject petition for certification election because its previous decision was based on a mistaken [15] appreciation of facts. and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath. we shall decide the issues under the pertinent legal provisions then in force [18] (i.O. provides: Section 1. Upon motion for reconsideration by petitioner union on January 13. The charter certificate need not be certified under oath by the local union's secretary or treasurer and attested to by its president. No. Our Ruling The petition is meritorious. 9. the DOLE found that petitioner union complied with the documentation requirements of the Labor Code and that the evidence was insufficient to establish that there was an illegal mixture of supervisory and rank-and-file employees in its membership.A. petitioner union cannot be accorded the status of a legitimate labor organization. No. DOLE. It also contends that petitioner union is not a legitimate labor organization because its composition is a mixture of supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Book IV of the Rules to Implement the Labor Code and the doctrine enunciated in Tagaytay Highlands International Golf Club [13] Incoprorated v.. 1999 Decision of the DOLE. It agreed with the MedArbiter that the Charter Certificate. expressly requires that the charter certificate be certified under oath. series of 1997. 9. Philippines. Respondent Company's Arguments Respondent company asserts that it cannot be precluded from challenging the July 16. as [20] amended by D. Rule V.O. Rule XI of D. We disagree.O. Respondent company maintains that the ruling inToyota Motor Philippines vs.petitioner [union's] membership is [a] ground for the cancellation of petitioner [union's] legal personality and dismissal of [the] petition for certification election. 9481 which took effect on June 14. In this decision. In its July 16. respondent company notes that Article 235 of the Labor Code and Section 1. the CA ruled that petitioner union failed to comply with the requisite documents for registration under Article 235 of the Labor Code and its implementing rules. 2000. amending Book V of the Labor Code. 2007. No. since the operative facts in this case occurred in 1999. A review of the records indicates that the issue as to petitioner union's legal personality has been timely and consistently raised by respondent company before the Med-Arbiter.

held: "Clearly. and the principal office of the local/chapter. Thus. Who may file. and its principal office. and (3) its constitution and [26] by-laws -. 6715. we ruled In San Miguel Foods-Cebu B-Meg Feed Plant v. and provided further. consisting of batchman. The petition shall be in writing and under oath. the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. Where to file. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President. supervisory employees are not eligible for membership in a labor organization of rank-and-file employees. viz: R. Toyota Motor [28] Philippines Corporation Labor Union (hereinafter Toyota).A. petitioner union failed to present any rebuttal evidence in the proceedings below after respondent company submitted in evidence the job [29] descriptions of the aforesaid employees. are supervisory employees. the Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. (Emphasis supplied) In accordance with this ruling. As readily seen. (b) The names of the local/chapter's officers. shall contain. Mandaue Packing Products Plants-San Miguel Corporation Monthlies Rank-and-File [22] Union-FFW (MPPP-SMPP-SMAMRFU-FFW). mill operator and leadman. [31] Inc.A petition for certification election may be filed with the Regional Office which has jurisdiction over the principal office of the employer. No. we note that petitioner union questions the factual findings of the Med-Arbiter. InKawashima. it validly acquired the status of a legitimate labor organization upon submission of (1) [24] its charter certificate. that 12 of its members. Id. petitioner union sought to represent the bargaining unit consisting of rank[27] and-file employees. the appellate court ruled that petitioner union cannot be considered a legitimate labor organization pursuant to Toyota Motor Philippines v. it does not make sense to have the local/chapter's officers x x xcertify or attest to a document [23] which they had no hand in the preparation of. the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization. we explained at length how and why the Toyota doctrine no longer holds sway under the altered state of the law and rules applicable to this case. as upheld by the appellate court.While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the 1997 amendments. It was the Rules and Regulations Implementing R. that petitioner union consisted of both rank-and-file and supervisory employees. petitioner union's charter certificate need not be executed under oath. Who may join unions. when filed by a legitimate labor organization. we are constrained to agree with the Med-Arbiter. 1. For this reason. The appellate court's reliance on Toyota is misplaced in view of this Court's subsequent ruling in Republic v. Petitioner union concedes and the records confirm that its charter certificate was not executed under oath. The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization.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. hence. 2. based on this provision. their [25] addresses. (Emphasis supplied) By that provision. when the issue of the effect of mingling was brought to the fore inToyota. . Kawashima Textile Mfg. 9. . 6715 (1989 Amended Omnibus Rules) which supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions): "Sec.A. that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or security guards. (Emphasis supplied) and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules. 6715 omitted specifying the exact effect any violation of the prohibition [on the co-mingling of supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization. 331 Phil. which was decided under the auspices of D. their addresses. Philippines. Provided. upon the effectivity of Republic Act No. as upheld by the appellate court. . Laguesma. we believe that the same doctrine obtains in this case. The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. this fact shall be indicated accordingly. Series of 1997. However. the Court. No. Nonetheless. assist or form separate labor organizations of their own. Thus. As to the charter certificate.x x x Supervisory employees and security guards shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. (hereinafter Kawashima). However. 6715. 1. among others: xxxx (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require. (2) the names of its officers. viz: "Sec. The petition. in San Miguel Corporation (Mandaue Packaging Products Plants) v. that those supervisory employees who are included in an existing rank-and-file bargaining unit. Under Article 245 of the Labor Code. and (c) The local/chapter's constitution and by-laws provided that where the local/chapter's constitution and by-laws [are] the same as [those] of the federation or national union.O. falling within the definition of [30] supervisory employees under Article 212(m) of the Labor Code. No. a labor organization composed of both rank-and-file and supervisory employees is no labor .A. may file the petition. when requested to bargain collectively. Consequently. shall remain in that unit x x x. 356 (1996). Preliminarily. the above-quoted rule indicates that it should be executed under oath. Hon.Any legitimate labor organization or the employer. No. However. citing Article 245 of the Labor Code.. any questioned mingling will prevent an otherwise legitimate and duly registered labor organization from exercising its right to file a petition for certification election. The job descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary but require the use of independent judgment. Sec.the last two requirements having been executed under oath by the proper union officials as borne out by the records. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter. as amended by R.

Toyota andDunlop no longer hold sway in the present [32] altered state of the law and the rules. As we explained in Kawashima: Except when it is requested to bargain collectively. the Court held that after a labor organization has been registered. it had the right to file the subject petition for certification election. provided that where the local/chapter's constitution and bylaws is the same as that of the federation or national union. for any guise or purpose. No. be a legitimate labor organization." (Emphasis supplied) In Dunlop. a local or chapter submit a list of its members. respectively. the 1997 Amended Omnibus Rules. 1995. hence. (Mandaue Packaging Products Plants) v. an employer is a mere bystander to any petition for certification election. 9. Then came Tagaytay Highlands Int'l. but in which the membership included rank-and-file employees. it would be improper for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual members. unless such mingling was brought about by misrepresentation. series of 1997 (1997 Amended Omnibus Rules). v. unless such inclusion is due to misrepresentation. 4. As a result. while the latest issuance is R. Specifically. All said. The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification election proceedings.A.organization at all. Trajano. given the altered legal milieu. false statement or fraud under Article 239 of the Labor Code. v. 2(c) of the 1989 Amended Omnibus Rules . this fact shall be indicated accordingly. was still in effect. to wit: "Section. for its creation and registration. Not being one. series of 1997. Forms and contents of petition. . the union could not.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. false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code.O. . their addresses. the requirement under Sec. the 1989 Amended Omnibus Rules was further amended by Department Order No. as respondent union's membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions. [Underline supplied] The applicable law and rules in the instant case are the same as those in Kawashimabecause the present petition for certification election was filed in 1999 when D. (b) the names of the local/chapter's officers. 1. in which the labor organization that filed a petition for certification election was one for supervisory employees. for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. Monthlies Rank-and-File UnionFFW. More to the point is Air Philippines Corporation v. It cannot. This time. Tagaytay Highlands Employees Union-PGTWO in which the core issue was whether mingling affects the legitimacy of a labor organization and its right to file a petition for certification election. Hence. therefore. Mandaue Packing Products Plants-San Miguel Packaging Products-San Miguel Corp. petitioner union was not divested of its status as a legitimate labor organization even if some of its members were supervisory employees. thus: Rule XI Certification Elections xxxx Sec. and the principal office of the local/chapter. Kawashima applies with equal force here. Inc. Instead. the following: x x x (c) The description of the bargaining unit. including the right to file a petition for certification election for the purpose of collective bargaining. among others.was removed. 1997. Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election proceedings. Thus. San Miguel and Air Philippines. Bureau of Labor Relations. attain the status of a legitimate labor organization. Not being one. Inc.The petition shall be in writing and under oath and shall contain. an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization. Chartering and creation of a local/chapter. the Court had occasion to uphold the validity of the 1997 Amended Omnibus Rules. which involved a petition for cancellation of union registration filed by the employer in 1999 against a rank-and-file labor organization on the ground of mixed membership: the Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of disqualified employees is not among the grounds for cancellation. and (c) the local/ chapter's constitution and bylaws. what the 1997 Amended Omnibus Rules requires is a plain description of the bargaining unit. the Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization. 9481. 1. had already set the tone for it. the Court reiterated that such labor organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its members.that the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been mingled with supervisory employees . But then. on June 21. It should be emphasized that the petitions for certification election involved in Toyota and Dunlop were filed on November 26. 9. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President. No. prior to purging itself of its supervisory employee members. as interpreted by the Court in Tagaytay Highlands. to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. In San Miguel Corp. the 1989 Rules was applied in both cases. anterior to the granting of an order allowing a certification election. the Court explained that since the 1997 Amended Omnibus Rules does not require a local or chapter to provide a list of its members. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration. 1992 and September 15. although the specific provision involved therein was only Sec. Rule VI. it may exercise all the rights and privileges of a legitimate labor organization. the Labor Code does not provide for the effects thereof. In Pagpalain Haulers." which does not require that. such proceeding is non-adversarial and merely investigative. It becomes necessary. Golf Club. it cannot possess the requisite personality to file a petition for certification election. The xxxx In the case at bar..

No pronouncement as to costs. not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election. it cannot interfere with. the process by filing a motion to dismiss or an appeal from it.R. 2005 Resolution of the Court of Appeals in CA-G. SP No. . 2000 Decision of the Department of Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED. 58203 are REVERSEDand SET ASIDE. much less oppose. The employer's only right in the proceeding is to be notified or informed thereof. The amendments to the Labor Code and its implementing rules [33] have buttressed that policy even more. WHEREFORE. the employer cannot have any partisan interest therein. the petition is GRANTED. The January 13.choice of their representative is the exclusive concern of the employees. SO ORDERED. 2005 Decision and September 16. The March 15.