G.R. No. 76673 June 22, 1988 PHILIPPINE AIRLINES EMPLOYEES' ASSOCIATION (PALEA), petitioner, vs. HON.

PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, PHILIPPINE AIRLINES NON-MANAGERIAL EMPLOYEES ASSOCIATION (PANOMEA-FUR), and PHILIPPINE AIRLINES, INC., respondents. Juanito R. Carlos, Jr. for private respondent PANOMEA-FUR. Cenon S. Cervantes, Jr. for respondent PAL. Petitioner in this special civil action for certiorari and prohibition, alleges grave abuse of discretion on the part of the Bureau of Labor Relations in issuing the following orders: 1. NCR Med-Arbiter Edgardo dela Cruz' Resolution dated January 13, 1981; 2. BLR Resolution dated November 27,1981 signed by OIC Romeo Young; 3. BLR Order signed by Director CresencianoTrajano dated April 4, 1986; 4. BLR Order signed by Director CresencianoTrajano dated June 26, 1986; and 5. BLR Order dated October 29, 1986 signed by Director PuraFerrer-Calleja in BLR Case No. A-034-81 (NCR-LRD-M-9-361-80). Petitioner prays for the issuance of a restraining order enjoining the respondent BLR Director from proceeding with the certification election in BLR Case No. 034-81 (NCR-LRD-M-9-361-80) and moves to dismiss the petition for certification election filed by Philippine Airlines Non-Managerial Employees Association (PANOMEA-FUR). The records show that prior to the effectivity of the Labor Code on November 1, 1974, there were four collective bargaining agents in the Philippine Airlines, Inc., namely: 1) the Airline Pilots Association of the Philippine (ALPAP), representing pilots; 2) Flight Attendants and Flight Stewards Association of the Philippines, (FASAP), representing flight attendants and stewards; 3) Philippine Airlines Supervisors' Association (PALSA), representing ground supervisory personnel, and 4) petitioner (PALEA) representing ground rank-and-file personnel. Pursuant to Section II, Rule II of the Labor Code, in relation to Articles 212(k) and 246, Labor Code as amended, the continued existence of PALSA was rejected, because a supervisory union could not organize as a labor unit separate from that of the rank-and-file organization. In anticipation of PALSA's dissolution, the Philippine Airlines Personnel Association (PALPA-Legayada) filed on November 19, 1974 a petition for certification election under BLR Case No. 0013. In this case, the BLR Director ruled on November 24,1975 that "all employees with the positions of division heads or above shall be considered "managerial employees" and ineligible to vote, and all others shall be declared rank and file." On April 27,1977, a certification election was held among: (1) PALPA, (2) PALEA, and (3) No Union. PALEA, as the winner in that election, was certified by the BLR as the exclusive bargaining agent of all the rank-and-file employee of the Philippine Airlines, Inc. PALEA and PAL signed a 3-year collective bargaining agreement effective October 1, 1976 up to September 30, 1979. Its life was, by agreement of the parties, extended up to September 30, 1980. Before the expiration of the agreement in September, 1980, the respondent Philippine Airlines Non-Managerial Employees' Association (PANOMEA-FUR) filed a petition for certification election among the "administrative, supervisory, licensed mechanics, technical and confidential employees" of PAL, alleging inter alia that "there is no other union existing in the proposed bargaining unit nor is there a certified collective bargaining agreement which may be a bar to the petition." PALEA, which had an existing collective bargaining agreement with the Management, was not mentioned in the petition, nor notified of the filing of the same. Although PAL had filed its position paper in the said certification election case, the Med-Arbiter issued a resolution on January 13, 1981, granting the petition for a certification election among the administrative, supervisory, licensed mechanics, technical and confidential employees of PAL with the following as the contending parties: P (1) PANOMEA-FUR and (2) No Union. Upon learning of the Med-Arbiters resolution. PALEA appealed to the BLR Director on February 9, 1981 as a compulsory intervenor. The BLR Officer-in-charge affirmed on November 27, 1981 the Med-Arbiter's resolution calling for a certification election. PALEA and PAL filed separate motions for reconsideration of the BLR resolution.

Meanwhile, PAL and PALEA concluded a collective bargaining agreement on May 19, 1981, with a three-year life span from October 1, 1980 to September 30, 1983. It was renewed for another three-year period expiring on September 30, 1986. While PAL and PALEA's motions for reconsideration were pending resolution by the BLR Director, the licensed mechanics whom PANOMEA-FUR sought to represent, filed their own petition for certification election on October 16, 1984 under the name of PAL Licensed/Amalgamated Federation of Labor of the Philippines (PALMA-AFL). PAL and PLEA separately filed an answer/opposition to the petition of PALMA-AFL. PALEA argued that it was the exclusive bargaining agent of the rank-and-file employees of PAL, including the members of PALMA-AFL who are also embraced within the CBA that was concluded between PAL and PALEA. On October 11, 1985, the BLR Director dismissed the petition of the licensed mechanics only (PALMA-AFL), excluding the administrative, supervisory, technical and confidential employees. He ruled that the existing law did not allow the creation of a separate bargaining unit for the licensed mechanics at PAL, because they were considered members of the existing rank-and-file unit represented for collective bargaining purposes by PALEA. However, on April 4, 1986, the BLR Director ordered the holding of a certification election among the administrative, supervisory, licensed mechanics, technical and confidential employees of PAL and denied PAL's and PALEA's motions for reconsideration of the BLR's November 27, 1981 decision. In his Order of June 26, 1986, BLR Director CrescianoTrajano denied PAL's and PALEA's motions for reconsideration. However, finding it necessary to conduct pre-election conferences to delineate the proper composition of the proposed bargaining unit, the BLR on August 15, 1986 temporarily restrained the holding of the certification election. On October 29, 1986, BLR Director Calleja lifted the restraining order and directed the holding of the said election. Hence, this petition for certiorari by PALEA, alleging that the BLR Director erred: 1. in ordering a certification election among PAL's administrative, supervisory, licensed mechanics, technical and confidential employees as a separate bargaining unit distinct from the rank-and-file employees, in violation of specific provisions of the Labor Code as amended, particularly Article 256 thereof; and 2. in not dismissing the petition for certification election filed by respondent PANOMEA-FUR (NCR-LRD-M-9-361-80) for having been rendered moot and academic by supervening factors. Petitioner claims that PALEA is the exclusive bargaining representative of all rank-and-file PAL employees, and that PANOMEA seeks to dismember or fragmentize the already existing unit so that another one may be created. Furthermore, petitioner argues that PANOMEA's petition for a certification election is fatally defective, as it is not supported by the signatures of at least 30% of the bargaining unit composed of 7,000 rank-and-file employees (only 369 signatures were allegedly obtained), contrary to law and national policy. We are not persuaded that the public respondent gravely abused her discretion in issuing the assailed orders. The rule is that factual findings of the Bureau of Labor Relations which are supported by substantial evidence are binding on this Court and must be respected (Asian Design and Manufacturing Corp. vs. Deputy Minister of Labor, 142 SCRA 79). The Bureau of Labor Relations found that the present CBA between PALEA and PAL covers only the rank and file employees but not the licensed mechanics, administrative, supervisory, technical and confidential employees of PAL. The petition failed to prove that PANOMEA's petition lacked the support of 30% of the employees. Employees have a constitutional right to choose their own bargaining representative. The holding of a certification election is a statutory policy that should not be circumvented (George and Peter Lines, Inc. vs. Association of Labor Unions [ALU], 134 SCRA 92). Whenever there is doubt as to whether a particular union represents the majority of the rank-and-file employees, in the absence of a legal impediment, the holding of a certification election is the most democratic method of determining the employees' choice of their bargaining representative. It is the appropriate means whereby controversies and disputes on representation may be laid to rest, by the unequivocal vote of the employees themselves. In lifting the restraining order which her predecessor had issued, and ordering that the certification election proceed, respondent Ferrer-Calleja opened the door for the employees to express their choice. WHEREFORE, the petition is dismissed for lack of merit. SO ORDERED.

G.R. No. 75321 June 20, 1988 ASSOCIATED TRADE UNIONS (ATU), petitioner, vs. HON. CRESENCIO B. TRAJANO, in his capacity as Director of the Bureau of Labor Relations, MOLE, BALIWAG TRANSIT, INC. and TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS)WFTU,respondents. Puerto, Nunez & Associates for petitioner. Tupaz and Associates for respondent Union. Jose C. Espinas collaborating counsel for private respondent. Agapito S. Mendoza for respondent Baliwag Transit, Inc. The Solicitor General for public respondent.

CRUZ .J,: The resolution of this case has been simplified because it has been, in Justice Vicente Abad Santos's felicitous phrase, "overtaken by events." This case arose when on March 25, 1986, the private respondent union (TUPAS) filed with the Malolos labor office of the MOLE a petition for certification election at the Baliwag Transit, Inc. among its rank-and-file workers. 1 Despite opposition from the herein petitioner, Associated Trade Unions (ATU), the petition was granted by the med-arbiter on May 14, 1986, and a certification election was ordered "to determine the exclusive bargaining agent (of the workers) for purposes of collective bargaining with respect to (their) terms and conditions of employment." 2 On appeal, this order was sustained by the respondent Director of Labor Relations in his order dated June 20, 1986, which he affirmed in his order of July 17, 1986, denying the motion for reconsideration. 3 ATU then came to this Court claiming that the said orders are tainted with grave abuse of discretion and so should be reversed. On August 20, 1986, we issued a temporary restraining order that has maintained the status quo among the parties. 4 In support of its petition, ATU claims that the private respondent's petition for certification election is defective because (1) at the time it was filed, it did not contain the signatures of 30% of the workers, to signify their consent to the certification election; and (2) it was not allowed under the contract-bar rule because a new collective bargaining agreement had been entered into by ATU with the company on April 1, 1986. 5 TUPAS for its part, supported by the Solicitor General, contends that the 30% consent requirement has been substantially complied with, the workers' signatures having been subsequently submitted and admitted. As for the contract-bar rule, its position is that the collective bargaining agreement, besides being vitiated by certain procedural defects, was concluded by ATU with the management only on April 1, 1986 after the filing of the petition for certification election on March 25, 1986. 6 This initial sparring was followed by a spirited exchange of views among the parties which insofar as the first issue is concerned has become at best only academic now. The reason is that the 30% consent required under then Section 258 of the Labor Code is no longer in force owing to the amendment of this section by Executive Order No. 111, which became effective on March 4, 1987. As revised by the said executive order, the pertinent articles of the Labor Code now read as follows: Art. 256. Representation issue in organized establishments. In organized establishments, when a petition questioning the majority status of the incumbent bargaining agent is filed before the Ministry within the sixty-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot to ascertain the will of the employees in the appropriate bargaining unit. To have a valid election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the

majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast, a runoff election shall be conducted between the choices receiving the two highest number of votes. Art. 257. Petitions in unorganized establishments . In any establishment where there is no certified bargaining agent, the petition for certification election filed by a legitimate labor organization shall be supported by the written consent of at least twenty (20%) percent of all the employees in the bargaining unit. Upon receipt and verification of such petition, the Med-Arbiter shall automatically order the conduct of a certification election. The applicable provision in the case at bar is Article 256 because Baliwag transit, Inc. is an organized establishment. Under this provision, the petition for certification election need no longer carry the signatures of the 30% of the workers consenting to such petition as originally required under Article 258. The present rule provides that as long as the petition contains the matters 7 required in Section 2, Rule 5, Book V of the Implementing Rules and Regulations, as amended by Section 6, Implementing Rules of E.O. No. 111, the med-arbiter "shall automatically order" an election by secret ballot "to ascertain the will of the employees in the appropriate bargaining unit." The consent requirement is now applied only to unorganized establishments under Article 257, and at that, significantly, has been reduced to only 20%. The petition must also fail on the second issue which is based on the contract-bar rule under Section 3, Rule 5, Book V of the Implementing Rules and Regulations. This rule simply provides that a petition for certification election or a motion for intervention can only be entertained within sixty days prior to the expiry date of an existing collective bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification election during the existence of a collective bargaining agreement except within the freedom period, as it is called, when the said agreement is about to expire. The purpose, obviously, is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good faith and for the stipulated original period. ATU insists that its collective bargaining agreement concluded by it with Baliwag Transit, Inc, on April 1, 1986, should bar the certification election sought by TUPAS as this would disturb the said new agreement. Moreover, the agreement had been ratified on April 3, 1986, by a majority of the workers and is plainly beneficial to them because of the many generous concessions made by the management. 8 Besides pointing out that its petition for certification election was filed within the freedom period and five days before the new collective bargaining agreement was concluded by ATU with Baliwag Transit, Inc. TUPAS contends that the said agreement suffers from certain fatal procedural flaws. Specifically, the CBA was not posted for at least five days in two conspicuous places in the establishment before ratification, to enable the workers to clearly inform themselves of its provisions. Moreover, the CBA submitted to the MOLE did not carry the sworn statement of the union secretary, attested by the union president, that the CBA had been duly posted and ratified, as required by Section 1, Rule 9, Book V of the Implementing Rules and Regulations. These requirements being mandatory, non-compliance therewith rendered the said CBA ineffective. 9 The Court will not rule on the merits and/or defects of the new CBA and shall only consider the fact that it was entered into at a time when the petition for certification election had already been filed by TUPAS and was then pending resolution. The said CBA cannot be deemed permanent, precluding the commencement of negotiations by another union with the management. In the meantime however, so as not to deprive the workers of the benefits of the said agreement, it shall be recognized and given effect on a temporary basis, subject to the results of the certification election. The agreement may be continued in force if ATU is certified as the exclusive bargaining representative of the workers or may be rejected and replaced in the event that TUPAS emerges as the winner. This ruling is consistent with our earlier decisions on interim arrangements of this kind where we declared: ... we are not unmindful that the supplemental collective bargaining contract, entered into in the meanwhile between management and respondent Union contains provisions beneficial to labor. So as not to prejudice the workers involved, it must be made clear that until the conclusion of a new collective bargaining contract entered into by it and whatever labor organization may be chosen after the certification election, the existing labor contract as thus supplemented should be left undisturbed. Its terms call for strict compliance. This mode of assuring that the cause of labor suffers no injury from the struggle between contending labor organization follows the doctrine announced in the recent case of Vassar Industries Employees v. Estrella (L-46562, March 31, 1978). To quote from the opinion. "In the meanwhile, if as contended by private respondent labor union the interim collective bargaining agreement which it engineered and entered into on September 26, 1977 has, much more favorable terms for the workers of private respondent Vassar Industries, then it should continue in full force and effect until the appropriate bargaining representative is chosen and negotiations for a new collective bargaining agreement thereafter concluded." 10 It remains for the Court to reiterate that the certification election is the most democratic forum for the articulation by the workers of their choice of the union that shall act on their behalf in the negotiation of a collective bargaining

agreement with their employer. Exercising their suffrage through the medium of the secret ballot, they can select the exclusive bargaining representative that, emboldened by their confidence and strengthened by their support shall fight for their rights at the conference table. That is how union solidarity is achieved and union power is increased in the free society. Hence, rather than being inhibited and delayed, the certification election should be given every encouragement under the law, that the will of the workers may be discovered and, through their freely chosen representatives, pursued and realized. WHEREFORE, the petition is DENIED. The temporary restraining order of August 20, 1986, is LIFTED. Cost against the petitioner. SO ORDERED.

G.R. No. L-11065

February 12, 1916

THE UNITED STATES, plaintiff-appellee, vs. LOPE K. SANTOS, defendant-appellant. The appellant was convicted in the court below of the publication of a libel, and sentenced to pay a fine of P150 and the costs of the proceedings. The facts as found by the trial judge are substantially undisputed. Defendant and appellant was the editor or director of Ag Mithi, the Tagalog section of El Ideal, a newspaper of general circulation in the Philippine Islands. As such editor, or director, he ordered and procured the publication of an article which is set out at length in the information. This article contains grave charges against the complaining witness, Agustin Martinez; among others, that Martinez is an "estafador" (embezzler); that while president of the municipality of Pagil, Laguna, he collected money from various inhabitants of that town under color if authority of law, and appropriated this money to his own use; that he bribed various persons to give false testimony against municipal officers; and that he is a disturber of public order and stirs up litigation among the people. These charges and aspersions against the official and private character of the complaining witness had previously been embodied in a communication signed by various residents of the town of Pagil, Laguna, and addressed and transmitted by them to His Excellency the Governor-General with a request that they be investigate. This communication was filed in due course in the archive of the Executive Bureau, and the accused before publishing the contents of this communication, took pains to verify the fact that the communication had been submitted and filed. The article in question contained no improper comment on the charges contained in the communication on file in the Executive Bureau, and set forth merely the fact that the editor had received a copy, with a request that it be published, followed by extracts of the charges and the names of the persons who signed the communication. There can be no doubt that the charges published in the article in question tended to impeach the honesty and reputation of the complaining witness, and to expose him to public hatred, contempt and ridicule. On its face it is a malicious defamation constituting the offense of libel defined and penalized in Act No. 277 of the Philippine Commission, unless its publication was privileged, as counsel for appellant contends, on the ground that the original document, from which the charges were taken, was on file in the records of the Government bureau prior to their publication by the appellant. A mere reading of the provisions of sections 7 and 9 the Libel Law (Act No. 277) clearly discloses that the publication of the article under consideration is not privileged under the express terms of that Act; and further that no privilege could be claimed for its publication upon any of those "principles of natural right as well as of public policy too obvious to require any express recognition in the written law," upon which the doctrine of privilege has been developed in the courts of the United States and of England. Counsel for appellant in support of his claim of privilege relies wholly on the privilege which is recognized in the United States with relation to the publication of "public records and documents," and cites in support of his contentions the text of the Cyclopedia of Law under that heading, and the cases cited in support of the text. It is there said that: The publication of public records to which every one has a right of access is privileged.

A report of a bureau officer of an executive department of the government, when incorporated in a printed senate document as part of a committed report, becomes a public document, which every person is entitled to receive, inspect, and circulate; and, if such bureau officer gives or loans to another person such a senate document, he does not incur liability as for a publication of a libel. (De Arnaud vs. Ainsworth, 24 App. Cas. [D. C.]. 167.) (25 Cyc., 411.) The provision of St. 1896, c. 303 declaring that the "record shall at all times be open to public inspection" made it a public record, and that as such the publication of it was privileged. It was not necessary to prove that the hearings before the fire marshall were public. (Conner vs. Standard Pub.Co., 67 N.E., 596; 183 Mass., 474.) But the statement of the doctrine thus announced clearly limits this privilege to the publication of records and documents to which every one has a right of access; and without attempting to discuss or decide to what extent such a privilege should be recognized in this jurisdiction, it is sufficient for the purposes of this opinion to indicate that the cases cited in support of the doctrine in those jurisdictions in which it has been applied, would seem to indicate that the privilege had been strictly limited to cases in which the right of access is secured by law, and in which the purpose and object of the law is to give publicity to the contents of the record or document, in the interest, or for the protection of the public generally. Thus, where the public record of a judgment gives a lien on the real or personal property of the judgment debtor in favor of the judgment creditor, the publication of the record judgment has been held to be privileged. On like principles has been extended to the publication of the contents of a register of protests of commercial paper; and it will readily be seen that the privilege with relation to printed senate documents and firemarshals' reports in the cases cited by counsel rest on similar grounds of public policy. (Searles vs. Scarlett. [1892] 2 Q. B., 56; 56 J. P., 789; 61 L. J. Q. B., 573; 66 L. T. Rep. N. S., 837; 40 Wkly. Rep., 696; Annaly vs. Trade Auxiliary Co., L. R. 26 Ir., 394; Fleming vs. Newton, 1 H. L. Cas., 363; 9 Eng. Reprint, 797; Mcnally vs. Oldham, 16 Ir., C. L., 298; 8 L. T. Rep., N. S., 604; Cosgrave vs. Trade Auxiliary Co., Ir., R. 8 C. L., 349. Compare Reis vs. Perry, 64 L. J. Q. B., 566; 15 Reports, 427; 43 Wkly. Rep., 648.) Manifestly, the principles on which the privilege has been recognized in these cases are wholly inapplicable in support of the privilege claimed by the defendant in the case at bar. The mere filing of the communication addressed to the Governor-General in the records of the office of the Executive Secretary did not convert it into a public document or record to which the law gives every one a right of access. The public at large have no legal rights to demand the privilege of inspecting the contents of the files of the Executive Secretary; and many of the documents of file in his office, far from being public documents or records in that sense, are of the most highly confidential nature. The law makes no provision for the publication of the contents of the files of the Executive Secretary, and indeed there must be many instances when, in the very nature of things, to do so would be highly prejudicial to the interests of the public. The name, fame, and reputation of no man would be safe from unfounded attacks if the mere presentation to the executive authorities of a libelous communication, signed by one of more irresponsible persons, would give the newspapers the right to publish its contents broadcast with impugnity, however false, calumnious, and defamatory they may be. It appearing that the defendant editor was not actuated by express malice in the publication of the libelous article and that he was not even acquainted with the complaining witness, the trial judge properly imposed a comparatively light fine, and, in doing so, he doubtless took into consideration the claim of the defendant that he believed, in good faith, that he had a legal right to publish the contents of any communication of this nature filed in the office of the Executive Secretary. We find no error in the proceedings prejudicial to the rights of the appellant. The judgment appealed from should therefore be affirmed with costs of this instance against him. So ordered.

G.R. No. L-28223

August 30, 1968

MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE NATIONAL RAILWAYS, petitioner, vs. COURT OF INDUSTRIAL RELATIONS and SAMAHAN NG MGA MANGGAGAWA SA CALOOCAN SHOPS,respondents. SisenandoVillaluz for petitioner. Gregorio E. Fajardo for respondent SamahanngmgaManggagawasa Caloocan Shops. REYES, J.B.L., J.: Petition by the "Mechanical Department Labor Union sa PNR" for a review of an order of the Court of Industrial Relations, in its Case No. 1475-MC, directing the holding of a plebiscite election to determine whether the employees at the Caloocan Shops desire the respondent union, "SamahanngmgaManggagawasa Caloocan Shops", to be separated from the Mechanical Department Labor Union, with a view to the former being recognized as a separate bargaining unit. The case began on 13 February 1965 by a petition of the respondent "SamahanngmgaManggagawa, etc." calling attention to the fact that there were three unions in the Caloocan shops of the Philippine National Railways: the "Samahan", the "KapisananngManggagawasa Manila Railroad Company", and the Mechanical Department Labor Union; that no certification election had been held in the last 12 months in the Caloocan shops; that both the "Samahan" and the Mechanical Department Labor Union had submitted different labor demands upon the management for which reason a certification election was needed to determine the proper collective bargaining agency for the Caloocan shop workers. The petition was opposed by the management as well as by the Mechanical Department Labor Union, the latter averring that it had been previously certified in two cases as sole and exclusive bargaining agent of the employees and laborers of the PNR'S mechanical department, and had negotiated two bargaining agreements with management in 1961 and 1963; that before the expiration of the latter, a renewal thereof had been negotiated and the contract remained to be signed; that the "Samahan" had been organized only in 21 January 1965; that the Caloocan shops unit was not established nor separated from the Mechanical Department unit; that the "Samahan" is composed mainly of supervisors who had filed a pending case to be declared non-supervisors; and that the purpose of the petition was to disturb the present smooth working labor management relations.

By an order of 18 August 1967, Judge Arsenio Martinez, after receiving the evidence, made the following findings:.1wph1.t The Court, after a cursory examination of the evidence presented made the following findings: That petitioner union is composed of workers exclusively at the Caloocan shops of the Philippine National Railways charged with the maintenance of rolling stocks for repairs; major repairs of locomotive, engines, etc. are done in the Caloocan shops while minor ones in the Manila sheds; workers in the Caloocan shops do not leave their station unlike Manila shop workers who go out along the routes and lines for repairs; workers both in the Caloocan shops and Manila sheds are exposed to hazards occasioned by the nature of their work; that with respect to wages and salaries of employees, categories under the Job Classification and Evaluation Plan of the company apply to all workers both in the Caloocan Shops and Manila sheds; administration over employees, members of petitioner union as well as oppositor is under the Administrative Division of the company; that from the very nature of their work, members of petitioner union and other workers of the Mechanical Department have been under the coverage of the current collective bargaining agreement which was a result of a certification by this Court of the Mechanical Department Labor union, first in 1960 and later in 1963. Subsequently, when the latter contract expired, negotiations for its renewal were had and at the time of the filing of this petition was already consummated, the only act remaining to be done was to affix the signatures of the parties thereto; that during the pendency of this petition, on June 14, 1965, the aforesaid collective bargaining agreement was signed between the Philippine National Railways and the Mechanical Department Labor Union sa Philippine National Railways (Manila Railroad Company). The main issue involved herein is: Whether or not a new unit should be established, the Caloocan shops, separate and distinct from the rest of the workers under the Mechanical Department now represented by the Mechanical Department Labor Union. The Caloocan Shops, all located at Caloocan City have 360 workers more or less. It is part and parcel of the whole Mechanical Department of the Philippine National Railways. The department is composed of four main divisions or units, namely: Operations, Manila Area and Lines; Locomotive Crew; Motor Car Crew; and the Shops Rolling Stocks Maintenance. (Exhibits "D" and "D-1"). The Locomotive crew and Motor Car Crew, though part of the Mechanical Department, is a separate unit, and is represented by the Union de Maquinistas, Fogoneros Y Motormen. The workers under the other two main units of the departments are represented by the Mechanical Department Labor Union. The workers of the Shops Rolling Stocks Maintenance Division or the Caloocan Shops now seek to be separated from the rest of the workers of the department and to be represented by the "Samahan Ng MgaManggagawasa Caloocan Shops." . There is certainly a community of interest among the workers of the Caloocan Shops. They are grouped in one place. They work under one or same working condition, same working time or schedule and are exposed to same occupational risk. Though evidence on record shows that workers at the Caloocan Shops perform the same nature of work as their counterparts in the Manila Shed, the difference lies in the fact that workers at the Caloocan Shops perform major repairs of locomotives, rolling stocks, engines, etc., while those in the Manila Shed, works on minor repairs. Heavy equipment and machineries are found in the Caloocan Shops. The trial judge then reviewed the collective bargaining history of the Philippine National Railways, as follows: 1wph1.t On several similar instances, this Court allowed the establishment of new and separate bargaining unit in one company, even in one department of the same company, despite the existence of the same facts and circumstances as obtaining in the case at bar. The history of the collective bargaining in the Manila Railroad Company, now the Philippine National Railways shows that originally, there was only one bargaining unit in the company, represented by the Kapisanan Ng Manggagawasa MRR. Under Case No. 237-MC, this Court ordered the establishment of two additional units, the engine crew and the train crew to be represented by the Union de Maquinistas, Fogoneros, Ayudante Y Motormen and Union de Empleados de Trenes, respectively. Then in 1961, under Cases Nos. 491-MC, 494-MC and 507-MC three new separate units were established, namely, the yard crew unit, station employees unit and engineering department employees unit, respectively, after the employees concerned voted in a plebiscite conducted by the court for the separation from existing bargaining units in the company. Then again, under Case No. 763-MC, a new unit, composed of the Mechanical Department employees, was established to be represented by the Mechanical Department Labor Union. Incidentally, the first attempt of the employees of the Mechanical Department to be separated as a unit was dismissed by this Court of Case No. 488-MC.

In the case of the yard crew, station employees and the Engineering Department employees, the Supreme Court sustained the order of this Court in giving the employees concerned the right to vote and decide whether or not they desire to be separate units (See G.R. Nos. L-16292-94, L-16309 and L-16317-18, November, 1965). In view of its findings and the history of "union representation" in the railway company, indicating that bargaining units had been formed through separation of new units from existing ones whenever plebiscites had shown the workers' desire to have their own representatives, and relying on the "Globe doctrine" (Globe Machine & Stamping Co., 3 NLRB 294) applied in Democratic Labor Union vs. Cebu Stevedoring Co., L-10321, 28 February 1958, Judge Martinez held that the employees in the Caloocan Shops should be given a chance to vote on whether their group should be separated from that represented by the Mechanical Department Labor Union, and ordered a plebiscite held for the purpose. The ruling was sustained by the Court en banc; wherefore, the Mechanical Department Labor Union appealed to this Court questioning the applicability under the circumstances of the "Globe doctrine" of considering the will of the employees in determining what union should represent them. Technically, this appeal is premature, since the result of the ordered plebiscite among the workers of the Caloocan shops may be adverse to the formation of a separate unit, in which event, as stated in the appealed order, all questions raised in this case would be rendered moot and academic. Apparently, however, the appellant Mechanical Department Labor Union takes it for granted that the plebiscite would favor separation. We find no grave abuse of discretion in the issuance of the ruling under appeal as would justify our interfering with it. Republic Act No. 875 has primarily entrusted the prosecution of its policies to the Court of Industrial Relations, and, in view of its intimate knowledge concerning the facts and circumstances surrounding the cases brought before it, this Court has repeatedly upheld the exercise of discretion of the Court of Industrial Relations in matters concerning the representation of employee groups (Manila Paper Mills Employees & Workers' Association vs. C.I.R. 104 Phil. 10; Benguet Consolidated vs. Bobok Lumber Jack Association, 103 Phil. 1150). Appellant contends that the application of the "Globe doctrine" is not warranted because the workers of the Caloocan shops do not require different skills from the rest of the workers in the Mechanical Department of the Railway Company. This question is primarily one of facts. The Industrial Court has found that there is a basic difference, in that those in the Caloocan shops not only have a community of interest and working conditions but perform major repairs of railway rolling stock, using heavy equipment and machineries found in said shops, while the others only perform minor repairs. It is easy to understand, therefore, that the workers in the Caloocan shops require special skill in the use of heavy equipment and machinery sufficient to set them apart from the rest of the workers. In addition, the record shows that the collective bargaining agreements negotiated by the appellant union have been in existence for more than two (2) years; hence, such agreements can not constitute a bar to the determination, by proper elections, of a new bargaining representative (PLDT Employees' Union vs. Philippine Long Distance Telephone Co., 51 Off. Gaz., 4519). As to the charge that some of the members of the appellee, "Samahan Ng Manggagawa", are actually supervisors, it appears that the question of the status of such members is still pending final decision; hence, it would not constitute a legal obstacle to the holding of the plebiscite. At any rate, the appellant may later question whether the votes of those ultimately declared to be supervisors should be counted. Whether or not the agreement negotiated by the appellant union with the employer, during the pendency of the original petition in the Court of Industrial Relations, should be considered valid and binding on the workers of the Caloocan shops is a question that should be first passed upon by the Industrial Court. IN VIEW OF THE FOREGOING, the order appealed from is affirmed, with costs against appellant Mechanical Department Labor Union sa Philippine National Railways. G.R. No. L-14656 November 29, 1960

PHILIPPINE LAND-AIR-SEA LABOR UNION (PLASLU), petitioner, vs. COURT OF INDUSTRIAL RELATIONS, ET AL., respondents. Emilio Lumontad for petitioner. Simeon S. Andres for respondent CIR. Severino, Ferrer, Revira and Benigno for respondent AWA. Hilado and Hilado for respondent San Carlos Milling Co. GUTIERREZ DAVID, J.:

This is a petition to review on certiorari an order of the Court of Industrial Relations in Case No. 38 MC-Cebu certifying the Allied Workers' Association of the Philippines, San Carlos Chapter, as the sole collective bargaining representative of the employees of the San Carlos Milling Co., Inc. The record shows that in said Case No. 38 MC-Cebu the Industrial Court on May 25, 1956 ordered the holding of a certification election to determine which of the two contending labor unions therein, herein petitioner Philippine LandAir-Sea Labor Union (PLASLU)or respondent Allied Workers' Association of the Philippines (AWA), shall be the sole collective bargaining agent to the employees of the San Carlos Milling Co. The pertinent portions of the court's order read as follows: Considering the history of bargaining relations in this case where there has only been one bargaining unit, and for purposes of effectuating the policies of the Act, the same should be maintained. In other words, the appropriate bargaining unit is the Employer unit composed of 602 employees including some 200 piece work (pakiao) workers and stevedores appearing in the Employer's payrolls during the milling and off the season minus the alleged laborers and operators of farm tractors who are hired and paid by the sugar cane planters. (Emphasis supplied.) All the foregoing considered, the Court hereby directs the Department of Labor to conduct a certification election in the premises of the San Carlos Milling Company, Ltd. at San Carlos, Negros Occidental for the purpose of determining, under existing rules and regulations on the matter, which of the two (2) contending labor unions herein, the PLASLU or the AWA shall be the sole collective bargaining agent in accordance with the provisions of the Act. The Employer is hereby ordered to submit a list of employees appearing in its payroll during milling season for the year 1955 to the Department of Labor which, together with the "Exhibit X-Court" now part of the records of this case shall be used as the list of eligible voters minus employees who are performing functions of supervisors and security guards who are excluded from participating in said election. (Emphasis supplied.) SO ORDERED. Prior to the holding of the election, respondent AWA filed an urgent motion to exclude 144 employees from participating in the election. The motion, however, was denied, the Industrial Court holding that the workers sought to be excluded were eligible to vote since they were actual employees of good standing of the respondent company during the milling season of 1955 and were included in the company's payroll as of that date. On September 21, 1956, the certification election was held in the premises of the San Carlos Milling Co., PLASLU receiving 88 votes while AWA garnered 149, with 390 ballots recorded as challenged, 242 of them by the petitioner PLASLU and 148 by the respondent AWA filed with the Industrial Court a petition contesting the election on the ground of the ineligibility of the voters cast the 148 ballots is challenged by PLASLU were cast by legitimate employee of the company, as they were the votes of "piece work (pakiao) workers and stevedores appearing in the employer's payroll during the milling and off-season" of 1955. PLSLU, on the other hand, in an urgent motion filed on October 4, 1956, questioned the validity of the 242 ballots cast by stevedores and piece workers. The motion was opposed by AWA on the ground that as a protest of the election it was filed late. The Industrial Court, however, considered the same as an answer to AWA'S petition, and on September 4, 1957, after hearing the arguments of the parties, ordered that all the 390 challenged ballots were opened. After the canvass, 148 votes challenged by AWA were counted in favor of PLASLU. Of the 242 votes challenged by PLASLU, 3 were counted in its favor, 228 credited in favor of AWA, and 11 declared either for no union or spoiled ballots. Adding the votes to the results of the certification election, the final count showed that respondent AWA garnered a total of 377 votes as against 239 for PLASLU. Accordingly, said respondent was certified by the Industrial Court in its order dated March 12, 1958 as the sole collective bargaining agent of the employees of the San Carlos Milling Co. As its motion for reconsideration of the order was denied by the court en banc with Judge Feliciano Tabigne dissenting -- the petitioner PLASLU filed the present petition for review, contending that Industrial Court erred in not excluding the 242 votes challenged by it from the total number of votes credited to respondent AWA. We find petitioner's contention to be meritorious. In order of May 25, 1956 authorizing the certification election, the trial judge of the Industrial Court directed the "list of employees appearing in its payroll during milling season for the year 1955 ... together with the Exhibit "X-Court" now part of the records of this case shall be used as the list of eligible voters minus employees who are performing functions of supervisors and security guards who are excluded from participating in said election." It being undisputed that the challenged votes were cast by casual employees consisting of stevedores and piece workers who as stated by Judge Tabigne in his dissent "were not included in the list of employees appearing in the payroll of the company during the milling season for the year 1955 nor did they appear in the Exhibit "X-Court" which formed portion of the list of personnel allowed to vote in this certification election", the said challenged votes should have been excluded. Citing that the appropriate bargaining unit is the employer's unit composed of 602 employees, including the piece workers and stevedores whose votes were challenged by PLASLU, the respondent AWA argues that the challenged

votes were cast by employees eligible to vote. It will be noted, however, that these employees whose votes were challenged were hired on temporary or casual basis and had work of a different nature from those of the laborers permitted to vote in the certification election. In the case of Democratic Labor Union vs. Cebu Stevedoring Co., Inc., et al. (G.R. No. L-10321, February 28, 1958) this Court had occasion to rule that in the determination of the proper constituency of a collective bargaining unit, certain factors must be considered, among them, the employment status of the employees to be affected, that is to say, the positions and categories of work to which they belong, and the unity of the employees' interest. And this is so because the basic test of a bargaining unit's acceptability is whether it will best assure to all employees is whether it will be assure to all employees the exercise of their collective bargaining rights. (See also Alhambra Cigar & Cigarette Manufacturing Co. vs. Alhambra Employee's Association, 107 Phil., 23.) It appearing that the 242 stevedores and piece workers, whose votes have been challenged, were employed on casual or day to day basis and have no reasonable basis for continued or renewed employment for any appreciable substantial time not to mention the nature of work they perform they cannot be considered to have such mutuality of interest as to justify their inclusion in a bargaining unit composed of permanent or regular employees. There is nothing to the contention that the order complained of is merely complementary to the order of the Industrial Court dated September 4, 1957, which has become final and executory the same not having been appealed. It will be observed that the said order of September 4, 1957, merely ordered the opening and canvassing of the challenged ballots. Any appeal taken from said order would therefore have been premature. Disregarding the votes cast by stevedores and piece workers which were counted in favor of the respondent AWA, the final results of the certification election show that the petitioner PLASLU garnered a majority of the votes cast by eligible voters. Consequently, said petitioner should be certified as the sole collective bargaining representative of the employees of the San Carlos Milling Co. Wherefore, the order complained of is reversed and the petitioner PLASLU is hereby certified as the collective bargaining agent of the employees of the San Carlos Milling Company. Without costs.

G.R. No. 110399 August 15, 1997 SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President,petitioners, vs. HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION, respondents.

ROMERO, J.: This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the Order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91 1 entitled "In Re: Petition for Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt Union, Petitioner." The Order excluded the employees under supervisory levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the certification election. The antecedent facts are undisputed: On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Direct Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis. On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit. On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiter's error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature. On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent company's Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit. Upon petitioner-union's motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis. On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings. On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC 2 case. Said Order reads in part: . . . Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining. In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above court's ruling. Consequently, they are not allowed to participate in the certification election. WHEREFORE, the Motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the socalled exempt employees are not allowed to join the proposed bargaining unit and are therefore excluded from those who could participate in the certification election. 3

Hence this petition. For resolution in this case are the following issues: 1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union. 2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit. On the first issue, this Court rules that said employees do not fall within the term "confidential employees" who may be prohibited from joining a union. There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245 4 of the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not allowed membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not. Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. 5 The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. 6 The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the ''confidential employee rule." The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests. 7 "Management should not be required to handle labor relations matters through employees who are represented by the union with which the company is required to deal and who in the normal performance of their duties may obtain advance information of the company's position with regard to contract negotiations, the disposition of grievances, or other labor relations matters." 8 There have been precedents in this regards, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez, 9 the Court held that "if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also become company-dominated with the presence of managerial employees in Union membership." The same rationale was applied to confidential employees in "Golden Farms, Inc. v. Ferrer-Calleja" 10 and in the more recent case of "Philips Industrial Development, Inc. v. NLRC" 11 which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to them. 12 An important element of the "confidential employee rule" is the employee's need to use labor relations information. Thus, in determining the confidentiality of certain employees, a key question frequently considered is the employee's necessary access to confidential labor relations information. 13 It is the contention of respondent corporation that Supervisor employees 3 and 4 and the exempt employees come within the meaning of the term "confidential employees" primarily because they answered in the affirmative when asked "Do you handle confidential data or documents?" in the Position Questionnaires submitted by the Union. 14In the same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to "labor relations." 15 Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee. 16 "If access to confidential labor relations information is to be a factor in the determination of an employee's confidential status, such information must relate to the employer's labor relations policies. Thus, an employee of a labor union, or of a management association, must have access to confidential labor relations information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not cause an employee to be excluded from the bargaining unit

representing employees of the union or association." 17 "Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information 18 or technical trade secrets, will not render an employee a confidential employee." 19 Herein listed are the functions of supervisors 3 and higher: 1. To undertake decisions to discontinue/temporarily stop shift operations when situations require. 2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products. 3. To administer efficient system of evaluation of products in the outlets. 4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials. 5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant. 20 It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the employer's internal business operations. As held in Westinghouse Electric Corporation v.National Labor Relations Board, 21 "an employee may not be excluded from appropriate bargaining unit merely because he has access to confidential information concerning employer's internal business operations and which is not related to the field of labor relations." It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to "all" workers the right to self-organization. Hence, confidential employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right to bargain collectively through representatives of their choosing. 22 In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle "confidential data" as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. 23 In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out. It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao, Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, oneunion policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests. This Court finds the contention of the petitioner meritorious. An appropriate bargaining unit may be defined as "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." 24 A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining. 25 It is readily seen that the employees in the instant case have "community or mutuality of interests," which is the standard in determining the proper constituency of a collective bargaining unit. 26 It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different

plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities. In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the mandate of the Constitution. 27 The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v.Calleja-Ferrer where all non-academic rank and file employee of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative. WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the Med-Arbiter on December 19, 1990 is REINSTATED under which a certification election among the supervisors (level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.SO ORDERED. G.R. No. 96189 July 14, 1992 UNIVERSITY OF THE PHILIPPINES, petitioner, vsHON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, Department of Labor and Employment, and THE ALL U.P. WORKERS' UNION, represented by its President, Rosario del Rosario,respondent. In this special civil action of certiorari the University of the Philippines seeks the nullification of the Order dated October 30, 1990 of Director PuraFerrer-Calleja of the Bureau of Labor Relations holding that "professors, associate professors and assistant professors (of the University of the Philippines) are . .rank-and-file employees . . ;" consequently, they should, together with the so-called non-academic, non-teaching, and all other employees of the University, be represented by only one labor organization. 1 The University is joined in this undertaking by the Solicitor General who "has taken a position not contrary to that of petitioner and, in fact, has manifested . .that he is not opposing the petition . . ." 2 The case 3 was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990 by a registered labor union, the "Organization of Non-Academic Personnel of UP" (ONAPUP). 4 Claiming to have a membership of 3,236 members comprising more than 33% of the 9,617 persons constituting the non-academic personnel of UP-Diliman, Los Baos, Manila, and Visayas, it sought the holding of a certification election among all said non-academic employees of the University of the Philippines. At a conference thereafter held on March 22, 1990 in the Bureau, the University stated that it had no objection to the election. On April 18, 1990, another registered labor union, the "All UP Workers' Union," 5 filed a comment, as intervenor in the certification election proceeding. Alleging that its membership covers both academic and non-academic personnel, and that it aims to unite all UP rank-and-file employees in one union, it declared its assent to the holding of the election provided the appropriate organizational unit was first clearly defined. It observed in this connection that the Research, Extension and Professional Staff (REPS), who are academic non-teaching personnel, should not be deemed part of the organizational unit. For its part, the University, through its General Counsel, 6 made of record its view that there should be two (2) unions: one for academic, the other for non-academic or administrative, personnel considering the dichotomy of interests, conditions and rules governing these employee groups. Director Calleja ruled on the matter on August 7, 1990. 7 She declared that "the appropriate organizational unit . .should embrace all the regular rank-and-file employees, teaching and non-teaching, of the University of the Philippines, including all its branches" and that there was no sufficient evidence "to justify the grouping of the nonacademic or administrative personnel into an organization unit apart and distinct from that of the academic or teaching personnel." Director Calleja adverted to Section 9 of Executive Order No. 180, viz.: Sec. 9. The appropriate organizational unit shall be the employer unit consisting of rank-and-file employees, unless circumstances otherwise require.

and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC. 2, Resolution of Public Sector Labor Management Council dated May 14, 1989, viz.: For purposes of registration, an appropriate organizational unit may refer to: d. State universities or colleges, government-owned or controlled corporations with original charters. She went on to say that the general intent of EO 180 was "not to fragmentize the employer unit, as "can be gleaned from the definition of the term "accredited employees' organization," which refers to: . . a registered organization of the rank-and-file employees as defined in these rules recognized to negotiate for the employees in an organizational unit headed by an officer with sufficient authority to bind the agency, such as . . . . . . state colleges and universities. The Director thus commanded that a certification election be "conducted among rank-and-file employees, teaching and non-teaching" in all four autonomous campuses of the UP, and that management appear and bring copies of the corresponding payrolls for January, June, and July, 1990 at the "usual pre-election conference . . ." At the pre-election conference held on March 22, 1990 at the Labor Organizational Division of the DOLE, 8 the University sought further clarification of the coverage of the term, "rank-and-file" personnel, asserting that not every employee could properly be embraced within both teaching and non-teaching categories since there are those whose positions are in truth managerial and policy-determining, and hence, excluded by law. At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking the exclusion from the organizational unit of those employees holding supervisory positions among non-academic personnel, and those in teaching staff with the rank of Assistant Professor or higher, submitting the following as grounds therefor: 1) Certain "high-level employees" with policy-making, managerial, or confidential functions, are ineligible to join rankand-file employee organizations under Section 3, EO 180: Sec. 3. High-level employees whose functions are normally considered as policy-making or managerial or whose duties are of a highly confidential nature shall not be eligible to join the organization of rankand file government employees; 2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank-and file: just as there are those occupying managerial positions within the non-teaching roster, there is also a dichotomy between various levels of the teaching or academic staff; 3) Among the non-teaching employees composed of Administrative Staff and Research personnel, only those holding positions below Grade 18 should be regarded as rank-and-file, considering that those holding higher grade positions, like Chiefs of Sections, perform supervisory functions including that of effectively recommending termination of appointments or initiating appointments and promotions; and 4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only those holding appointments at the instructor level may be so considered, because those holding appointments from Assistant Professor to Associate Professor to full Professor take part, as members of the University Council, a policy-making body, in the initiation of policies and rules with respect to faculty tenure and promotion. 9 The ONAPUP quite categorically made of record its position; that it was not opposing the University's proferred classification of rank-and file employees. On the other hand, the "All UP Workers' Union" opposed the University's view, in a Position Paper presented by it under date of October 18, 1990. Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the "sole issue" of "whether or not professors, associate professors and assistant professors are included in the definition of high-level employee(s)" in light of Rule I, Section (1) of the Implementing Guidelines of Executive Order No. 180, defining "high level employee" as follows: 1. High Level Employee is one whose functions are normally considered policy determining, managerial or one whose duties are highly confidential in nature. A managerial function refers to the exercise of powers such as: 1. To effectively recommend such managerial actions;

2. To formulate or execute management policies and decisions; or 3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees. The Director adjudged that said teachers are rank-and-file employees "qualified to join unions and vote in certification elections." According to her A careful perusal of the University Code . . shows that the policy-making powers of the Council are limited to academic matters, namely, prescribing courses of study and rules of discipline, fixing student admission and graduation requirements, recommending to the Board of Regents the conferment of degrees, and disciplinary power over students. The policy-determining functions contemplated in the definition of a high-level employee pertain to managerial, executive, or organization policies, such as hiring, firing, and disciplining of employees, salaries, teaching/working hours, other monetary and non-monetary benefits, and other terms and conditions of employment. They are the usual issues in collective bargaining negotiations so that whoever wields these powers would be placed in a situation of conflicting interests if he were allowed to join the union of rank-andfile employees. The University seasonably moved for reconsideration, seeking to make the following points, to wit: 1) UP professors do "wield the most potent managerial powers: the power to rule on tenure, on the creation of new programs and new jobs, and conversely, the abolition of old programs and the attendant re-assignment of employees. 2) To say that the Council is "limited to (acting on) academic matters" is error, since academic decisions "are the most important decisions made in a University . . (being, as it were) the heart, the core of the University as a workplace. 3) Considering that the law regards as a "high level" employee, one who performs either policy-determining, managerial, or confidential functions, the Director erred in applying only the "managerial functions" test, ignoring the "policy-determining functions" test. 4) The Director's interpretation of the law would lead to absurd results, e.g.: "an administrative officer of the College of Law is a high level employee, while a full Professor who has published several treatises and who has distinguished himself in argument before the Supreme Court is a mere rank-and-file employee. A dormitory manager is classified as a high level employee, while a full Professor or Political Science with a Ph. D. and several Honorary doctorates is classified as rank-and-file." 10 The motion for reconsideration was denied by Director Calleja, by Order dated November 20, 1990. The University would now have this Court declare void the Director's Order of October 30, 1990 as well as that of November 20, 1990. 11 A temporary restraining order was issued by the Court, by Resolution dated December 5, 1990 conformably to the University's application therefor. Two issues arise from these undisputed facts. One is whether or not professors, associate professors and assistant professors are "high-level employees" "whose functions are normally considered policy determining, managerial or . .highly confidential in nature." The other is whether or not, they, and other employees performing academic functions, 12 should comprise a collective bargaining unit distinct and different from that consisting of the nonacademic employees of the University, 13 considering the dichotomy of interests, conditions and rules existing between them. As regards the first issue, the Court is satisfied that it has been correctly resolved by the respondent Director of Bureau Relations. In light of Executive Order No. 180 and its implementing rules, as well as the University's charter and relevant regulations, the professors, associate professors and assistant professors (hereafter simply referred to as professors) cannot be considered as exercising such managerial or highly confidential functions as would justify their being categorized as "high-level employees" of the institution. The Academic Personnel Committees, through which the professors supposedly exercise managerial functions, were constituted "in order to foster greater involvement of the faculty and other academic personnel in appointments, promotions, and other personnel matters that directly affect them." 14 Academic Personnel Committees at the departmental and college levels were organized "consistent with, and demonstrative of the very idea of consulting the faculty and other academic personnel on matters directly affecting them" and to allow "flexibility in the determination of guidelines peculiar to a particular department or college." 15

Personnel actions affecting the faculty and other academic personnel should, however, "be considered under uniform guidelines and consistent with the Resolution of the Board (of Regents) adopted during its 789th Meeting (11-26-69) creating the University Academic Personnel Board." 16 Thus, the Departmental Academic Personnel Committee is given the function of "assist(ing) in the review of the recommendations initiated by the Department Chairman with regard to recruitment, selection, performance evaluation, tenure and staff development, in accordance with the general guidelines formulated by the University Academic Personnel Board and the implementing details laid down by the College Academic Personnel Committee;" 17 while the College Academic Personnel Committee is entrusted with the following functions: 18 1. Assist the Dean in setting up the details for the implementation of policies, rules, standards or general guidelines as formulated by the University Academic Personnel Board; 2. Review the recommendation submitted by the DAPCs with regard to recruitment, selection, performance evaluation, tenure, staff development, and promotion of the faculty and other academic personnel of the College; 3. Establish departmental priorities in the allocation of available funds for promotion; 4. Act on cases of disagreement between the Chairman and the members of the DAPC particularly on personnel matters covered by this Order; 5. Act on complaints and/or protests against personnel actions made by the Department Chairman and/or the DAPC. The University Academic Personnel Board, on the other hand, performs the following functions: 1. Assist the Chancellor in the review of the recommendations of the CAPC'S. 2. Act on cases of disagreement between the Dean and the CAPC. 3. Formulate policies, rules, and standards with respect to the selection, compensation, and promotion of members of the academic staff. 4. Assist the Chancellor in the review of recommendations on academic promotions and on other matters affecting faculty status and welfare. From the foregoing, it is evident that it is the University Academic Personnel Committee, composed of deans, the assistant for academic affairs and the chief of personnel, which formulates the policies, rules and standards respecting selection, compensation and promotion of members of the academic staff. The departmental and college academic personnel committees' functions are purely recommendatory in nature, subject to review and evaluation by the University Academic Personnel Board. In Franklin Baker Company of the Philippines vs. Trajano ,20 this Court reiterated the principle laid down in National Merchandising Corp. vs. Court of Industrial Relations , 21that the power to recommend, in order to qualify an employee as a supervisor or managerial employee "must not only be effective but the exercise of such authority should not be merely of a routinary or clerical nature but should require the use of independent judgment." Where such recommendatory powers, as in the case at bar, are subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, are not effective and not an exercise of independent judgment as required by law. Significantly, the personnel actions that may be recommended by the departmental and college academic personnel committees must conform with the general guidelines drawn up by the university personnel academic committee. This being the case, the members of the departmental and college academic personnel committees are not unlike the chiefs of divisions and sections of the National Waterworks and Sewerage Authority whom this Court considered as rank-and-file employees in National Waterworks & Sewerage Authority vs. NWSA Consolidated Unions , 22 because "given ready policies to execute and standard practices to observe for their execution, . . . they have little freedom of action, as their main function is merely to carry out the company's orders, plans and policies." The power or prerogative pertaining to a high-level employee "to effectively recommend such managerial actions, to formulate or execute management policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees" 23 is exercised to a certain degree by the university academic personnel board/committees and ultimately by the Board of Regents in accordance with Section 6 of the University Charter, 24 thus:
19

(e) To appoint, on the recommendation of the President of the University, professors, instructors, lecturers and other employees of the University; to fix their compensation, hours of service, and such other duties and conditions as it may deem proper; to grant them in its discretion leave of absence under such regulations as it may promulgate, any other provision of law to the contrary notwithstanding, and to remove them for cause after investigation and hearing shall have been had. Another factor that militates against petitioner's espousal of managerial employment status for all its professors through membership in the departmental and college academic personnel committees is that not all professors are members thereof. Membership and the number of members in the committees are provided as follows: 25 Sec. 2.Membership in Committees. Membership in committees may be made either through appointment, election, or by some other means as may be determined by the faculty and other academic personnel of a particular department or college. Sec. 3.Number of Members. In addition to the Chairman, in the case of a department, and the Dean in the case of a college, there shall be such number of members representing the faculty and academic personnel as will afford a fairly representative, deliberative and manageable group that can handle evaluation of personnel actions. Neither can membership in the University Council elevate the professors to the status of high-level employees. Section 6 (f) and 9 of the UP Charter respectively provide: 26 Sec. 6. The Board of Regents shall have the following powers and duties . . . ; (f) To approve the courses of study and rules of discipline drawn up by the University Council as hereinafter provided; . . . Sec. 9. There shall be a University Council consisting of the President of the University and of all instructors in the university holding the rank of professor, associate professor, or assistant professor. The Council shall have the power to prescribe the courses of study and rules of discipline, subject to the approval of the Board of Regents. It shall fix the requirements for admission to any college of the university, as well as for graduation and the receiving of a degree. The Council alone shall have the power to recommend students or others to be recipients of degrees. Through its president or committees, it shall have disciplinary power over the students within the limits prescribed by the rules of discipline approved by the Board of Regents . The powers and duties of the President of the University, in addition to those specifically provided in this Act shall be those usually pertaining to the office of president of a university. It is readily apparent that the policy-determining functions of the University Council are subject to review, evaluation and final approval by the Board of Regents. The Council's power of discipline is likewise circumscribed by the limits imposed by the Board of Regents. What has been said about the recommendatory powers of the departmental and college academic personnel committees applies with equal force to the alleged policy-determining functions of the University Council. Even assuming arguendo that UP professors discharge policy-determining functions through the University Council, still such exercise would not qualify them as high-level employees within the context of E.O. 180. As correctly observed by private respondent, "Executive Order No. 180 is a law concerning public sector unionism. It must therefore be construed within that context. Within that context, the University of the Philippines represents the government as an employer. 'Policy-determining' refers to policy-determination in university mattes that affect those same matters that may be the subject of negotiation between public sector management and labor. The reason why 'policy-determining' has been laid down as a test in segregating rank-and-file from management is to ensure that those who lay down policies in areas that are still negotiable in public sector collective bargaining do not themselves become part of those employees who seek to change these policies for their collective welfare." 27 The policy-determining functions of the University Council refer to academic matters, i.e. those governing the relationship between the University and its students, and not the University as an employer and the professors as employees. It is thus evident that no conflict of interest results in the professors being members of the University Council and being classified as rank-and-file employees. Be that as it may, does it follow, as public respondent would propose, that all rank-and-file employees of the university are to be organized into a single collective bargaining unit? A "bargaining unit" has been defined as a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the

employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. 28 Our labor laws do not however provide the criteria for determining the proper collective bargaining unit. Section 12 of the old law, Republic Act No. 875 otherwise known as the Industrial Peace Act, simply reads as follows: 29 Sec. 12.Exclusive Collective Bargaining Representation for Labor Organizations . The labor organization designated or selected for the purpose of collective bargaining by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of all the employees in such unit for the purpose of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment; Provided, That any individual employee or group of employees shall have the right at any time to present grievances to their employer. Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the Labor Code with minor changes, no guidelines were included in said Code for determination of an appropriate bargaining unit in a given case. 30 Thus, apart from the single descriptive word "appropriate," no specific guide for determining the proper collective bargaining unit can be found in the statutes. Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section 9, is that "(t)he appropriate organizational unit shall be the employer unit consisting of rank-and-file employees, unless circumstances otherwise require." Case law fortunately furnishes some guidelines. When first confronted with the task of determining the proper collective bargaining unit in a particular controversy, the Court had perforce to rely on American jurisprudence. In Democratic Labor Association vs. Cebu Stevedoring Company, Inc., decided on February 28, 1958, 31 the Court observed that "the issue of how to determine the proper collective bargaining unit and what unit would be appropriate to be the collective bargaining agency" . . . "is novel in this jurisdiction; however, American precedents on the matter abound . . (to which resort may be had) considering that our present Magna Carta has been patterned after the American law on the subject." Said the Court: . . . Under these precedents, there are various factors which must be satisfied and considered in determining the proper constituency of a bargaining unit. No one particular factor is itself decisive of the determination. The weight accorded to any particular factor varies in accordance with the particular question or questions that may arise in a given case. What are these factors? Rothenberg mentions a good number, but the most pertinent to our case are: (1) will of the employees (Globe Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal probationary employees. . . . An enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the 10th Annual Report of the National Labor Relations Board wherein it is emphasized that the factors which said board may consider and weigh in fixing appropriate units are: the history, extent and type of organization of employees; the history of their collective bargaining; the history, extent and type of organization of employees in other plants of the same employer, or other employers in the same industry; the skill, wages, work, and working conditions of the employees; the desires of the employees; the eligibility of the employees for membership in the union or unions involved; and the relationship between the unit or units proposed and the employer's organization, management, and operation. . . . . . In said report, it is likewise emphasized that the basic test in determining the appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . . . The Court further explained that "(t)he test of the grouping is community or mutuality of interests. And this is so because 'the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights' (Rothenberg on Labor Relations, 490)." Hence, in that case, the Court upheld the trial court's conclusion that two separate bargaining units should be formed, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Since then, the "community or mutuality of interests" test has provided the standard in determining the proper constituency of a collective bargaining unit. In Alhambra Cigar & Cigarette Manufacturing Company, et al. vs. Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting that the employees in the administrative, sales and dispensary departments of a cigar and cigarette manufacturing firm perform work which have nothing to do

with production and maintenance, unlike those in the raw lead (malalasi), cigar, cigarette, packing (precintera) and engineering and garage departments, authorized the formation of the former set of employees into a separate collective bargaining unit. The ruling in the Democratic Labor Association case, supra, was reiterated in Philippine Land-Air-Sea Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees were barred from joining the union of the permanent and regular employees. Applying the same "community or mutuality of interests" test, but resulting in the formation of only one collective bargaining units is the case of National Association of Free Trade Unions vs. Mainit Lumber Development Company Workers Union-United Lumber and General Workers of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598. In said case, the Court ordered the formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the Logging Division in Zapanta Valley, Kitcharao, Agusan Norte of the Mainit Lumber Development Company. The Court reasoned: Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging Division. Their functions mesh with one another. One group needs the other in the same way that the company needs them both. There may be difference as to the nature of their individual assignments but the distinctions are not enough to warrant the formation of a separate bargaining unit. In the case at bar, the University employees may, as already suggested, quite easily be categorized into two general classes: one, the group composed of employees whose functions are non-academic, i.e., janitors, messengers, typists, clerks, receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics, plumbers; 32 and two, the group made up of those performing academic functions, i.e., full professors, associate professors, assistant professors, instructors who may be judges or government executives and research, extension and professorial staff. 33 Not much reflection is needed to perceive that the community or mutuality of interests which justifies the formation of a single collective bargaining unit is wanting between the academic and non-academic personnel of the university. It would seem obvious that teachers would find very little in common with the University clerks and other non-academic employees as regards responsibilities and functions, working conditions, compensation rates, social life and interests, skills and intellectual pursuits, cultural activities, etc. On the contrary, the dichotomy of interests, the dissimilarity in the nature of the work and duties as well as in the compensation and working conditions of the academic and nonacademic personnel dictate the separation of these two categories of employees for purposes of collective bargaining. The formation of two separate bargaining units, the first consisting of the rank-and-file non-academic personnel, and the second, of the rank-and-file academic employees, is the set-up that will best assure to all the employees the exercise of their collective bargaining rights. These special circumstances, i.e., the dichotomy of interests and concerns as well as the dissimilarity in the nature and conditions of work, wages and compensation between the academic and non-academic personnel, bring the case at bar within the exception contemplated in Section 9 of Executive Order No. 180. It was grave abuse of discretion on the part of the Labor Relations Director to have ruled otherwise, ignoring plain and patent realities. WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it declares the professors, associate professors and assistant professors of the University of the Philippines as rank-and-file employees. The Order of August 7, 1990 is MODIFIED in the sense that the non-academic rank-and-file employees of the University of the Philippines shall constitute a bargaining unit to the exclusion of the academic employees of the institution i.e., full professors, associate professors, assistant professors, instructors, and the research, extension and professorial staff, who may, if so minded, organize themselves into a separate collective bargaining unit; and that, therefore, only said non-academic rank-and-file personnel of the University of the Philippines in Diliman, Manila, Los Baos and the Visayas are to participate in the certification election. SO ORDERED.

G.R. No. 85343 June 28, 1989 PHILTRANCO SERVICE ENTERPRISES, petitioner, vs. BUREAU OF LABOR RELATIONS and KAPISANAN NG MGA KAWANI, ASSISTANT, MANGGAGAWA AT KONPIDENSIYAL SA PHILTRANCO, respondents. Bengzon, Zarraga, Narciso, Cudala, Pecson&Bengson for petitioner. Lily S. Dayaon for KASAMA KO . In this petition for certiorari, the petitioner assails the order of the Bureau of Labor Relations (BLR) dated September 5, 1988. The dispositive portion of the order reads: WHEREFORE, premises considered, the Order of the Med-Arbiter dated 4 April 1988 is hereby set aside and vacated and a new one entered ordering the conduct of a certification election among regular rank-and-file professional, technical, administrative and confidential employees of respondent company, with the following choices: 1. KapisananngmgaKawani, Assistant Manggagawa at KonpidensyalsaPhiltranco (KASAMA KO) 2. No Union. Let, therefore the records of the case be remanded to the Office of origin for the immediate conduct of the election. SO ORDERED. (Rollo, p. 33) The antecedent facts are as follows: Petitioner Philtranco Service Enterprises, Inc. is a land transportation company engaged in the business of carrying passengers and freight. The company employees included field workers consisting of drivers, conductors, coach drivers, coach stewards and mechanics and office employees like clerks, cashiers, programmers, telephone operators, etc. On February 15, 1988, the KapisananngmgaKawani, Assistant, Manggagawa at KonpidensyalsaPhiltranco (KASAMA KO), a registered labor organization filed a petition for certification election with the Department of Labor and Employment, alleging among others that: 3. Petitioner desires to represent all professional, technical, administrative, and confidential employees personnel of respondent at its establishments in Luzon, Visayas and Mindanao for purposes of collective bargaining; 4. The aforementioned employees were always expressly excluded from participating in the certification election conducted among the rank and file employees (drivers, conductors, coach drivers, coach stewards, and mechanics) of respondent and are excluded from the bargaining unit covered by the CBA between respondent and its rank and file employees. In addition, there exist substantial differences in the terms and conditions of employment between the above-mentioned employees, hence, the former are covered by another appropriate bargaining unit which is separate and distinct from that of the rank and file employees of respondent and; which has been recognized by the Bureau of Labor Relations and upheld by the Honorable Supreme Court. Attached hereto as Annex 'A' and Annex 'B' are copies of the decision of the BLR and the Supreme Court in support thereof; 6. The petition is supported by the signatures of more than twenty percent (20%) of all covered employees as provided for by law and which shall be presented during the initial hearing; 8. There has been no Consent Election or Certification Election held and conducted by this Honorable Office for the past three (3) years prior to the filing of this petition in the bargaining unit petitioner sought to represent, the last Certification Election having been held last November 27, 1984. Attached hereto as Annex "C" is a copy of the Order issued by this Honorable Office relative to the result of the last certification election. (Rollo, pp. 4-5)

On February 24, 1988, the National Mines and Allied Workers Union (NAMAWU-MIF) filed a motion for intervention alleging that it is the bargaining agent of the workers at Philtranco and as such it has a substantial interest in the outcome of the petition. On February 26, 1988, Arbiter PaternoAdap called the parties to a hearing. Philtranco and NAMAWU were ordered to submit their respective position papers and KASAMA KO was given the opportunity to submit a reply. On April 4, 1988, a resolution was rendered with the following dispositive portion: WHEREFORE, in the light of the foregoing premises, this petition is, as it is hereby ordered DISMISSED. If there are still individual members of the herein petitioner eligible to join a labor organization, it is hereby directed that all should be included/incorporated in the existing bargaining unit. Parties are further directed/enjoined to device a mechanism for the implementation of the matter herein treated. (Rollo, pp. 29-30) KASAMA KO appealed to the Bureau of Labor Relations (BLR) On September 5, 1988 the BLR reversed the resolution of the Med-Arbiter. A motion for reconsideration was denied in an order dated October 10, 1988. As prayed for by the petitioner, a temporary restraining order was issued by this Court on November 7, 1988 restraining the BLR from enforcing and/or carrying out the decision dated September 5, 1988 and the order dated October 10, 1988. The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the rank and file groups. Thus, Art. 212 (k) of the Code provides: (k) Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered rank and file employees for purposes of this Book. In implementation of the aforequoted provision of the law, Section 11 of Rule II, Book V of the Omnibus Rules implementing the Labor Code did away with existing supervisors' unions classifying the members either as managerial or rank and file employees depending on the work they perform. If they discharge managerial functions, supervisors are prohibited from forming or joining any labor organization. If they do not perform managerial work, they may join the rank and file union and if none exists, they may form one such rank and file organization. This rule was emphasized in the case of Bulletin Publishing Corp. v. Sanchez, (144 SCRA 628 [1986]). It, therefore, follows that the members of the KASAMA KO who are professional, technical, administrative and confidential personnel of PHILTRANCO performing managerial functions are not qualified to join, much less form a union. This rationalizes the exclusion of managers and confidential employees exercising managerial functions from the ambit of the collective bargaining unit. As correctly observed by Med-Arbiter Adap: ... managerial and confidential employees were expressly excluded within the operational ambit of the bargaining unit for the simple reason that under the law, managers are disqualified to be members of a labor organization. On the other hand, confidential workers were not included because either they were performing managerial functions and/or their duties and responsibilities were considered or may be categorized as part and parcel of management as the primary reason for their exclusion in the bargaining unit. The other categorized employees were likewise not included because parties have agreed on the fact that the aforementioned group of workers are not qualified to join a labor organization at the time the agreement was executed and that they were classified as outside the parameter of the bargaining unit. (Rollo, pp. 28-29) The respondents, on the other hand, aver that the members of the respondent union are rank and file employees qualified to form a union. In fact their status as rank and file employees was allegedly recognized by this Court in the case of Pantranco South Express, Inc. v. NAMAWU, (G.R. No. 67475, July 30, 1984). The reliance on the Pantranco South Express, Inc. case is misplaced. The petition filed by Pantranco South Express Inc. simply asked for a ruling that certain employees were performing managerial functions. We denied the petition for lack of merit in a minute resolution. There was absolutely no discussion on the recognition of another separate rank and file union in addition to the existing bargaining unit.

There is no conflict. The employees of Philtranco have been appraised and their functions evaluated. Managers by any name may not join the rank and file union. On the other hand, those who are rank and file workers may join the existing bargaining unit instead of organizing another bargaining unit and compelling the employer to deal with it. We are constrained to disallow the formation of another union. There is no dispute that there exists a labor union in the company, herein intervenor, the NAMAWU-MIF which is the collective bargaining agent of the rank and file employees in PHILTRANCO. Article 2 of the Collective Bargaining Agreement between PHILTRANCO and NAMAWU-MIF under the sub-title Appropriate Bargaining Unit provides: Section 1 -The appropriate bargaining unit covered by this agreement consists of all regular rank- and file employees of the company. Managerial, confidential, casuals, temporary, probationary and contractual employees as well as trainees, apprentices, security personnel and foreman are excluded from the bargaining unit and therefore, not covered by this AGREEMENT. The job description outside the bargaining unit are enumerated in the list hereto attached as Annex '1' and made an integral part hereof (Emphasis supplied; Rollo, p. 27) We see no need for the formation of another union in PHILTRANCO. The qualified members of the KASAMA KO may join the NAMAWU-MIF if they want to be union members, and to be consistent with the one-union, one-company policy of the Department of Labor and Employment, and the laws it enforces. As held in the case of General Rubber and Footwear Corp. v. Bureau of Labor Relations (155 SCRA 283 [1987]): ... It has been the policy of the Bureau to encourage the formation of an employer unit 'unless circumstances otherwise require. The proliferation of unions in an employer unit is discouraged as a matter of policy unless there are compelling reasons which would deny a certain class of employees the right to self-organization for purposes of collective bargaining. This case does not fall squarely within the exception. (Emphasis supplied). There are no compelling reasons in this case such as a denial to the KASAMA KO group of the right to join the certified bargaining unit or substantial distinctions warranting the recognition of a separate group of rank and file workers. Precisely, NAMAWU-MIF intervened to make it clear it has no objections to qualified rank and file workers joining its union. It is natural in almost all fairly sized companies to have groups of workers discharging different functions. No company could possibly have all employees performing exactly the same work. Variety of tasks is to be expected. It would not be in the interest of sound labor-management relations if each group of employees assigned to a specialized function or section would decide to break away from their fellow-workers and form their own separate bargaining unit. We cannot allow one unit for typists and clerks, one unit for accountants, another unit for messengers and drivers, and so on in needless profusion. Where shall the line be drawn? The questioned decision of the public respondent can only lead to confusion, discord and labor strife. The respondents state that this case is an exception to the general rule considering that substantial differences exist between the office employees or professional, technical, administrative and confidential employees vis-a-vis the field workers or drivers, conductors and mechanics of the petitioner. Against this contention, we find that the "substantial differences" in the terms and conditions of employment between the private respondent's members and the rest of the company's rank and file employees are more imagined than real. We agree with the petitioner that the differences alleged are not substantial or significant enough to merit the formation of another union. PHILTRANCO is a large bus company engaged in the business of carrying passengers and freight, servicing Luzon, Visayas and Mindanao. Certainly there is a commonality of interest among filing clerks, dispatchers, drivers, typists, and field men. They are all interested in the progress of their company and in each worker sharing in the fruits of their endeavors equitably and generously. Their functions mesh with one another. One group needs the other in the same way that the company needs them all. The drivers, mechanics and conductors are necessary for the company but technical, administrative and office personnel are also needed and equally important for the smooth operation of the business. There may be differences as to the nature of their individual assignments but the distinctions are not enough to warrant the formation of separate unions. The private respondent has not even shown that a separate bargaining unit would be beneficial to the employees concerned. Office employees also belong to the rank and file. There is an existing employer wide unit in the company represented by NAMAWU-MIF. And as earlier stated, the fact that NAMAWU-MIF moved to intervene in the petition for certification election filed by KASAMA KO negates the allegations that "substantial differences" exist between the employees concerned. We find a commonality of interest among them. There are no compelling reasons for the formation of another union. We quote with favor Med-Arbiter Adap's rationale, to wit:

... It is against the policy of the Department of Labor to dismember the already wide existing bargaining unit because of its well established goal towards a single employer wide unit which is more to the broader and greater benefit of the employees working force. The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees bargaining power with the management. To do otherwise, would be contrary, inimical and repugnant to the objectives of a strong and dynamic unionism. Let there be a unified whole rather than a divisive one, let them speak as one in a clear resonant voice unmarred by dissension towards progressive unionism. (Rollo, p. 29) WHEREFORE, the decision of the Bureau of Labor Relations, dated September 5, 1988 and the Order dated October 10, 1988 are hereby SET ASIDE. The resolution of the Med-Arbiter dated April 4, 1988 is REINSTATED. The restraining order issued by the Court on November 7, 1988 is made permanent. SO ORDERED.

[G.R. No. 104692. September 5, 1997] KATIPUNAN NG MGA MANGGAGAWA SA DAUNGAN (KAMADA), petitioner, vs. HON. PURA FERRER-CALLEJA and ASSOCIATED SKILLED AND TECHNICAL EMPLOYEES UNION (ASTEUO), respondents. May a new labor union be organized and granted registration during the lifetime of a collective bargaining agreement (CBA) between the company and another union?

The Case This is the simple query brought before this Court by Petitioner KatipunanngmgaManggagawasaDaungan (KAMADA) via a petition[1] for certiorari under Rule 65 of the Rules of Court assailing the Order [2] dated February 27, 1992 of Public Respondent PuraFerrer-Calleja, Director of the Bureau of Labor Relations (BLR), in BLR Case No. A-4-12-91 (NCR-0D-M-90-10-007) which reversed the resolution [3] of MedArbiter Edgardo De la Cruz. Public respondent disposed as follows: [4] WHEREFORE, premises considered, this Office having found that no ground exists for the cancellation of the union registration of ASTEOU [sic], the decision of Med-Arbiter de la Cruz is hereby reversed. Let, therefore, the certificate of registration of ASTEOU [sic] (Associated Skilled and Technical Employees Union of OTSI) be reinstated in the registry of Unions. The subsequent appeal filed by the counsel for the petitioner was treated as a motion for reconsideration and denied in the other assailed Order[5] dated March 20, 1992. Hence, this petition before us.

The Facts Petitioner claims to be the sole and exclusive bargaining agent for all workers in Ocean Terminal Services, Inc. (OTSI).[6] After a certification election, it concluded a collective bargaining agreement with the company. Soon thereafter, in September 1990, private respondent union (ASTEUO) -- allegedly composed also of OTSI workers -- was registered. Upon learning of such fact, Petitioner KAMADA filed a suit to cancel the registration of ASTEUO on the ground that the latters members were already covered by the existing collective bargaining agreement. Private respondent, on the other hand, claimed that its existence as a union could not be disturbed, as its registration was made during the freedom period when there was no collective bargaining agreement concluded as yet. Private respondents registration was cancelled by the med-arbiter in his resolution dated November 27, 1990, finding that the organization of another union covering the same workers can no longer be considered as a labor protective [sic] activity under P.D. 1391[7] and that this will even be against the present policy of one union in one company.[8]

Private respondent appealed to the Bureau of Labor Relations. As earlier stated, Public Respondent PuraFerrerCalleja, director of the said office, reversed the decision of the med-arbiter and denied the subsequent motion for reconsideration.

The Issue Petitioner accuses public respondent of grave abuse of discretion amounting to lack of jurisdiction and gross ignorance of the law. It argues that private respondent, contrary to Section 4 (f), Rule II, Book V of the Rules Implementing the Labor Code, obtained its union registration beyond the last sixty (60) days of the existing CBA, and after participating in the certification election where it lost. More specifically, petitioner raises in its Memorandum dated May 3, 1993, the following three grounds to reverse public respondents Order:[9] 1. 2. 3. That there was already an existing certified bargaining agent when it obtained its registration; The same cannot be considered as a labor productive activity under PD 1391; and It is against the policy of one union in one company.

The Courts Ruling: Petitioners contentions are utterly devoid of merit.

First Issue: Timeliness of Registration We quote hereunder public respondents disquisition which clearly shows the untenable position of petitioner: [10] A perusal of the arguments advanced in this suit shows that some clarification is necessary regarding the present laws on union registration. First, nowhere does the law contemplate or even intimate that once a union of a bargaining unit has registered with the DOLE, this prevents all other would-be union from registering. The reasons are obvious. To establish such a rule would render superflous (sic) certification elections, and would establish in perpetuity anyone who had the good fortune, means or scheme to beat everyone else to the punch. Second, in order to establish order and effectively exercise this right, certain policies have been instituted. One such policy, taken from letter (f) of Section 4 of Rule II of Book V of the Implementing Rules of the Labor Code, is that applications for union registration are not valid if filed within one year from certification elections and/or are done during the effectivity of a CBA unless filed within the freedom period. Anent the above, and the facts of this case, ASTEOUs [sic] union registration issued last September, 1990 cannot be assailed. The period of prohibition of union registration in relation to certification elections starts from the final proclamation of certification election results in a final decision of the DOLE or the Supreme Court. In the present case, the Order of the Secretary of DOLE was issued last October 31, 1990, a month after the registration of ASTEOU [sic]. Moreover, KAMADAs previous CBA expired on March 23, 1989, while its new CBA was not signed until April 25, 1991. It is settled that factual findings of quasi-judicial agencies, like the Labor Department, [11] which have acquired expertise in matters entrusted to their jurisdiction, are accorded by this Court not only respect but finality if supported by substantial evidence. Substantial evidence refers to that amount of relevant evidence which a reasonable mind may accept as adequate to justify a conclusion. [12] In this case, the findings of the public respondent, particularly those on the dates of the registration and the signing of the CBA, are supported by substantial evidence. In fact, petitioner does not even contradict these findings. Having ruled on the factual findings, we now take up the relevant labor regulations. Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code, [13] prohibits not the registration of a new union but the holding of a certification election within one year from the date of issuance of a final certification election result. Clearly, private respondents registration is not covered by the prohibition. In any event, the union registration was effected in September 1990, a month before the secretary of labor issued his decision on the result of the certification election on October 31, 1990. Hence, there was yet no certified bargaining agent when the private respondent was registered as a union.

Second Issue: Labor Productive Activity Petitioner argues that private respondents registration cannot be considered a labor productive activity under PD 1391, specifically under paragraph 6 thereof which reads: 6. No petitions for certification election, for intervention or disaffiliation shall be entertained or given due course except within the 60-day freedom period immediately preceding the expiration of a collective bargaining agreement. Very clearly, the foregoing provision does not help petitioner. It has nothing to do with the registration of a union. It deals only with petitions for certification election, intervention or disaffiliation and not -- we hazard being redundant -- to applications for registration of a new union.

Third Issue: One Union in One Company As regards petitioners battle cry of one union in one company, this Court has already laid down in Knitjoy Manufacturing, Inc. vs. Ferrer-Calleja [14] the exceptions to that policy. The Court, through Mr. Justice Hilario G. Davide, Jr., held: 1. The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the greater mutual benefits which the parties could derive, especially in the case of employees whose bargaining strength could undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and dissension, is not without exceptions. The present Article 245 of the Labor Code expressly allows supervisory employees who are not performing managerial functions to join, assist or form their separate union but bars them from membership in a labor organization of the rank-and-file employees. It reads: ART. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees . -Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. This provision obviously allows more than one union in a company. Even Section 2 (c), Rule V, Book V of the Implementing Rules and Regulations of the Labor Code, which seeks to implement the policy, also recognizes exceptions. It reads: SEC. 2. Who may file. -- Any legitimate labor organization or the employer, when requested to bargain collectively, may file the petition. The petition, when filed by a legitimate labor organization shall contain, among others: xxx (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; x xx. (Emphasis supplied) The usual exception, of course, is where the employer unit has to give way to the other units like the craft unit, plant unit, or a subdivision thereof; the recognition of these exceptions takes into account the policy to assure employees of the fullest freedom in exercising their rights. (PASCUAL. C., Labor Relations Law, 1986, ed., 109) Otherwise stated, the one company-one union policy must yield to the right of the employees to form unions or associations for purposes not contrary to law, to self-organization and to enter into collective bargaining negotiations, among others, which the Constitution guarantees. (Section 8, Article III and Section 3, Article XIII, 1987 Constitution). Moreover, the issue of which union truly represents the working force should be raised during the certification election, not during the registration period. Indeed, a certification election provides the most effective and expeditious mode to determine the real representatives of the working force in the appropriate bargaining unit. [15] It may be well to add that Section 5, Rule II, Book V [16] of the Omnibus Rules Implementing the Labor Code, enumerates the grounds for the denial of registration to local unions, and the existence of another union is not one of these grounds.

WHEREFORE, the petition is DISMISSED for utter lack of merit. Double costs against the petitioner. SO ORDERED.

[G.R. Nos. 113204-05. September 16, 1996] BARBIZON PHILIPPINES, INC., petitioner, vs. NAGKAKAISANG SUPERVISOR NG BARBIZON PHILIPPINES, INC.-NAFLU AND THE HON. UNDERSECRETARY OF LABOR BIENVENIDO E. LAGUESMA, respondents. This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court to set aside and annul the decision and orders of the public respondent dated 11 February 1993, 4 March 1993, 16 June 1993 and 25 November 1993, respectively. The facts which gave rise to the present petition are as follows: On 27 June 1988, petitioner (formerly the Philippine Lingerie Corporation) filed a petition for certification election among its rank-and-file employees (docketed as NCR-OD-M-6-349-88). As a consequence thereof, two (2) unions sought recognition, namely: PHILIPPINE LINGERIE WORKERS UNION-ALAB and BUKLOD NG MANGGAGAWA NG PHILIPPINE LINGERIE CORPORATION. In one of the pre-election conferences, PHILIPPINE LINGERIE WORKERS UNION-ALAB moved for the exclusion of a number of employees who were allegedly holding supervisory positions. On 28 July 1988, Med-Arbiter Rasidali C. Abdullah issued an order denying the motion of PHILIPPINE LINGERIE CORPORATION WORKERS UNION-ALAB for lack of merit. Said order was appealed to the Bureau of Labor Relations (BLR) which issued an Order on 16 November 1988, the dispositive portion of which declares: WHEREFORE, premises considered, the Order dated 28 July 1988 is hereby affirmed. Accordingly, to ensure fairness to all the parties and in order to hasten the proceedings, let the election be conducted under the supervision of the Labor Organization Division, this Office, which is hereby directed to immediately set this case for pre-election conference. SO ORDERED.[1] PHILIPPINE LINGERIE WORKERS UNION-ALAB filed two (2) separate motions for reconsideration of the above order which were consolidated and treated in an Order dated 22 December 1988, the decretal portion of which reads:

WHEREFORE, premises considered, the twin motions for reconsideration are hereby deemed denied for lack of merit. Accordingly, let the pre-election conference preparatory to the certification election proceed without further delay. No further motion of similar nature shall be hereafter entertained. SO ORDERED.[2] No further appeal of the above-quoted order was interposed, thus it became final and executory. On 3 May 1989, a certification election was conducted with the votes of "supervisors and confidential" employees being challenged. Thus, the certification election showed the following results: 1.Philippine Lingerie Workers Union-ALAB- - - - - - - - - - - - -318 votes 2.Buklod Ng Manggagawa Ng Philippine Lingerie Corporation- - - - - - - - - - - - - - - - - - - - - 412 votes 3.No Union- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 17 votes 4.Challenged Supervisors/Confidential Employees- - - - - - - - - - - - - - - - - - - - - - - - - - - - 99 votes _________ TOTAL VALID VOTES CAST- - - - - - - - - - - - - - - - - - - - -855 votes SPOILED BALLOTS- - - - - - - - - - - - - - - - - - - - - - - - - - - - -12 votes PHILIPPINE LINGERIE WORKERS UNION-ALAB filed an election protest which was later formalized on 25 May 1989. In the meantime, on 9 May 1989, BUKLOD moved for the opening of the challenged ballots. On 20 July 1989, the BLR, through its director PuraFerrer-Calleja, issued an Order, the dispositive portion of which reads: WHEREFORE, premises considered, the protest and challenged (sic) of the AlyansangLikha Ng MgaAnak Ng Bayan (ALAB) are hereby denied for lack of merit. Accordingly, let the challenged votes of the supervisors and confidential employees be opened in the presence of the parties under the supervision of the Labor Organization Division (LOD) on 26 July 1989 at 9:00 A.M., Bureau of Labor Relations. SO ORDERED.[3] With the above-quoted order, the challenged votes were opened on 3 August 1989 and the results were as follows: Philippine Lingerie Workers Union-ALAB- - - - - - - - - - 4 votes Buklod Ng Manggagawa Ng Phil. Lingerie Corp.- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 84 votes No Union- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6 votes Spoiled - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5 votes TOTAL VOTES CAST- - - - - - - - - - - - - - - - - - - - - --99 votes PHILIPPINE LINGERIE WORKERS UNION-ALAB filed a motion for reconsideration of the BLRs Order of 20 July 1989 which, however, was denied in an Order dated 22 August 1989, the pertinent portion of which states: xxx xxx xxx

This time movant should now be convinced that the alleged supervisory and confidential employees are more rankand-file employees.

As early as Resolution dated 16 November 1988, the Bureau had already ruled that the alleged supervisors are not managerial employees (rec. p. 154, First Folder). On motion for reconsideration the Bureau affirmed the aforementioned Resolution in its Order dated 22 December 1988 (rec. p. 302. First Folder). And on 20 July 1989, when R.A. 6715 was already in full force and effect, the Bureau in resolving the protest of ALAB declared that the job descriptions of the alleged supervisors and confidential employees do not in any way suggest that they are indeed supervisors or managerial employees (rec. p. 39, Second Folder). xxx WHEREFORE, the motion for reconsideration is hereby denied and the Buklod Ng Manggagawa Ng Philippine Lingerie Corporation (now, Barbizon Philippines, Inc.) is hereby certified as the sole and exclusive bargaining representative of all the regular rank-and-file employees of Barbizon Philippines, Inc. (formerly Philippine Lingerie Corporation). The management of Barbizon Philippines, Inc. is hereby directed to immediately start negotiating for a collective bargaining agreement (CBA) with the said union. No further motion of any nature shall hereinafter be entertained by this Office. SO ORDERED.[4] Not satisfied with the aforequoted order, PHILIPPINE LINGERIE WORKERS UNION-ALAB appealed to the Secretary of Labor but on 26 September 1989, the same was withdrawn and a motion to dismiss appeal with prejudice was filed by the same union. There being no more obstacle to collective bargaining, petitioner negotiated with BUKLOD as the sole and exclusive bargaining representative. A Collective Bargaining Agreement (CBA) was signed by petitioner and BUKLOD which was effective for five (5) years or until 18 November 1994.[5] While the CBA was still in force, several employees organized themselves into the Nagkakaisang Supervisors Ng Barbizon Philippines, Inc. (NSBPI) and the Nagkakaisang Excluded Monthly Paid Employees Ng Barbizon, Philippines, Inc. (NEMPEBPI) allegedly because they were excluded from the coverage of the existing CBA between petitioner and BUKLOD. Two (2) separate petitions for certification election were filed by NSBPI and NEMPEBPI. The petition of the former was raffled to Med-Arbiter Renato D. Parungo and the latter to Med-Arbiter Paterno D. Adap. Both cases were dismissed.[6] NSBPI appealed to the Office of the Secretary of Labor. On 29 December 1992, public respondent Undersecretary BienvenidoLaguesma denied the same for lack of merit. NSBPI moved for reconsideration on 15 January 1993. On 11 February 1993, the Office of the Secretary of Labor, through public respondent rendered the questioned Decision, the dispositive portion of which reads: WHEREFORE the Motion for Reconsideration of NagkakaisangSuperbisorng Barbizon Philippines, Inc. (NSBPI) and the appeal of Nagkakaisang Excluded Monthly Paid Employees ng Barbizon Philippines, Inc. (NEMPEBPI) are hereby granted and the Orders of this Office and the Med-Arbiter dated 29 December 1992 and 01 September 1992, respectively, are hereby SET ASIDE. Accordingly, a new Order is hereby entered in the above-captioned cases directing the conduct of certification election among the subject employees excluded from the coverage of the bargaining unit of the existing CBA of rank and file employeesaforestated, not otherwise excluded/disqualified by law. The choices are as follows: 1. NagkakaisangSuperbisorng Barbizon Philippines, Inc. (NSBPI) 2. Nagkakaisang Excluded Monthly Paid Employees ng Barbizon Philippines, Inc. (NEMPEBPI); and, 3. No Union. Let, therefore, the entire records of these consolidated cases be forwarded to the Regional Office of origin for the immediate conduct of certification election, subject to the usual pre-election conference. SO ORDERED.[7] Petitioner filed a motion for reconsideration but the same was denied. [8] A second motion for reconsideration was filed by petitioner but it was likewise denied, this time, with finality. [9]Undaunted, petitioner filed a third motion for reconsideration which was also denied for lack of merit. [10]

Hence, this petition wherein the following issues were raised: A THE RESPONDENT "SUPERVISORS" LOCAL UNION CANNOT FORM A SUPERVISORS UNION, WHEN THEIR MEMBERS ARE INCOMPATIBLY "RANK-AND-FILE EMPLOYEES"; MUCH LESS, CAN IT SEEK REPRESENTATION STATUS FOR SUPERVISORS, WHEN THE EMPLOYEES THEY WANT TO REPRESENT FOR COLLECTIVE BARGAINING PURPOSES BELONG IN THE "APPROPRIATE BARGAINING UNIT" OF RANK-AND-FILE EMPLOYEES ON THE "EMPLOYER WIDE UNIT", WHICH ALREADY HAS A CERTIFIED BARGAINING AGENT: BUKLOD NG MANGGAGAWA NG PHILIPPINE LINGERIE CORPORATION. B WORSE, SINCE THE MEMBERS OF THE RESPONDENT LOCAL UNION BELONG TO THE APPROPRIATE BARGAINING UNIT OF RANK-AND-FILE EMPLOYEES, THE EXISTING COLLECTIVE BARGAINING AGREEMENT WHICH COVERS THEM, IS (A) "BAR" TO ITS CERTIFICATION ELECTION PETITION. [11] Barbizon Philippines, Inc. alleges that this petition only assails the resolution of the public respondent regarding NSBPI and does not include the NEMPEBPI, the union of the excluded monthly paid employees because the separate motion for reconsideration it filed in connection with the latter has not yet been resolved by the NLRC. On 8 February 1994, this Court issued a temporary restraining order, enjoining the Bureau of Labor Relations from setting the pre-election conference in Case No. OS-MA-A-215-92-93 entitled "In Re: Petition for Certification Election among the Supervisory Employees of Barbizon Philippines, Inc., Nagkakaisang Supervisor Ng Barbizon Philippines, Inc.OBRERO" and from conducting further proceedings in the aforesaid cases. [12] During the pendency of the petition, the CBA expired. However, no other agreement between the parties was made known to this Court, thus, in accordance with Article XX of the CBA, it continues to be in force and shall govern the relations between the parties thereto. [13] We find no merit in the petition. Petitioner maintains its stance that the petition for certification election filed by the Nagkakaisang Supervisor ng Barbizon Philippines., Inc. - NAFLU (NSBPI) must necessarily fail because the employees designated as supervisors cannot legally form a supervisors union by virtue of the BLRs final decision dated 22 August 1989 declaring the abovementioned employees mere rank and file workers. Being part of the rank and file, petitioner avers that said employees belong to the employer wide unit, which is the appropriate bargaining unit of all its rank and file employees and which is represented by the BuklodngManggagawang Philippine Lingerie Corporation (BUKLOD) as the sole certified bargaining agent. Petitioner further asserts that the Undersecretary of Labor committed grave abuse of discretion in granting NSBPIs petition for certification election as this was tantamount to an unjustifiable reversal of the BLRs final ruling that the subject employees are not supervisory employees, but merely rank and file, due to the nature of their duties and functions. Petitioners reasoning is flawed, proceeding as it does from the wrong premise. Petitioner obstinately believes that NSBPIs petition for certification election was granted because the employees carrying the appellation supervisor were deemed supervisory employees. The status of the subject employees, however, is not the issue in the case at bar. Their status as supervisors is not in dispute. The aforestated decision of the BLR dated 22 August 1989 has settled with finality that said employees are merely rank and file and this fact has been accepted by the petitioning union NSBPI.[14] NSBPIs petition for certification election was granted because the subject employees, including petitioners monthly paid employees, were expressly excludedfrom the bargaining unit and from the coverage of the CBA executed between petitioner and BUKLOD, as clearly stated therein. [15] This is the real reason behind the certification election in question. Unfortunately, this was not successfully debunked by petitioner, which chose to focus, albeit erroneously, on the status of the subject employees. The exclusion of petitioners supervisors from the bargaining unit of the rank-and-file employees indiscriminately curtailed the right of these employees to self-organization and representation for purposes of collective bargaining, a right explicitly mandated by our labor laws [16] and accorded the highest consideration. [17] In the recent case of Golden Farms, Inc. v. Secretary of Labor,[18] we aptly declared: In the case at bench, the evidence established that the monthly paid rank-and-file employees of petitioner primarily perform administrative or clerical work. In contradistinction, the petitioners daily paid rank-and-file employees mainly work in the cultivation of bananas in the fields. It is crystal clear the monthly paid rank-and-file employees of petitioner have very little in common with its daily paid rank-and-file employees in terms of duties and obligations, working conditions, salary rates, and skills. To be sure, the said monthly paid rank-and-file employees have even been excluded from the bargaining unit of the daily paid rank-and-file employees. This dissimilarity of interests warrants the formation of a separate and distinct bargaining unit for the monthly paid rank-and-file employees of the petitioner. To rule otherwise would deny this distinct class of employees the right to self-organization for purposes of collective

bargaining. Without the shield of an organization, it will also expose them to the exploitations of management . x xx (Underscoring ours.) In the case at bar, BUKLOD cannot successfully act as the bargaining agent of and duly represent petitioners supervisor employees since the latter were expressly excluded from the appropriate bargaining unit. Petitioners reliance on the case of PagkakaisangmgaManggagawasa Triumph Intl.-United Lumber and General Workers of the Phils. v. Ferrer-Calleja[19] is misplaced. The aforecited case upholds the one union-one company" policy, thus: Once again, we enunciate that the proliferation of unions in an employer unit is discouraged as a matter of policy unless compelling reasons exist which deny a certain and distinct class of employees the right to selforganization for purpose of collective bargaining. (See General Rubber & Footwear Corporation v. Bureau of Labor Relations, 155 SCRA 283 [1987].)[20] (Underscoring ours.) As clearly indicated in the aforequoted decision, the one union - one company rule is not without exception. The exclusion of the subject employees from the rank-and-file bargaining unit and the CBA is definitely a compelling reason for it completely deprived them of the chance to bargain collectively with petitioner and are thus left with no recourse but to group themselves into a separate and distinct bargaining unit and form their own organization. The rationale behind the exception to the aforementioned policy is further elucidated in Knitjoy Manufacturing, Inc. v. Ferrer-Calleja:[21] 1. The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the greater mutual benefits which the parties could derive, especially in the case of employees whose bargaining strength could undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and dissension, is not without exceptions. xxx. The usual exception, of course, is where the employer unit has to give way to the other units like the craft unit, plant unit, or a subdivision thereof; the recognition of these exceptions takes into account the policy to assure employees of the fullest freedom in exercising their rights. Otherwise stated, the one company-one union policy must yield to the right of the employees to form unions or associations for purposes not contrary to law, to self-organization and to enter into collective bargaining negotiations, among others, which the Constitution guarantees. (Underscoring ours.) The receipt by petitioners supervisor employees of certain benefits under the CBA between BUKLOD and petitioner is not sufficient to deny the petition for certification election filed by the labor organization formed by the excluded employees. It is not equivalent to and does not compensate for the denial of the right of the excluded employees to self-organization and collective bargaining. We concur with the findings of the Undersecretary of Labor, thus: It is not disputed that the members of both petitioning unions NSBPI and NEMPEBPI are excluded from the coverage of the existing CBA entered into between the respondent BPI and BuklodngmgaManggagawang Barbizon Philippines, Inc. (BUKLOD) (pp. 84-85, folder II, records). Thus, respondent BPI being privy to the said exclusion has to accept the inescapable consequences of its act of depriving the excluded employees of their right to self-organization for the purpose of collective bargaining. We find immaterial and irrelevant the allegation of hereby respondent BPI to the effect that the benefit being enjoyed by the rank and file employees covered by the existing CBA are extended/accorded to the excluded employees. Indeed, what is crucial and of paramount consideration is the fact that the excluded rank and file employees are afforded the right to bargain collectively. The Supreme Court in the cases of General Rubber and Footwear Corporation vs. Bureau of Labor Relations, et al., G.R. No. 74262, October 29, 1987; and Manila Bay Spinning Mills, J and P Coats, Manila Bay, Inc. vs. Hon. PuraFerrer-Calleja, G. R. No. 80910, August 1, 1988, ruled that the employees excluded from the coverage of the CBA, who not being excluded by law, have the right to bargain collectively. Further, the Supreme Court aptly stated that: The allegation that some benefits under the existing CBA were extended to the monthly paid employees, even if true will not preclude them from entering into a CBA of their own. Neither is the inconvenience that may befall petitioner for having to administer two CBAs an excuse for depriving the monthly paid employees of their constitutionally guaranteed right to collective bargaining. (Underscoring supplied.)[22] The petition for certification election cannot likewise be deterred by the contract-bar rule, [23] which finds no application in the present case. The petitioning union NSBPI is not questioning the majority status of Buklod as the incumbent bargaining agent of petitioners rank and file employees. The petition for certification election is addressed to a separate bargaining unit--the excluded employees of petitioner. We agree with the ruling of the Undersecretary of Labor, thus:

Certainly, one who has been instrumental in the denial of a right otherwise enjoyable by a rank and file, as in membership in its appropriate bargaining unit, cannot now say that he ought to be included in the existing bargaining unit of the rank and file just because that rank and file employee is now seeking representation for himself as well as those who like him were specifically excluded from the coverage of the CBA. A rank and file employee, irrespective of his job designation and in whatever form his wages are paid has the unbridled right to the exercise of selforganization. This right cannot, like a chattel, be compromised in the bargaining table so as to deprive him of the same in violation of the constitutional mandate. In this wise, the claim as to the applicability of the contract bar doctrine could have not gained ground. A contract bar applies in a situation where the petition is directed towards one and the same bargaining unit. This does not appear to be so in the case considering the built-in-limitation in the CBA excluding the workers sought to be represented by herein petitioner from its coverage, albeit, their being admittedly rank and file employees. On the same line of reasoning, neither would the substantial mutual interest test hold. So too, is the claim against union turncoatism. In the latter case, the emergence thereof is farfetched considering the defined boundaries of the bargaining units concerned. Let it be stressed, that the certification election as ordered would only affect those rank and file employees who are excluded from the coverage of the existing CBA. Those who are already represented in the existing collective bargaining agreement may rest secured in the bargaining unit that considers them as members of its family.[24](Underscoring ours.) The right to self organization and collective bargaining is an integral part of the protection to labor provision embodied in our Constitution, the essence of which is aptly expressed in Tropical Hut Employees Union-CGW v. Tropical Hut Food Market, Inc.:[25] All employees enjoy the right to self-organization and to form and join labor organizations of their own choosing for the purpose of collective bargaining and to engage in concerted activities for their mutual aid or protection. This is a fundamental right of labor that derives its existence from the Constitution. In interpreting the protection to labor and social justice provisions of the Constitution and the labor laws or rules or regulations, we have always adopted the liberal approach which favors the exercise of labor rights. Finally, we take this opportunity to reiterate the standing rule that a certification election is the sole concern of the workers, hence, an employer lacks the personality to dispute the same. InGolden Farms, Inc. v. Secretary of Labor,[26] we held: Finally, we note that it was petitioner company that filed the motion to dismiss the petition for election. The general rule is that an employer has no standing to question a certification election since this is the sole concern of the workers. Law and policy demand that employers take a strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free from any extraneous influence of management. A labor bargaining representative, to be effective, must owe its loyalty to the employees alone and to no other. WHEREFORE, premises considered, the petition for certiorari is DISMISSED and the Temporary Restraining Order issued on 8 February 1994 is hereby LIFTED. SO ORDERED.

G.R. No. 111262 September 19, 1996

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its President RAYMUNDO HIPOLITO, JR., petitioner, vs. HON. MA. NIEVES D. CONFESOR, Secretary of Labor, Dept. of Labor & Employment, SAN MIGUEL CORPORATION, MAGNOLIA CORPORATION (Formerly, Magnolia Plant) and SAN MIGUEL FOODS, INC. (Formerly, B-Meg Plant), respondents. This is a petition for certiorari assailing the Order of the Secretary of Labor rendered on February 15, 1993 involving a labor dispute at San Miguel Corporation. The facts are as follows: On June 28, 1990, petitioner-union San Miguel Corporation Employees Union PTGWO entered into a Collective Bargaining Agreement (CBA) with private respondent San Miguel Corporation (SMC) to take effect upon the expiration of the previous CBA or on June 30, 1989. This CBA provided, among others, that: ARTICLE XIV DURATION OF AGREEMENT Sec. 1.This Agreement which shall be binding upon the parties hereto and their respective successorsin-interest, shall become effective and shall remain in force and effect until June 30, 1992 . Sec. 2.In accordance with Article 253-A of the Labor Code as amended, the term of this Agreement insofar as the representation aspect is concerned, shall be for five (5) years from July 1, 1989 to June 30, 1994. Hence, the freedom period for purposes of such representation shall be sixty (60) days prior to June 30, 1994. Sec. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all provisions of this Agreement, except insofar as the representation aspect is concerned . If no agreement is reached in such negotiations, this Agreement shall nevertheless remain in force up to the time a subsequent agreement is reached by the parties. 1 In keeping with their vision and long term strategy for business expansion, SMC management informed its employees in a letter dated August 13, 1991 2 that the company which was composed of four operating divisions namely: (1) Beer, (2) Packaging, (3) Feeds and Livestocks, (4) Magnolia and Agri-business would undergo a restructuring. 3 Effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-off and became two separate and distinct corporations: Magnolia Corporation (Magnolia) and San Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA remained in force and effect. After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA and Article 253-A of the Labor Code. Negotiations started sometime in July, 1992 with the two parties submitting their respective proposals and counterproposals. During the negotiations, the petitioner-union insisted that the bargaining unit of SMC should still include the employees of the spun-off corporations: Magnolia and SMFI; and that the renegotiated terms of the CBA shall be effective only for the remaining period of two years or until June 30, 1994. SMC, on the other hand, contended that the members/employees who had moved to Magnolia and SMFI, automatically ceased to be part of the bargaining unit at the SMC. Furthermore, the CBA should be effective for three years in accordance with Art. 253-A of the Labor Code. Unable to agree on these issues with respect to the bargaining unit and duration of the CBA, petitioner-union declared a deadlock on September 29, 1990. On October 2, 1992, a Notice of Strike was filed against SMC. In order to avert a strike, SMC requested the National Conciliation and Mediation Board (NCMB) to conduct preventive mediation. No settlement was arrived at despite several meetings held between the parties.

On November 3, 1992, a strike vote was conducted which resulted in a "yes vote" in favor of a strike. On November 4, 1992, private respondents SMC, Magnolia and SMFI filed a petition with the Secretary of Labor praying that the latter assume jurisdiction over the labor dispute in a vital industry. As prayed for, the Secretary of Labor assumed jurisdiction over the labor dispute on November 10, 1992. 4Several conciliation meetings were held but still no agreement/settlement was arrived at by both parties. After the parties submitted their respective position papers, the Secretary of Labor issued the assailed Order on February 15, 1993 directing, among others, that the renegotiated terms of the CBA shall be effective for the period of three (3) years from June 30, 1992; and that such CBA shall cover only the employees of SMC and not of Magnolia and SMFI. Dissatisfied, petitioner-union now comes to this Court questioning this Order of the Secretary of Labor. Subsequently, on March 30, 1995, 5 petitioner-union filed a Motion for Issuance of a Temporary Restraining Order or Writ of Preliminary Injunction to enjoin the holding of the certification elections in the different companies, maintaining that the employees of Magnolia and SMFI fall within the bargaining unit of SMC. On March 29, 1995, the Court issued a resolution granting the temporary restraining order prayed for.
6

Meanwhile, an urgent motion for leave to intervene 7 in the case was filed by the SamahanngMalayangManggagawa-San Miguel Corporation-Federation of Free Workers (SMM-SMC-FFW) through its authorized representative, Elmer S. Armando, alleging that it is one of the contending parties adversely affected by the temporary restraining order. The Intervenor cited the case of Daniel S.L. Borbon v. Hon. Bienvenido B. Laguesma, 8 G.R. No. 101766, March 5, 1993, where the Court recognized the separation of the employees of Magnolia from the SMC bargaining unit. It then prayed for the lifting of the temporary restraining order. Likewise, EfrenCarreon, Acting President of the SMCEU-PTGWO, filed a petition for the withdrawal/dismissal of the petition considering that the temporary restraining order jeopardized the employees' right to conclude a new CBA. At the same time, he challenged the legal personality of Mr. RaymundoHipolito, Jr. to represent the Union as its president when the latter was already officially dismissed from the company on October 4, 1994. Amidst all these pleadings, the following primordial issues arise: 1) Whether or not the duration of the renegotiated terms of the CBA is to be effective for three years of for only two years; and 2) Whether or not the bargaining unit of SMC includes also the employees of the Magnolia and SMFI. Petitioner-union contends that the duration for the non-representation provisions of the CBA should be coterminous with the term of the bargaining agency which in effect shall be for the remaining two years of the current CBA, citing a previous decision of the Secretary of Labor on December 14, 1992 in the matter of the labor dispute at Philippine Refining Company. However, the Secretary of Labor, in her questioned Order of February 15, 1993 ruled that the renegotiated terms of the CBA at SMC should run for a period of three (3) years. We agree with the Secretary of Labor. Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads: Art. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution . Any agreement on

such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining agreement, the parties may exercise their rights under this Code. (Emphasis supplied.) Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act No. 6715 (the HerreraVeloso Law) which took effect on March 21, 1989. This new provision states that the CBA has a term of five (5) years instead of three years, before the amendment of the law as far as the representation aspect is concerned. All other provisions of the CBA shall be negotiated not later than three (3) years after its execution. The "representation aspect" refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining unit concerned. "All other provisions" simply refers to the rest of the CBA, economic as well as non-economic provisions, except representation. 10 As the Secretary of Labor herself observed in the instant case, the law is clear and definite on the duration of the CBA insofar as the representation aspect is concerned, but is quite ambiguous with the terms of the other provisions of the CBA. It is a cardinal principle of statutory construction that the Court must ascertain the legislative intent for the purpose of giving effect to any statute. The history of the times and state of the things existing when the act was framed or adopted must be followed and the conditions of the things at the time of the enactment of the law should be considered to determine the legislative intent. 11 We look into the discussions leading to the passage of the law: THE CHAIRMAN (REP. VELASCO): . . .the CBA, insofar as the economic provisions are concerned . . . THE CHAIRMAN (SEN. HERRERA): Maximum of three years? THE CHAIRMAN (SEN. VELOSO): Maximum of three years. THE CHAIRMAN (SEN. HERRERA): Present practice? THE CHAIRMAN (REP. VELOSO): In other words, after three yearspwedenangmagnegotiate in the CBA for the remaining two years. THE CHAIRMAN (REP. HERRERA): You can negotiate for one year, two years or three years but assuming three years which, I think, that's the likelihood. . . THE CHAIRMAN (REP. VELOSO): Yes. THE CHAIRMAN (SEN. HERRERA): Three years, the new union, assuming there will be a change of agent, at least he has one year to administer and to adjust, to develop rapport with the management. Yan angimportante. You know, for us nanagne-negotiate, ang hazard talagasa negotiation, when we negotiate with somebody nahindinatinkilala, then, we are governed by our biases naito ay destroyer ng Labor; angmga employer, itobayarankolangito okay na. 'Yan angnangyayari, but let us give that allowance for the one year to let them know. Actually, ang thrust natin ay industrial peace, and there can be no industrial peace if you encourage union to fight each other. 'Yan angproblema. 12 xxxxxxxxx HON. ISIDRO: Madaliiyan, kasi these two periods that are mentioned in the CBA seem to provide some doubts later on in the implementation. Sabikasirito, insofar as representation issue is concerned, seven years and lifetime. . . HON. CHAIRMAN HERRERA: Five years. HON. ISIDRO: Five years, all the others three years. HON. CHAIRMAN HERRERA: No. Ang three years duonsa terms and conditions, not later than three years. HON. ISIDRO: Not later than three years, so within three years you have to make a new CBA. HON. CHAIRMAN HERRERA: Yes. HON. ISIDRO: That is again for purposes of renewing the terms, three years nanamaniyan then, seven years. . . HON. CHAIRMAN HERRERA: Not later than three years. HON. ISIDRO: Assuming that they usually follow the period three years nang three years, but under this law with respect to representation five years, ano? Now, after three years, nagkaroonngbagong terms, taposnaiyong term, renewed naiyong terms, angkarapatan noon sa representation issue mayroon pang two years left. HON. CHAIRMAN HERRERA: One year nalang because six years nanglahat, three plus three. HON. ISIDRO: Hindi, two years pa rinangnatitira, eh. Three years pa langangnatatapos. So, another CBA was formed and this CBA mayroonnanamansiyangbagong five years with respect to representation issue. HON. CHAIRMAN HERRERA: Hindi. Hindi na.Ganitoiyan.Iyong terms and conditions for three years. HON. ISIDRO: Yes. HON. CHAIRMAN HERRERA: One the third year you can start negotiating to change the terms and conditions. HON. ISIDRO: Yes. HON. CHAIRMAN HERRERA: Assuming you will follow the practice . . . HON. ISIDRO: Oo. HON. CHAIRMAN HERRERA: But on the fifth year, ang representation status now can be questioned, so bakapuwedengmagkaroonng certification election. If the incumbent union loses, then the new union administers the contract for one year to give him time to know his counterpart the employer, before he can negotiate for a new term. Iyanang advantage.

HON. ISIDRO: Kasi, when the CBA has only a three-year lifetime with respect to the terms and conditions and then, so you have to renew that in three years you renew for another three years, mayroonnanaman another five years iyongano . . . HON. ANIAG: Hindi, angnatitiraduonsa representation two years na lang. HON. CHAIRMAN HERRERA: Two years nalangsa representation. HON. ANIAG: So that if they changed the union, iyong last year . . . HON. CHAIRMAN HERRERA: Iyonlang, that you have to administer the contract. Then, voluntary arbitration na kayo and then mayroonkanangprobisyon "retroact on the date of the expiry date". Pagnataloang incumbent unyon, magaassumeang new union, administer the contract. As far as the term and condition, for one year, and that will give him time and the employer to know each other. HON. JABAR: Boy, let us be realistic. I think if a new union wins a certification election, it would not want to administer a CBA which has not been negotiated by the union itself. HON. CHAIRMAN HERRERA: That is not true, Hon. This is true because what is happening now in the country is that the term ng contract natin, duon din mage-expire ang representation. Iyonangnangyari. That is where you have the gulo. Ganoonangnangyari. So, angnangyaridiyan, pag-mayroon certification election, expireang contract, anoang usual issue company union. I can you (sic) give you more what the incumbent union is giving. So angmangyayaridiyan, pag-negotiate mo hardline naagad. HON. CHAIRMAN VELOSO : Mon, for four years? HON. ISIDRO: Angtinginkolangdito, iyong distinction between the terms and the representation aspect why do we have to distinguish between three and five? What's wrong with having a uniform expiration period? HON. CHAIRMAN HERRERA: Five years. HON. ISIDRO: Puro three years. HON. CHAIRMAN HERRERA: That is what we are trying to avoid because ang reality diyan, Mart, pagpasokmosakumpanya, mag-ne-negotiate kang six months, that's the average, aabot pa minsanng one year. Pagktaposng negotiation mo, signing kayo. There will be an allowed period of one year. Third year na, uumpisahannamanang organizations, papasoknaangibangunyon because the reality in Trade Union committee, they organize, we organize. So, actually, you have only industrial peace for one year, effective industrial peace. That is what we are trying to change. Otherwise, we will continue to discourage the investors and the union will never grow because every other year it has to use its money for the certification election. Anggrabe pang practice diyan, mag-aadvance ang federation for three years union dues parapanggastoslangsa certification election. That is what we are trying to avoid. HON. JABAR: Although there are unions which really get advances. HON. CHAIRMAN HERRERA: Pag nag-survey tayosamgaunyon, ganoonangmangyayari. And I think our responsibility here is to create a legal framework to promote industrial peace and to develop responsible and fair labor movement. HON. CHAIRMAN VELOSO: In other words, the longer the period of the effectivity . . . HON CHAIRMAN VELOSO. (continuing) . . . in other words, the longer the period of effectivity of the CBA, the better for industrial peace. HON. CHAIRMAN HERRERA: representation status. HON. CHAIRMAN VELOSO: Only on HON. CHAIRMAN HERRERA: the representations. HON. CHAIRMAN VELOSO: But on the economic issues. HON. CHAIRMAN HERRERA: You have to review that. The parties will have to review that. HON. CHAIRMAN VELOSO: At least on second year. HON. CHAIRMAN HERRERA: Not later than 3 years, angkaramihanngmga mag-negotiate when the companyis (interrupted) 13 From the aforesaid discussions, the legislators were more inclined to have the period of effectivity for three (3) years insofar as the economic as well as non-economic provisions are concerned, except representation. Obviously, the framers of the law wanted to maintain industrial peace and stability by having both management and labor work harmoniously together without any disturbance. Thus, no outside union can enter the establishment within five (5) years and challenge the status of the incumbent union as the exclusive bargaining agent. Likewise, the terms and conditions of employment (economic and non-economic) can not be questioned by the employers or employees during the period of effectivity of the CBA. The CBA is a contract between the parties and the parties must respect the terms and conditions of the agreement. 14 Notably, the framers of the law did not give a fixed term as to the effectivity of the terms and conditions of employment. It can be gleaned from their discussions that it was left to the parties to fix the period. In the instant case, it is not difficult to determine the period of effectivity for the non-representation provisions of the CBA. Taking it from the history of their CBAs, SMC intended to have the terms of the CBA effective for three (3) years reckoned from the expiration of the old or previous CBA which was on June 30, 1989, as it provides: Sec. 1. This Agreement which shall be binding upon the parties hereto and their respective successorsin-interest, shall become effective and shall remain in force and effect until June 30, 1992.

The argument that the PRC case is applicable is indeed misplaced. We quote with favor the Order of the Secretary of Labor in the light of SMC's peculiar situation as compared with PRC's company situation. It is true that in the Philippine Refining Company case (OS-AJ-0031-91) ( sic), Labor Dispute at Philippine Refining Company), we ruled that the term of the renegotiated provisions of the CBA should coincide with the remaining term of the agency. In doing so, we placed premium on the fact that PRC has only two (2) unions and no other union had yet executed a renewed term of 3 years. Nonetheless, in ruling for a shortened term, we were guided by our considered perception that the said term would improve, rather than ruin, the general welfare of both the workers and the company. It is equally true that once the economic provisions of the CBA expire, the residual representative status of the union is effective for only 2 more years. However, if circumstances warrant that the contract duration which it is soliciting from the company for the benefit of the workers, shall be a little bit longer than its lifespan, then this Office cannot stand in the way of a more ideal situation. We must not lose sight of the fact that the primordial purpose of a collective contract is to promote industrial harmony and stability in the terms and conditions of employment. To our mind, this objective cannot be achieved without giving due consideration to the peculiarities and unique characteristics of the employer. In the case at bar, there is no dispute that the mother corporation (SMC) spun-off two of its divisions and thereby gave birth to two (2) other entities now known as Magnolia Corporation and San Miguel Foods, Inc. In order to effect a smooth transition, the companies concerned continued to recognize the existing unions as the bargaining agents of their respective bargaining units. In the meantime, the other unions in these companies eventually concluded their CBA negotiations on the remaining term and all of them agreed on a 3-year cycle. Notably, the following CBAs were forged incorporating a term of 3-years on the renegotiated provisions, to wit: 1. SMC daily-paid employees union (IBM) 2. SMFI monthly-paid employees and daily-paid employees at the Cabuyao Plant. There is a direct link between the voluntary recognition by the company of the continuing representative status of the unions after the aforementioned spin-offs and the stand of the company for a 3-year renegotiated cycle when the economic provisions of the existing CBAs expired, i.e., the maintain stability and avoid confusion when the umbilical cord of the two divisions were severed from their parent. These two cannot be considered independently of each other for they were intended to reinforce one another. Precisely, the company conceded to face the same union notwithstanding the spin-offs in order to preserve industrial peace during the infancy of the two corporations. If the union would insist on a shorter renegotiated term, then all the advantages gained by both parties in this regard, would have gone to naught. With this in mind, this office feels that it will betray its mandate should we order the parties to execute a 2-year renegotiated term for then chaos and confusion, rather than tranquillity, would be the order of the day. Worse, there is a strong likelihood that such a ruling might spawn discontent and possible mass actions against the company coming from the other unions who had already agreed to a 3-year renegotiated terms. If this happens, the purpose of this Office's intervention into the parties' controversy would have been defeated. 15 The issue as to the term of the non-representation provisions of the CBA need not belabored especially when we take note of the Memorandum of the Secretary of Labor dated February 24, 1994 which was mentioned in the Resolution of Undersecretary BienvenidoLaguesma on January 16, 1995 in the certification election case involving the SMC employees. 16 In said memorandum, the Secretary of Labor had occasion to clarify the term of the renegotiated terms of the CBA vis-a-vis the term of the bargaining agent, to wit: As a matter of policy the parties are encourages (sic) to enter into a renegotiated CBA with a term which would coincide (sic) with the aforesaid five (5) year term of the bargaining representative. In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of three (3) years or one which does not coincide with the said 5-year term, and said agreement is ratified by majority of the members in the bargaining unit, the subject contract is valid and legal and therefore, binds the contracting parties. The same will however not adversely affect the right of another union to challenge the majority status of the incumbent bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA. Thus, we do not find any grave abuse of discretion on the part of the Secretary of Labor in ruling that the effectivity of the renegotiated terms of the CBA shall be for three (3) years. With respect to the second issue, there is, likewise, no merit in petitioner-union's assertion that the employees of Magnolia and SMFI should still be considered part of the bargaining unit of SMC.

Magnolia and SMFI were spun-off to operate as distinct companies on October 1, 1991. Management saw the need for these transformations in keeping with its vision and long term strategy as it explained in its letter addressed to the employees dated August 13, 1991: . . . As early as 1986, we announced the decentralization program and spoke of the need for structures that can react fast to competition, a changing environment, shorter product life cycles and shifts in consumer preference. We further stated in the 1987 Annual Report to Stockholders that San Miguel's businesses will be more autonomous and self sufficient so as to better acquire and master new technologies, cope with a labor force with different expertises and expectations, and master and satisfy the changing needs of our customers and end-consumers. As subsidiaries, Magnolia and FLD will gain better industry focus and flexibility, greater awareness of operating results, and speedier, more responsive decision making. We only have to look at the experience of Coca-Cola Bottlers Philippines, Inc., since this company was organized about ten years ago, to see the benefits that arise from restructuring a division of San Miguel into a more competitive organization. As a stand-alone enterprise, CCBPI engineered a dramatic turnaround and has sustained its sales and market share leadership ever since. We are confident that history will repeat itself, and the transformation of Magnolia and FLD will be successful as that of CCBPI. 17 Undeniably, the transformation of the companies was a management prerogative and business judgment which the courts can not look into unless it is contrary to law, public policy or morals. Neither can we impute any bad faith on the part of SMC so as to justify the application of the doctrine of piercing the corporate veil.18 Ever mindful of the employees' interests, management has assured the concerned employees that they will be absorbed by the new corporations without loss of tenure and retaining their present pay and benefits according to the existing CBAs. 19 They were advised that upon the expiration of the CBAs, new agreements will be negotiated between the management of the new corporations and the bargaining representatives of the employees concerned. As a result of the spin-offs: 1. Each of the companies are run by, supervised and controlled by different management teams including separate human resource/personnel managers. 2. Each Company enforces its own administrative and operational rules and policies and are not dependent on each other in their operations. 3. Each entity maintains separate financial statements and are audited separately from each other.
20

Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical personalities. Thus, they can not belong to a single bargaining unit as held in the case of Diatagon Labor Federation Local 110 of the ULGWP v. Ople. 21 We elucidate: The fact that their businesses are related and that the 236 employees of the Georgia Pacific International Corporation were originally employees of Lianga Bay Logging Co., Inc. is not a justification for disregarding their separate personalities. Hence, the 236 employees, who are now attached to Georgia Pacific International Corporation, should not be allowed to vote in the certification election at the Lianga Bay Logging Co., Inc. They should vote at a separate certification election to determine the collective bargaining representative of the employees of Georgia Pacific International Corporation. Petition-union's attempt to include the employees of Magnolia and SMFI in the SMC bargaining unit so as to have a bigger mass base of employees has, therefore, no more valid ground. Moreover, in determining an appropriate bargaining unit, the test of grouping is mutuality or commonality of interests. The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and working conditions as evinced by the type of work they performed. 22 Considering the spin-offs, the companies would consequently have their respective and distinctive concerns in terms of the nature of work, wages, hours of work and other conditions of employment. Interests of employees in the different companies perforce differ. SMC is engaged in the business of the beer manufacturing. Magnolia is involved in the manufacturing and processing of diary products 23 while SMFI is involved in the production of feeds and the processing of chicken. 24 The nature of their products and scales of business may require different skills which must necessarily be commensurated by different compensation packages. The different companies may have different volumes of work and different working conditions. For such reason, the employees of the different companies see the need to group themselves together and

organize themselves into distinctive and different groups. It would then be best to have separate bargaining units for the different companies where the employees can bargain separately according to their needs and according to their own working conditions. We reiterate what we have explained in the case of University of the Philippines v. Ferrer-Calleja
25

that:

[T]here are various factors which must be satisfied and considered in determining the proper constituency of a bargaining unit. No one particular factor is itself decisive of the determination. The weight accorded to any particular factor varies in accordance with the particular question or questions that may arise in a given case. What are these factors? Rothenberg mentions a good number, but the most pertinent to our case are: (1) will of the employees (Globe Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees. . . . xxxxxxxxx An enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the 10th Annual Report of the National Labor Relations Board wherein it is emphasized that the factors which said board may consider and weigh in fixing appropriate units are: the history, extent and type of organization of employees; the history of their collective bargaining; the history, extent and type of organization of employees in other plants of the same employer, or other employers in the same industry; the skill, wages, work, and working conditions of the employees; the desires of the employees; the eligibility of the employees for membership in the union or unions involved; and the relationship between the unit or units proposed and the employer's organization, management, and operation . . . . . . In said report, it is likewise emphasized that the basic test in determining the appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . . Finally, we take note of the fact that the separate interests of the employees of Magnolia and SMFI from those of SMC has been recognized in the case of Daniel Borbon v. Laguesma. 26 We quote: Even assuming in gratia argumenti that at the time of the election they were regular employees of San Miguel, nonetheless, these workers are no longer connected with San Miguel Corporation in any manner because Magnolia has ceased to be a division of San Miguel Corporation and has been formed into a separate corporation with a personality of its own (p. 305, Rollo). This development, which was brought to our attention by private respondents, necessarily renders moot and academic any further discourse on the propriety of the elections which petitioners impugn via the recourse (p. 319, Rollo). In view of all the foregoing, we do not find any grave abuse of discretion on the part of the Secretary of Labor in rendering the assailed Order. WHEREFORE, the petition is DISMISSED for lack of merit. The Temporary Restraining Order issued on March 29, 1995 is lifted. SO ORDERED.

G.R. No. 85915 January 17, 1990 PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH INTERNATIONAL-UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (PMTI-ULGWF), petitioner, vs. PURA FERRER-CALLEJA, DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND THE CONFEDERATION OF FILIPINO WORKERS (CFW), PROGRESSIVE EMPLOYEES UNION (PEU-TIPI), respondents. Once again we uphold the existing law which encourages one union, one company policy in this petition forcertiorari with prayer for preliminary injunction, The petitioner assails the resolutions of the public respondent dated August 24, 1988 and October 28, 1988 both ordering the holding of a certification election among certain monthlypaid employees of Triumph International Philippines, Inc. (Triumph International for brevity). The petitioner is the recognized collective bargaining agent of the rank-and-file employees of Triumph International with which the latter has a valid and existing collective bargaining agreement effective up to September 24, 1989. On November 25, 1987, a petition for certification election was filed by the respondent union with the Department of Labor and Employment. On January 30, 1988, a motion to dismiss the petition for certification election was filed by Triumph International on the grounds that the respondent union cannot lawfully represent managerial employees and that the petition cannot prosper by virtue of the contract-bar rule. On the same grounds, the petitioner, as intervenor, filed its opposition to the petition oil February 18, 1988. On April 13, 1988, the Labor Arbiter issued an order granting the petition for certification election and directing the holding of a certification election to determine the sole and exclusive bargaining representative of all monthly-paid administrative, technical, confidential and supervisory employees of Triumph International. On appeal, the public respondent on August 24, 1988 affirmed the Labor Arbiter's order with certain modifications as follows:

WHEREFORE, premises considered, the order appealed from is hereby affirmed subject to the modification in that the subject employees sought to be represented by the petitioner union are given the option whether to join the existing bargaining unit composed of daily paid rank-and-file employees. If they opt to join, the pertinent provision of the existing CBA should be amended so as to include them in its coverage. (Rollo, p. 19) On September 5, 1988, Triumph International filed a motion for reconsideration which was denied by the public respondent in a resolution dated October 28, 1988. The sole issue presented by the petitioner in the instant case is whether or not the public respondent gravely abused its discretion in ordering the immediate holding of a certification election among the workers sought to be represented by the respondent union. The petitioner argues that the members of respondent union and managerial employees who are expressly excluded from joining, assisting or forming any labor organization under Art. 245 of the Labor Code. In the determination of whether or not the members of respondent union are managerial employees, we accord due respect and, therefore, sustain the findings of fact made by the public respondent pursuant to the time-honored rule that findings of fact of quasi-judicial agencies like the Bureau of Labor Relations which are supported by substantial evidence are binding on us and entitled to great respect considering their expertise in their respective fields. ( see Phil. Airlines Employees Asso. (PALEA) v. Ferrer-Calleja, 162 SCRA 426 [1988]; Producers Bank of the Philippines v. National Labor Relations Commission, G.R. No. 76001, September 5, 1988; Salvador Lacorte v. Hon. Amado G. Inciong, et al., G.R. No. 52034, September 27, 1988: Johnson and Johnson Labor Union-FFW et al. v. Director cf. Labor Relations, G.R. No. 76427, February 21, 1989; Teofila Arica, et al. v. National Labor Relations Commission, et al., G.R. No. 78210, February 28, 1989; A.M. Oreta& Co. Inc. v. National Labor Relations Commission, G.R. No. 74004, August 10, 1989). According to the Med-Arbiter, while the functions, and we may add, the titles of the personnel sought to be organized appear on paper to involve an apparent exercise of managerial authority, the fact remains that none of them discharge said functions. The petitioner has failed to show reversible error insofar as this finding is concerned. In ruling that the members of respondent union are rank and file and not managerial employees, the public respondent made the following findings: . . . (1) They do not have the power to lay down and execute management policies as they are given ready policies merely to execute and standard practices to observe; 2) they do not have the power to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees but only to recommend for such actions as the power rests upon the personnel manager; and 3) they do not have the power to effectively recommend any managerial actions as their recommendations have to pass through the department manager for review, the personnel manager for attestation and general manager/president for final actions. . . . (At pp. 17-18, Rollo) The petitioner further argues that while it has recognized those signatories and employees occupying the positions of Assistant Manager, Section Chief, Head Supervisor and Supervisor as managerial employees under the existing collective bargaining agreement, in the event that they are declared as rank-and-file employees in the present case they are not precluded from joining and they should join the petitioner. We find the aforesaid contention of the petitioner meritorious in the absence of a showing that there are compelling reasons such as the denial of the right to join the petitioner which is the certified bargaining unit to the members of respondent union or that there are substantial distinctions warranting the recognition of a separate group of rank-andfile employees even as there is an existing bargaining agent for rank and file employees. In the case of Philtranco Service Enterprises v. Bureau of Labor Relations, et. al., G.R. No. 85343 promulgated on June 28, 1989, we stated that: The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the rank and file groups. Thus, Art. 212 (k) of the Code provides: (k) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial action. All employees not falling within this definition are considered rank and file employees for purposes of this Book. In implementation of the aforequoted provision of the law, Section II of Rule 11, Book V of the Omnibus Rules implementing the Labor Code did away with existing supervisory unions classifying the members either as managerial or rank and file employees depending on the work they perform. If they discharge managerial functions, supervisors

are prohibited from forming or joining any labor organization. If they do not perform managerial work, they may join the rank and file union and if none exists, they may form one such rank and file organization. This rule was emphasized in the case ofBulletin Publishing Corp. v. Sanchez, (144 SCRA 628 [1986]). We have explicitly explained in the case of Franklin Barker Company of the Philippines v. Trajano, 157 SCRA 416 [1988] that: The test of "supervisory" or "managerial status" depends on whether, a person possesses authority to act in the interest of his employer in the matter specified in Article 212 (K) of the Labor Code and Section 1 (m) of its Implementing Rules and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. Thus, where such recommendatory powers as in the case at bar, are subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, are not effective and not an exercise of independent judgment as required by law (National Warehousing Corp., v. CIR, 7 SCRA 602-603 [1963]). The public respondent, in its factual findings, found that the supervisory employees sought to be represented by the respondent union are not involved in policy-making and their recommendatory powers are not even instantly effective since the same are still subject to review by at least three managerial heads (department manager, personnel manager and general manager) before final action can be taken. Hence, it is evidently settled that the said employees do not possess a managerial status. The fact that their work designations are either managers or supervisors is of no moment considering that it is the nature of their functions and not the said nomenclatures or titles of their jobs which determines their statuses (see Engineering Equipment, Inc. v. National Labor Relations Commission, 133 SCRA 752 [1984] citing National Waterworks and Sewerage Authority v. NWSA Consolidated Unions, 11 SCRA 766 [1964]). Under the old Industrial Peace Act (Republic Act No. 875), the term "supervisors" had the following definition, to wit: Sec. 2.Definitions As used in this Act. xxxxxxxxx (k) "'Supervisor" means any person having authority in the interest of an employer, to hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline, other employees, or responsibly to direct them, and to adjust their grievances, or effectively to recommend such acts if, in connection with the foregoing, the exercise of such authority is not of a merely routinary or clerical nature but requires the use of independent judgment. Section 3 of the same Act further provides that the supervisors as defined above shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations of their own. With the enactment of the Labor Code (Presidential Decree No. 442 as amended,), the term "supervisor" was replaced by "managerial employee." Book V, Art. 212, subparagraph (k) of said Code reads: (k) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered rank and file employees for purposes of this Book. Art. 245 of the aforementioned Code prohibits managerial employees from joining, assisting or forming any labor organization. Hence, employees who had then formed supervisory unions were classified either as managerial or rankand-file depending on their functions in their respective work assignments. (Bulletin Publishing Corp. v. Sanchez, supra.) The recent amendments to the Labor Code contain separate definitions for managerial and supervisory employees. Section 4 of Republic Act No. 6715 states that: Section 4, Article 212 of the Labor Code of the Philippines, as amended, is further amended to read as follows: (m) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such management actions if the exercise of such authority is not merely routinary or

clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank and file employees for purposes of this Book. Section 18 of the same Act retains the provision on the ineligibility of managerial employees to join any labor organization. However, the right of supervisory employees to form their own union is revived under the said section which states, in part, to wit: . . . Supervisory employees shall not be eligible for membership in a labor organization of the rank-andfile employees but may join, assist or form separate labor organizations of their own. Thus, the right of supervisory employees to organize under the Industrial Peace Act is once more recognized under the present amendments to the Labor Code. (see Adamson & Adamson Inc., v. The Court of Industrial Relations, 127 SCRA 268 [1984]). In the absence of any grave abuse of discretion on the part of the public respondent as to the status of the members of the respondent union, we adopt its findings that the employees sought to be represented by the respondent union are rank-and-file employees. There is no evidence in the records which sufficiently distinguishes and clearly separates the group of employees sought to be represented by the private respondents into managerial and supervisory on one hand or supervisory and rank-and-file on the other. The respondents' pleadings do not show the distinctions in functions and responsibilities which differentiate the managers from the supervisors and sets apart the rank-and-file from either the managerial or supervisory groups. As a matter of fact, the formation of a supervisor's union was never before the Labor Arbiter and the Bureau of Labor Relations and neither is the issue before us. We, therefore, abide by the public respondent's factual findings in the absence of a showing of grave abuse of discretion. In the case at bar, there is no dispute that the petitioner is the exclusive bargaining representative of the rank-and-file employees of Triumph International. A careful examination of the records of this case reveals no evidence that rules out the commonality of interests among the rank-and-file members of the petitioner and the herein declared rank-andfile employees who are members of the respondent union. Instead of forming another bargaining unit, the law requires them to be members of the existing one. The ends of unionism are better served if all the rank-and-file employees with substantially the same interests and who invoke their right to self-organization are part of a single unit so that they can deal with their employer with just one and yet potent voice. The employees' bargaining power with management is strengthened thereby. Hence, the circumstances of this case impel us to disallow the holding of a certification election among the workers sought to be represented by the respondent union for want of proof that the right of said workers to self-organization is being suppressed. Once again we enunciate that the proliferation of unions in an employer unit is discouraged as a matter of policy unless compelling reasons exist which deny a certain and distinct class of employees the right to self-organization for purposes of collective bargaining. (see General Rubber & Footwear Corporation v. Bureau of Labor Relations, 155 SCRA 283 [1987]). Anent the correlative issue of whether or not the contract-bar rule applies to the present case, Rule V, Section 3, Book V of the Implementing Rules and Regulations of the Labor Code is written in plain and simple terms. It provides in effect that if a collective bargaining agreement validly exists, a petition for certification election can only be entertained within sixty (60) days prior to the expiry date of said agreement. Respondent union's petition for certification election was filed on November 25, 1987. At the time of the filing of the said petition, a valid and existing CBA was present between petitioner and Triumph International. The CBA was effective up to September 24, 1989. There is no doubt that the respondent union's CBA constituted a bar to the holding of the certification election as petitioned by the respondent union with public respondent. (see Associated Trade Unions [ATU] v. Trajano, 162 SCRA 318 [1988], Federation of Democratic Trade Union v. PambansangKilusanngPaggawa, 156 SCRA 482 [1987]); Tanduay Distillery Labor Union v. National Labor Relations Commission, 149 SCRA 470 [1987]). The members of the respondent union should wait for the proper time. The CBA in this case expired on September 24, 1989. If a new CBA with the same provisions as the old one has been executed, its terms should be amended so as to conform to the tenor of this decision. WHEREFORE, in view of the foregoing, the assailed resolutions of the public respondent dated August 24, 1988 and October 28, 1988 are hereby SET ASIDE. The restraining order dated January 11, 1989 issued by the Court is made permanent.SO ORDERED. G.R. No. L-77282 May 5, 1989 ASSOCIATED LABOR UNIONS (ALU) petitioner, vs. HON. PURA FERRER-CALLEJA, as Director of the Bureau of Labor Relations, Ministry of Labor and Employment; PHILIPPINE SOCIAL SECURITY LABOR UNION (PSSLU); SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL) and GAW TRADING, INC., respondents.

Petitioner Associated Labor Unions (ALU, for brevity) instituted this special civil action for certiorari and prohibition to overturn the decision of the respondent direcstor 1 dated December 10, 1986, which ordered the holding of a certification election among the rank-and-file workers of the private respondent GAW Trading, Inc. The averments in the petition therefor, which succinctly but sufficiently detail the relevant factual antecedents of this proceedings, justify their being quoted in full, thus: 1. The associated Labor Unions (ALU) thru its regional Vice-Presidents Teofanio C. Nuez, in a letter dated May 7, 1986 (ANNEX C) informed GAW Trading, Inc. that majority of the latter's employees have authorized ALU to be their sole and exclusive bargaining representative, and requested GAW Trading Inc., in the same Letter for a conference for the execution of an initial Collective Bargaining Agreement (CBA); 2. GAW Trading Inc. received the Letter of ALU aforesaid on the same day of May 7, 1986 as acknowledged thereunder and responded (sic) ALU in a letter dated May 12, 1986 (Annex D) indicating its recognition of ALU as the sole and exclusive bargaining agent for the majority of its employees and for which it set the time for conference and/or negotiation at 4:00 P.M. on May 12, 1986 at the Pillsbury Office, Aboitiz Building Juan Luna Street, Cebu City; 3. On the following day of May13, 1986, ALU in behalf of the majority of the employees of GAW Trading Inc. signed and excuted the Collective Bargaining (ANNEX F) ... 4. On May 15, 1986, ALU in behalf of the majority of the employees of GAW Trading Inc. and GAW Trading Inc. signed and executed the Collective Bargaining Agreements (ANNEX F) . . . . 5. In the meantime, at about 1:00 P.M. of May 9, 1986, the Southern Philippines Federation of Labor (SPFL) together with NagkahiusangMamumuosa GAW (NAMGAW) undertook a ... Strike ... after it failed to get the management of GAW Trading Inc. to sit for a conference respecting its demands presented at 11: A.M. on the same day in an effort to pressure GAW Trading Inc. to make a turnabout of its standign recognition of ALU as the sole and exclusive bargaining representative of its employees, as to which strike GAW Trading Inc. filed a petition for Restraining Order/Preliminary Injunction, dfated June 1, 1986 (Annex H) and which strike Labor Arbiter Bonifacio B. Tumamak held as illegal in a decision dated August 5, 1986 (ANNEX I); 6. On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU) Federation ... filed a Certification Election petition (ANNEX J), but as found by Med-Arbiter Candido M. Cumba in its (sic) Order dated Ju ne 11, 1986 (ANNEX K), without having complied (sic) the subscription requirement for which it was merely considered an intervenor until compliance thereof in the other petition for direct recogbnition as bargaining agent filed on MAy 28, 1986 by southern Philippines Federation of Labor (SPFL) as found in the same order (ANNEX K); 7. Int he meantime, the Collective Bargaining Agreement executed by ALU and GAW Trading Inc. (ANNEX F) was duly filed May 27, 1986 with the Ministry of Labor and Employment in Region VII, Cebu city; 8. Nevertheless, Med-Arbiter Candido M. Cumba in his order of June 11, 1986 (Annex K) ruled for the holding of a ceritfication election in all branches of GAW Trading Inc. in Cebu City, as to which ALU filed a Motion for Reconsideration dated June 19, 1986 (ANNEX L) which was treated as an appeal on that questioned Order for which reason the entire record of subject certification case was forwarded for the Director, Bureau of LAbor Relations, Ministry of Labor and Employment, Manila (ANNEX M); 9. Bureau of Labor Relations Director Cresencio B. Trajano, rendered a Decision on August 13, 1986 (Annex B) granting ALU's appeal (Motion for Reconsideration) and set aside the questioned Med-Arbiter Order of June 11, 1986 (Annex K), on the ground that the CBA has been effective and valid and the contract bar rule applicable; 10. But the same Decision of Director Crecensio B. Trajano was sought for reconsideratrion both by Southern Philippines Federation of Labor (SPFL) on August 26, 1986 (ANNEX N), supplemented by the 'SUBMISSION OD ADDITIONAL EVIDENCE' dated September 29, 1986 (ANNEX O), and the Philppine Social Security Labor Union (PSSLU) on October 2, 1986 (ANNEX P), which were opposed by both GAW Trading, Inc. on September 2, 1986 (ANNEX Q) and ALU on September 12, 1986 (ANNEX R); 2 The aforesaid decision of then Director Trajano was thereafter reversed by respondent director in her aforecited decision which is now assailed in this action. A motion for reconsideration of ALU 3 appears to have been disregarded, hence, its present resort grounded on grave abuse of discretion by public respondent. Public respondent ordered the holding of a certification election ruling that the "contract bar rule" relied upon by her predecessor does not apply in the present controversy. According to the decision of said respondent, the collective bargaining agreement involved herein is defective because it "was not duly submitted in accordance with Section I, Rule IX, Book V of the Implementing Rules of Batas PambansaBlg. 130." It was further observed that "(t)here is no proof tending to show that the CBA has been posted in at least two conspicuous places in the 1 establishment at least five days before its ratification and that it has been ratified by the majority of the employees in the bargaining unit." We find no reversible error in the challenged decision of respondent director. A careful consideration of the facts culled from the records of this case, especially the allegations of petitioner itself as hereinabove quoted, yields the conclusion that the collective bargaining agreement in question is indeed defective hence unproductive of the legal effects attributed to it by the former director in his decision which was subsequently and properly reversed. We have previously held that the mechanics of collective bargaining are set in motion only when the following jurisdictional preconditions are present, namely, (1) possession of the status of majority representation by the employees' representative in accordance with any of the means of selection and/or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, paragraph (a), of the New Labor Code. 4 In the present case, the standing of petitioner as an exclusive bargaining representative is dubious, to say the least. It may be recalled that respondent company, in a letter dated May 12, 1986 and addressed to

petitioner, merely indicated that it was "not against the desire of (its) workers" and required petitioner to present proof that it was supported by the majority thereof in a meeting to be held on the same date. 5 The only express recognition of petitioner as said employees' bargaining representative that We see in the records is in the collective bargaining agreement entered into two days thereafter. 6 Evidently, there was precipitate haste on the part of respondent company in recognizing petitioner union, which recognition appears to have been based on the self-serving claim of the latter that it had the support of the majority of the employees in the bargaining unit. Furthermore, at the time of the supposed recognition, the employer was obviously aware that there were other unions existing in the unit. As earlier stated, respondent company's letter is dated May 12, 1986 while the two other unions, Southern Philippine Federation of Labor (hereafter, SPFL and Philippine Social Security Labor Union (PSSLU, for short), went on strike earlier on May 9, 1986. The unusual promptitude in the recognition of petitioner union by respondent company as the exclusive bargaining representative of the workers in GAW Trading, Inc. under the fluid and amorphous circumstances then obtaining, was decidedly unwarranted and improvident. It bears mention that even in cases where it was the then Minister of Labor himself who directly certified the union as the bargaining representative, this Court voided such certification where there was a failure to properly determine with legal certainty whether the union enjoyed a majority representation. In such a case, the holding of a certification election at a proper time would not necessarily be a mere formality as there was a compelling reason not to directly and unilaterally certify a union. 7 An additional infirmity of the collective bargaining agreement involved was the failure to post the same in at least two (2) conspicuous places in the establishment at least five days before its ratification. 8 Petitioners rationalization was that "(b)ecause of the real existence of the illegal strike staged by SPFL in all the stores of GAW Trading, Inc. it had become impossible to comply with the posting requirement in so far as the realization of tits purpose is concerned as there were no impartial members of the unit who could be appraised of the CBA's contents. " 9 This justification is puerile and unacceptable. In the first place, the posting of copies of the collective bargaining agreement is the responsibility of the employer which can easily comply with the requirement through a mere mechanical act. The fact that there were "no impartial members of the unit" is immaterial. The purpose of the requirement is precisely to inform the employees in the bargaining unit of the contents of said agreement so that they could intelligently decide whether to accept the same or not. The assembly of the members of ALU wherein the agreement in question was allegedly explained does not cure the defect. The contract is intended for all employees and not only for the members of the purpoted representative alone. It may even be said the the need to inform the non-members of the terms thereof is more exigent and compelling since, in all likehood, their contact with the persons who are supposed to represent them is limited. Moreover, to repeat, there was an apparent and suspicious hurry in the formulation and finalization of said collective bargaining accord. In the sforementioned letter where respondent company required petitioner union to present proof of its support by the employees, the company already suggested that petitioner ALU at the same time submit the proposals that it intended to embody in the projected agreement. This was on May 12, 1986, and prompltly on thre following day the negoltiation panel; furnish respondent company final copies of the desired agreement whcih, with equal dispatch, was signed on May 15, 1986. Another potent reason for annulling the disputed collective bargaining is the finding of respondent director that one hundred eighty-one( 181) of the two hundred eighty-one (281) workers who "ratified" the same now " strongly and vehemently deny and/or repudiate the alleged negotiations and ratification of the CBA. " 10 Although petitioner claims that only sev en (7) of the repudiating group of workers belong to the total number who allegedly ratified the agreement, nevertheless such substantiated contention weighed against the factujal that the controverted contract will not promote industrial stability . The Court has long since declared that: ... Basic to the contract bar rule is the proposition that the delay of the right to select representatives can be justified only where stability is deemed paramount. Excepted from the contract which do not foster industrial stability, such as contracts where the identity of the representative is in doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice because it does not establish the type of industrial peace contemplated by the law. 11At this juncture, petitioner should be reminded that the technical rules of pocedure do not strictly apply in the adjudication of labor disputes. 12 Consequently, its objection that the evidence with respect to the aforesaid repudiiation of the supposed collective bargaining agreement cannot be considered for the first time on appeal on the Bureau of Labor Relations should be disregarded, especially considering the weighty significance thereof. Both petitioner and private respondent GAW Trading, Inc. allege that the employees of the latter are now enjoying the benefits of the collective bargaining agreement that both parties had forged. However, We cannot find sufficient evidence of record to support this contention. The only evidence cited by petitioner is supposed payment of union fees by said employees, a premise too tenuous to sustain the desired conclusion. Even the actual number of workers in the respondent company is not clear from the records. Said private respondent claims that it is two hundred eighty-one (281) 13 but petitioner suggests that it is more than that number. The said parties should be aware that this Court is not an adjudicator of facts. Worse, to borrow a trite but apt phrase, they would heap the Ossa of confusion upon the Pelion of uncertainty and still expect a definitive ruling on the matter thus confounded.

Additionally, the inapplicability of the contract bar rule is further underscored by the fact that when the disputed agreement was filed before the Labor Regional Office on May 27, 1986, a petition for certification election had already been filed on May 19, 1986. Although the petition was not supported by the signatures of thirty percent (30%) of the workers in the bargaining unit, the same was enough to initiate said certification election.WHEREFORE, the order of the public respondent for the conduct of a certification election among the rank-and-file workers of respondent GAW Trading Inc. is AFFIRMED. The temporary restraining order issued in this case pursuant to the Resolution of March 25, 1987 is hereby lifted.SO ORDERED. G.R. No. 104556 March 19, 1998 NATIONAL FEDERATION OF LABOR (NFL), petitioner, vs. THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO PLANTATION INC., (HPI), respondents. Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file employees of the Hijo Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a certification election held on August 20, 1989. Protests filed by the company and three other unions against the results of the election were denied by the Department of Labor and Employment in its resolution dated February 14, 1991 but, on motion of the company (HPI), the DOLE reconsidered its resolution and ordered another certification election to be held. The DOLE subsequently denied petitioner NFL's motion for reconsideration. The present petition is for certiorari to set aside orders of the Secretary of Labor and Employment dated August 29, 1991, December 26, 1991 and February 17, 1992, ordering the holding of a new certification election to be conducted in place of the one held on August 20, 1989 and, for this purpose, reversing its earlier resolution dated February 14, 1991 dismissing the election protests of private respondent and the unions. The facts of the case are as follows: On November 12, 1988, a certification election was conducted among the rank-and-file employees of the Hijo Plantation, Inc. resulting in the choice of "no union." However, on July 3, 1989, on allegations that the company intervened in the election, the Director of the Bureau of Labor Relations nullified the results of the certification election and ordered a new one to be held. The new election was held on August 20, 1989 under the supervision of the DOLE Regional Office in Davao City with the following results: Total Votes cast Associated Trade Unions (ATU) RUST KILUSAN National Federation of Labor (NFL) Southern Philippines Federation of Labor SANDIGAN UFW No Union Invalid 1,012 39 5 876 4 6 15 55 13

The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and General Workers of the Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc. sought the nullification of the results of the certification election on the ground that it was conducted despite the pendency of the appeals filed by Hijo Labor Union and ULGWP from the order, dated August 17, 1989, of the Med-Arbiter denying their motion for intervention. On the other hand, HPI claimed that it was not informed or properly represented at the pre-election conference. It alleged that, if it was represented at all in the pre-election conference, its representative acted beyond his authority and without its knowledge. Private respondent also alleged that the certification election was marred by massive fraud and irregularities and that out of 1,692 eligible voters, 913, representing 54% of the rank-and-file workers of private respondent, were not able to vote, resulting in a failure of election.

On January 10, 1990, Acting Labor Secretary Dionisiodela Serna directed the Med-Arbiter, Phibun D. Pura, to investigate the company's claim that 54% of the rank-and-file workers were not able to vote in the certification election. In his Report and Recommendation, dated February 9, 1990, Pura stated: 1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989 because of confusion caused by the announcement of the company that the election had been postponed in view of the appeals of ULGWP and Hijo Labor Union (HLU) from the order denying their motions for intervention. In addition, the election was held on a Sunday which was non-working day in the company. 2. There were irregularities committed in the conduct of the election. It was possible that some people could have voted for those who did not show up. The election was conducted in an open and hot area. The secrecy of the ballot had been violated. Management representatives were not around to identify the workers. 3. The total number of votes cast, as duly certified by the representation officer, did not tally with the 41-page listings submitted to the Med-Arbitration Unit. The list contained 1,008 names which were checked or encircled (indicating that they had voted) and 784 which were not, (indicating that they did not vote), or a total of 1,792. but according to the representation officer the total votes cast in the election was 1,012. Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not able to vote and who were surprised to know that their names had been checked to indicate that they had voted. But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of the investigation conducted by Med-Arbiter Pura and so was not heard on its evidence. For this reason, the Med-Arbiter was directed by the Labor Secretary to hear interested parties. The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the annulment of the results of the certification election. Hijo Labor Union manifested that it was joining private respondent HPI's appeal, adopting as its own the documentary evidence presented by the company, showing fraud in the election of August 20, 1989. On the other hand, petitioner NFL reiterated its contention that management had no legal personality to file an appeal because it was not a party to the election but was only a bystander which did not even extend assistance in the election. Petitioner denied that private respondent HPI was not represented in the pre-election conference, because the truth was that a certain Bartolo was present on behalf of the management and he in fact furnished the DOLE copies of the list of employees, and posted in the company premises notices of the certification election. Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692 qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting to all kinds of manipulation to frustrate the election and make the "Non Union" win. In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election. With respect to claim that election could not be held in view of the pendency of the appeals of the ULGWP and Hijo Labor Union from the order of the Med-Arbiter denying their motions for intervention, the DOLE said: 1 . . . even before the conduct of the certification election on 12 November 1988 which was nullified, Hijo Labor Union filed a motion for interventions. The same was however, denied for being filed unseasonably, and as a result it was not included as one of the choices in the said election. After it has been so disqualified thru an order which has become final and executory, ALU filed a second motion for intervention when a second balloting was ordered conducted. Clearly, said second motion is proforma and intended to delay the proceedings. Being so, its appeal from the order of denial did not stay the election and the Med-Arbiter was correct and did not violate any rule when he proceeded with the election even with the appeal. In fact, the Med-Arbiter need not rule on the motion as it has already been disposed of with finality. The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to the election on September 1988 and its motion to withdraw was granted by the Med-Arbiter on October motion for intervention filed before the conduct of a second balloting where the choices has already been predetermined. Let it be stressed that ULGWP and HLU were disqualified to participate in the election through valid orders that have become final and executory even before the first certification election was conducted. Consequently, they may not be allowed to disrupt the proceeding through the filing of nuisance motions. Much less are they possessed of the legal standing to question the results of the second election considering that they are not parties thereto.

The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive fraud and irregularities. Although affidavits were submitted showing that the election was held outside the company premises and private vehicles were used as makeshift precincts, the DOLE found that this was because respondent company did not allow the use of its premises for the purpose of holding the election, company guards were allegedly instructed not to allow parties, voters and DOLE representation officers to enter the company premises, and notice was posted on the door of the company that the election had been postponed. Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been violated, first, because the NFL was not given notice of the investigation nor the chance to present its evidence to dispute this finding and, second, the Med Arbiter's report was not supported by the minutes of the proceedings nor by any record of the interviews of the 315 workers. Moreover, it was pointed out that the report did not state the names of the persons investigated, the questions asked and the answers given. The DOLE held that the report was "totally baseless." The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the exclusive bargaining representative is the sole concern of the workers. It said: "If indeed there were irregularities committed during the election, the contending unions should have been the first to complain considering that they are the ones which have interest that should be protected." 2 Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-KILUSAN, HLU and the HPI and instead certified petitioner NFL as the sole and exclusive bargaining representative of the rank-andfile employees of private respondent HPI. However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of February 14, 1991. Petitioner NFL filed a motion for reconsideration but its motion was denied in an order, dated December 26, 1991. Petitioner's second motion for reconsideration was likewise denied in another order dated February 17, 1992. Hence, this petition. First. Petitioner contends that certification election is the sole concern of the employees and the employer is a mere bystander. The only instance wherein the employer may actively participate is when it files a petition for certification election under Art. 258 of the Labor Code because it is requested to bargain collectively. Petitioner says that this is not the case here and so the DOLE should not have given due course to private respondent's petition for annulment of the results of the certification election. In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier resolution because "workers of Hijo Plantation, Inc. have deluged this Office with their letter-appeal, either made singly or collectively expressing their wish to have a new certification election conducted" and that as a result "the firm position we held regarding the integrity of the electoral exercise had been somewhat eroded by this recent declaration of the workers, now speaking in their sovereign capacity." It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not the petition of the employer but the letter-appeals that the employees sent to his office denouncing the irregularities committed during the August 20, 1989 certification election. The petition of private respondent was simply the occasion for the employees to voice their protests against the election. Private respondent HPI attached to its Supplemental Appeal filed on September 5, 1989 the affidavits and appeals of more or less 784 employees who claimed that they had been disfranchised, as a result of which they were not able to cast their votes at the August 20, 1989 election. It was the protests of employees which moved the DOLE to reconsider its previous resolution of February 14, 1991, upholding the election. Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the employer. The manner in which the election was held could make the difference between industrial strife and industrial harmony in the company. What an employer is prohibited from doing is to interfere with the conduct of the certification election for the purpose of influencing its outcome. But certainly an employer has an abiding interest in seeing to it that the election is clean, peaceful, orderly and credible. Second. The petitioner argues that any protest concerning the election should be registered and entered into the minutes of the election proceedings before it can be considered. In addition, the protest should be formalized by filing it within five (5) days. Petitioner avers that these requirements are condition precedents in the filing of an appeal. Without these requisites the appeal cannot prosper. It cites the following provisions of Book V, Rule VI of the Implementing Rules and Regulations of the Labor Code: Sec. 3.Representation officer may rule on any on-the-spot question. The Representation officer may rule on any on-the-spot question arising from the conduct of the election. The interested party may however, file a protest with the representation officer before the close of the proceedings.

Protests not so raised are deemed waived. Such protests shall be contained in the minutes of the proceedings. Sec. 4.Protest to be decided in twenty (20) working days . Where the protest is formalized before the medarbiter within five (5) days after the close of the election proceedings, the med-arbiter shall decide the same within twenty (20) working days from the date of its formalization. If not formalized within the prescribed period, the protest shall be deemed dropped. The decision may be appealed to the Bureau in the same manner and on the same grounds as provided under Rule V. In this case, petitioner maintains that private respondent did not make any protest regarding the alleged irregularities (e.g., massive disfranchisement of employees) during the election. Hence, the appeal and motions for reconsideration of private respondent HPI should have been dismissed summarily. The complaint in this case was that a number of employees were not able to cast their votes because they were not properly notified of the date. They could not therefore have filed their protests within five (5) days. At all events, the Solicitor General states, that the protests were not filed within five (5) days, is a mere technicality which should not be allowed to prevail over the workers' welfare. 3 As this Court stressed in LVN Pictures, Inc. v. Phil.Musicians Guild, 4 it is essential that the employees must be accorded an opportunity to freely and intelligently determine which labor organization shall act in their behalf. The workers in this case were denied this opportunity. Not only were a substantial number of them disfranchised, there were, in addition, allegations of fraud and other irregularities which put in question the integrity of the election. Workers wrote letters and made complaints protesting the conduct of the election. The Report of Med-Arbiter Pura who investigated these allegations found the allegations of fraud and irregularities to be true. In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in the voting and bribery. 5 We hold the same in this case. The workers' right to self-organization as enshrined in both the Constitution and Labor Code would be rendered nugatory if their right to choose their collective bargaining representative were denied. Indeed, the policy of the Labor Code favors the holding of a certification election as the most conclusive way of choosing the labor organization to represent workers in a collective bargaining unit. 6 In case of doubt, the doubt should be resolved in favor of the holding of a certification election. Third. Petitioner claims that the contending unions, namely, the Association of Trade Union (ATU), the Union of Filipino Workers (UFW), as well as the representation officers of the DOLE affirmed the regularity of the conduct of the election and they are now estopped from questioning the election. In its comment, ATU-TUCP states, . . . The representative of the Association of Trade Unions really attest to the fact that we cannot really identify all the voters who voted on that election except some workers who were our supporters in the absence of Hijo Plantation representatives. We also attest that the polling precinct were not conducive to secrecy of the voters since it was conducted outside of the Company premises. The precincts were ( sic) the election was held were located in a passenger waiting shed infront of the canteen across the road; on the yellow pick-up; at the back of a car; a waiting shed near the Guard House and a waiting shed infront of the Guard House across the road. Herein private respondents also observed during the election that there were voters who dictated some voters the phrase "number 3" to those who were casting their votes and those who were about to vote. Number 3 refers to the National Federation of Labor in the official ballot. ATU-TUCP explains that it did not file any protest because it expected workers who had been aggrieved by the conduct of the election would file their protest since it was in their interests that they do so. Fourth. Petitioner points out that the letter-appeals were written almost two years after the election and they bear the same dates (May 7 and June 14, 1991); they are not verified; they do not contain details or evidence of intelligent acts; and they do not explain why the writers failed to vote. Petitioner contends that the letter-appeals were obtained through duress by the company. We find the allegations to be without merit. The records shows that as early as August 22 and 30, 1989, employees already wrote letters/affidavits/ manifestoes alleging irregularities in the elections and disfranchisement of workers. 7 As the Solicitor General says in his Comment, 8 these affidavits and manifestoes, which were attached as Annexes "A" to "CC" and Annexes "DD" to "DD-33" to private respondent's Supplemental Petition of September 5, 1989 just 16 days after the August 20, 1989 election. It is not true therefore that the employees slept on their rights. As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were prepared by private respondent HPI and employees were merely asked to sign them, suffice it to say that this is plain speculation which petitioner has not proven by competent evidence.

As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases. The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier letters 9of the workers already gave details of what they had witnessed during the election, namely the open balloting (with no secrecy), and the use of NFL vehicles for polling precinct. These letters sufficiently give an idea of the irregularities of the certification election. Similarly, the letters containing the signatures of those who were not able to vote are sufficient. They indicate that the writers were not able to vote because they thought the election had been postponed, especially given the fact that the two unions had pending appeals at the time from orders denying them the right to intervene in the election. WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary of Labor and Employment are AFFIRMED. SO ORDERED.

G.R. No. 106830 November 16, 1993 R. TRANSPORT CORPORATION, petitioner, vs. HON. BIENVIENIDO E. LAGUESMA. in his capacity as Undersecretary of the Department of Labor and Employment, CHRISTIAN LABOR ORGANIZATION OF THE PHILIPPINES (CLOP), NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), and ASSOCIATED LABOR UNIONS (ALU-TUCP), respondents. This is a petition for certiorari under Rule 65 of the Rules of Court which seeks to set aside the Resolutions of the Undersecretary of the Department of Labor and Employment (DOLE) dated July 22, 1992, affirming the order of the Med-Arbiter calling for the conduct of the certification election, and August 25, 1992, denying petitioner's motion for reconsideration. On January 4, 1991, respondent Christian Labor Organization of the Philippines (CLOP), filed with the Med-Arbitration Unit of the DOLE a petition for certification election among the rank and file employees of the petitioner (NCR-OD-M91-01-002). On April 8, 1991, Med-Arbiter A. Dizon dismissed the petition on the ground that the bargaining unit sought to be represented by respondent did not include all the eligible employees of petitioner but only the drivers, conductors and conductresses to the exclusion of the inspectors, inspectresses, dispatchers, mechanics and washerboys. On May 10, 1991, respondent. CLOP rectified its mistake and filed a second petition for certification election,which included all the rank and file employees of the company, who hold non-managerial. and non-supervisorial positions. Petitioner filed a motion to dismiss the second petition and contended that the dismissal of the first petition constituted res judicata. Petitioner argued that respondent CLOP should have interposed an appeal to the dismissal of the first petition and its failure to do so barred it from filing another petition for certification election.

On July 3, 1991, Med-Arbiter R. Parungo rendered a decision, which ordered that a certification election among the regular rank and file workers of petitioner company be conducted ( Rollo, pp. 87-91). On October 16, 1991, the Associated Labor Unions (ALU-TUCP) filed a motion for intervention (NCR OD-M-91-01-002) and alleged that it has members in the proposed bargaining unit. Subsequently, the National Federation of Labor Unions (NAFLU) filed a separate petition for certification election (NCR-OD-M-91-10-058) and a motion to consolidate related cases to avoid confusion. Dissatisfied with the Decision dated July 3, 1991 rendered by Med-Arbiter R. Parungo, petitioner appealed to the DOLE Secretary, who, through Undersecretary Bienvenido E. Laguesma, affirmed the Med-Arbiter in its Resolution dated July 22, 1992 calling for the conduct of the certification election ( Rollo, pp. 25-28). The Resolution, in pertinent part, reads as follows: xxxxxxxxx The defense of res judicata is not obtaining in the present petition for certification election. It is settled that for res judicata to apply there must be a final judgment on the merits on matters put in issue. In the instant case, it could not be said that there is a final judgment on the merits of the petition simply because the composition of the present proposed bargaining unit is different from that in the first petition. Moreover, there are now other parties involved, and therefore, it would not be correct to say that the parties in the said two cases are identical. xxxxxxxxx With regard however, to the question on propriety of consolidation, there is merit in the argument of respondent-appellant on the need to consolidate the separate petitions for certification election because they involve the same bargaining unit. Case No. NCR-OD-M-91-10-058 should be consolidated with that of Case No. NCR- OD-M-91-05-062, where the petition of NAFLU should be treated as an intervention and resolved by the Med-Arbiter together with the intervention of ALU-TUCP. PREMISES CONSIDERED, the Order of the Med-Arbiter calling for the conduct of the certification election is hereby affirmed subject to the resolution of the Med-Arbiter of the motions for intervention aforementioned (Rollo, pp. 27-28; emphasis supplied). On July 31, 1992, petitioner filed a Motion for Reconsideration, again stressing the principle of res judicata. Petitioner further argued that the second petition for a certification election by respondent CLOP, NAFLU and ALU-TUCP were barred at least for a period of one year from the time the first petition of CLOP was dismissed pursuant to Section Rule V, Book V of the Omnibus Rules Implementing the Labor Code as amended. On August 25, 1991, Undersecretary Laguesma denied the motion for reconsideration ( Rollo, pp. 32-34). On September 3, 1992, petitioner filed a Motion to Suspend Proceedings based on Prejudicial Questions as an Addendum to the Motion for Reconsideration filed on July 31, 1992. Petitioner argued that the present case must be indefinitely suspended until the following cases are resolved by the NLRC and the Supreme Court: a) NLRC-NCR Case No. 00-08-04708-91 entitled "R". Transport Corporation v. Jose S. Torregaza, et. al., wherein Labor Arbiter de Castro declared the strike staged by respondent CLOP illegal and ordered the strikers to pay petitioner the amount of P10,000.00 as exemplary damages; b) NLRC-NCR Case No. 06-03415092 filed by respondent CLOP and its members for illegal dismissal; and NLRC-NCR Case No. 00-08-04389-92 filed by respondent CLOP in behalf of its affected members for illegal dismissal (Rollo, pp. 139-145). On September 29, 1992, Undersecretary Laguesma in a resolution denied the motion to suspend the conduct of the certification election. The pertinent portion of said resolution reads as follows: The pendency of NLRC-NCR Cases Nos. 00-08- 04708-91, 06-03415092 and 00-08-04389-92 before the NLRC is not a valid ground for the suspension of the already stalled petition for certification election which must be resolved with dispatch. This must be so, because the employees subject of the pending cases before the NLRC legally remain as employees of respondent until the motion to declare them as having lost their employment status by reason of the illegal strike or their complaint for illegal dismissal is finally resolved . (Rollo, pp. 181182; emphasis supplied)

On October 14, 1992, petitioner filed a motion for reconsideration of the Resolution dated September 29, 1992 which was subsequently denied by Undersecretary Laguesma on October 29, 1992 ( Rollo, pp. 29-31). Petitioner filed a Comment and Objection to the Order dated October 29, 1992 with Urgent Motion to Dismiss the Petition for Certification Election. Without waiting for the resolution of the motion to dismiss, petitioner resorted to this Court by way of the instant special civil action. This petition is without merit. Before the principle of res judicata can be operative, the following requisites must be present: a) the former judgment or order must be final; b) it must be a judgment ororder on the merits; c) it must have been rendered by a court having jurisdiction over the subject-matter and the parties; and d) there must be, between the first and second actions, identity of parties (Nabus v. Court of Appeals, 193 SCRA 732 [1991]). In the case at bench, it cannot be said that the parties in the first and second actions were identical. The first action was dismissed by the Med-Arbiter because it excluded parties essential to the bargaining unit such as inspectors, inspectresses, dispatchers and washer boys. The second petition included all the employees who were excluded in the first petition. Therefore, the Med-Arbiter was correct when he gave due course to the second petition for certification election after respondent CLOP corrected its mistake. Likewise untenable is petitioner's contention that the second petition for certification election should have been filed after one year from the dismissal of the first petition certification election under Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code as amended. Said section provides as follows: When to file In the absence of collective bargaining agreement duly registered in accordance with Article 231 of the Code, a petition for certification election may be filed any time. However, no certification election may be held within one year from the date of the issuance of a final certification election result (Emphasis supplied). Apparently, petitioner misread the above-mentioned provision of law. The phrase "final certification election result" means that there was an actual conduct of election i.e. ballots were cast and there was a counting of votes. In this case, there was no certification election conducted precisely because the first petition was dismissed, on the ground of a defective petition which did not include all the employees who should be properly included in the collective bargaining unit. Devoid of merit is petitioner's contention that the employment status of the members of respondent CLOP who joined the strike must first be resolved before a certification election can be conducted. As held in the case of Philippine Fruits and Vegetables Industries, Inc. v. Torres, 211 SCRA 95 (1992): At any rate, it is now well-settled that employees who have been improperly laid-off but who have a present, unabandoned right to or expectation of re-employment, are eligible to vote in certification elections (Rothenberg on Labor Relations, p. 548). Thus, and to repeat, if the dismissal is under question, as in the case now at bar whereby a case of illegal dismissal and/or unfair labor practices was filed, the employees concerned could still qualify to vote in the elections. Therefore, the employees of petitioner who participated in the strike, legally remain as such, until either the motion to declare their employment status legally terminated or their complaint for illegal dismissal is resolved by the NLRC. It should be noted that it is the petitioner, the employer, which has offered the most tenacious resistance to the holding of a certification election. This must not be so for the choice of a collective bargaining agent is the sole concern of the employees. The employer has no right to interfere in the election and is merely regarded as a bystander (Divine Word University of Tacloban v. Secretary of Labor and Employment, 213 SCRA 759 [1992]). Finally, petitioner's Comment and Objection to the Order dated October 29, 1992 with Urgent Motion to Dismiss the Petition for Certification Election is still pending with the Undersecretary of Labor. The resort to judicial action by petitioner is premature. Hence, it is also guilty of forum-shopping in pursuing the same cause of action involving the same issue, parties and subject matter before two different fora. WHEREFORE, the Court Resolved to DISMISS the petition. SO ORDERED.

G.R. No. 107792 March 2, 1998 SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-TUCP), petitioners, vs. THE SECRETARY OF LABOR, NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER AND EXPORTER CORPORATION, respondents.

MENDOZA, J.: This is a petition for review on certiorari of the decision, dated October 8, 1992 and order dated November 12, 1992, of Undersecretary of Labor and Employment BienvenidoLaguesma, ordering a certification election to be conducted among the employees of respondent company. The facts of the case are as follows. On January 15, 1991, a certification election was conducted among employees of respondent Permex Producer and Exporter Corporation (hereafter referred to as Permex Producer). The results of the elections were as follows: National Federation of Labor (NFL) No Union Spoiled Ballots Marked Ballots Challenged Ballots 235 466 18 9 7

However, some employees of Permex Producer formed a labor organization known as the SamahangManggagawasaPermex (SMP) which they registered with the Department of Labor and Employment on March 11, 1991. The union later affiliated with the Philippine Integrated Industries Labor Union (PIILU). On August 16, 1991, SamahangManggagawasaPermex-Philippine Integrated Industries Labor Union (SMP-PIILU), wrote the respondent company requesting recognition as the sole and exclusive bargaining representative of employees at the Permex Producer. On October 19, 1991 Permex Producer recognized SMP-PIILU and, on December 1, entered into a collective bargaining agreement with it. The CBA was ratified between December 9 and 10, 1991 by the majority of the rank and file employees of Permex Producer. On December 13, 1991, it was certified by the DOLE. On February 25, 1992, respondent NFL filed a petition for certification election, but it was dismissed by Med-Arbiter Edgar B. Gongalos in an order dated August 20, 1992. Respondent NFL then appealed the order to the Secretary of Labor and Employment. On October 8, 1992, the Secretary of Labor, through Undersecretary BienvenidoLaguesma, set aside the order of the Med-Arbiter and ordered a certification election to be conducted among the rank and file employees at the Permex Producer, with the following choices: 1. National Federation of Labor 2. SamahangManggagawasaPermex 3. No union Petitioner moved for a reconsideration but its motion was denied in an order dated November 12, 1992. Hence, this petition. Two arguments are put forth in support of the petition. First, it is contended that petitioner has been recognized by the majority of the employees at Permex Producer as their sole collective bargaining agent. Petitioner argues that when a group of employees constituting themselves into an organization and claiming to represent a majority of the work force requests the employer to bargain collectively, the employer may do one of two things. First, if the employer is satisfied with the employees' claim the employer may voluntarily recognize the union by merely bargaining collectively with it. The formal written confirmation is ordinarily stated in the collective bargaining agreement. Second, if on the other hand, the employer refuses to recognize the union voluntarily, it may petition the Bureau of Labor Relations to conduct a certification election. If the employer does not submit a petition for certification election, the

union claiming to represent the employees may submit the petition so that it may be directly certified as the employees' representative or a certification election may be held. The case of Ilaw at BuklodngManggagawa v. Ferrer-Calleja, 1 cited by the Solicitor General in his comment filed in behalf of the NLRC, is particularly apropos. There, the union also requested voluntary recognition by the company. Instead of granting the request, the company petitioned for a certification election. The union moved to dismiss on the ground that it did not ask the company to bargain collectively with it. As its motion was denied, the union brought the matter to this Court. In sustaining the company's stand, this Court ruled: . . . Ordinarily, in an unorganized establishment like the Calasiao Beer Region, it is the union that files a petition for a certification election if there is no certified bargaining agent for the workers in the establishment. If a union asks the employer to voluntarily recognize it as the bargaining agent of the employees, as the petitioner did, it in effect asks the employer to certify it as the bargaining representative of the employees A CERTIFICATION WHICH THE EMPLOYER HAS NO AUTHORITY TO GIVE, for it is the employees' prerogative (not the employer's) to determine whether they want a union to represent them, and, if so, which one it should be. (emphasis supplied) In accordance with this ruling, Permex Producer should not have given its voluntary recognition to SMP-PIILU-TUCP when the latter asked for recognition as exclusive collective bargaining agent of the employees of the company. The company did not have the power to declare the union the exclusive representative of the workers for the purpose of collective bargaining, Indeed, petitioner's contention runs counter to the trend towards the holding of certification election. By virtue of Executive Order No. 111, which became effective on March 4, 1987, the direct certification previously allowed under the Labor Code had been discontinued as a method of selecting the exclusive bargaining agents of the workers. 2 Certification election is the most effective and the most democratic way of determining which labor organization can truly represent the working force in the appropriate bargaining unit of a company. 3 Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its application for registration with the DOLE and that when petitioner signed the CBA with the company, the CBA was ratified by 542 employees. Petitioner contends that such support by the majority of the employees justifies its finding that the CBA made by it is valid and binding. But it is not enough that a union has the support of the majority of the employees. It is equally important that everyone in the bargaining unit be given the opportunity to express himself. 4 This is especially so because, in this case, the recognition given to the union came barely ten (10) months after the employees had voted "no union" in the certification election conducted in the company. As pointed out by respondent Secretary of Labor in his decision, there can be no determination of a bargaining representative within a year of the proclamation of the results of the certification election. 5 Here the results, which showed that 61% of the employees voted for "no union," were certified only on February 25, 1991 but on December 1, 1991 Permex Producer already recognized the union and entered into a CBA with it. There is something dubious about the fact that just ten (10) months after the employees had voted that they did not want any union to represent them, they would be expressing support for petitioner. The doubt is compounded by the fact that in sworn affidavits some employees claimed that they had either been coerced or misled into signing a document which turned out to be in support of petitioner as its collective bargaining agent. Although there were retractions, we agree with the Solicitor General that retractions of statements by employees adverse to a company (or its favored union) are oftentimes tainted with coercion and intimidation. For how could one explain the seeming flipflopping of position taken by the employees? The figures claimed by petitioner to have been given to it in support cannot readily be accepted as true. Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253, 253-A and 256 of the Labor Code and Book V, Rule 5, 3 of its Implementing Rules and Regulations, a petition for certification election or motion for intervention may be entertained only within 60 days prior to the date of expiration of an existing collective bargaining agreement. The purpose of the rule is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good faith and for the stipulated original period. Excepted from the contract-bar rule are certain types of contracts which do not foster industrial stability, such as contracts where the identity of the representative is in doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice because it does not establish the kind of industrial peace contemplated by the law. 6 Such situation obtains in this case. The petitioner entered into a CBA with Permex Producer when its status as exclusive bargaining agent of the employees had not been established yet. WHEREFORE, the challenged decision and order of the respondent Secretary of Labor are AFFIRMED.SO ORDERED.

G.R. No. L-67485 April 10, 1992 NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)TUCP,petitioner, vs. DIR. CRESENCIANO B. TRAJANO, Bureau of Labor Relations, Ministry of Labor and Employment, Manila, FEDERATION OF UNIONS OF RIZAL (FUR)-TUCP, and CALINOG REFINERY CORPORATION (NASUREFCO),respondents. This petition for certiorari seeks to annul and set aside the decision rendered by the respondent Director Cresenciano B. Trajano of the Bureau of Labor Relations, Ministry of Labor and Employment, dated November 18, 1983 affirming the order of Med-Arbiter Demetrio Correa dated May 2, 1983 giving due course to the petition for certification election filed by private respondent Federation of Unions of Rizal (FUR)-TUCP; and the order dated March 21, 1984 denying the motion for reconsideration for lack of merit. The antecedent facts are as follows: Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP)-TUCP is the certified exclusive bargaining representative of the rank and file workers of Calinog Refinery Corporation. Private respondent Federation of Unions of Rizal (FUR)-TUCP is a labor organization duly registered with the Department of Labor and Employment while private respondent Calinog Refineries Employees Union (CREU)-NACUSIP is the certified exclusive bargaining representative of the rank and file workers of the private respondent Calinog Refinery Corporation by virtue of the certification election held on March 30, 1981. On June 21, 1982, petitioner union filed a petition for deadlock in collective bargaining with the Ministry of Labor and Employment (now Department of Labor and Employment). In order to obviate friction and tension, the parties agreed to submit the petition for deadlock to compulsory arbitration on July 14, 1982 and was docketed as RAB Case No. VI0220-82. On July 21, 1982, private respondent FUR-TUCP filed with the Regional Office No. VI, MOLE (now DOLE), Iloilo City a petition for certification election among the rank and file employees of private respondent company, alleging that: (1) about forty-five percent (45%) of private respondent company's employees had disaffiliated from petitioner union and joined private respondent union; (2) no election had been held for the past twelve (12) months; and (3) while petitioner union had been certified as the sole collective bargaining agent, for over a year it failed to conclude a collective bargaining agreement with private respondent company. Petitioner union filed a motion to intervene in the petition for certification election filed by private respondent union. By order dated July 23, 1982, the Acting Med-Arbiter Pacifico V. Militante dismissed the petition for certification election for lack of merit since the petition is barred by a pending bargaining deadlock. On August 25, 1982, private respondent union filed an appeal to the Bureau of Labor Relations, Manila. The Bureau of Labor Relations through respondent Director Cresenciano B. Trajano rendered a decision on September 30, 1982 setting aside the order of the Acting Med-Arbiter and remanding the case to Regional Office VI, Iloilo City for hearing and reception of evidence. On May 2, 1983, Honorable Med-Arbiter Demetrio Correa issued an order in LRD Case No. 4293 giving due course to the petition of private respondent FUR-TUCP and ordering that an election be held within 20 days from receipt of the order. From the order of Med-Arbiter Correa, petitioner interposed an appeal to the Bureau of Labor Relations. During the pendency of the appeal or on September 10, 1983, a collective bargaining agreement was entered and executed by the management of the National Sugar Refineries Co., Inc. and petitioner union and was subsequently ratified by a majority of the rank and file employees. On the basis of the concluded CBA, the Honorable Executive Labor Arbiter CelerinoGrecia II issued an award dated September 12, 1983 adopting the submitted agreement as the CBA between the parties. On November 18, 1983, respondent Director Trajano rendered a decision affirming with qualification the order of MedArbiter Correa dated May 2, 1983, the pertinent portions of which provide as follows: It appears that the Calinog Refinery Employees, Union-NACUSIP-TUCP no longer commands the support of the majority of the employees. This observation is buttressed by the fact that more than seventy five percent (75%) of the workers have disaffiliated from the intervenor and joined the ranks

of the petitioner. Thus, intervenor's status as sole and exclusive bargaining representative is now of doubtful validity. For the above-mentioned reason, we stand obliged to resort to the most expeditious, practical and democratic option open to us, that is, the conduct of a certification election. Through this forum, the true sentiments of the workers as to which labor organization deserves their loyalty can be fairly ascertained. In any event, it is our view that the 10 September 1983 collective agreement should be respected by the union that shall prevail in the election not only because it is an arbitration award but also because substantial benefits are provided thereunder. Otherwise stated, the winning union shall administer said agreement. In passing, it may be pointed out that CAREFCO has been included as one of the contending parties in the election. We feel that it is error for the acting Med-Arbiter to do so considering that the company is a mere bystander in this representation dispute. WHEREFORE, as above qualified, the Order dated 2 May 1983 is affirmed. SO DECIDED. (Rollo, pp. 40-41) From the decision of respondent Director Trajano, petitioner filed a motion for reconsideration dated December 6, 1983. The respondent Director in his order dated March 21, 1984 denied the motion for reconsideration for lack of merit and affirmed the Bureau's decision of November 18, 1983. Hence, this petition. This Court in a resolution dated December 10, 1984 resolved to grant the urgent motion of petitioner for the issuance of a restraining order and issued a temporary restraining order enjoining the respondents from conducting and holding the certification election on December 17, 1984 among the rank and file employees of respondent company (see Rollo, p. 99). Petitioner maintains that respondent Director Trajano committed grave abuse of discretion amounting to lack of jurisdiction when it rendered a decision affirming the order of Med-Arbiter Correa finding that the deadlock is "nothing but a mere subterfuge to obstruct the exercise of the workers of their legitimate right to self-organization, a last minute maneuver to deny the workers the exercise of their constitutional rights" ( Rollo, p. 28) and ordering a certification election among the rank and file workers of respondent company. Furthermore, petitioner stresses that the finding that the contract (deadlock) bar rule has no room for application in the instant case, runs counter to the provision of Section 3 of the Rules Implementing Batas PambansaBlg. 130 which prohibits the filing of a petition for certification election during the pendency of a bargaining deadlock. In conformity with the petitioner's contentions, the Solicitor General insists that the respondent Director has acted arbitrarily in issuing the assailed decision and order. In addition, it argues that the CBA concluded on September 10, 1983 has a life span of three (3) years and constitutes a bar to the petition for certification election pursuant to Section 3 of the Rules Implementing Batas PambansaBlg. 130. The pivotal issue therefore, is whether or not a petition for certification election may be filed during the pendency of a bargaining deadlock submitted to arbitration or conciliation. After a careful review of the records of this case, the Court finds the petition meritorious and holds that the respondent Director gravely abused his discretion when he affirmed the order of Med-Arbiter Correa calling for a certification election among the rank and file workers of private respondent company. The law on the matter is Section 3, Book V, Rule V of the Omnibus Rules Implementing the Labor Code, to wit: Sec. 3.When to file. In the absence of a collective bargaining agreement duly registered in accordance with Article 231 of the Code, a petition for certification election may be filed at any time. However, no certification election may be held within one year from the date of issuance of a final certification election result. Neither may a representation question be entertained if, before the filing of a petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted to conciliation or arbitration or had become the subject of valid notice or strike or lockout.

If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement. The clear mandate of the aforequoted section is that a petition for certification election may be filed at any time, in the absence of a collective bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification election in the following cases: (1) during the existence of a collective bargaining agreement except within the freedom period; (2) within one (1) year from the date of issuance of declaration of a final certification election result; or (3) during the existence of a bargaining deadlock to which an incumbent or certified bargaining agent is a party and which had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. The Deadlock Bar Rule simply provides that a petition for certification election can only be entertained if there is no pending bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. The principal purpose is to ensure stability in the relationship of the workers and the management. In the case at bar, a bargaining deadlock was already submitted to arbitration when private respondent FUR-TUCP filed a petition for certification election. The same petition was dismissed for lack of merit by the Acting Med-Arbiter in an order dated July 23, 1982 on the sole ground that the petition is barred by a pending bargaining deadlock. However, respondent Director set aside the same order and subsequently affirmed an order giving due course to the petition for certification election and ordering that an election be held. The law demands that the petition for certification election should fail in the presence of a then pending bargaining deadlock. A director of the Bureau of Labor Relations, by the nature of his functions, acts in a quasi-judicial capacity. We find no reason why his decision should be beyond this Court's review. Administrative officials, like the director of the Bureau of Labor Relations are presumed to act in accordance with law but this Court will not hesitate to pass upon their work where there is a showing of abuse of authority or discretion in their official acts or when their decisions or orders are tainted with unfairness or arbitrariness. Noteworthy is the fact that a certification was issued by Executive Labor Arbiter CelerinoGrecia II on October 21, 1982 certifying that the petition for deadlock in RAB Case No. VI-0220-82 was forwarded to the Executive Labor Arbiter for compulsory arbitration (see Rollo, p. 19). The respondent Director erred in finding that the order issued by the MedArbiter dismissing the petition for certification election was irregular and was merely based on information. All premises considered, the Court is convinced that the assailed decision and order of the respondent Director is tainted with arbitrariness that would amount to grave abuse of discretion. ACCORDINGLY, the petition is GRANTED; the decision dated November 18, 1983 and order dated March 21, 1984 of the respondent Director Cresenciano B. Trajano are hereby nullified and the order of Med-Arbiter Militante dated July 23, 1982 dismissing the petition for certification election is hereby reinstated. SO ORDERED.

G.R. No. 75810 September 9, 1991 KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner, vs. HON. CRESENCIANO B. TRAJANO in his capacity as Director, Bureau of Labor Relations, and VIRON GARMENTS MFG., CO., INC., respondents. The propriety of holding a certification election is the issue in the special civil action of certiorari at bar. By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National Federation of Labor Unions (NAFLU) was declared the exclusive bargaining representative of all rank-and-file employees of Viron Garments Manufacturing Co., Inc. (VIRON). More than four years thereafter, or on April 11, 1985, another union, the KaisahanngManggagawang Pilipino KAMPIL Katipunan filed with the Bureau of Labor Relations a petition for certification election among the employees of VIRON. The petition allegedly counted with the support of more than thirty percent (30%) of the workers at VIRON. NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14, 1985, that a certification election be held at VIRON as prayed for, after ascertaining that KAMPIL had complied with all the requirements of law and that since the certification of NAFLU as sole bargaining representative in 1981, no collective bargaining agreement had been executed between it and VIRON. NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985, it was in process of collective bargaining with VIRON; that there was in fact a deadlock in the negotiations which had prompted it to file a notice of strike; and that these circumstances constituted a bar to the petition for election in accordance with Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code, 1 reading as follows: SEC. 3.When to file. In the absence of a collective bargaining agreement submitted in accordance with Article 231 of the Code, a petition for certification election may be filed at any time. However, no certification election may be held within one year from the date of issuance of declaration of a final certification election result. Neither may a representation question be entertained if, before the filing of a petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement. Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April 30, 1986 setting aside the Med-Arbiter's Order of June 14, 1985 and dismissing KAMPIL's petition for certification election. This disposition is justified in the Resolution as follows: ... While it may be true that the one-year period (mentioned in Section 3 above quoted) has long run its course since intervenor NAFLU was certified on February 27, 1981, it could not be said, however, that NAFLU slept on its right to bargain collectively with the employer. If a closer look was made on the history of labor management relations in the company, it could be readily seen that the delay in the

negotiations for and conclusion of a collective agreement the object of the one-year period could be attributed first, on the exhaustion of all legal remedies in the representation question twice initiated in the company before the filing of the present petition and second, to management who had been resisting the representations of NAFLU in collective bargaining. The one-year period therefore, should not be applied literally to the present dispute, especially considering that intervenor had to undergo a strike to bring management to the negotiation table. ... KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the present certiorari action. It is evident that the prohibition imposed by law on the holding of a certification election "within one year from the date of issuance of declaration of a final certification election result' in this case, from February 27, 1981, the date of the Resolution declaring NAFLU the exclusive bargaining representative of rank-and-file workers of VIRON can have no application to the case at bar. That one-year period-known as the "certification year" during which the certified union is required to negotiate with the employer, and certification election is prohibited 2 has long since expired. Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred because, before its filing, a bargaining deadlock between VIRON and NAFLU as the incumbent bargaining agent, had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout , in accordance with Section 3, Rule V, Book V of the Omnibus Rules above quoted. Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such "bargaining deadlock ... (which) had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance and unfulfilled promises to bargain collectively; 3 but there is no proof that it had taken any action to legally coerce VIRON to comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by continuing challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining process between it and VIRON. The stark, incontrovertible fact is that from February 27, 1981 when NAFLU was proclaimed the exclusive bargaining representative of all VIRON employees to April 11, 1985 when KAMPIL filed its petition for certification election or a period of more than four (4) years, no collective bargaining agreement was ever executed, and no deadlock ever arose from negotiations between NAFLU and VIRON resulting in conciliation proceedings or the filing of a valid strike notice. The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain and for violation of terms and conditions of employment, which was settled by the parties' agreement, and to another strike staged on December 6, 1986 in connection with a claim of violation of said agreement, a dispute which has since been certified for compulsory arbitration by the Secretary of Labor & Employment. 4 Obviously, however, these activities took place after the initiation of the certification election case by KAMPIL, and it was grave abuse of discretion to have regarded them as precluding the holding of the certification election thus prayed for. WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the law exists in the case at bar, and it was in the premises grave abuse of discretion to have ruled otherwise, the contested Resolution of the respondent Director of the Bureau of Labor Relations dated April 30, 1986 in BLR Case No. A-7-139-85 (BZEO-CE04-004-85) is NULLIFIED AND SET ASIDE. Costs against private respondent. SO ORDERED.

G.R. No. 97020 June 8, 1992 CALIFORNIA MANUFACTURING CORPORATION, petitioner, vs. THE HONORABLE UNDERSECRETARY OF LABOR BIENVENIDO E. LAGUESMA, ABD FEDERATION OF FREE WORKERS (FFW), CALIFORNIA MFG. CORP. SUPERVISORS UNION CHAPTER (CALMASUCO), respondents. This is a petition for review on certiorari with prayer for preliminary injunction and/or temporary restraining order seeking to annul and set aside the (a) resolution * of the Department of Labor and Employment dated October 16, 1990 in OS-A-10-283-90 (NCR-OD-M-90-05-095) entitled "In Re: Petition for Certification Election Among the Supervisors of California Manufacturing Corporation, Federation of Free Workers (FFW) California Mfg. Corp. Supervisors Union Chapter (CALMASUCO), petitioner-appellee, California Manufacturing Corporation, employerappellant" which denied herein petitioner's appeal and affirmed the order of Med-Arbiter Arsenia Q. Ocampo dated August 22, 1990 directing the conduct of a certification election among the supervisory employees of California Manufacturing Corporation, and (b) the Order ** of the same Department denying petitioner's motion for reconsideration. As culled from the records, the following facts appear undisputed: On May 24, 1990, a petition for certification election among the supervisors of California Manufacturing Corporation (CMC for brevity) was filed by the Federation of Free Workers (FFW) California Manufacturing Corporation Supervisors Union Chapter (CALMASUCO), alleging inter alia, that it is a duly registered federation with registry certificate no. 1952-TTT-IP, while FFW-CALMASUCO Chapter is a duly registered chapter with registry certificate no. 1AFBI-038 issued on May 21, 1990 (Annex "A", Rollo, p. 63); that the employer CMC employs one hundred fifty (150) supervisors; that there is no recognized supervisors union existing in the company; that the petition is filed in accordance with Article 257 of the Labor Code, as amended by Republic Act No. 6715; and that the petition is nevertheless supported by a substantial member of signatures of the employees concerned (Annexes "E" and "F", Ibid., pp. 28-29). In its answer, CMC, now petitioner herein, alleged among others, that the petition for the holding of a certification election should be denied as it is not supported by the required twenty-five percent (25%) of all its supervisors and that a big number of the supposed signatories to the petition are not actually supervisors as they have no subordinates to supervise, nor do they have the powers and functions which under the law would classify them as supervisors (Annex "D", Ibid., P. 25). On July 24. 1990, FFWCALMASUCO filed its reply maintaining that under the law, when there is no existing unit yet in a particular bargaining unit at the time a petition for certification election is filed, the 25% rule on the signatories does not apply; that the "organized establishment" contemplated by law does not refer to a "company" per se but rather refers to a "bargaining unit" which may be of different classifications in a single company; that CMC has at least two

(2) different bargaining units, namely, the supervisory (unorganized) and the rank-and-file (organized); that the signatories to the petition have been performing supervisory functions; that since it is CMC which promoted them to the positions, of supervisors. it is already estopped from claiming that they are not supervisors; that the said supervisors were excluded from the coverage of the collective bargaining agreement of its rank-and-file employees; and that the contested signatories are indeed supervisors as shown in the "CMC Master List of Employees" of January 2, 1990 and the CMS Publication (Annex "G", Ibid., p 30). On August 12, 1990, the Med-Arbiter issued an order, the decretal portion of which reads: WHEREFORE, premises considered, it is hereby ordered that a certification election be conducted among the supervisory employees of California Manufacturing Corporation within twenty (20) days from receipt hereof with the usual pre-election conference of the parties to thresh out the mechanics of the election The payroll of the company three (3) months prior to the filing of the petition shall be used as the basis in determining the list of eligible voters. The choices are: 1. Federation of Free Workers (FFW) California Manufacturing Corporation Supervisors Union Chapter (CALMASUCO); and 2. No union. SO ORDERED.(Annex "H" Ibid., p. 33). CMC thereafter appealed to the Department of Labor and Employment which, however, affirmed the above order in its assailed resolution dated October 16, 1990 (Annex, "B", Ibid, a 18) CMC's subsequent motion for reconsideration was also denied in its order dated November 17, 1990 (Annex "A", Ibid., p. 15), hence, his petition. a) whether or not the term "unorganized establishment' in Article 257 of the tabor Code refers to a bargaining unit or a business establishment; b) whether or not non-supervisors can participate in a supervisor's certification election; and c) whether or not the two (2) different and separate plants of herein petitioner in Paraaque and Las Pias can be treated as a single bargaining unit. The petition must be denied. The Court has already categorically ruled that Article 257 of the Labor code is applicable to unorganized labor organizations and not to establishments where there exists a certified bargaining agent which had previously entered into a collective bargaining agreement with the management (Associated Labor Unions [ALU] v. Calleja, G.R. No. 85085, November 6, 1989, 179 SCRA 127) (Emphasis supplied). Otherwise stated, the establishment concerned must have no certified bargaining agent (Associated Labor Unions [ALU] v. Calleja G.R. No. 82260, July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that the supervisors of CMC which constitute a bargaining unit separate and distinct from that of the rank-and-file, have no such agent. thus they correctly filed a petition for certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate labor organization. CMC's insistence on the 25% subscription requirement, is clearly immaterial. The same has been expressly deleted by Section 24 of Republic Act No. 6715 and is presently prescribed only in organized establishments, that is, those with existing bargaining agents. Compliance with the said requirement need not even be established with absolute certainty. The Court has consistently ruled that "even conceding that the statutory requirement of 30% (now 25%) of the labor force asking for a certification election had not been strictly compiled with, the Director (now the Med-Arbiter) is still empowered to order that it be held precisely for the purpose of ascertaining which of the contending labor organizations shall be the exclusive collective bargaining agent (Atlas Free Workers Union (AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA 565). The requirement then is relevant only when it becomes mandatory to conduct a certification election. In all other instances, the discretion, according to the rulings of this Tribunal, ought to be ordinarily exercised in favor of a petition for certification (National Mines and Allied Workers Union (NAMAWU-UIF) v. Luna, et al., G.R. No. L-46722, June 15, 1978, 83 SCRA 607). In any event, CMC as employer has no standing to question a certification election (Asian Design and Manufacturing Corporation v. Calleja, et al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the sole concern of the workers. The only exception is where the employer has to file the petition for certification election pursuant to Article 259 (now 258) of the Labor Code because it was requested to bargain collectively. Thereafter, the role of the employer in the certification process ceases. The employer becomes merely a bystander. Oft-quoted is the pronouncement of the Court on management interference in certification elections, thus:

On matters that should be the exclusive concern of labor, the choice of a collective bargaining representative, the employer is definitely an intruder, His participation, to say the least, deserves no encouragement. This Court should be the last agency to lend support to such an attempt at interference with purely internal affair of labor. (Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano.G.R. No.L-61153 January 17, 1983, 120 SCRA 64 citing Consolidated Farms, Inc. v. Noriel, G.R No.L-47752 July 31, 1978, 84 SCRA 469, 473). PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit. SO ORDERED.

G.R. No. L-55674 July 25, 1983 LA SUERTE CIGAR AND CIGARETTE FACTORY, petitioner, vs. DIRECTOR OF THE BUREAU OF LABOR RELATIONS, THE LA SUERTE CIGAR AND CIGARETTE FACTORY PROVINCIAL (Luzon) AND METRO MANILA SALES FORCE ASSOCIATION-NATU, and THE NATIONAL ASSOCIATION OF TRADE UNIONS, respondents. In the determination of the basic issue raised in the case at bar involving the status of some 14 members of private respondent local union whether they are employees of petitioner company in which case they should be included in the 30% jurisdictional requirement necessary to support the petition for certification election, or independent contractors and hence, excluded therefrom, Our rulings in Mafinco Trading Corp. vs. Ople, 70 SCRA 139, where We reiterated the "control test" earlier laid down in Investment Planning Corp. vs. Social Security System , 21 SCRA 924, and in Social Security System vs. Hon. Court of Appeals and Shriro (Phils.) Inc., 37 SCRA 579 are authoritative and controlling. In the Mafinco case, the Court, through Justice Aquino, said: In a petition for certiorari, the issue of whether respondents are employees or independent contractors should be resolved mainly in the light of their peddling contracts. Pro hac vice the issue of whether Repomanta and Moralde were employees of Mafinco or were independent contractors should be resolved mainly in the light of their peddling contracts. A different approach would lead this Court astray into the field of factual controversy where its legal pronouncements would not rest on solid grounds. A contract whereby one engages to purchase and sell soft drinks on trucks supplied by the manufacturer but providing that other party (peddler) shall have the right to employ his own workers, shall post a bond to protect the manufacturer against losses, shall be responsible for damages caused to third persons, shall obtain the necessary licenses and permits and bear the expenses incurred in the sale of the soft drinks is not a contract of employment.-We hold that under their peddling contracts

Repomanta and Moralde were not employees of Mafinco but were independent contractors as found by the NLRC and its factfinder and by the committee appointed by the Secretary of Labor to look into the status of Cosmos and Mafinco peddlers. They were distributors of Cosmos soft drinks with their own capital and employees. Ordinarily, an employee or a mere peddler does not execute a formal contract of employment. He is simply hired and he works under the direction and control of the employer. Repomanta and Moralde voluntarily executed with Mafinco formal peddling contracts which indicate the manner in - which they would se Cosmos soft drinks. That circumstance signifies that they were acting as independent businessmen. They were free to sign or not to sign that contract. If they did not want to sell Cosmos products under the conditions defined in that contract, they were free to reject it. But having signed it, they were bound by its stipulations and the consequences thereof under existing labor laws. One such stipulation is the right of the parties to terminate the contract upon 5 days' prior notice. Whether the termination in this case was an unwarranted dismissal of an employee, as contended by Repomanta and Moralde, is a point that cannot be resolved without submission of evidence. Using the contract itself as the sole criterion, the termination should perforce be characterized as simply the exercise of a right freely stipulated upon by the parties. Tests for determining the existence of employer-employee relationship.-In determining the existence of employer-employee relationship, the following elements are generally considered, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees' conduct-although the latter is the most important element. Factors to determine existence of independent contract relationship. An independent contractor is one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to control of his employer except as to the result of the work. 'Among the factors to be considered are whether the contractor is carrying on an independent business; whether the work is part of the employer's general business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of the work to another; the power to terminate the relationship; the existence of a contract for the performance of a specified piece of work; the control and supervision of the work; the employer's powers and duties with respect to the hiring, firing, and payment of the contractor's servants; the control of the premises; the duty to supply the premises, tools, appliances, material and labor, and the mode, manner, and terms of payment.' In the Shriro case, We held that the common law rule of determining the existence of employer-employee relationship, principally the "control test", applies in its jurisdiction. Where the element of control is absent; where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof, relationship of employer and employee does not exist. And supplementing the above jurisprudence is Our ruling in Social Security System vs. The Hon. Court of Appeals, Manila Jockey Club, Inc., Phil. Racing Club, 30 SCRA 210 wherein the Supreme Court, speaking through then Associate Justice, now Chief Justice Fernando, held: The question of when there is employer-employee relationship for purposes of the Social Security Act has been settled in this jurisdiction in the case of Investment Planning Corp. vs. Social Security System, 21 SCRA 924 which applied the so-called control test, that is, whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. In other words, where the element of control is absent; whether a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof, we should not find that the relationship of employer and employee exists. This decision rejected the economic facts of the relation test. The instant petition for certiorari seeks to reverse the resolution of the Director of the Bureau of Labor Relations dated January 15, 1980 ordering that a certification election be conducted among the sales personnel of La Suerte Cigar and Cigarette Factory, as well as his resolution dated November 18, 1980 denying the motion for reconsideration and directing that a certification election be conducted immediately. The said resolutions reversed and set aside the order of dismissal dated August 29, 1979 of the Med-Arbiter. The antecedent facts show that on April 7, 1979, the La Suerte Cigar and Cigarette Factory Provincial (Luzon) and Metro Manila Sales Force Association (herein referred to as the local union) applied for and was granted chapter status by the National Association of Trade Unions (hereinafter referred to as NATU).

On April 16, 1979, some thirty-one (31) local union members signed a joint letter withdrawing their membership from NATU. Nonetheless, on April 18, 1979, the local union and NATU filed a petition for direct certification or certification election which alleged among others, that forty-eight of the sixty sales personnel of the Company were members of the local union; that the petition is supported by no less than 75% of the sales force; that there is no existing recognized labor union in the Company representing the said sales personnel; that there is likewise no existing collecting bargaining agreement; and that there had been no certification election in the last twelve months preceding the filing of the petition. The Company then filed a motion to dismiss the petition on June 13, 1979 on the ground that it is not supported by at least 30% of the members of the proposed bargaining unit because (a) of the alleged forty-eight (48) members of the local union, thirty-one (31) had withdrawn prior to the filing of the petition; and (b) fourteen (14) of the alleged members of the union were not employees of the Company but were independent contractors. NATU and the local union opposed the Company's motion to dismiss alleging that the fourteen dealers are actually employees of the Company because they are subject to its control and supervision. On August 29, 1979, the Med-Arbiter issued an order dismissing the petition for lack of merit as the fourteen dealers who joined the union should not be counted in determining the 30% consent requirement because they are not employees but independent contractors and the withdrawal of the 31 salesmen from the union prior to the filing of the petition for certification election was uncontroverted by the parties. Thereafter, on September 24, 1979, the local union on its own signed only by the local union President, filed a motion for reconsideration and/or appeal from the order of dismissal on the following grounds: (a) the findings of facts of the med-arbiter as it appears on the order are contrary to facts and (b) in finding that no employer-employee relationship exists between the alleged dealers and respondent firm, the med-arbiter decided in a manner not in accord with the factual circumstances attendant to the relationship. Acting on the motion for reconsideration/appeal, the Director of the Bureau of Labor Relations, in the Resolution dated January 15, 1980, reversed and set aside the order of dismissal, holding that the withdrawal of the 31 signatories to the petition two days prior to the filing of the instant petition did not establish the fact that the same was executed freely and voluntarily and that the records are replete with company documents showing that the alleged dealers are in fact employees of the company. The Company then filed a motion to set aside the resolution dated January 15, 1980 of the Director of the Bureau of Labor Relations, contending that the appeal was never perfected or is jurisdictionally defective, copy of the motion for reconsideration/appeal not having been served upon the Company, and that the Resolution was based solely on the distorted and self-serving allegations of the union. The local union opposed the Company's motion for reconsideration and submitted a memorandum on April 22, 1980 in amplification of its opposition. At this juncture, the legal counsel of NATU filed a manifestation on May 15, 1980 stating that the act of the local union of engaging another lawyer to handle the case amounts to disaffiliation, for which reason said legal counsel was withdrawing from the case. The local union counter manifested that the local union had not been officially notified of its expulsion from the NATU; that there was no valid ground for its expulsion; that the National Executive Council of NATU had not approved such expulsion; and that it had no objection to the withdrawal of Atty. MarcelinoLontok, Jr. as its counsel. Then came a motion of NATU through its President and legal counsel withdrawing as petitioner and contending that since the local union was no longer affiliated with it, it was no longer interested in the case. Twelve members of the National Executive Council then came in and manifested that they constitute a majority of the Executive Board of NATU and affirmed that the local union was still an affiliate of NATU. There followed a counter-manifestation of Atty. MarcelinoLontok, Jr. on August 27, 1980 stating that six signatories to the aforesaid manifestation had no authority to make the said foregoing statement as they had resigned from the Executive Board en masse; that the acts of the President may not be reversed by the Executive Council; and that the twelve signatories did not constitute a majority of the sixty (60) members of the Executive Council. The local union made its reply to the counter-manifestation stating that the power to expel an affiliate exclusively belonged to the National Executive Council of NATU, under Section 2, Article V of the NATU Constitution and By-Laws; that such power could only be wielded after due investigation and hearing; that disaffiliation is effected only by

voluntary act of the local union, which is not the case here, because it is the President and legal counsel who are trying to expel the union. Simultaneously with said reply, the local union filed an opposition to Atty. Lontok's motion to dismiss-withdraw petition, stating that Atty. Lontok had no more personality to file the same inasmuch as he had previously withdrawn as counsel in his manifestation dated May 7, 1980, and the local union has accepted the same in its countermanifestation dated May 16, 1980; that expulsion requires two-thirds vote of the members of the National Executive Council, as well as investigation and hearing; that engaging another lawyer is not a ground for expulsion of an affiliate; and that the local union was compelled to hire another lawyer because up to the last day of the reglementary period, Atty. Lontok still had not filed an appeal from the decision of the Med-Arbiter. On November 18, 1980, the Director of the Bureau of Labor Relations promulgated a resolution denying the Company's motion for reconsideration and directing that the certification election be conducted immediately. Hence, this petition. In the apparently simple task of determining whether the Director of the Bureau of Labor Relations committed grave abuse of discretion amounting to lack of jurisdiction in ordering the direct certification election, three difficult issues must be resolved, namely: I. Whether or not the 14 dealers are employees or independent contractors. II. Whether or not the withdrawal of 31 union members from the NATU affected the petition for certification election insofar as the thirty per cent requirement is concerned. III. Whether or not the withdrawal of the petition for certification election by the NATU, through its President and legal counsel, was valid and effective. A basic factor underlying the exercise of rights under the Labor Code is status of employment. The question of whether employer-employee relationship exists is a primordial consideration before extending labor benefits under the workmen's compensation, social security, medicare, termination pay and labor relations law. It is important in the determination of who shall be included in a proposed bargaining unit because it is the sine qua non, the fundamental and essential condition that a bargaining unit be composed of employees. Failure to establish this juridical relationship between the union members and the employer affects the legality of the union itself. It means the ineligibility of the union members to present a petition for certification election as well as to vote therein. Corollarily, when a petition for certification election is supported by 48 signatories in a bargaining unit composed of 60 salesmen, but 14 of the 48 lacks employee status, the petition is vitiated thereby. Herein lies the importance of resolving the status of the dealers in this case. It is the contention of the company that the dealers in the sale of its tobacco products are independent contractors. On the other hand, the Union contends that such dealers are actually employees entitled to the coverage and benefits of labor relations laws. According to the petitioner, to effectively market its products, the Company maintains a network of dealers all over the country. These arrangements are covered by a dealership agreement signed between the Company and a dealer in a particular area or territory. And attached to the petition is a representative copy of the said dealership agreement which We quote below: DEALERSHIP AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This DEALERSHIP AGREEMENT, executed at Pasay City, Philippines, this 8 day of March 1977, entered into by JOSE TEN SIU KEE, JR., of legal age, married and a resident of 178-E San Ramon Street, Iloilo City, hereinafter referred to as DEALER, and TELENGTAN BROTHERS & SONS, INC., doing business under the style of "LA SUERTE CIGAR & CIGARETTE FACTORY", hereinafter referred to as FACTORY, bears witness that: WHEREAS, JOSE TAN SIU KEE, JR. of 178-E San Ramon Street, Iloilo City, had applied to be a DEALER of the FACTORY for the territories of ILOILO and/or such other territories that the FACTORY may designate from time to time; and WHEREAS, the FACTORY had accepted the application of JOSE TAN SIU KEE, JR., and therefore, appointed him as one of its dealers in ILOILO and/or such other territories that the FACTORY may designate from time to time, who is willing and able to do so as such for the main purpose of extensively selling the products of the FACTORY in the said territories, under the following express terms and conditions, to wit: 1. That the DEALER shall handle for sale and distribution of cigarette products of the factory covering the territories of ILOILO and/or such other territories that the FACTORY may designate from time to time, in accordance with existing laws and regulations of the government, without however, incurring any expenses in doing so, without the previous written consent of the FACTORY being first had and obtained; 2. That for the purpose of selling the cigarettes or products of the FACTORY, the DEALER shall send his orders to the FACTORY plant in Paraaque, Metro Manila, either in cash or on credit; Provided, however, that in cases of credit order

the DEALER can only get or order the supply of cigarettes up to the amount of not more than FIFTY THOUSAND PESOS (P50,000.00) only at any given time during the existence of this Contract, unless allowed by the FACTORY to get more; 3. That the FACTORY shall supply the DEALER with a truck or panel delivery and all expenses shall be borne by the FACTORY; driver shall be borne by the DEALER; 4. That the DEALER shall not receive any commission from the FACTORY but the latter shall give the DEALER a discount for all sales either on consignment or in cash, and said discount shall be decided by the FACTORY from time to time; 5. That the FACTORY shall not be liable for any violation of any law, which the DEALER may commit, and that the DEALER alone shall be responsible for any violation; 6. The geographical area (hereinafter referred to as "Territory") covered by this Agreement in which the DEALER shall undertake the responsibilities provided herein is ILOILO. It is, however, agreed and understood that the FACTORY may from time to time, upon written notice thereof THE DEALER, change or subdivide the Territory as the business exigencies, and the policy of the FACTORY with respect thereto will dictate. 7. The DEALER agrees that during the term of this Agreement: (a) He will diligently, loyally and faithfully serve the FACTORY as its DEALER and diligently canvass for buyers of the FACTORY's Products in the Territory; (b) He shall not sell or distribute goods of a similar nature or such as would compete and interfere with the sale of the Products of the FACTORY in the Territory, either on his account or on behalf of any other person whatsoever; (c) Furnish to the FACTORY every three (3) months a list of the buyers/customers in the Territory, specifying the names and address of such customers as well as their individual daily supply/stock requirements; (d) He will faithfully and religiously abide by the FACTORY policy, rules and regulations, particularly with respect to the pricing of all Products to be sold and distributed by him; (e) He will keep account of all his dealings hereunder and promptly liquidate his account with the FACTORY with respect to the Products sold by him in the Territory; (f) He will not engage in any activity which will in any manner prejudice either the business or name of the FACTORY, such as, but not limited to, "black- marketing" operations; (g) He will not withdraw cigarettes if the maximum volume allotted to him by the FACTORY has been exceeded; (8) That the DEALER shall sell the Products of the FACTORY at a price to be agreed upon between both parties; (9) That the DEALER shall hereby bind and obligate himself to furnish the FACTORY, within a week from the date of this Contract with Surety or Cash Bond in the amount of not less than FIFTY THOUSAND PESOS (P 50,000.00). The surety bond should be issued by one or several bonding companies acceptable to and approved by the FACTORY to guarantee and secure complete and faithful performance of the DEALER and his obligations herein enumerated, particularly the payment of his financial obligations with the FACTORY. The bond may be increased as required by the FACTORY; 10. In the event that the DEALER should become incapacitated to discharge his undertakings and responsibilities under this Agreement, for any reason whatsoever, the FACTORY may designated, for the duration of such incapacity, a substitute to handle the sale and distribution of the Products in the Territory; 11. The FACTORY reserves its right to determine, from time to time, the amount of credit granted or to be granted to the DEALER with respect to the Products to be sold and distributed in the Territory; 12. This Agreement may be cancelled and/or terminated by the FACTORY should the DEALER violate its undertaking under this Agreement especially with respect to Paragraph 7(f) hereof. It is understood, however, that the failure of the FACTORY to enforce at any time or for any period of time, any right, power or remedy accruing to the FACTORY upon default by the DEALER of his undertakings under this Agreement shall not impair any such right, power or remedy or to be construed to be a waver or an acquiescence in such default; nor shall the action of the FACTORY in respect of any default, or any acquiescence by it in any default, affect or impair any right, power or remedy of the FACTORY in respect of any other default. 13. That either party may terminate this Contract without cause by giving to the other party fifteen (15) days notice in writing but without prejudice to any right or claim which as of that date may have accrued to either of the parties hereunder, however, in the event of breach of this Contract, the FACTORY may terminate this Contract without notice to the DEALER. 14. That it is hereby finally stipulated and agreed that in case of litigation arising out of or in connection with this Contract, the Municipal Court of Paraaque or the Court of First Instance cf Rizal, as the case may be, shall be the competent court wherein to file such action or actions. 15. That this Contract shall supersede any Contract which the DEALER may have with the FACTORY. IN WITNESS WHEREOF, these presents are signed at Pasay City, Philippines on this 8 day of March 1977. TELENGTAN BROTHERS & SONS, INC. (La Suerte Cigar & Cigarette Factory) FACTORY By: (SGD.) LIM HAN ENG (SGD.) JOSE TAN SIU KEE, JR.

Assistant Manager Dealer Sales Department TAN 5976-397-9 SIGNED IN THE PRESENCE OF: (SGD.) ILLEGIBLE (SGD.) ILLEGIBLE" (Acknowledgment omitted) The records embody standard copies of the Dealership Supplementary Agreement which We also quote hereunder: DEALERSHIP SUPPLEMENTARY AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Supplementary Agreement, made and entered into this 14th day of February, 1975 in Pasay City, Philippines, by and between: TELENGTAN BROTHERS & SONS, INC., a corporation duly organized and existing under the laws of the Philippines and doing business under the business name and style of "LA SUERTE CIGAR & CIGARETTE FACTORY", with principal place of business at Km. 14 South Super Highway, Paranaque, Rizal, represented in this act by its duly authorizedManager, Mr. ROBERT UY, hereinafter referred to as COMPANY; and MR. PURISIMO EMBING of legal age, married, Filipino and with postal address at 3047 Lawaan, UP II, Paranaque, Rizal hereinafter referred to as DEALER, WITNESSETH: That For and in consideration of the mutual covenants and agreements made herein, by one to the other, the COMPANY and the DEALER, by these presents, enter into this Supplementary Agreement whereby the COMPANY will avail of the services of the DEALER to handle the sale and distribution of its cigarette products, consisting of MARLBORO REGULAR, MARLBORO KING SIZE, MARLBORO 100'S; PHILIP MORRIS REGULAR, PHILIP MORRIS FILTER KING, PHILIP MORRIS 100'S MENTHOL, PHILIP MORRIS 100'S REGULAR; ALPINE 100'S; MR. SLIM 100'S REGULAR, MR. SLIM 100'S MENTHOL, subject to the following terms and conditions: 1. The COMPANY hereby constitutes and appoints the DEALER as its authorized dealer for the sale and distribution of the COMPANY's products as enumerated above, (hereinafter referred to as "Products") and the DEALER hereby accepts such appointment, all upon the terms and conditions herein contained. 2. The geographical area (hereinafter referred to as "Territory") covered by this Agreement in which the DEALER shall undertake the responsibilities provided herein is GREATER MANILA AND SUBURBS. It is, however, agreed and understood that the COMPANY may from time to time, upon written notice thereof to the DEALER, change or subdivide the Territory as the business exigencies, and the policy of the COMPANY with respect thereto will dictate. 3. The DEALER agrees that during the term of this Agreement: (a) He will diligently, loyally and faithfully serve the COMPANY as its DEALER and diligently canvass for buyers of the COMPANY's Products in the Territory; (b) He shall not sell or distribute goods of a similar nature or such as would compete and interfere with the sale or the Products of the COMPANY in the Territory, either on this account or on behalf of any other person whatsoever;

(c) Furnish to the COMPANY every three (3) months a list of the buyers/customers in the Territory, specifying the names and address of such customers as well as their individual daily supply/stock requirements; (d) He will faithfully and religiously abide by the COMPANY policy, rules and regulations, particularly with respect to the pricing of all Products to be sold and distributed by him; (e) He will keep account of all his dealings hereunder and promptly liquidate his account with the COMPANY with respect to the Products sold by him in the Territory; (f) He will not engage in any activity which will in any manner prejudice either the business or name of the COMPANY, such as, but not limited to, "Black marketing" operations; (g) He will not withdraw cigarettes if the maximum volume allotted to him by the COMPANY has been exceeded; 5. The DEALER shall put up a bond, or additional bond, with the COMPANY in such amount or amounts, as in the judgment of the COMPANY, will be satisfactory. It is agreed that the COMPANY can apply against said bond or additional bond, such damages as may be suffered by the COMPANY by reason of breach on the part of the DEALER of any of the latter's undertakings under this Agreement. 6. In the event that the DEALER should become incapacitated to discharge his undertakings and responsibilities under this Agreement, for any reason whatsoever, the COMPANY may designate for the duration of such incapacity, a substitute to handle the sale and distribution of the Products in the Territory; 7. The COMPANY reserves its right to determine, from time to time, the amount of credit granted or to be granted to the DEALER with respect to the Products to be sold and distributed in the Territory. 8. This Agreement may be cancelled and/or terminated by the COMPANY should the DEALER violate its undertaking under this Agreement especially with respect to Paragraph 4(f) hereof. It is understood. however, that the failure of the COMPANY to enforce at any time or for any period of time, any right, power or remedy accruing to the COMPANY upon default by the DEALER of his undertakings under this Agreement shall not impair any such right, power or remedy or be construed to be a waiver or an acquiescence in such default; nor shall the action of the COMPANY in respect of any default, or any acquiescence by it in any default, affect or impair any right, power or remedy of the COMPANY in respect of any other default. (9) In the appropriate cases, this Agreement shall constitute as a supplement, revision or modification of any agreement between the company and the DEALER now existing. However, should there be a conflict between the provisions of this Agreement and any such existing agreement between the COMPANY and the DEALER, this Agreement shall prevail. IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed at the place and on the date hereinabove written. TELENGTAN BROTHERS & SONS, INC. (La Suerte Cigar & Cigarette Factory) By: (SGD.) ROBERT UY (SGD.) PURISIMO EMBING Manager DEALER (Signature of Witnesses & Acknowledgment Omitted) Following the rule in the Mafinco case that in a petition for certiorari, the issue of whether respondents are employees or independent contractors should be resolved mainly in the light of their peddling contracts, so must We likewise

resolve the status of the 14 members of the local union involved herein mainly on their dealership agreements for verily, "a different approach would lead this Court astray into the field of factual controversy where its legal pronouncements would not rest on solid grounds." We must stress the Supreme Court is not a trier of facts. Accordingly, after considering the terms and stipulations of the Dealership Contracts which are clear and leave no doubt upon the intention of the contracting parties in establishing the relationship between the dealers on one hand and the company on the other as that of buyer and seller, We find that the status thereby created is one of independent contractorship, pursuant to the first rule in the interpretation of contracts that the literal meaning of the stipulations shall control. (Article 1370, New Civil Code) From the plain language of the Dealership Agreement, We find that the same is premised with the prefatory statement "the factory has accepted the application of (name of applicant) and therefore has appointed him as one of its dealers." Its terms and conditions include the following: that the dealer shall handle the products in accordance with existing laws and regulations of the government (par. ); that the dealer shall send his orders to the factory plant in cash in any amount or on credit up to the amount of not more than P10,000.00 only at any given time (par. 2); that the factory shall supply the dealer with a truck or a panel delivery and all expenses for repairs shall be borne by the factory (par. 3); and that the dealer shall not receive any commission but shall be given a discount for all sales and said discount shall be decided by the factory from time to time (par. 4). It also provides that the dealer alone shall be responsible for any violation of any law (par. 5); that the dealer shall be assigned to a particular territory which the factory may decide from time to time (par. 6); that the dealer shall sell the products at the price to be agreed upon between the parties (par. 7); and that the dealer shall post a surety bond of not less than P10,000.00 to guarantee and secure complete and faithful performance (par. 8). Either party may terminate the contract without cause by giving 15 days notice in writing; however, in the event of breach or failure to comply with any of the conditions, the factory may terminate or rescind the contract immediately (par. 9 and 10). The Dealership Supplementary Agreement reiterates that the Company "hereby constitute and appoints the DEALER as its authorized dealer for the sale and distribution of the COMPANY products" and "the DEALER hereby accepts such appointment" (par. 1). It also provides that the geographical area in which the dealer shall undertake his responsibilities is Greater Manila and Suburbs. However, the Company may change or subdivide the territory as the business exigencies and the policy of the Company will dictate (par. 2). Under said supplementary agreement, the dealer undertakes to: (a) diligently canvass for buyers of the Company's products; (b) refrain from selling or distributing goods of similar nature; (c) furnish the Company every 3 months a list of buyers/customers, specifying their addresses and individual daily supply; (d) abide by the Company policy, particularly with respect to pricing; (e) keep account of all his dealings and promptly liquidate his accounts; (f) refrain from engaging in any activity which will prejudice the Company from withdrawing cigarettes beyond the maximum volume allotted to him (par. 3.) In case of incapacity of the dealer, the Company may designate a substitute (par. 6). The Company also reserves the right to determine, from time to time, the amount of credit granted or to be granted to the dealer (par. 7). It is likewise immediately noticeable that no such words as "to hire and employ" are present. The Dealership Agreement uses the words "the factory has accepted the application of (name of applicant) and therefore has appointed him as one of its dealers"; whereas the Dealership Supplementary Agreement is prefaced with the statement: "For and in consideration of the mutual covenants and agreements made herein, by one to the other, the COMPANY and the DEALER by these presents, enter into this Supplementary Agreement whereby the COMPANY will avail of the services of the DEALER to handle the sale and distribution of the cigarette products". Nothing in the terms and conditions likewise reveals that the dealers were engaged as employees. Again, on the basis of the clear terms of the dealership agreements, no mention is made of the wages of the dealers. In fact, it specifies that the dealer shall not receive any commission from the factory but the latter shall give the dealer a discount for all sales either on consignment or in cash (par. 4). Considering the matter of wages, the term "wages" as defined in Section 2 of the Minimum Wage Law (Rep. Act No. 602) as amended, is as follows: (g) 'Wage' paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, commission basis, or other method of calculating the same, which is payable by an employer under a written or unwritten contract of employment for work done or to be done or for services rendered or to

be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee ... Section 10(k) of the same law also provides: (k) Notification of wage conditions. It shall be the duty of every employer to notify his employees at the time of hiring of the wage conditions under which they are employed, which shall include the following(1) The rate of wages payable; (2) The method of calculation of wages; (3) The periodicity of wage payment; the day, the hour and place of payment; and (4) Any change with respect to any of the foregoing items." then, par. (h) of Sec. 10 of said law provides that such "wages" must be paid to them periodically at least once every two weeks or twice a month. Considering the foregoing, the dealer's discount lacks the foregoing characteristics of the term "wage". Since it varies from month to month depending on the volume of the sales, it lacks the characteristic of periodicity in the manner and procedure contemplated in the Minimum Wage Law. Respondents, in effect, admit the clarity of the terms and conditions of the agreements which covenant that the relationship between the dealers and the Company is one of buyer and seller of La Suerte products, and therefore, one of an independent contractorship when they claimed that the dealership arrangement as established under the Dealership Agreement and the Dealership Supplementary Agreement is essentially a legal cover, cloak or disguise to hide the continuing Employer-Employee relationship established prior to 1964. (Respondents' Joint Memorandum, p. 34). Precisely, there was need to change the contract of employment because of the change of relationship, from an employee to that of an independent dealer or contractor. The employees were free to enter into the new status, to sign or not to sign the new agreement. As in the Mafinco case, the respondents therein as in the instant case, were free to reject the terms of the dealership but having signed it, they were bound by its stipulations and the consequences thereof under existing labor laws. The fact that the 14 local union members voluntarily executed with La Suerte formal dealership agreements which indicate the distribution and sale of La Suerte cigarettes signifies that they were acting as independent businessmen. We ruled earlier that the terms and stipulations of the dealership agreement leave no room for doubt that the parties entered into a transaction for the distribution and sale of La Suerte products whereby the distributor/sever or dealer assumes the status of an independent contractor. We note that the applicant who is appointed dealer "is willing and able to do as such for the main purpose of extensively selling the products of the FACTORY in the said territories under certain expressed terms and conditions" among them: "1. That the DEALER shall handle for saleand distribution cigarette products of the factory ..."; "2. That for the purpose of selling cigarettes or products of the factory, the dealer shall send his order to the factory plant in Paraaque, Metro Manila either in cash or on credit ..."; "4. That the dealer shall not receive any commission from the factory but the latter shall give the dealer a discount for all sales either on consignment or in cash ..."; "7. (b) He shall not sell or distribute goods of a similar nature or such as would compete and interfere with the sale of the products of the factory in the territory, either on his account or on behalf of any other person whatsoever ..."; "8. That the dealer shall sell the products of the factory at a price to be agreed upon between both parties." It is not disputed that under the dealership agreement, the dealer purchases and sells the cigarettes manufactured by the company under and for his own account. The dealer places his order for the purchase of cigarettes to be sold by him in a particular territory by filling up an Issuance Slip. The Issuance Slip is approved by the Sales Manager and after the sale is approved, a Sales Invoice is then issued to the dealer. On the basis of the approved Issuance Slip and the Sales Invoice, the dealer secures the delivery of his order from the warehouse of the company and upon delivery of the cigarettes from the warehouse, the dealer has the 'obligation to pay whether the cigarettes are disposed or not. The dealer on his own account sells the cigarettes in any manner he deems best without constraint as to time. The dealers do not devote their full time in selling company products. They are likewise engaged in other livelihood and businesses while selling cigarettes manufactured by the company. The sales to the dealers are either on cash or credit basis. Where it is on cash basis, the amount is paid immediately upon the delivery of the products from the company's warehouse. If it is on credit, the dealer would usually settle his account within one week from the time the credit is extended to him. Upon payment of the purchase price, a company official receipt is issued to him.

Private respondents contend that there are essential differences between the dealership agreement and that in actual practice and operation, then proceeded to point them in the attempt to prove the control of La Suerte over the sales effort of the dealers. They also contend that the dealership agreement, as stated earlier, is essentially a legal cover, a cloak or disguise to hide the continuing employer-employee relationship established prior to 1964. We reject both contentions as being without merit. In the first place, We cannot accept nor consider evidence varying the terms of the agreement other than the contents of the writing itself pursuant to Section 7, Rule 130 of the Revised Rules of Court, which provides that: Section 7. Evidence of written agreements . When the terms of an agreement have been reduced to writing, it is to be considered as containing all such terms, and, therefore, there can be, between the parties and their successors in interest, no evidence of the terms of the agreement other than the contents of the writing except in the following cases: (a) Where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleadings. (b) When there is an intrinsic ambiguity in the writing. The term 'agreement' includes wills. If there are changes by reason of actual practice and operation, certiorari is not the proper proceeding or remedy therefor. In the second place, petitioner's claim that respondent local union relies heavily on evidence dehors the record or extraneous evidence found in cases other than the one at bar, as the testimony in the Limarez case, NCR Case AB-34960-80 cited extensively (pp. 63, 64, 65-66, 66-67, 68-69, 70-72, 73-76, 77-83, 84-85, 86-87, 89, 90-94, 97-98, 107, Comment of Local Union) and that practically all the appendages to the Comment of Local Union constituting the main bulk thereof (Annexes 1 to 52) were evidence introduced in other cases and not in the case at bar, is meritorious. We reject said evidence dehors the record and the appendages raised for the first time on appeal as extrinsic, beyond the scope of this review. Private respondents contend that under the dealership agreement, the totality of the powers expressly reserved to the company, respecting essential aspects or facets of the sales operation of the dealers, clearly establish company control over the manner and details of performance. And they cite the following: "(1) The dealer shall be assigned to a particular territory which the factory shall decide from time to time (par. 6); (2) The dealer shall handle for sale and distribution cigarette products of the company. . . without however incurring any expense in doing so, without previous written consent of the factory being first had and obtained (par. 1); (3) In cases of credit order, the dealer can only get or order the supply of cigarettes up to the amount of not more than P 10,000.00 only at any given time during the existence of this contract, unless allowed by the factory to get more (par. 2); (4) The company shall give the dealer a discount for all sales . . . and said discount shall be decided by the factory from time to time (par. 4); (5) It is however agreed and understood that the company may, from time to time, upon written notice thereof to the dealer, change or divide the territory as the business exigencies and policy of the factory with respect thereto will dictate (par. 2, Annex 10); (6) Each dealer will faithfully and religiously abide by the company policy, rules and regulations, particularly with respect to pricing of all products to be sold and distributed by him (par. 3, sub-par. (d), Annex 10); (7) The dealer shall put up a bond or additional bond with the company in such amounts as in the judgment of the company may be satisfactory (par. 5, Annex 10); (8) In the event that the dealer should become incapacitated for any reason whatsoever, the factory may designate for the duration of said incapacity a substitute to handle the sale and distribution of the products in the territory (par. 6, Annex 10); (9) The company reserves the right to determine, from time to time, the amount of credit granted or to be granted the dealer (par. 7, Annex 10); (10) This agreement may be cancelled and/or terminated by the company should the dealer violate its undertaking under this Agreement, especially par. 7(f) hereof (par. 8, Annex 10); (11) That either party may terminate this contract without cause by giving to the other party 15 days notice in writing (par. 9, Annex 9); and (12) In the event of breach of this contract, the company may terminate this contract without notice to the dealer (proviso in par. 9, Annex 9). " 1 Disputing private respondents' above contention that the company exercises company control over the manner and details of the sales operation of the dealers and not merely over the result of the work of each dealer, petitioner maintains that: 1. The allocation of a definite territory to be assigned to a dealer or distributor is standard practice in dealership agreements, whether international or domestic. Allocation of area responsibility and territorial and customer restrictions are common features of dealership agreements. Thus, a company may be appointed exclusive distributor

or dealer of a product in the Philippines, the Asian region or in the Far East in the same way that some Philippine manufacturers appoint exclusive dealers for the United States or Canada; 2. In the Shriro case, the expenses for handling and delivery of the goods to the customers are all for the account of the company (See Social Security System vs. Hon. Court of Appeals &Shriro (Phil.) Inc., 37 SCRA 579) and there, the Supreme Court did not consider the facts as indicia of an employment relation; 3. In limiting a credit order for cigarettes up to the amount of P 10,000.00 only at any given time during the existence of the contract, unless allowed by the factory to get more, the company merely controls the result of the work of the dealer. The credit order is limited because in a dealership contract, the transaction is one of buy and sell and once an order is made, specially a credit order, the risk of loss is passed on to the dealer; 4. In the Mafinco case, the peddlers are given also a discount and the Supreme Court held that the peddling contract is not a contract of employment but signifies an independent contractor relationship. 5. The change or division of the territory to which a dealer is assigned as the business exigencies and policy of the factory with respect thereto will dictate from time to time is no indicia of company control over the means and methods for in the Mafinco case the peddlers are also assigned definite area routes or zones. 6. That the dealers shall abide with the company policies and rules, particularly in pricing of products is a standard practice in dealership agreements and more so in franchising agreements. The fact that a person has to conform with standards of conduct set by the company does not declassify such a person as an independent contractor so long as he can determine his own day to day activities. In independent contracts, there is always the element of control as to what shall be done as distinguished from how it should be done. 7. The posting of a surety bond under par. 8 of the Dealers Agreement is similar to the giving of a cash bond under par. 7, Peddlers Contract in the Mafinco case wherein it is ruled that the Peddlers Contract involved therein is not an employment agreement. 8. The right to designate a substitute dealer in the event of the incapacity of the regular dealer is no indication of an employer-employee relationship. It is just business prudence to provide for substitute dealers in case of the regular dealer's incapacity. 9. That the company may determine from time to time the amount of credit granted or to be granted the dealer is more a control over the result rather than the means as in Shriro case where the company even reserves the right to approve or reject a sales order, whether on cash or on credit basis. 10. The power to cancel or terminate should the dealer violate its undertaking under the agreement on the basis of the company's opinion that the dealer must engage in any activity which will in any manner prejudice either the business or name of the factory is a standard practice in dealership agreements. We agree with the petitioner. We hold further that the terms and conditions for the termination of the contract are the usual and common stipulations in independent contractorship agreements. In any event, the contention that the totality of the powers expressly reserved to the company establish company control over the manner and details of performance is merely speculative and conjectural. There are indeed striking similarities between the Peddler's Contract in the Mafinco case and the Dealer's Agreement and Supplementary Dealer's Agreement in the case at bar. Thus: 1. Use of company facilities La Suerte provides dealers with truck or panel delivery (par. 3, Dealer's Agreement) whereas in Mafinco, the company also provides peddler with delivery truck (par. 1, Peddling Contract); 2. Salary of drivers Dealer in this La Suerte case pays salary of driver (par. 3, Dealer's Agreement). In Mafinco, the salary of drivers is for peddler's account (par. 2, Peddling Contract); 3. Expenses of operation and maintenance La Suerte pays for expenses and repair pertaining to the truck or panel delivery (par. 3, Dealership Agreement). In Mafinco, the company furnishes gasoline and oil to run trucks and bear costs of maintenance and repair (par. 4, Peddling Contract); 4. Profit Margin In instant La Suerte case, no commission given. Company gives a sales discount (par. 4, Dealership Agreement). In Mafinco, no commission is also given. Peddler given a sales discount (par. 6, Peddler's Contract);

5. Collateral Dealer in La Suerte gives a surety bond (par. 8, Dealer's Agreement). In Mafinco, peddler gives a cash bond (par. 7), Peddler's Contract); 6. Payment Dealer required to promptly liquidate account (par. 3, (e), Supplementary Dealer's Contract). In Mafinco, peddler liquidates everyday at the end of each day, otherwise his cash bond shall answer for unliquidated account (par. 8, Peddler's Contract); 7. Termination In La Suerte case, no fixed period but either party may terminate after 15 days written notice (par. 9, Dealer's Contract). In Mafinco, the contract is for one year but either party may terminate earlier upon 5-day written notice (par. 9, Peddler's Contract); 8. Government licenses Dealers secure own municipal license and Mayor's permit (Annexes 23 to 24, Comment of Local Union). In Mafinco, peddler secure own licenses to peddle (Committee Report, 70 SCRA 157); 9. Working hours Dealers have to get quotas daily but no fixed time. In Mafinco, peddlers get their trucks in the morning and have to report daily (Report of Committee, 70 SCRA 154-156). No fixed time; 10. Territory Dealer assigned a particular territory (par. 6, Dealer's Agreement). In Mafinco, peddlers have a fixed territory in Manila, see whereas clause of Peddler's Contract, subject to prearranged routes, areas and zones agreed upon by Peddler's Association (Committee Report, 70 SCRA 156); 11. Supervision Supervisors also for market analysis in La Suerte case. In Mafinco, Liaison Officer or Supervisors for market analysis (Committee Report, 70 SCRA 156); 12. Basic Agreement In the instant La Suerte case, the dealer is "appointed" (not hired as in employment contract) "to handle" products without commission but with sales discount through sales invoices which state "sold to" dealer (Annex B, Petition; Annex D, Petition). Payments duly receipted (Annex E, Petition). In Mafinco, the peddler is "desirous of buying and selling" (70 SCRA 143). On the second issue-whether or not the withdrawal of 31 union members from NATU affected the petition for certification election insofar as the 30% requirement is concerned, We reserve the Order of the respondent Director of the Bureau of Labor Relations, it appearing undisputably that the 31 union members had withdrawn their support to the petition before the filing of said petition. It would be otherwise if the withdrawal was made after the filing of the petition for it would then be presumed that the withdrawal was not free and voluntary. The presumption would arise that the withdrawal was procured through duress, coercion or for valuable consideration. In other words, the distinction must be that withdrawals made before the filing of the petition are presumed voluntary unless there is convincing proof to the contrary, whereas withdrawals made after the filing of the petition are deemed involuntary. The reason for such distinction is that if the withdrawal or retraction is made before the filing of the petition, the names of employees supporting the petition are supposed to be held secret to the opposite party. Logically, any such withdrawal or retraction shows voluntariness in the absence of proof to the contrary. Moreover, it becomes apparent that such employees had not given consent to the filing of the petition, hence the subscription requirement has not been met. When the withdrawal or retraction is made after the petition is filed, the employees who are supporting the petition become known to the opposite party since their names are attached to the petition at the time of filing. Therefore, it would not be unexpected that the opposite party would use foul means for the subject employees to withdrawal their support. In recapitulation, We hold and rule that the 14 members of respondent local union are dealers or independent contractors. They are not employees of petitioner company. With the withdrawal by 31 members of their support to the petition prior to or before the filing thereof, making a total of 45, the remainder of 3 out of the 48 alleged to have supported the petition can hardly be said to represent the union. Hence, the dismissal of the petition by the MedArbiter was correct and justified. Respondent Director committed grave abuse of discretion in reversing the order of the Med- Arbiter. With the above pronouncements, the resolution of the third issue raised herein is unnecessary. WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Resolution dated January 15, 1980 of respondent Director of the Bureau of Labor Relations and the Resolution dated November 18,1980 are hereby REVERSED and SET ASIDE, and the petition for certification election is ordered dismissed. No costs.SO ORDERED.