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Introduction

A. Constitution, Art. III, Sec. 8; Art. XIII, Sec. 3


B. Labor Code, Arts. 218[211], 289[275], 219[212] (a,b,c,d)
C. Common Terms
Labor Code, Art. 219[212] (e,f,g,h,I,l), Art. 258(d) [248(d)]
Right to Self-Organization
A. Concept & Scope: Arts. 252[243], 256[246], 291(c) [277(c)]
Omnibus Rules, Book V, RuleI-Rule II, as amended by D.O. 40, series of 2003
* S.S. Ventures International v. S.S. Ventures Labor Union, 559 SCRA 435

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION
S.S. VENTURES INTERNATIONAL, G.R. No. 161690
INC.,
Petitioner,
Present:
QUISUMBING, J., Chairperson,
- versus - YNARES-SANTIAGO,*
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
S.S. VENTURES LABOR UNION
(SSVLU) and DIR. HANS LEO Promulgated:
CACDAC, in His capacity as
Director of the Bureau of Labor July 23, 2008
Relations (BLR),
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA-registered export
firm with principal place of business at Phase I-PEZA-Bataan Export Zone,

Mariveles, Bataan, is in the business of manufacturing sports shoes. Respondent


S.S. Ventures Labor Union (Union), on the other hand, is a labor organization
registered with the Department of Labor and Employment (DOLE) under
Certificate of Registration No. RO300-00-02-UR-0003.
On March 21, 2000, the Union filed with DOLE-Region III a petition
for certification election in behalf of the rank-and-file employees of
Ventures. Five hundred forty two (542)signatures, 82 of which belong to
______________________
* Additional member as per Special Order No. 509 dated July 1, 2008.

terminated Ventures employees, appeared on the basic documents supporting the


petition.
On August 21, 2000, Ventures filed a Petition[1] to cancel the Unions certificate of
registration invoking the grounds set forth in Article 239(a) of the Labor Code.
[2]
Docketed as Case No. RO300-0008-CP-002 of the same DOLE regional office,
the petition alleged the following:
(1) The Union deliberately and maliciously included the names of more or
less 82 former employees no longer connected with Ventures in its list of members
who attended the organizational meeting and in the adoption/ratification of its
constitution and by-laws held on January 9, 2000 in Mariveles, Bataan; and the
Union forged the signatures of these 82 former employees to make it appear they
took part in the organizational meeting and adoption and ratification of the
constitution;
(2) The Union maliciously twice entered the signatures of three persons
namely: Mara Santos, Raymond Balangbang, and Karen Agunos;
(3) No organizational meeting and ratification actually took place; and
(4) The Unions application for registration was not supported by at least
20% of the rank-and-file employees of Ventures, or 418 of the total 2,197employee complement. Since more or less 82 of the 500 [3] signatures were forged
or invalid, then the remaining valid signatures would only be 418, which is very
much short of the 439 minimum (2197 total employees x 20% = 439.4) required by
the Labor Code.[4]

In its Answer with Motion to Dismiss,[5] the Union denied committing the
imputed acts of fraud or forgery and alleged that: (1) the organizational meeting
actually took place on January 9, 2000 at the Shoe City basketball court in
Mariveles; (2) the 82 employees adverted to in Ventures petition were qualified
Union members for, although they have been ordered dismissed, the one-year
prescriptive period to question their dismissal had not yet lapsed; (3) it had
complied with the 20%-member registration requirement since it had 542
members; and (4) the double signatures were inadvertent human error.
In its supplemental reply memorandum[6] filed on March 20, 2001, with
attachments, Ventures cited other instances of fraud and misrepresentation,
claiming that the affidavits executed by 82 alleged Union members show that they
were deceived into signing paper minutes or were harassed to signing their
attendance in the organizational meeting. Ventures added that some employees
signed the affidavits denying having attended such meeting.
In a Decision dated April 6, 2001, Regional Director Ana C. Dione of DOLERegion III found for Ventures, the dispositive portion of which reads:
Viewed in the light of all the foregoing, this office hereby grants
the petition. WHEREFORE, this office resolved to CANCEL Certificate
of Registration No. [RO300-00-02-UR-0003] dated 28 February 2000 of
respondent S.S. Ventures Labor Union-Independent.
So Ordered.[7]

Aggrieved, the Union interposed a motion for reconsideration, a recourse which


appeared to have been forwarded to the Bureau of Labor Relations
(BLR). Although it would later find this motion to have been belatedly filed, the
BLR, over the objection of Ventures which filed a Motion to Expunge, gave it due
course and treated it as an appeal.

Despite Ventures motion to expunge the appeal,[8] the BLR Director rendered
on October 11, 2002 a decision[9] in BLR-A-C-60-6-11-01, granting the Unions
appeal and reversing the decision of Dione. The fallo of the BLRs decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of
Director Ana C. Dione dated 6 April 2001 is hereby REVERSED and
SET ASIDE. S.S. Ventures Labor Union-Independent shall remain in the
roster of legitimate labor organizations.
SO ORDERED.[10]

Ventures sought reconsideration of the above decision but was denied by the BLR.
Ventures then went to the Court of Appeals (CA) on a petition for certiorari
under Rule 65, the recourse docketed as CA-G.R. SP No. 74749. On October 20,
2003, the CA rendered a Decision,[11] dismissing Ventures petition. Ventures motion
for reconsideration met a similar fate.[12]
Hence, this petition for review under Rule 45, petitioner Ventures raising the
following grounds:
I.
PUBLIC RESPONDENT ACTED RECKLESSLY AND
IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND
EXCEEDED ITS JURISDICTION IN DISREGARDING THE
SUBSTANTIAL AND OVERWHELMING EVIDENCE ADDUCED
BY THE PETITIONER SHOWING THAT RESPONDENT UNION
PERPETRATED FRAUD, FORGERY, MISREPRESENTATION AND
MISSTATEMENTS IN CONNECTION WITH THE ADOPTION AND
RATIFICATION OF ITS CONSTITUTION AND BY-LAWS, AND IN
THE PREPARATION OF THE LIST OF MEMBERS WHO TOOK
PART IN THE ALLEGED ORGANIZATIONAL MEETING BY
HOLDING THAT:
A.
THE 87 AFFIDAVITS OF ALLEGED UNION MEMBERS
HAVE NO EVIDENTIARY WEIGHT.

B.
THE INCLUSION OF THE 82 EMPLOYEES IN THE LIST OF
ATTENDEES TO THE JANUARY 9, 2000 MEETING IS
AN INTERNAL MATTER WITHIN THE AMBIT OF
THE WORKERS RIGHT TO SELF-ORGANIZATION
AND OUTSIDE THE SPHERE OF INFLUENCE (OF)
THIS OFFICE (PUBLIC RESPONDENT IN THIS CASE)
AND THE PETITIONER.
II.
PUBLIC
RESPONDENT
ACTED
RECKLESSLY
AND
IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND
EXCEEDED
ITS
JURISDICTION
IN
IGNORING
AND
DISREGARDING THE BLATANT PROCEDURAL LAPSES OF THE
RESPONDENT UNION IN THE FILING OF ITS MOTION FOR
RECONSIDERATION AND APPEAL.
A.
BY GIVING DUE COURSE TO THE MOTION FOR
RECONSIDERATION
FILED
BY
THE
RESPONDENT UNION DESPITE THE FACT THAT IT
WAS FILED BEYOND THE REGLEMENTARY
PERIOD.
B.
BY ADMITTING THE APPEAL FILED BY ATTY.
ERNESTO R. ARELLANO AND HOLDING THAT THE
SAME DOES NOT CONSTITUTE FORUM SHOPPING
UNDER SUPREME COURT CIRCULAR NO. 28-91.
III.
PUBLIC
RESPONDENT
ACTED
RECKLESSLY
AND
IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND
EXCEEDED
ITS
JURISDICTION
IN
INVOKING
THE
CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION AND ILO
CONVENTION NO. 87 TO JUSTIFY THE MASSIVE

FRAUD, MISREPRESENTATION,
MISSTATEMENTS
FORGERY COMMITTED BY THE RESPONDENT UNION.[13]
The petition lacks merit.

AND

The right to form, join, or assist a union is specifically protected by Art.


XIII, Section 3[14] of the Constitution and such right, according to Art. III, Sec. 8 of
the Constitution and Art. 246 of the Labor Code, shall not be abridged. Once
registered with the DOLE, a union is considered a legitimate labor organization
endowed with the right and privileges granted by law to such organization. While a
certificate of registration confers a union with legitimacy with the concomitant
right to participate in or ask for certification election in a bargaining unit, the
registration may be canceled or the union may be decertified as the bargaining unit,
in which case the union is divested of the status of a legitimate labor organization.
[15]
Among the grounds for cancellation is the commission of any of the acts
enumerated in Art. 239(a)[16] of the Labor Code, such as fraud and
misrepresentation in connection with the adoption or ratification of the unions
constitution and like documents. The Court, has in previous cases, said that to
decertify a union, it is not enough to show that the union includes ineligible
employees in its membership. It must also be shown that there was
misrepresentation, false statement, or fraud in connection with the application for
registration and the supporting documents, such as the adoption or ratification of
the constitution and by-laws or amendments thereto and the minutes of ratification
of the constitution or by-laws, among other documents.[17]
Essentially, Ventures faults both the BLR and the CA in finding that there
was no fraud or misrepresentation on the part of the Union sufficient to justify
cancellation of its registration. In this regard, Ventures makes much of, first, the
separate hand-written statements of 82 employees who, in gist, alleged that they
were unwilling or harassed signatories to the attendance sheet of the organizational
meeting.
We are not persuaded. As aptly noted by both the BLR and CA, these mostly
undated written statements submitted by Ventures on March 20, 2001, or seven
months after it filed its petition for cancellation of registration, partake of the
nature of withdrawal of union membership executed after the Unions filing of a
petition for certification election on March 21, 2000.We have in precedent

cases[18] said that the employees withdrawal from a labor union made before the
filing of the petition for certification election is presumed voluntary, while
withdrawal after the filing of such petition is considered to be involuntary and does
not affect the same. Now then, if a withdrawal from union membership done after a
petition for certification election has been filed does not vitiate such petition, is it
not but logical to assume that such withdrawal cannot work to nullify the
registration of the union? Upon this light, the Court is inclined to agree with the
CA that the BLR did not abuse its discretion nor gravely err when it concluded that
the affidavits of retraction of the 82 members had no evidentiary weight.
It cannot be over-emphasized that the registration or the recognition of a
labor union after it has submitted the corresponding papers is not ministerial on the
part of the BLR. Far from it. After a labor organization has filed the necessary
registration documents, it becomes mandatory for the BLR to check if the
requirements under Art. 234[19] of the Labor Code have been sedulously complied
with.[20] If the unions application is infected by falsification and like serious
irregularities, especially those appearing on the face of the application and its
attachments, a union should be denied recognition as a legitimate labor
organization. Prescinding from these considerations, the issuance to the Union of
Certificate of Registration No. RO300-00-02-UR-0003 necessarily implies that its
application for registration and the supporting documents thereof are prima
facie free from any vitiating irregularities.
Second, Ventures draws attention to the inclusion of 82 individuals to the list
of participants in the January 9, 2000 organizational meeting. Ventures submits that
the 82, being no longer connected with the company, should not have been counted
as attendees in the meeting and the ratification proceedings immediately
afterwards.
The assailed inclusion of the said 82 individuals to the meeting and
proceedings adverted to is not really fatal to the Unions cause for, as determined by
the BLR, the allegations of falsification of signatures or misrepresentation with
respect to these individuals are without basis. [21] The Court need not delve into the
question of whether these 82 dismissed individuals were still Union members
qualified to vote and affix their signature on its application for registration and
supporting documents. Suffice it to say that, as aptly observed by the CA, the

procedure for acquiring or losing union membership and the determination of who
are qualified or disqualified to be members are matters internal to the union and
flow from its right to self-organization.
To our mind, the relevancy of the 82 individuals active participation in
the Unions organizational meeting and the signing ceremonies thereafter comes in
only for purposes of determining whether or not the Union, even without the 82,
would still meet what Art. 234(c) of the Labor Code requires to be submitted, to
wit:
Art. 234. Requirements of Registration.Any applicant labor
organization x x x shall acquire legal personality and shall be entitled to
the rights and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the following
requirements:
xxxx
(c) The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate.

The BLR, based on its official records, answered the poser in the
affirmative. Wrote the BLR:
It is imperative to look into the records of respondent union with
this Bureau pursuant to our role as a central registry of union and CBA
records under Article 231 of the Labor Code and Rule XVII of the rules
implementing Book V of the Labor Code, as amended x x x.
In its union records on file with this Bureau, respondent union
submitted the names of [542] members x x x. This number easily
complied with the 20% requirement, be it 1,928 or 2,202 employees in
the establishment. Even subtracting the 82 employees from 542 leaves
460 union members, still within 440 or 20% of the maximum total of
2,202 rank-and-file employees.

Whatever misgivings the petitioner may have with regard to the


82 dismissed employees is better addressed in the inclusion-exclusion
proceedings during a pre-election conference x x x. The issue
surrounding the involvement of the 82 employees is a matter of
membership or voter eligibility. It is not a ground to cancel union
registration. (Emphasis added.)

The bare fact that three signatures twice appeared on the list of those who
participated in the organizational meeting would not, to our mind, provide a valid
reason to cancel Certificate of Registration No. RO300-00-02-UR-0003. As
the Union tenably explained without rebuttal from Ventures, the double entries are
no more than normal human error, effected without malice.Even the labor arbiter
who found for Ventures sided with the Union in its explanation on the absence of
malice.[22]
The cancellation of a unions registration doubtless has an impairing
dimension on the right of labor to self-organization. Accordingly, we can accord
concurrence to the following apt observation of the BLR: [F]or fraud and
misrepresentation [to be grounds for] cancellation of union registration under
Article 239 [of the Labor Code], the nature of the fraud and misrepresentation must
be grave and compelling enough to vitiate the consent of a majority of union
members.[23]

In its Comment, the Union points out that for almost seven (7) years following the
filing of its petition, no certification election has yet been conducted among the
rank-and-file employees.If this be the case, the delay has gone far enough and can
no longer be allowed to continue. The CA is right when it said that Ventures should
not interfere in the certification election by actively and persistently opposing the
certification election of the Union. A certification election is exclusively the
concern of employees and the employer lacks the legal personality to challenge it.
[24]
In fact, jurisprudence frowns on the employers interference in a certification
election for such interference unduly creates the impression that it intends to
establish a company union.[25]

Ventures allegations on forum shopping and the procedural lapse supposedly


committed by the BLR in allowing a belatedly filed motion for reconsideration
need not detain us long.Suffice it to state that this Court has consistently ruled that
the application of technical rules of procedure in labor cases may be relaxed to
serve the demands of substantial justice.[26] So it must be in this case.
WHEREFORE, the petition is DENIED. The Decision and Resolution
dated October 20, 2003 and January 19, 2004, respectively, of the CA
are AFFIRMED. S.S. Ventures Labor Union shall remain in the roster of
legitimate labor organizations, unless it has in the meantime lost its legitimacy for
causes set forth in the Labor Code. Costs against petitioner.
SO ORDERED.

B. Special Groups of Employees


1. Managerial and Supervisory Employees: Art. 254[245], 219(m) [212(m)];
Omnibus Rules, Book V, Rule I, Sec. 1 (hh), (nn), (xx), as amended by D.O. 40
2. Confidential Employees
* Standard Charter, etc. v. Standard Charter Bank 552 SCRA 284

Republic of the Philippines


SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 161933

April 22, 2008

STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEU-NUBE), petitioner,


vs.
STANDARD CHARTERED BANK and ANNEMARIE DURBIN, in her capacity as Chief
Executive Officer, Philippines, Standard Chartered Bank, respondents.

DECISION
AUSTRIA-MARTINEZ, J.:
For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the Rules of
Court, assailing the Decision1 dated October 9, 2002 and Resolution 2 dated January 26,
2004 issued by the Court of Appeals (CA), dismissing their petition and affirming the
Secretary of Labor and Employments Orders dated May 31, 2001 and August 30, 2001.
Petitioner and the Standard Chartered Bank (Bank) began negotiating for a new Collective
Bargaining Agreement (CBA) in May 2000 as their 1998-2000 CBA already expired. Due to
a deadlock in the negotiations, petitioner filed a Notice of Strike prompting the Secretary of
Labor and Employment to assume jurisdiction over the labor dispute.
On May 31, 2001, Secretary Patricia A. Sto. Tomas of the Department of Labor and
Employment (DOLE) issued an Order with the following dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the Standard Chartered Bank and the Standard
Chartered Bank Employees Union are directed to execute their collective bargaining
agreement effective 01 April 2001 until 30 March 2003 incorporating therein the foregoing
dispositions and the agreements they reached in the course of negotiations and conciliation.
All other submitted issues that were not passed upon are dismissed.
The charge of unfair labor practice for bargaining in bad faith and the claim for damages
relating thereto are hereby dismissed for lack of merit.
Finally, the charge of unfair labor practice for gross violation of the economic provisions of
the CBA is hereby dismissed for want of jurisdiction.
SO ORDERED.3
Both petitioner and the Bank filed their respective motions for reconsideration, which were
denied by the Secretary per Order dated August 30, 2001. 4
Petitioner sought recourse with the CA via a petition for certiorari, and in the assailed
Decision dated October 9, 20025 and Resolution dated January 26, 2004,6 the CA dismissed
their petition and affirmed the Secretarys Orders.
Hence, herein petition based on the following grounds:

I.
THE COURT A QUO ERRED IN DECIDING THAT THERE WAS NO BASIS FOR
REVISING THE SCOPE OF EXCLUSIONS FROM THE APPROPRIATE BARGAINING
UNIT UNDER THE CBA.
II.
THE COURT A QUO ERRED IN DECIDING THAT A ONE-MONTH OR LESS
TEMPORARY OCCUPATION OF A POSITION (ACTING CAPACITY) DOES NOT MERIT
ADJUSTMENT IN REMUNERATION.7
The resolution of this case has been overtaken by the execution of the parties 2003-2005
CBA. While this would render the case moot and academic, nevertheless, the likelihood that
the same issues will come up in the parties future CBA negotiations is not far-fetched, thus
compelling its resolution. Courts will decide a question otherwise moot if it is capable of
repetition yet evading review.8
The CBA provisions in dispute are the exclusion of certain employees from the appropriate
bargaining unit and the adjustment of remuneration for employees serving in an acting
capacity for one month.
In their proposal, petitioner sought the exclusion of only the following employees from the
appropriate bargaining unit all managers who are vested with the right to hire and fire
employees, confidential employees, those with access to labor relations materials, Chief
Cashiers, Assistant Cashiers, personnel of the Telex Department and one Human
Resources (HR) staff.9
In the previous 1998-2000 CBA,10 the excluded employees are as follows:
A. All covenanted and assistant officers (now called National Officers)
B. One confidential secretary of each of the:
1. Chief Executive, Philippine Branches
2. Deputy Chief Executive/Head, Corporate Banking Group
3. Head, Finance
4. Head, Human Resources

5. Manager, Cebu
6. Manager, Iloilo
7. Covenanted Officers provided said positions shall be filled by new recruits.
C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in any other
branch that the BANK may establish in the country.
D. Personnel of the Telex Department
E. All Security Guards
F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code, as
amended by R.A. 6715, casuals or emergency employees; and
G. One (1) HR Staff 11
The Secretary, however, maintained the previous exclusions because petitioner failed to
show that the employees sought to be removed from the list qualify for exclusion. 12
With regard to the remuneration of employees working in an acting capacity, it was
petitioners position that additional pay should be given to an employee who has been
serving in a temporary/acting capacity for one week. The Secretary likewise rejected
petitioners proposal and instead, allowed additional pay for those who had been working in
such capacity for one month. The Secretary agreed with the Banks position that a
restrictive provision would curtail managements prerogative, and at the same time,
recognized that employees should not be made to work in an acting capacity for long
periods of time without adequate compensation.
The Secretarys disposition of the issues raised by petitioner were affirmed by the CA. 13 The
Court sustains the CA.
Whether or not the employees sought to be excluded from the appropriate bargaining unit
are confidential employees is a question of fact, which is not a proper issue in a petition for
review under Rule 45 of the Rules of Court. 14 This holds more true in the present case in
which petitioner failed to controvert with evidence the findings of the Secretary and the CA.
The disqualification of managerial and confidential employees from joining a bargaining unit
for rank and file employees is already well-entrenched in jurisprudence. While Article 245 of

the Labor Code limits the ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required to assist
or act in a fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.15
In this case, the question that needs to be answered is whether the Banks Chief Cashiers
and Assistant Cashiers, personnel of the Telex Department and HR staff are confidential
employees, such that they should be excluded.
As regards the qualification of bank cashiers as confidential employees, National
Association of Trade Unions (NATU) Republic Planters Bank Supervisors Chapter v.
Torres16 declared that they are confidential employees having control, custody and/or access
to confidential matters, e.g., the branchs cash position, statements of financial condition,
vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable
instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody,
and therefore, disqualified from joining or assisting a union; or joining, assisting or forming
any other labor organization.17
Golden Farms, Inc. v. Ferrer-Calleja 18 meanwhile stated that confidential employees such
as accounting personnel, radio and telegraph operators who, having access to
confidential information, may become the source of undue advantage. Said employee(s)
may act as spy or spies of either party to a collective bargaining agreement. 19
Finally, in Philips Industrial Development, Inc. v. National Labor Relations Commission,20 the
Court designated personnel staff, in which human resources staff may be qualified, as
confidential employees because by the very nature of their functions, they 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.
Petitioner insists that the foregoing employees are not confidential employees; however, it
failed to buttress its claim. Aside from its generalized arguments, and despite the
Secretarys finding that there was no evidence to support it, petitioner still failed to
substantiate its claim. Petitioner did not even bother to state the nature of the duties and
functions of these employees, depriving the Court of any basis on which it may be
concluded that they are indeed confidential employees. As aptly stated by the CA:
While We agree that petitioners proposed revision is in accordance with the law, this does
not necessarily mean that the list of exclusions enumerated in the 1998-2000 CBA is

contrary to law. As found by public respondent, petitioner failed to show that the
employees sought to be removed from the list of exclusions are actually rank and file
employees who are not managerial or confidential in status and should, accordingly,
be included in the appropriate bargaining unit.
Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex
department and one (1) HR Staff have mutuality of interest with the other rank and file
employees, then they are rightfully excluded from the appropriate bargaining unit. x x
x 21 (Emphasis supplied)
Petitioner cannot simply rely on jurisprudence without explaining how and why it should
apply to this case. Allegations must be supported by evidence. In this case, there is barely
any at all.
There is likewise no reason for the Court to disturb the conclusion of the Secretary and the
CA that the additional remuneration should be given to employees placed in an acting
capacity for one month. The CA correctly stated:
Likewise, We uphold the public respondents Order that no employee should be temporarily
placed in a position (acting capacity) for more than one month without the corresponding
adjustment in the salary. Such order of the public respondent is not in violation of the equal
pay for equal work principle, considering that after one (1) month, the employee performing
the job in an acting capacity will be entitled to salary corresponding to such position.
xxxx
In arriving at its Order, the public respondent took all the relevant evidence into account and
weighed both parties arguments extensively. Thus, public respondent concluded that a
restrictive provision with respect to employees being placed in an acting capacity may
curtail managements valid exercise of its prerogative. At the same time, it recognized that
employees should not be made to perform work in an acting capacity for extended periods
of time without being adequately compensated. x x x 22
Thus, the Court reiterates the doctrine that:
[T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires
that it shall raise only questions of law. The factual findings by quasi-judicial agencies, such
as the Department of Labor and Employment, when supported by substantial evidence, are
entitled to great respect in view of their expertise in their respective fields. Judicial review of
labor cases does not go so far as to evaluate the sufficiency of evidence on which the labor

officials findings rest. It is not our function to assess and evaluate all over again the
evidence, testimonial and documentary, adduced by the parties to an appeal, particularly
where the findings of both the trial court (here, the DOLE Secretary) and the appellate court
on the matter coincide, as in this case at bar. The Rule limits that function of the Court to the
review or revision of errors of law and not to a second analysis of the evidence. x x x Thus,
absent any showing of whimsical or capricious exercise of judgment, and unless lack of any
basis for the conclusions made by the appellate court be amply demonstrated, we may not
disturb such factual findings.23
WHEREFORE, the petition is DENIED.
SO ORDERED.
Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

* Pepsi Cola Products v. Secretary of Labor, 312 SCRA 104

THIRD DIVISION

[G.R. No. 96663. August 10, 1999]

PEPSI - COLA PRODUCTS PHILIPPINES, INC., petitioner, vs.


HONORABLE SECRETARY OF LABOR, MED - ARBITER
NAPOLEON V. FERNANDO & PEPSI - COLA SUPERVISORY
EMPLOYEES ORGANIZATION - UOEF, respondents.

[G.R. No. 103300. August 10, 1999]

PEPSI COLA PRODUCTS PHILIPPINES, petitioner, vs. OFFICE OF THE


SECRETARY DEPARTMENT OF LABOR AND HON. CELENIO N.
DAING, in his capacity as Med-Arbiter Labor Regional Office No. X,
Cagayan de Oro City, CAGAYAN DE ORO PEPSI COLA
SUPERVISORS UNION (UOEF), respondents.

DECISION
PURISIMA, J.:

These are petitions for certiorari relating to three (3) cases filed with the Med-Arbiter, to
wit: MED ARB ROX Case No. R100-9101-RU-002 for Certification Election filed by Pepsi
Cola Supervisors Union-UOEF (Union), MED ARB Case No. R1000-9102-RU-008, Re: Petition
to Set Aside, Cancel and/ or Revoke the Charter Affiliation of the Union, and MED-ARB ROX
Case No. R1000-9104-RU-012, for Cancellation of Registration Certificate No. 11492-LC in
favor of the Union.
G. R. No. 96663

The facts that matter can be culled as follows:


Sometime in June 1990, the Pepsi-Cola Employees Organization-UOEF (Union) filed a
petition for certification election with the Med-Arbiter seeking to be the exclusive bargaining
agent of supervisors of Pepsi-Cola Philippines, Inc. (PEPSI).
On July 12, 1990, the Med-Arbiter granted the Petition, with the explicit statement that it
was an affiliate of Union de Obreros Estivadores de Filipinas (federation) together with two (2)
rank and file unions, Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola Employees Union of the
Philippines (PEUP).
On July 23, 1990, PEPSI filed with the Bureau of Labor Relations a petition to Set Aside,
Cancel and/or Revoke Charter Affiliation of the Union, entitled PCPPI v. PCEU-UOEF and
docketed as Case No. 725-90, on the grounds that (a) the members of the Union were managers
and (b) a supervisors union can not affiliate with a federation whose members include the rank
and file union of the same company.
On August 29,1990, PEPSI presented a motion to re-open the case since it was not furnished
with a copy of the Petition for Certification Election.
On September 4, 1990, PEPSI submitted its position paper to the BLR in Case No. 725-90.
On September 21, 1990, PEPSI received summons to appear at the pre-trial conference set
on September 25, 1990 but which the hearing officer rescheduled on October 21, 1990.
On October 12, 1990, PEPSI filed a Notice of Appeal and Memorandum of Appeal with the
Secretary of Labor, questioning the setting of the certification election on the said date and five
(5) days after. It also presented an urgent Ex-Parte Motion to Suspend the Certification Election,
which motion was granted on October 18, 1990.
On November 12, 1990, the Secretary of Labor denied the appeal and Motion for
Reconsideration. Even as the Petition to Cancel, Revoke and Suspend Union Charter Certificate
was pending before the BLR, PEPSI found its way to this Court via the present petition
for certiorari.
On February 6, 1991, the Court granted the prayer for temporary restraining order and/or
preliminary injunction.

The pivot of inquiry here is: whether or not a supervisors union can affiliate with the same
Federation of which two (2) rank and file unions are likewise members, without violating Article
245 of the Labor Code (PD 442), as amended, by Republic Act 6715, which provides:

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.
In its Comment dated March 19, 1991, the Federation argued that:

The pertinent portion of Article 245 of the Labor Code states that. 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 organization of their own.
This provision of law does not prohibit a local union composed of supervisory
employees from being affiliated to a federation which has local unions with rank-andfile members as affiliates.
xxx xxx xxx

xxx the Petition to Cancel, Revoke or Set Aside the Charter Certificate of the private
respondent is anchored on the alleged ground that certain managerial employees are
included as members thereof. The grounds for the cancellation of the registration
certificate of a labor organization are provided in Section 7 of Rule II, Book V of the
Omnibus Rules Implementing the Labor Code, and the inclusion of managerial
employees is not one of the grounds. xxx (in this case, the private respondent herein)
remains to be a legitimate labor organization. [1]
On April 8, 1991, the Secretary of Labor and Employment, through the Office of the
Solicitor General, sent in a Comment, alleging inter alia, that:

xxx under Article 259 of the New Labor Code, only orders of the Med-Arbiter can be
appealed through the Secretary of Labor and only on the ground that the rules and
regulations for the conduct of the certification election have been violated. The Order
of the Representation Officer is interlocutory and not appealable. xxx
xxx until and unless there is a final order cancelling its certificate of registration or
charter certificate, a labor organization remains to be a legitimate labor organization
entitled to exercise all the rights and duties accorded to it by the Labor Code including
the right to be certified as a bargaining representative. xxx

xxx Public respondent cannot be deemed to have committed grave abuse of discretion
with respect to an issue that was never presented before it for resolution. xxx
Article 245 of the New Labor Code does not preclude the supervisors union and the
rank-and-file union from being affiliated with the same federation.
xxx xxx xxx

A federation of local union is not the labor organization referred to in Article 245 but
only becomes entitled to all the rights enjoyed by the labor organization (at the
company level) when it has complied with the registration requirements found in
Articles 234 and 237. Hence, what is prohibited by Article 245 is membership of
supervisory employees in a labor union (at the company level) of the rank and
file. xxx
xxx In other words, the affiliation of the supervisory employees union with the same
federation with which the rank and file employees union is affiliated did not make the
supervisory employees members of the rank and file employees union and vice versa.
[2]

xxx

PEPSI, in its Reply dated May 7, 1991, asserted:

It is our humble contention that a final determination of the Petition to Set-Aside,


Cancel, Revoke Charter Union Affiliation should first be disposed of before granting
the Petition for the Conduct of Certification Election. To allow the conduct of the
certification election to proceed would make any decision arrived at by the Bureau of
Labor Relations useless inasmuch as the same would necessarily be rendered moot
and academic.[3]
On June 7, 1991, petitioner again filed a Supplemental Reply stressing:

It is likewise stressed that officials of both the PCLU and PEUP are top ranking
officers of UOEF, the federation of supervisors union, to wit:
POSITION IN RANK AND FILE POSITION IN FEDERATION
UNION
1. Rogelio de la Cruz PCLU -President General Vice President
2. Felix Gatela PEUP - President General Treasurer
3. Carlito Epino PCLU Board Member Educational Research
Director
xxx xxx xxx

The respondent supervisory union could do indirectly what it could not do directly as
the simple expedient of affiliating with UOEF would negate the manifest intent and
letter of the law that supervisory employees can only join, assist or form separate
labor organizations of their own and cannot be eligible for membership in a labor
organization of the rank and file employees.[4]
On August 6, 1991, the Secretary of Labor and Employment filed a Rejoinder, claiming
thus:

xxx an employer has no legal standing to question the validity of a certification


election.
xxx For this reason, the Supreme Court has consistently held that, as a rule, a
certification election is the sole and exclusive concern of the employees and that the
employer is definitely an intruder or a mere bystander (Consolidated Farms vs. Noriel,
L-47752, July 31, 1978, 84 SCRA 469; Filipino Metals Corporation vs. Ople, L43861, September 4, 1981, 107 SCRA 211; Trade Unions of the Philippines and
Allied Services (TUPAS) vs. Trajano No. L-61153, January 17, 1983, 120 SCRA 64].
xxx xxx xxx

In Adamson & Adamson, Inc. vs. CIR No. L-35120, January 31, 1984, 127 SCRA
268, the Supreme Court (then dealing with the interpretation of Section 3 of the
Industrial Peace Act, from which Section 245 of the Labor Code was derived)
grappled with the issue in the case at bar. It held that,
There is nothing in the provisions of the Industrial Peace Act which provides that a
duly registered local union affiliating with a national union or federation loses its legal
personality, or its independence.
xxx xxx xxx

However, there is absolutely nothing in the Labor Code that prohibits a federation
from representing or exercising influence over its affiliates. On the contrary, this is
precisely the reason why federations are formed and are allowed by law to exist. [5]
On November 8, 1991, the Union also filed a Rejoinder.
On December 9, 1991, the Court resolved to DISMISS the case for failure to sufficiently
show that the questioned judgment is tainted with grave abuse of discretion.
In a Resolution dated March 2, 1992, the Second Division of the Court resolved to grant the
motion for reconsideration interposed on January 28, 1992.

G.R. No. 103300

What are assailed in this case is Med-Arbiter Order dated May 23, 1991 and the Decision
and Order of the Secretary of Labor and Employment, dated October 4, 1991 and December 12,
1991, respectively.
The decretal portion of the Med-Arbiter Order under attack, reads:

WHEREFORE, premises considered, an order is hereby issued:


1. Dismissing MED ARB ROX CASE NO. R1000-919104-RU-012 and R1000-9102RU-008 for lack of merit; and
2. Ordering the conduct of a Certification Election to be participated by and among
the supervisory workers of the respondent company, Pepsi-Cola Products Philippines,
Inc. at its plant at Tin-ao, Cagayan de Oro City, including all the satellite warehouse
within the territorial coverage and control of the Cagayan de Oro Pepsi-Cola
Plant. The choices are as follows:
1. Cagayan de Oro Pepsi-Cola Supervisors Union (U.O.E.P.)
2. No union
The parties are directed to attend a pre-election conference on June 10, 1991, 2:30
p.m. at the Regional Office to determine the qualification of the voters and to thresh
out the mechanics of the election.Respondent/employer is directed to submit five (5)
copies of the names of the rank and file workers taken from the payroll on October 131, 1991, alphabetically arranged (sic) indicating their names and positions and dates
of employment and to bring the aforementioned payroll during the pre-election
conference for verification purposes.[6] xxx
The supervisory employees of the Union are:

POSITION
1. Felipe Valdehueza Route Manager
2. Gerberto Vertudazo C & C Manager
3. Paul Mendoza Sales Service Department Manager
4. Gilberto Emano, Jr. Route Manager

5. Jaime Huliganga Chief Checker


6. Elias Edgama, Sr. Accounting Manager
7. Romanico Ramos Route Manager
8. Raul Yacapin Route Manager
9. Jovenal Albaque Route Manager
10. Fulvio Narciso Route Manager
11. Apolinario Opiniano Route Manager
12. Alfredo Panas Route Manager
13. Simplicio Nelie Route Manager
14. Arthur Rodriguez Route Manager
15. Marco Ilano Warehouse Operations Manager and
16. Deodoro Ramos Maintenance Manager
On June 6, 1991, PEPSI appealed the said Order to the Secretary of Labor and Employment
on the ground of grave abuse of discretion, docketed as Case No. OS-A-232-91.
On October 4, 1991, the Secretary modified the appealed decision, ruling thus:

WHEREFORE, the Order of the Med-Arbiter dated 23 May 1991 is hereby modified
to the effect that MED ARB ROX Case No. R1000-9104-RU-012 and R1000-9102RU-008 are hereby referred to the Office of the Regional Director which has
jurisdiction over these cases. The call for certification election among the supervisory
workers of the Pepsi-Cola Products Philippines, Inc. at its plant at Tin-ao, Cagayan de
Oro City is hereby sustained.[7]
On October 19, 1991, PEPSI presented a motion for reconsideration of the aforesaid Order
but the same was denied on December 12, 1991.
Meanwhile, the BLR issued Registration Certificate No. 11492-LC in favor of the
Union. Dissatisfied therewith, PEPSI brought the instant petition for certiorari, contending that:

PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN


RULING THAT PRIVATE RESPONDENTS OFFICERS AND MEMBERS ARE
NOT MANAGERIAL EMPLOYEES;

PRIVATE RESPONDENT IS PROHIBITED FROM AFFILIATING ITSELF


WITH A FEDERATION ALREADY AFFILIATED WITH THE RANK AND
FILE UNION;
PUBLIC RESPONDENT COMMITTED GRAVE OF (SIC) ABUSE OF
DISCRETION IN RULING THAT THE INSTITUTION OF A PETITION FOR
CANCELLATION OF UNION REGISTRATION DOES NOT CONSTITUTE A
PREJUDICIAL QUESTION TO A PETITION CERTIFICATION ELECTION.[8]
The petitions must fail for want of merit.
At the outset, it must be stressed that on September 1, 1992, there was a Resolution of the
Union withdrawing from the Federation, to wit:

BE IT RESOLVED, as it is hereby RESOLVED, that this UNION WITHDRAW, as it


hereby WITHDRAWS its affiliation from the Union de Obreros Estivadores de
Filipinas, and at the same time, give our thanks to the said federation for its help and
guidance rendered to this Union in the past.[9]
The issue in G.R. No. 96663, whether or not the supervisors union can be affiliated with a
Federation with two (2) rank and file unions directly under the supervision of the former, has
thus become moot and academic in view of the Unions withdrawal from the federation.
In a long line of cases (Narciso Nakpil, et. al., vs. Hon. Crisanto Aragon, et. al.,, G. R. No. L
- 24087, January 22, 1980, 95 SCRA 85; Toribio v. Bidin, et. al., G.R. No. L-37960, February
28, 1980, 96 SCRA 361; Gumaua v. Espino, G.R. No. L- 36188 - 37586 February 29, 1980, 96
SCRA 402), the Court dismissed the petition for being moot and academic. In the case of F. C.
Fisher v. Yangco Steamship Co., March 31, 1915, the Court held:

It is unnecessary, however to indulge in academic discussion of a moot question. xxx


xxx The action would have been dismissed at any time on a showing of the facts as
they were . The question left for the court was a moot one. Its Resolution would have
been useless. Its judgment would have been impossible of execution xxx.
However, in the case of University of San Agustin, Inc., et al. vs. Court of Appeals, et al., the
court resolved the case, ruling that even if a case were moot and academic, a statement of the
governing principle is appropriate in the resolution of dismissal for the guidance not only of the
parties but of others similarly situated. xxx[10]
In Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12, [1992] decided by the
Third Division with J. Gutierrez, Jr., as ponente and JJ. Feliciano, Bidin, Romero and now Chief
Justice Davide, Jr., as members it was ratiocinated:
xxx xxx xxx

Thus, if the intent of the law is to avoid a situation where supervisors would merge
with the rank-and-file or where the supervisors labor organization would represent
conflicting interests, then a local supervisors union should not be allowed to affiliate
with the national federation of union of rank-and-file employees where that federation
actively participates in union activity in the company.
xxx xxx xxx

The prohibition against a supervisors union joining a local union of rank and file is
replete with jurisprudence. The Court emphasizes that the limitation is not confined to
a case of supervisors wanting to join a rank-and-file union. The prohibition extends to
a supervisors local union applying for membership in a national federation the
members of which include local unions of rank and file employees. The intent of the
law is clear especially where, as in this case at bar, the supervisors will be co-mingling
with those employees whom they directly supervise in their own bargaining unit.
Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial
question to the petition for certification election, the following ruling in the case of Association
of the Court of Appeals Employees (ACAE) vs. Hon. Pura Ferrer-Calleja, in her capacity as
Director, Bureau of Labor Relations et. Al., 203 ACRA 597, 598, [1991], is in point, to wit:

xxx It is a well-settled rule that a certification proceedings is not a litigation in the


sense that the term is ordinarily understood, but an investigation of a non-adversarial
and fact finding character. (Associated Labor Unions (ALU) v. Ferrer-Calleja, 179
SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v. NLRC, 183
SCRA 451 [1990]. Thus, the technical rules of evidence do not apply if the decision to
grant it proceeds from an examination of the sufficiency of the petition as well as a
careful look into the arguments contained in the position papers and other documents.
At any rate, the Court applies the established rule correctly followed by the public
respondent that an order to hold a certification election is proper despite the pendency
of the petition for cancellation of the registration certificate of the respondent
union. The rationale for this is that at the time the respondent union filed its petition, it
still had the legal personality to perform such act absent an order directing the
cancellation.
xxx xxx xxx
As regards the issue of whether or not confidential employees can join the labor union of the
rank and file, what was held in the case of National Association of Trade Unions (NATU) Republic Planters Bank Supervisors Chapter vs. Hon. R. D. Torres, et. al., G.R. No. 93468,
December 29, 1994, applies to this case. Citing Bulletin Publishing Corporation vs. Sanchez, 144
SCRA 628,635, Golden Farms vs. NLRC, 175 SCRA 471, and Pier 8 Arrastre and Stevedoring

Services, Inc. vs. Hon. Nieves Roldan-Confessor et al., G.R. No. 110854, February 14, 1995, the
Court ruled:

xxx A confidential employee is one entrusted with confidence on delicate matters, or


with the custody, handling, or care and protection of the employers property. While
Art. 245 of the Labor Code singles out managerial employee as ineligible to join,
assist or form any labor organization, under the doctrine of necessary implication,
confidential employees are similarly disqualified. This doctrine states that what is
implied in a statute is as much a part thereof as that which is expressed, as elucidated
in several case; the latest of which is Chua v. Civil Service Commission where we
said:
No statute can be enacted that can provide all the details involved in its
application. There is always an omission that may not meet a particular
situation. What is thought, at the time of the enactment, to be an all embracing
legislation maybe inadequate to provide for the unfolding events of the future. Socalled gaps in the law develop as the law is enforced. One of the rules of statutory
construction used to fill in the gap is the doctrine of necessary implication xxx, Every
statute is understood, by implication, to contain all such provisions as may be
necessary to effectuate its object and purpose, or to make effective rights, powers,
privileges or jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its terms. Ex necessitate
legis xxx
In applying the doctrine of necessary implication, we took into consideration the
rationale behind the disqualification of managerial employees expressed in Bulletin
Publishing Corporation v. Sanchez, thus xxx if these managerial employees would
belong to or be affiliated with a Union, the latter might not be assured of their loyalty
to the Union in view of evident conflict of interests. The Union can also become
company dominated with the presence of managerial employees in Union
membership. Stated differently, in the collective bargaining process, managerial
employees are supposed to be on the side of the employer, to act as its representatives,
and to see to it that its interest are well protected. The employer is not assured of such
protection if these employees themselves are union members. Collective bargaining in
such a situation can become one-sided. It is the same reason that impelled this Court
to consider the position of confidential employees as included in the disqualification
found in Art. 245 as if the disqualification of confidential employees were written in
the provision. If confidential employees could unionize in order to bargain for
advantages for themselves, then they could be governed by their own motives rather
than the interest of the employers. Moreover, unionization of confidential employees
for the purpose of collective bargaining would mean the extension of the law to
persons or individuals who are supposed to act in the interest of the employers. It is

not farfetched that in the course of collective bargaining, they might jeopardize that
interest which they are duty bound to protect. Along the same line of reasoning we
held in Golden Farms, Inc. vs. Ferrer-Calleja reiterated in Philips Industrial
Development, Inc., NLRC, that confidential employees such as accounting personnel,
radio and telegraph operators who, having access to confidential information, may
become the source of undue advantage.Said employee(s) may act as spy or spies of
either party to a collective bargaining agreement.
The Court finds merit in the submission of the OSG that Route Managers, Chief Checkers
and Warehouse Operations Managers are supervisors while Credit & Collection Managers and
Accounting Managers are highly confidential employees. Designation should be reconciled with
the actual job description of subject employees. A careful scrutiny of their job description
indicates that they dont lay down company policies.Theirs is not a final determination of the
company policies since they have to report to their respective superior. The mere fact that an
employee is designated manager does not necessarily make him one. Otherwise, there would be
an absurd situation where one can be given the title just to be deprived of the right to be a
member of a union. In the case of National Steel Corporation v. Laguesma, G. R. No. 103743,
January 29,1996, it was stressed that:

What is essential is the nature of the employees function and not the nomenclature or
title given to the job which determines whether the employee has rank and file or
managerial status, or whether he is a supervisory employee.
WHEREFORE, the petitions under consideration are DISMISSED but subject Decision,
dated October 4, 1991, of the Secretary of Labor and Employment is MODIFIED in that Credit
and Collection Managers and Accounting Managers are highly confidential employees not
eligible for membership in a supervisors union. No pronouncement as to costs.
SO ORDERED.
Melo, (Chairman), Vitug, and Gonzaga-Reyes, JJ., concur.
Panganiban, J., in the result.
3. Security Guards
* Manila Electric Co. v. Secretary of Labor and Employment, 197 SCRA 275
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 91902

May 20, 1991

MANILA ELECTRIC COMPANY, petitioner,


vs.

THE HON. SECRETARY OF LABOR AND EMPLOYMENT, STAFF AND TECHNICAL


EMPLOYEES ASSOCIATION OF MERALCO, and FIRST LINE ASSOCIATION OF MERALCO
SUPERVISORY EMPLOYEES,respondents.
Rolando R. Arbues, Atilano S. Guevarra, Jr. and Gil S. San Diego for petitioner.
The Solicitor General for public respondent.
Felipe Gojar for STEAM-PCWF.
Wakay & Wakay Legal Services for First Line Association of Meralco Supervisory Employees.

MEDIALDEA, J.:
This petition seeks to review the Resolution of respondent Secretary of Labor and Employment
Franklin M. Drilon dated November 3, 1989 which affirmed an Order of Med-Arbiter Renato P.
Parungo (Case No. NCR-O-D-M-1-70), directing the holding of a certification election among certain
employees of petitioner Manila Electric Company (hereafter "MERALCO") as well as the Order dated
January 16, 1990 which denied the Motion for Reconsideration of MERALCO.
The facts are as follows:
On November 22, 1988, the Staff and Technical Employees Association of MERALCO (hereafter
"STEAM-PCWF") a labor organization of staff and technical employees of MERALCO, filed a petition
for certification election, seeking to represent regular employees of MERALCO who are: (a) nonmanagerial employees with Pay Grades VII and above; (b) non-managerial employees in the Patrol
Division, Treasury Security Services Section, Secretaries who are automatically removed from the
bargaining unit; and (c) employees within the rank and file unit who are automatically disqualified
from becoming union members of any organization within the same bargaining unit.
Among others, the petition alleged that "while there exists a duly-organized union for rank and file
employees in Pay Grade I-VI, which is the MERALCO Employees and Worker's Association (MEWA)
which holds a valid CBA for the rank and file employees, there is no other labor organization except
STEAM-PCWF claiming to represent the MERALCO employees.
1

The petition was premised on the exclusion/disqualification of certain MERALCO employees


pursuant to Art. I, Secs. 2 and 3 of the existing MEWA CBA as follows:
ARTICLE I
SCOPE
xxx

xxx

xxx

Sec. 2. Excluded from the appropriate bargaining unit and therefore outside the scope of this
Agreement are:
(a) Employees in Patrol Division;
(b) Employees in Treasury Security Services Section;

(c) Managerial Employees; and


(d) Secretaries.
Any member of the Union who may now or hereafter be assigned or transferred to Patrol
Division or Treasury Security Services Section, or becomes Managerial Employee or a
Secretary, shall be considered automatically removed from the bargaining unit and excluded
from the coverage of this agreement. He shall thereby likewise be deemed automatically to
have ceased to be member of the union, and shall desist from further engaging in union
activity of any kind.
Sec. 3. Regular rank-and-file employees in the organization elements herein below listed
shall be covered within the bargaining unit, but shall be automatically disqualified from
becoming union members:
1. Office of the Corporate Secretary
2. Corporate Staff Services Department
3. Managerial Payroll Office
4. Legal Service Department
5. Labor Relations Division
6. Personnel Administration Division
7. Manpower Planning & Research Division
8. Computer Services Department
9. Financial Planning & Control Department
10. Treasury Department, except Cash Section
11. General Accounting Section
xxx

xxx

xxx

(p. 19, Rollo)


MERALCO moved for the dismissal of the petition on the following grounds:
I
The employees sought to be represented by petitioner are either 1) managerial who are
prohibited by law from forming or joining supervisory union; 2) security services personnel
who are prohibited from joining or assisting the rank-and-file union; 3) secretaries who do not
consent to the petitioner's representation and whom petitioner can not represent; and 4)
rank-and-file employees represented by the certified or duly recognized bargaining

representative of the only rank-and-file bargaining unit in the company, the Meralco
Employees Workers Association (MEWA), in accordance with the existing Collective
Bargaining Agreement with the latter.
II
The petition for certification election will disturb the administration of the existing Collective
Bargaining Agreement in violation of Art. 232 of the Labor Code.
III
The petition itself shows that it is not supported by the written consent of at least twenty
percent (20%) of the alleged 2,500 employees sought to be represented. (Resolution, Sec.
of Labor, pp. 223-224, Rollo)
Before Med-Arbiter R. Parungo, MERALCO contended that employees from Pay Grades VII and
above are classified as managerial employees who, under the law, are prohibited from forming,
joining or assisting a labor organization of the rank and file. As regards those in the Patrol Division
and Treasury Security Service Section, MERALCO maintains that since these employees are tasked
with providing security to the company, they are not eligible to join the rank and file bargaining unit,
pursuant to Sec. 2(c), Rule V, Book V of the then Implementing Rules and Regulations of the Labor
Code (1988) which reads as follows:
Sec. 2. Who may file petition. The employer or any legitimate labor organization may file
the petition.
The petition, when filed by a legitimate labor organization, shall contain, among others:
xxx

xxx

xxx

(c) description of the bargaining unit which shall be the employer unit unless circumstances
otherwise require, and provided, further: that the appropriate bargaining unit of the rank and
file employees shall not include security guards (As amended by Sec. 6, Implementing Rules
of EO 111)
xxx

xxx

xxx

(p. 111, Labor Code, 1988 Ed.)


As regards those rank and file employees enumerated in Sec. 3, Art. I, MERALCO contends that
since they are already beneficiaries of the MEWA-CBA, they may not be treated as a separate and
distinct appropriate bargaining unit.
MERALCO raised the same argument with respect to employees sought to be represented by
STEAM-PCWF, claiming that these were already covered by the MEWA-CBA.
On March 15, 1989, the Med-Arbiter ruled that having been excluded from the existing Collective
Bargaining Agreement for rank and file employees, these employees have the right to form a union
of their own, except those employees performing managerial functions. With respect to those
employees who had resented their alleged involuntary membership in the existing CBA, the MedArbiter stated that the holding of a certification election would allow them to fully translate their

sentiment on the matter, and thus directed the holding of a certification election. The dispositive
portion of the Resolution provides as follows:
WHEREFORE, premises considered, a certification election is hereby ordered conducted
among the regular rank-and-file employees of MERALCO to wit:
1. Non-managerial employees with Pay Grades VII and above;
2. Non-managerial employees of Patrol Division, Treasury Security Services Section and
Secretaries; and
3. Employees prohibited from actively participating as members of the union.
within 20 days from receipt hereof, subject to the usual pre-election conference with the
following choices:
1. Staff and Technical, Employees Association of MERALCO (STEAM-PCWF);
2. No Union.
SO ORDERED. (p. 222, Rollo)
On April 4, 1989, MERALCO appealed, contending that "until such time that a judicial finding is
made to the effect that they are not managerial employee, STEAM-PCWF cannot represent
employees from Pay Grades VII and above, additionally reiterating the same reasons they had
advanced for disqualifying respondent STEAM-PCWF.
On April 7, 1989, MEWA filed an appeal-in-intervention, submitting as follows:
A. The Order of the Med-Arbiter is null and void for being in violation of Article 245 of the
Labor Code;
B. The Order of the Med-Arbiter violates Article 232 of the Labor Code; and
C. The Order is invalid because the bargaining unit it delineated is not an appropriated (sic)
bargaining unit.
On May 4, 1989, STEAM-PCWF opposed the appeal-in-intervention.
With the enactment of RA 6715 and the rules and regulations implementing the same, STEAMPCWF renounced its representation of the employees in Patrol Division, Treasury Security Services
Section and rank-and-file employees in Pay Grades I-VI.
On September 13, 1989, the First Line Association of Meralco
Supervisory Employees. (hereafter FLAMES) filed a similar petition (NCR-OD-M-9-731-89) seeking
to represent those employees with Pay Grades VII to XIV, since "there is no other supervisory union
at MERALCO." (p. 266,Rollo). The petition was consolidated with that of STEAM-PCWF.

On November 3, 1989, the Secretary of Labor affirmed with modification, the assailed order of the
Med-Arbiter, disposing as follows:
WHEREFORE, premises considered, the Order appealed from is hereby affirmed but
modified as far as the employees covered by Section 3, Article I of the exist CBA in the
Company are concerned. Said employees shall remain in the unit of the rank-and-file already
existing and may exercise their right to self organization as above enunciated.
Further, the First Line Association of Meralco Supervisory Employees (FLAMES) is included
as among the choices in the certification election.
Let, therefore, the pertinent records of the case be immediately forwarded to the Office of
origin for the conduct of the certification election.
SO ORDERED. (p. 7, Rollo)
MERALCO's motion for reconsideration was denied on January 16, 1990.
On February 9, 1990, MERALCO filed this petition, premised on the following ground:
RESPONDENT SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION AND/OR IN
EXCESS OF JURISDICTION AMOUNTING TO LACK OF JURISDICTION IN RULING THAT:
I. ANOTHER RANK-AND-FILE BARGAINING UNIT CAN BE ESTABLISHED
INDEPENDENT, DISTINCT AND SEPARATE FROM THE EXISTING RANK-AND-FILE
BARGAINING UNIT.
II. THE EMPLOYEES FROM PAY GRADES VII AND ABOVE ARE RANK-AND-FILE
EMPLOYEES.
III. THE SECURITY GUARDS OR PERSONNEL MAY BE LUMPED TOGETHER WITH THE
RANK-AND-FILE UNION AND/OR THE SUPERVISORY UNION. (p. 8, Rollo)
On February 26, 1990, We issued a temporary restraining order (TRO) against the implementation
of the disputed resolution.
In its petition, MERALCO has relented and recognized respondents STEAM-PCWF and FLAMES'
desired representation of supervisory employees from Grades VII up. However, it believes that all
that the Secretary of Labor has to do is to establish a demarcation line between supervisory and
managerial rank, and not to classify outright the group of employees represented by STEAM-PCWF
and FLAMES as rank and file employees.
In questioning the Secretary of Labor's directive allowing security guards (Treasury/Patrol Services
Section) to be represented by respondents, MERALCO contends that this contravenes the
provisions of the recently passed RA 6715 and its implementing rules (specifically par. 2, Sec. 1,
Rule II, Book V) which disqualifies supervisory employees and security guards from membership in a
labor organization of the rank and file (p. 11, Rollo).
The Secretary of Labor's Resolution was obviously premised on the provisions of Art. 212, then par.
(k), of the 1988 Labor Code defining "managerial" and "rank and file" employees, the law then in
force when the complaint was filed. At the time, only two groups of employees were recognized, the

managerial and rank and file. This explains the absence of evidence on job descriptions on who
would be classified managerial employees. It is perhaps also for this reason why the Secretary of
Labor limited his classification of the Meralco employees belonging to Pay Grades VII and up, to
only two groups, the managerial and rank and file.
However, pursuant to the Department of Labor's goal of strenghthening the constitutional right of
workers to self-organization, RA 6715 was subsequently passed which reorganized the employeeranks by including a third group, or the supervisory employees, and laying down the distinction
between supervisory employees and those of managerial ranks in Art. 212, renumbered par. [m],
depending on whether the employee concerned has the power to lay down and execute
management policies, in the case of managerial employees, or merely to recommend them, in case
of supervisory employees.
In this petition, MERALCO has admitted that the employees belonging to Pay Grades VII and up are
supervisory (p. 10, Rollo). The records also show that STEAM-PCWF had "renounced its
representation of the employees in Patrol Division, Treasury Security Service Section and rank and
file employees in Pay Grades I-VI" (p. 6, Rollo); while FLAMES, on the other hand, had limited its
representation to employees belonging to Pay Grades VII-XIV,generally accepted as supervisory
employees, as follows:
It must be emphasized that private respondent First Line Association of Meralco Supervisory
Employees seeks to represent only the Supervisory Employees with Pay Grades VII to XIV.
Supervisory Employees with Pay Grades VII to XIV are not managerial employees. In fact
the petition itself of petitioner Manila Electric Company on page 9, paragraph 3 of the petition
stated as follows, to wit:
There was no need for petitioner to prove that these employees are not rank-and-file.
As adverted to above, the private respondents admit that these are not the rank-andfile but the supervisory employees, whom they seek to represent. What needs to be
established is the rank where supervisory ends and managerial begins.
and First Line Association of Meralco Supervisory Employees herein states that Pay Grades
VII to XIV are not managerial employees. In fact, although employees with Pay Grade XV
carry the Rank of Department Managers, these employees only enjoys (sic) the Rank
Manager but their recommendatory powers are subject to evaluation, review and final action
by the department heads and other higher executives of the company. (FLAMES'
Memorandum, p. 305, Rollo)
Based on the foregoing, it is clear that the employees from Pay Grades VII and up have been
recognized and accepted as supervisory. On the other hand, those employees who have been
automatically disqualified have been directed by the Secretary of Labor to remain in the existing
labor organization for the rank and file, (the condition in the CBA deemed as not having been written
into the contract, as unduly restrictive of an employee's exercise of the right to self-organization). We
shall discuss the rights of the excluded employees (or those covered by Sec. 2, Art. I, MEWA-CBA
later.
Anent the instant petition therefore, STEAM-PCWF, and FLAMES would therefore represent
supervisory employees only. In this regard, the authority given by the Secretary of Labor for the
establishment of two labor organizations for the rank and file will have to be disregarded since We
hereby uphold certification elections only for supervisory employees from Pay Grade VII and up, with
STEAM-PCWF and FLAMES as choices.

As to the alleged failure of the Secretary of Labor to establish a demarcation line for purposes of
segregating the supervisory from the managerial employees, the required parameter is really not
necessary since the law itself, Art. 212-m, (as amended by Sec. 4 of RA 6715) has already laid down
the corresponding guidelines:
Art. 212. Definitions. . . .
(m) "Managerial employee" is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such 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 to Book.
In his resolution, the Secretary of Labor further elaborated:
. . . Thus, the determinative factor in classifying an employee as managerial, supervisory or
rank-and-file is the nature of the work of the employee concerned.
In National Waterworks and Sewerage Authority vs. National Waterworks and Sewerage
Authority Consolidated Unions (11 SCRA 766) the Supreme Court had the occasion to come
out with an enlightening dissertation of the nature of the work of a managerial employees as
follows:
. . . that the employee's primary duty consists of the management of the
establishment or of a customarily recognized department or subdivision thereof, that
he customarily and regularly directs the work of other employees therein, that he has
the authority to hire or discharge other employees or that his suggestions and
recommendations as to the hiring and discharging and or to the advancement and
promotion or any other change of status of other employees are given particular
weight, that he customarily and regularly exercises discretionary powers . . . (56 CJS,
pp. 666-668. (p. 226, Rollo)
We shall now discuss the rights of the security guards to self-organize. MERALCO has
questioned the legality of allowing them to join either the rank and file or the supervisory
union, claiming that this is a violation of par. 2, Sec. 1, Rule II, Book V of the Implementing
Rules of RA 6715, which states as follows:
Sec 1. Who may join unions. . . .
xxx

xxx

xxx

Supervisory employees and security guards shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own; . . .
xxx
(emphasis ours)

xxx

xxx

Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of Book V of the
implementing rules of RA 6715:
Rule V.
REPRESENTATION CASES AND
INTERNAL-UNION CONFLICTS
Sec. 1. . . .
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:
(a) . . .
(b) . . .
(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate
bargaining unit of the rank-and-file employees shall not include supervisory
employees and/or security guards;
xxx

xxx

xxx

(emphasis ours)
Both rules, barring security guards from joining a rank and file organization, appear to have been
carried over from the old rules which implemented then Art. 245 of the Labor Code, and which
provided thus:
Art. 245. Ineligibility of security personnel to join any labor organization.Security guards
and other personnel employed for the protection and security of the person, properties and
premises of the employer shall not be eligible for membership in any labor organization.
On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No. 111 which eliminated the abovecited provision on the disqualification of security guards. What was retained was the disqualification
of managerial employees, renumbered as Art. 245 (previously Art. 246), as follows:
Art. 245. Ineligibility of managerial employees to joint any labor organization.Managerial
employees are not eligible to join, assist or form any labor organization.
With the elimination, security guards were thus free to join a rank and file organization.
On March 2, 1989, the present Congress passed RA 6715. Section 18 thereof amended Art. 245, to
read as follows:
2

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. (emphasis ours)
As will be noted, the second sentence of Art. 245 embodies an amendment disqualifying supervisory
employeesfrom membership in a labor organization of the rank-and-file employees. It does not
include security guards in the disqualification.
The implementing rules of RA 6715, therefore, insofar as they disqualify security guards from joining
a rank and file organization are null and void, for being not germane to the object and purposes of
EO 111 and RA 6715 upon which such rules purportedly derive statutory moorings. In Shell
Philippines, Inc. vs. Central Bank, G.R. No. 51353, June 27, 1988, 162 SCRA 628, We stated:
The rule-making power must be confined to details for regulating the mode or proceeding to
carry into effect the law as it has been enacted. The power cannot be extended to amending
or expanding the statutory requirements or to embrace matters not covered by the statute.
Rules that subvert the statute cannot be sanctioned. (citing University of Sto. Tomas vs.
Board of Tax Appeals, 93 Phil. 376).
While therefore under the old rules, security guards were barred from joining a labor organization of
the rank and file, under RA 6715, they may now freely join a labor organization of the rank and file or
that of the supervisory union, depending on their rank. By accommodating supervisory employees,
the Secretary of Labor must likewise apply the provisions of RA 6715 to security guards by favorably
allowing them free access to a labor organization, whether rank and file or supervisory, in recognition
of their constitutional right to self-organization.
We are aware however of possible consequences in the implementation of the law in allowing
security personnel to join labor unions within the company they serve. The law is apt to produce
divided loyalties in the faithful performance of their duties. Economic reasons would present the
employees concerned with the temptation to subordinate their duties to the allegiance they owe the
union of which they are members, aware as they are that it is usually union action that obtains for
them increased pecuniary benefits.
Thus, in the event of a strike declared by their union, security personnel may neglect or outrightly
abandon their duties, such as protection of property of their employer and the persons of its officials
and employees, the control of access to the employer's premises, and the maintenance of order in
the event of emergencies and untoward incidents.
It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to
avoid possible conflict of interest in security personnel.
1wphi1

ACCORDINGLY, the petition is hereby DISMISSED. We AFFIRM with modification the Resolution of
the Secretary of Labor dated November 3, 1989 upholding an employee's right to self-organization.
A certification election is hereby ordered conducted among supervisory employees of MERALCO,
belonging to Pay Grades VII and above, using as guideliness an employee's power to either
recommend or execute management policies, pursuant to Art. 212 (m), of the Labor Code, as
amended by Sec. 4 of RA 6715, with respondents STEAM-PCWF and FLAMES as choices.
Employees of the Patrol Division, Treasury Security Services Section and Secretaries may freely join
either the labor organization of the rank and file or that of the supervisory union depending on their
employee rank. Disqualified employees covered by Sec. 3, Art. I of the MEWA-CBA, shall remain
with the existing labor organization of the rank and file, pursuant to the Secretary of Labor's directive:

By the parties' own agreement, they find the bargaining unit, which includes the positions
enumerated in Section 3, Article I of their CBA, appropriate for purposes of collective
bargaining. The composition of the bargaining unit should be left to the agreement of the
parties, and unless there are legal infirmities in such agreement, this Office will not substitute
its judgment for that of the parties. Consistent with the story of collective bargaining in the
company, the membership of said group of employees in the existing rank-and-file unit
should continue, for it will enhance stability in that unit already well establish. However, we
cannot approve of the condition set in Section 3, Article I of the CBA that the employees
covered are automatically disqualified from becoming union members. The condition unduly
restricts the exercise of the right to self organization by the employees in question. It is
contrary to law and public policy and, therefore, should be considered to have not been
written into the contract. Accordingly, the option to join or not to join the union should be left
entirely to the employees themselves. (p. 229, Rollo)
The Temporary Restraining Order (TRO) issued on February 26, 1990 is hereby LIFTED. Costs
against petitioner.
SO ORDERED.

4. Members of Cooperatives
* Benguet Electric Cooperative v. Ferrer-Calleja, 180 SCRA 740
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 79025. December 29, 1989.
BENGUET ELECTRIC COOPERATIVE, INC., petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, and BENECO
EMPLOYEES LABOR UNION, respondents.
E.L. Gayo & Associates for petitioner.

CORTES, J.:
On June 21, 1985 Beneco Worker's Labor Union-Association of Democratic Labor Organizations
(hereinafter referred to as BWLU- ADLO) filed a petition for direct certification as the sole and
exclusive bargaining representative of all the rank and file employees of Benguet Electric
Cooperative, Inc. (hereinafter referred to as BENECO) at Alapang, La Trinidad, Benguet alleging,
inter alia, that BENECO has in its employ two hundred and fourteen (214) rank and file employees;
that one hundred and ninety-eight (198) or 92.5% of these employees have supported the filing of
the petition; that no certification election has been conducted for the last 12 months; that there is no

existing collective bargaining representative of the rank and file employees sought to represented by
BWLU- ADLO; and, that there is no collective bargaining agreement in the cooperative.
An opposition to the petition was filed by the Beneco Employees Labor Union (hereinafter referred to
as BELU) contending that it was certified as the sole and exclusive bargaining representative of the
subject workers pursuant to an order issued by the med-arbiter on October 20,1980; that pending
resolution by the National Labor Relations Commission are two cases it filed against BENECO
involving bargaining deadlock and unfair labor practice; and, that the pendency of these cases bars
any representation question.
BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a non-profit
electric cooperative engaged in providing electric services to its members and patron-consumers in
the City of Baguio and Benguet Province; and, that the employees sought to be represented by
BWLU-ADLO are not eligible to form, join or assist labor organizations of their own choosing
because they are members and joint owners of the cooperative.
On September 2, 1985 the med-arbiter issued an order giving due course to the petition for
certification election. However, the med-arbiter limited the election among the rank and file
employees of petitioner who are non-members thereof and without any involvement in the actual
ownership of the cooperative. Based on the evidence during the hearing the med-arbiter found that
there are thirty-seven (37) employees who are not members and without any involvement in the
actual ownership of the cooperative. The dispositive portion of the med-arbiter's order is as follows:
WHEREFORE, premises considered, a certification election should be as it is hereby
ordered to be conducted at the premises of Benguet, Electric Cooperative, Inc., at
Alapang, La Trinidad, Benguet within twenty (20) days from receipt hereof among all
the rank and file employees (non-members/consumers and without any involvement
in the actual ownership of the cooperative) with the following choices:
1. BENECO WORKERS LABOR UNION-ADLO
2. BENECO EMPLOYEES LABOR UNION
3. NO UNION
The payroll for the month of June 1985 shall be the basis in determining the qualified
voters who may participate in the certification election to be conducted.
SO ORDERED. [Rollo, pp. 22-23.]
BELU and BENECO appealed from this order but the same was dismissed for lack of merit on
March 25,1986. Whereupon BENECO filed with this Court a petition for certiorari with prayer for
preliminary injunction and /or restraining order, docketed as G.R. No. 74209, which the Supreme
Court dismissed for lack of merit in a minute resolution dated April 28, 1986.
The ordered certification election was held on October 1, 1986. Prior to the conduct thereof
BENECO's counsel verbally manifested that "the cooperative is protesting that employees who are
members-consumers are being allowed to vote when . . . they are not eligible to be members of any
labor union for purposes of collective bargaining; much less, to vote in this certification election."

[Rollo, p. 28]. Petitioner submitted a certification showing that only four (4) employees are not
members of BENECO and insisted that only these employees are eligible to vote in the certification
election. Canvass of the votes showed that BELU garnered forty-nine (49) of the eighty-three (83)
"valid" votes cast.
Thereafter BENECO formalized its verbal manifestation by filing a Protest. Finding, among others,
that the issue as to whether or not member-consumers who are employees of BENECO could form,
assist or join a labor union has been answered in the affirmative by the Supreme Court in G.R. No.
74209, the med-arbiter dismissed the protest on February 17, 1987. On June 23, 1987, Bureau of
Labor Relations (BLR) director Pura Ferrer-Calleja affirmed the med-arbiter's order and certified
BELU as the sole and exclusive bargaining agent of all the rank and file employees of BENECO.
Alleging that the BLR director committed grave abuse of discretion amounting to lack or excess of
jurisdiction BENECO filed the instant petition for certiorari. In his Comment the Solicitor General
agreed with BENECO's stance and prayed that the petition be given due course. In view of this
respondent director herself was required by the Court to file a Comment. On April 19, 1989 the Court
gave due course to the petition and required the parties to submit their respective memoranda.
The main issue in this case is whether or not respondent director committed grave abuse of
discretion in certifying respondent BELU as the sole and exclusive bargaining representtative of the
rank and file employees of BENECO.
Under Article 256 of the Labor Code [Pres. Decree 442] to have a valid certification 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 workers in
the unit." Petitioner BENECO asserts that the certification election held on October 1, 1986 was null
and void since members-employees of petitioner cooperative who are not eligible to form and join a
labor union for purposes of collective bargaining were allowed to vote therein.
Respondent director and private respondent BELU on the other hand submit that members of a
cooperative who are also rank and file employees are eligible to form, assist or join a labor union
[Comment of Respondent Director, p. 4; Rollo, p. 125; Comment of BELU, pp. 9-10; Rollo pp. 99100].
The Court finds the present petition meritorious.
The issue of whether or not employees of a cooperative are qualified to form or join a labor
organization for purposes of collective bargaining has already been resolved and clarified in the case
of Cooperative Rural Bank of Davao City, Inc. vs. Ferrer Calleja, et al. [G.R. No. 7795, September
26,1988] and reiterated in the cases ofBatangas-Electric Cooperative Labor Union v. Young, et
al. [G.R. Nos. 62386, 70880 and 74560 November 9, 1988] and San Jose City Electric Service
Cooperative, Inc. v. Ministry of Labor and Employment, et al. [G.R. No. 77231, May 31, 1989]
wherein the Court had stated that the right to collective bargaining is not available to an employee of
a cooperative who at the same time is a member and co-owner thereof. With respect, however, to
employees who are neither members nor co-owners of the cooperative they are entitled to exercise
the rights to self-organization, collective bargaining and negotiation as mandated by the 1987
Constitution and applicable statutes.

Respondent director argues that to deny the members of petitioner cooperative the right to form,
assist or join a labor union of their own choice for purposes of collective bargaining would amount to
a patent violation of their right to self-organization. She points out that:
Albeit a person assumes a dual capacity as rank and file employee and as member
of a certain cooperative does not militate, as in the instant case, against his/her
exercise of the right to self-organization and to collective bargaining guaranteed by
the Constitution and Labor Code because, while so doing, he/she is acting in his/her
capacity as rank and file employee thereof. It may be added that while the
employees concerned became members of petitioner cooperative, their status
employment as rank and filers who are hired for fixed compensation had not
changed. They still do not actually participate in the management of the cooperative
as said function is entrusted to the Board of Directors and to the elected or appointed
officers thereof. They are not vested with the powers and prerogatives to lay down
and execute managerial policies; to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees; and/or to effectively recommend such managerial
functions [Comment of Respondent Director, p. 4; Rollo, p. 125.]
Private respondent BELU concurs with the above contention of respondent director and, additionally,
claims that since membership in petitioner cooperative is only nominal, the rank and file employees
who are members thereof should not be deprived of their right to self-organization.
The above contentions are untenable. Contrary to respondents' claim, the fact that the membersemployees of petitioner do not participate in the actual management of the cooperative does not
make them eligible to form, assist or join a labor organization for the purpose of collective bargaining
with petitioner. The Court's ruling in the Davao City case that members of cooperative cannot join a
labor union for purposes of collective bargaining was based on the fact that as members of the
cooperative they are co-owners thereof. As such, they cannot invoke the right to collective
bargaining for "certainly an owner cannot bargain with himself or his co-owners." [Cooperative Rural
Bank of Davao City, Inc. v. Ferrer-Calleja, et al., supra]. It is the fact of ownership of the cooperative,
and not involvement in the management thereof, which disqualifies a member from joining any labor
organization within the cooperative. Thus, irrespective of the degree of their participation in the
actual management of the cooperative, all members thereof cannot form, assist or join a labor
organization for the purpose of collective bargaining.
Respondent union further claims that if nominal ownership in a cooperative is "enough to take away
the constitutional protections afforded to labor, then there would be no hindrance for employers to
grant, on a scheme of generous profit sharing, stock bonuses to their employees and thereafter
claim that since their employees are not stockholders [of the corporation], albeit in a minimal and
involuntary manner, they are now also co-owners and thus disqualified to form unions." To allow this,
BELU argues, would be "to allow the floodgates of destruction to be opened upon the rights of labor
which the Constitution endeavors to protect and which welfare it promises to promote." [Comment of
BELU, p. 10; Rollo, p. 100].
The above contention of respondent union is based on the erroneous presumption that membership
in a cooperative is the same as ownership of stocks in ordinary corporations. While cooperatives
may exercise some of the rights and privileges given to ordinary corporations provided under
existing laws, such cooperatives enjoy other privileges not granted to the latter [See Sections 4, 5, 6,
and 8, Pres. Decree No. 175; Cooperative Rural Bank of Davao City v. Ferrer-Calleja, supra].

Similarly, members of cooperatives have rights and obligations different from those of stockholders
of ordinary corporations. It was precisely because of the special nature of cooperatives, that the
Court held in the Davao City case that members-employees thereof cannot form or join a labor union
for purposes of collective bargaining. The Court held that:
A cooperative ... is by its nature different from an ordinary business concern being
run either by persons, partnerships, or corporations. Its owners and/or members are
the ones who run and operate the business while the others are its employees. As
above stated, irrespective of the number of shares owned by each member they are
entitled to cast one vote each in deciding upon the affairs of the cooperative. Their
share capital earn limited interest. They enjoy special privileges as-exemption from
income tax and sales taxes, preferential right to supply their products to State
agencies and even exemption from the minimum wage laws.
An employee therefore of such a cooperative who is a member and co-owner thereof
cannot invoke the right to collective bargaining for certainly an owner cannot bargain
with himself or his co-owners.
It is important to note that, in her order dated September 2, 1985, med-arbiter Elnora V. Balleras
made a specific finding that there are only thirty-seven (37) employees of petitioner who are not
members of the cooperative and who are, therefore, the only employees of petitioner cooperative
eligible to form or join a labor union for purposes of collective bargaining [Annex "A" of the Petition,
p. 12; Rollo, p. 22]. However, the minutes of the certification election [Annex "C" of the Petition:
Rollo, p. 28] show that a total of eighty-three (83) employees were allowed to vote and of these,
forty-nine (49) voted for respondent union. Thus, even if We agree with respondent union's
contention that the thirty seven (37) employees who were originally non-members of the cooperative
can still vote in the certification election since they were only "forced and compelled to join the
cooperative on pain of disciplinary action," the certification election held on October 1, 1986 is still
null and void since even those who were already members of the cooperative at the time of the
issuance of the med-arbiter's order, and therefore cannot claim that they were forced to join the
union were allowed to vote in the election.
Article 256 of the Labor Code provides, among others, that:
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 workers in the unit . . . [Italics
supplied.]
In this case it cannot be determined whether or not respondent union was duly elected by the eligible
voters of the bargaining unit since even employees who are ineligible to join a labor union within the
cooperative because of their membership therein were allowed to vote in the certification election.
Considering the foregoing, the Court finds that respondent director committed grave abuse of
discretion in certifying respondent union as the sole and exclusive bargaining representative of the
rank and file employees of petitioner cooperative.
WHEREFORE, the petition is hereby GRANTED and the assailed resolution of respondent director
is ANNULLED. The certification election conducted on October 1, 1986, is SET ASIDE. The Regional
Office No. 1 of San Fernando, La Union is hereby directed to immediately conduct new certification

election proceedings among the rank and file employees of the petitioner who are not members of
the cooperative.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., and Bidin, JJ., concur.
Feliciano, J., on leave.

5. Members of Iglesia ni Cristo


* Kapatiran sa Meat and Canning Division v. Ferrer-Calleja, 162 SCRA 367
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 82914 June 20, 1988
KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local Chapter No. 1027), petitioner,
vs.
THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA, MEAT AND CANNING DIVISION
UNIVERSAL ROBINA CORPORATION and MEAT AND CANNING DIVISION NEW EMPLOYEES
AND WORKERS UNITED LABOR ORGANIZATION, respondents.
Alar, Comia, Manalo and Associates for petitioner.
Danilo Bolos for respondent Robina Corporation.
RESOLUTION

GRIO-AQUINO, J.:
The petitioner, Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027) hereinafter
referred to as "TUPAS," seeks a review of the resolution dated January 27, 1988 (Annex D) of public
respondent Pura Ferrer-Calleja, Director of the Bureau of Labor Relations, dismissing its appeal
from the Order dated November 17, 1987 (Annex C) of the Med-Arbiter Rasidali C. Abdullah
ordering a certification election to be conducted among the regular daily paid rank and file
employees/workers of Universal Robina Corporation-Meat and Canning Division to determine which
of the contending unions:
a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027 (or
"TUPAS" for brevity);

b) Meat and Canning Division New Employees and Workers United Labor
Organization (or "NEW ULO" for brevity);
c) No union.
shall be the bargaining unit of the daily wage rank and file employees in the Meat and Canning
Division of the company.
From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining representative of the
workers in the Meat and Canning Division of the Universal Robina Corporation, with a 3-year
collective bargaining agreement (CBA) which was to expire on November 15, 1987.
Within the freedom period of 60 days prior to the expiration of its CBA, TUPAS filed an amended
notice of strike on September 28, 1987 as a means of pressuring the company to extend, renew, or
negotiate a new CBA with it.
On October 8, 1987, the NEW ULO, composed mostly of workers belonging to the IGLESIA NI
KRISTO sect, registered as a labor union.
On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an injunction against the strike,
resulting in an agreement to return to work and for the parties to negotiate a new CBA.
The next day, October 13, 1987, NEW ULO, claiming that it has "the majority of the daily wage rank
and file employees numbering 191," filed a petition for a certification election at the Bureau of Labor
Relations (Annex A).
TUPAS moved to dismiss the petition for being defective in form and that the members of the NEW
ULO were mostly members of the Iglesia ni Kristo sect which three (3) years previous refused to
affiliate with any labor union. It also accused the company of using the NEW ULO to defeat TUPAS'
bargaining rights (Annex B).
On November 17, 1987, the Med-Arbiter ordered the holding of a certification election within 20 days
(Annex C).
TUPAS appealed to the Bureau of Labor Relations BLR. In the meantime, it was able to negotiate a
new 3-year CBA with ROBINA, which was signed on December 3, 1987 and to expire on November
15, 1990.
On January 27, 1988, respondent BLR Director Calleja dismissed the appeal (Annex D).
TUPAS' motion for reconsideration (Annex E) was denied on March 17, 1988 (Annex F). On April 30,
1988, it filed this petition alleging that the public respondent acted in excess of her jurisdiction and
with grave abuse of discretion in affirming the Med-Arbiter's order for a certification election.
After deliberating on the petition and the documents annexed thereto, We find no merit in the
Petition. The public respondent did not err in dismissing the petitioner's appeal in BLR Case No. A12-389-87. This Court's decision inVictoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54,
upholding the right of members of the IGLESIA NI KRISTO sect not to join a labor union for being
contrary to their religious beliefs, does not bar the members of that sect from forming their own

union. The public respondent correctly observed that the "recognition of the tenets of the sect ...
should not infringe on the basic right of self-organization granted by the constitution to workers,
regardless of religious affiliation."
The fact that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day freedom
period of the existing CBA, does not foreclose the right of the rival union, NEW ULO, to challenge
TUPAS' claim to majority status, by filing a timely petition for certification election on October 13,
1987 before TUPAS' old CBA expired on November 15, 1987 and before it signed a new CBA with
the company on December 3, 1987. As pointed out by Med-Arbiter Abdullah, a "certification election
is the best forum in ascertaining the majority status of the contending unions wherein the workers
themselves can freely choose their bargaining representative thru secret ballot." Since it has not
been shown that this order is tainted with unfairness, this Court will not thwart the holding of a
certification election (Associated Trade Unions [ATU] vs. Noriel, 88 SCRA 96).
WHEREFORE, the petition for certiorari is denied, with costs against the petitioner.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

6. Government Employees: Arts. 253[244], 290[276]; Executive Order No. 180


issued in 1987
* Acosta v. CA, G.R. 132088, June 28, 2000
Republic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 132088

June 28, 2000

EVERDINA ACOSTA, NOEMI ACOSTA, ELVIRA AMPARADO, REBECCA AQUINO, ROBERTO


ARCAYA, EVA ARCEO, JULIET ARELLANO, ANITA ASCANO, GRACE AUSTRA, LUISA AVILES,
SUSIE AW, VICTORIA BADILLO, SUSAN BALDEMOR, ELISA BASA, NORY BATUIGAS,
TERESITA BAUTISTA, SEGUNDINA BERMAS, FERMINER BOCO, EVELYN BULAONG, SYLVA
BULARIO, GILDA BOLOSAN, JOSIE BUNGAY, ARCELI CABUSE, TERESA CACHO, ROSSANA
CAJANDINEZ, NELY CALPITO, OLIVIA CARDINES, THELMA CARINO, CORAZON
CARRACEDO, ELENITA CASAUAY, MARIETA CAULI, MARILOU CAYTON, VIRGINIA
CHIAPOCO, ALLEN CIPRIANO, MELINDA B. CONTRERAS, ZENAIDA CORPORAL, PRISCILLA
CORPUZ, LUZ COSIO, EMILIA CRUZ, CRISTINA DELA CRUZ, ROSALINA DELA CRUZ, GRACE
CUNANAN, EVELYN DE CASTRO, HAYDEE DE VALLE, CECILIA DEL ROSARIO, GULLERMINA
DE LA CRUZ, FRANCIS DINGIL, BELLA DY, CORAZON ESTEBAL, LUZ FAJARDO, TERESA
FRAGO, VIRGINIA GACHO, SABINO GALES, MYRNA GALLEGO, MARILYN GARNA,
NATIVIDAD GAVILAN, LOLITA GAVINO, MARILOU GO, LETICIA GOMEZ, OLYMPIO GONZAGA,
RUTH GONZALES, REMEDIOS HAVOC, GREGORIA HERNANDEZ, OSCAR HIDALGO,
BIBIANO HUGO, RITA HUERTA, LOURDES HULIPAS, ROMEO IDOS, ERLINDA ISLA, LITA
ITALIA, MATIAS JABONETE, DIANA JIMENEZ, DOMINADOR LABACLADO, ALMA LAGUIAN,
MELCY LALU, REBECCA LAMALINAO, MARITA LAMSEN, LOURDES ESTER LAREDO,

TERESITA LATION, ROSALINA LEDESMA, NORMA LECCIONES, NORMA LEYTE, CECILIA


LINCOPINES, OFELIA LIZARDO, VENILLA LOCSIN, ADELINA LORENZO, SATURNINA
LORENZO, ALEJANDRA MABAET, JULIETA MADRID, ERLINA MAGPAYO, ROLANDO
MAGSINO, ERLINDA MAILIG, FLORENDA MALAPAYA, CORAZON MALLEN, ESMERALDA
MANALANG, MERLE MANALO, ERLINDA MANEGA, SHIRLEY MANGAHAS, ELFRIDA
MARQUEZ, EFIGENIA MENEZ, NILDA NAVA, MERLY NERY, ROSAMINDA OBEN, MELISSA
OLAQUERRA, ENRIQUETA OLIVAR, DOLORES ORDINARIO, ESTRELLA ORTEGA, ROSE
ORPRECIO, AURORA OSTACO, ELVIRA PAMPANGA, NORMA PAQUIZ, EVANGELINE PARDO,
GLORIA PARMA, ERLINDA PASTRANA, LERMA QUIRIT, MECELIN QUILANDRA, MEWLIN
QUILLANORA, NATIVIDAD RAGUD, ERLINDA RANTE, EUFEMIA RAMIREZ, JUDITHA
RANESES, ULDARICO REJABA, MELINA REJUSO, FELISA RENIDO, MILGROS REY,
REDENTOR REYES, RESALINA SAGUN, ZENAIDA SALAZAR, FE SALIMA, SHIRLEY
SARAGON, PURIFICACION SARI, ELVIRA SATUMBAGA, MARIBEY SEALMOY, EDITHA
SINJAY, TITA SILVINO, AURORA TOLENTINO, ESPERANZA URBIZTONDO, SATURNINO
YODICO, RODOLFO MARIANO, ALICIA MARINAY, SUSAN MATANGA, PATRIA MATIAS,
LOUELITA MAYUNA, LOLITA MERCADO, EUGENIA MILLA, CRESENCIA MIRADOR, ERMA
MORAL, RAQUEL MORALES, DOLORES LAGRADA,petitioners,
vs.
HON. COURT OF APPEALS and THE CIVIL SERVICE COMMISSION and THE SECRETARY OF
EDUCATION, CULTURE AND SPORTS, respondents.
DE LEON. JR., J.:
Before us is a petition for review on certiorari which seeks to set aside the Decision 1 dated August
29, 1997 and Resolution2 dated January 7, 1998 of the Court of Appeals in CA-G.R. SP No. 39878,
affirming the Resolutions3of respondent Civil Service Commission (CSC) finding petitioners guilty of
conduct prejudicial to the service and imposing a penalty of six-(6) months suspension without pay.
Petitioners are teachers from different public schools in Metro Manila. On various dates in
September and October 1990, petitioners did not report for work and instead, participated in mass
actions by public school teachers at the Liwasang Bonifacio for the purpose of petitioning the
government for redress of their grievances.
On the basis of reports submitted by their respective school principals that petitioners participated in
said mass actions and refused to comply with the return-to-work order issued September 17, 1990
by then Secretary Isidro D. Cario of the Department of Education, Culture and Sports (DECS),
petitioners were administratively charged with such offenses as grave misconduct, gross neglect of
duty, gross violation of civil service law, rules and regulations and reasonable office regulations,
refusal to perform official duty, gross insubordination, conduct prejudicial to the best interest of the
service and absence without official leave. Petitioners failed to answer these charges. Following the
investigations conducted by the DECS Investigating Committees, Secretary Cario found petitioners
guilty as charged and ordered their immediate dismissal from the service. 4
Petitioners appealed the orders of Secretary Cario to the Merit Systems Protection Board (MSPB)
and later to the CSC. In 1995, the CSC modified the said orders of Secretary Cario as follows:
WHEREFORE, the Commission hereby finds Everdina Acosta guilty of Conduct Prejudicial
to the Best Interest of the Service. She is hereby meted out the penalty of six (6) months
suspension without pay. Considering the period of time she was out of service, she is
automatically reinstated to her former position (sic).5

Following the denial of their motion for reconsideration, petitioners questioned the matter before the
Court of Appeals. The appellate court denied their petition for certiorari and subsequent motion for
reconsideration. Hence, this petition.
Petitioners submit the following issues for our consideration:
RESPONDENT COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT AFFIRMED THE
ASSAILED RESOLUTIONS OF THE CIVIL SERVICE COMMISSION THAT WRONGLY
PENALIZED PETITIONERS WHOSE ONLY "OFFENSE" WAS TO EXERCISE THEIR
CONSITUTIONAL RIGHT TO PEACEABLY ASSEMBLE AND PETITION THE
GOVERNMENT FOR REDRESS OF GRIEVANCES.
RESPONDENT COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT AFFIRMED THE
ASSAILED RESOLUTIONS OF THE CIVIL SERVICE COMMISSION THAT WRONGLY
DENIED PETITIONERS THEIR RIGHT TO BACKWAGES.
This petition is not impressed with merit.
Petitioners do not deny their absence from work nor the fact that said absences were due to their
participation in the mass actions at the Liwasang Bonifacio. However, they contend that their
participation in the mass actions was an exercise of their constitutional rights to peaceably assemble
and petition the government for redress of grievances. Petitioner likewise maintain that they never
went on strike because they never sought to secure changes or modification of the terms and
conditions of their employment.
Petitioners' contentions are without merit. The character and legality of the mass actions which they
participated in have been passed upon by this Court as early as 1990 in Manila Public School
Teachers' Association (MPSTA) v.Laguio, Jr.6 wherein we ruled that "these 'mass actions' were to all
intents and purposes a strike; they constituted a concerted and unauthorized stoppage of, or
absence from, work which it was the teachers' sworn duty to perform, undertaken for essentially
economic reasons."7 In Bangalisan v. Court of Appeals, 8 we added that:
It is an undisputed fact that there was a work stoppage and that petitioners' purpose was to
realize their demands by withholding their services. The fact that the conventional term
"strike" was not used by the striking employees to describe their common course of action is
inconsequential, since the substance of the situation, and not its appearance, will be deemed
to be controlling.
The ability to strike is not essential to the right of association. In the absence of statute,
public employees for not have the right to engaged in concerted work stoppages for any
purpose.
Further, herein petitioners, except Mariano, are being penalized not because they exercised
their right of peaceable assembly and petition for redress of grievances but because of their
successive unauthorized and unilateral absences which produced adverse effects upon their
students for whose education they are responsible. The actuations of petitioners definitely
constituted conduct prejudicial to the best interest of the service, punishable under the Civil
Service law, rules and regulations.
1wphi1.nt

As aptly stated by the Solicitor General, "It is not the exercise by the petitioners of their
constitutional right to peaceable assemble that was punished, but the manner in which they

exercised such right which resulted in the temporary stoppage or disruption of public service
and classes in various public schools in Metro Manila. For, indeed, there are efficient and
non-disruptive avenues, other than the mass actions in question, whereby petitioners could
petition the government for redress of grievances.
It bears stressing that suspension of public services, however temporary, will inevitably derail
services to the public, which is one of the reasons why the right to strike is denied
government employees. It may be conceded that the petitioners had valid grievances and
noble intentions in staging the "mass action," but that will not justify their absences to the
prejudice of innocent school children. Their righteous indignation does not legalize an illegal
work stoppage.9
In Jacinto v. Court of Appeals, 10 De La Cruz v. Court of Appeals, 11 and Alipat v. Court of
Appeals, 12 we upheld our rulings in MPSTA and Bangalisan. Considering the factual circumstances
of this case and the doctrine of stare decisis to which we consistently adhere, we find no compelling
reason to deviate from our earlier rulings in these related cases.
Anent the second issue, petitioners invoke our statement in Bangalisan that payment of salaries
corresponding to the period when an employee is not allowed to work may be decreed if he is found
innocent of the charges which caused his suspension and if his suspension is unjustified. Petitioners
cite CSC Resolution No. 93-162 and contend that the determination of the CSC therein that not
an iota of evidence was given to substantiate the conclusion that they participated in a "teacher's
strike" amounted to a finding that they were innocent of the charges filed against them.
As a general proposition, a public official is not entitled to any compensation if he has not rendered
any service. 1While there recognized instances when backwages may be awarded to a suspended or
dismissed public official who is later ordered reinstated, as pointed by petitioners in citing
Bangalisan, the factual circumstances of the case at bar impel us to rule otherwise.
Petitioners' reliance on CSC Resolution No. 93-162 is misplaced. Said CSC resolution disposed of
the appeals of Fely Ilarina, Adelaida Dela Cruz, Alicia Galvo, Nenita Albios and Nerissa Abellanda.
Petitioners were never parties to their appeals and, therefore, cannot cite CSC Resolution No. 93162 in support of their contention. Petitioner also overlook the fact that although no evidence was
presented to prove that Ilarina, et al. participated in the mass actions, the CSC explained that the
deficiency was cured by their admissions during the hearings before the MSPB. 14 More importantly,
however, herein petitioners' claim of exoneration is belied by the determination of the CSC that their
participation in the mass actions constituted conduct prejudicial to the service. Being found liable for
a lesser offense is not equivalent to
exoneration. 15
Petitioners also point out that from the issuance of the orders of dismissal by Secretary Cario to the
modification thereof by the CSC, almost five (5) years elapsed. Petitioners argue that the period in
excess of their preventive suspension and penalty of six (6) months suspension amounted to
unjustified suspension for which an award of backwages was proper pursuant to our rulings Bautista
v. Peralta 16 and Abellera v. City of Baguio. 17
We disagree. It will be recalled that in Jacinto, we upheld the legality of the immediate execution of
the dismissal orders issued by Secretary Cario on the ground that under Section 47(2), 18 Subtitle A,
Title I, Book V of Executive Order No. 292, otherwise known as the Administrative Code of 1987, the
decision of a department secretary confirming the dismissal of an employee under his jurisdiction is
executory even pending appeal thereof.19 Since dismissal orders remain valid and effective until
modified or set aside, the intervening period during which an employee is not permitted to work

cannot be argued as amounting to unjustified suspension. In Gloria v. Court of Appeals, 20 we further


explained that:
Preventive suspension pending investigation, as already discussed, is not a penalty but only
a means of enabling the disciplining authority to conduct an unhampered investigation. On
the other hand, preventive suspension pending appeal is actually punitive although it is in
effect subsequently considered illegal if respondent is exonerated and the administrative with
full pay for the period of the suspension. Thus, 47(4) state that respondent "shall be
considered as under preventive suspension during the pendency of the appeal in the event
he wins." On the other hand, if his conviction is affirmed, i.e. if he is not exonerated, the
period of his suspension becomes part of the final penalty of suspension or dismissal. 21
Petitioners' reliance on Fabella v. Court of Appeals 22 is likewise unavailing. In that case, the
petitioners therein immediately went to court to seek injunctive relief against the DECS
administrative proceedings on the ground that they were deprived of due process. The trial court
declared the administrative proceedings void and ordered the payment of backwages to the
petitioners therein. The Court of Appeals then upheld the order of the trial court. In affirming both the
trial and the Court, we stated therein that:
. . . Because the administrative proceedings involved in this case are void, no delinquency or
misconduct may be imputed to private respondents. Moreover, the suspension or dismissal
meted on them is baseless. Private respondents should, as a consequence, be reinstated
and awarded all monetary benefits that may have accrued to them during the period of their
unjustified suspension or dismissal. . . . 2
On the other hand, in the case at bar, petitioners initially assailed the alleged non-observance of due
process by the DECS Investigating Committees only upon appeal to the MSPB. Significantly,
however, it had been our consistent ruling that an appeal is curative of any supposed denial of due
process. 24 Thus, after full ventilation of their case before the MSPB and CSC, and later on before
the Court of Appeals, petitioner cannot now allege denial of due process to justify their claim for
backwages.
WHEREFORE, the instant petition is DENIED.
SO ORDERED.
Bellosillo, Mendoza and Buena, JJ., concur.
Quisumbing, J., took no part.

Footnotes
Penned by now Supreme Court Associate Justice Fidel P. Purisima and concurred in by
Associate Justices Ma. Alicia Austria-Martinez and Romeo J. Callejo, Sr.
1

Penned by Justice Purisima and concurred in by Justices Callejo and Oswaldo D. Agcaoli.

Annexes "2" to "299" of the Petition before the Court of Appeals, CA-Rollo, pp. 116-710.

Petition, Rollo, pp. 22-23; Resolutions to this effect were issued by Secretary Cario on
various dates in October 1990. Except for the names of the parties, dates and case
numbers, said resolutions similarly provided as follows:
4

October 15, 1990


Case No. DECS . . .
The Regional Director
DECS, National Capital Region
PPSTA Building, Banawe St.,
Quezon City
DECISION
Dear Sir:
This is a motu-proprio administrative complaint separately filed by the Secretary of
Education, Culture and Sports against the following public school teachers, namely

NAME

SCHOOL
xxx

xxx

ABSENCES
xxx

based on the report submitted by their respective school principals wherein it was
alleged that the above-named teachers participated in the mass action/illegal strike
on Sept. 17-21, 1990 and subsequently defied the return-to-work order dated
September 17, 1990 issued by this Office, which acts constitute grave misconduct,
gross neglect of duty, gross violation of Civil Service Law, Rules and Regulations and
reasonable office regulations, refusal to perform official duty, gross insubordination,
conduct prejudicial to the best interest of the service and absence without official
leave (AWOL), in violation of President Decree 807, otherwise known as the Civil
Service Decree of the Philippines.
Required to explain within a period of not less than 72 hours but not more than 5
days from receipt of the complaint, respondents failed to submit the required answer
within the given time and up to the present, and despite the denial of their request for
extension of 30 days within which to submit their answer dated September 25, 1990
filed by their counsel, Atty. Gregorio Fabros, in a letter of this office to him dated
September 28, 1990, respondents failed to submit the same, which failure, is
considered a waiver on their part of their right to answer the charges and to
controvert the same.
Wherefore, after careful evaluation of the records, this Office finds the respondents
guilty as charged.
In accordance with Memorandum Circular 30 s. 1989 of the Civil Service
Commission on Guidelines in the Application of Penalty in Administrative Cases, the
herein respondents are dismissed from office effective immediately.

Advice of the date the respondents received this decision is desired.


Very truly yours,
(Signed)
ISIDRO D. CARIO
Secretary
Copy furnished:
1. All respondents.
2. The IBM, Dakota, Manila.
3. City Superintendent of School.
Annex "C," Rollo, pp. 73; Except for the names of the parties, dates and case numbers, the
dispositive portion of the orders of the CSC were similarly worded.
5

200 SCRA 232 (1991).

Id. at 329-30.

276 SCRA 619 (1997).

Id. at 627-628.

10

281 SCRA 657 (1997).

11

G.R. No. 126183, March 25, 1999.

12

G.R. No. 132841, June 21, 1999.

13

Villamor vs. Lacson, 12 SCRA 418, 423 (1964).

14

Annex "E" of the Petition, Rollo, p. 81.

15

Jacinto v. Court of Appeals, supra at 682.

16

18 SCRA 223 (1966).

17

19 SCRA 600 (1967).

18

Sec. 47. Disciplinary Jurisdiction.


xxx

xxx

xxx

(2) The Secretaries and heads of agencies and instrumentalities, provinces, cities
and municipalities shall have jurisdiction to investigate and decide matters involving
disciplinary action against and employees under their jurisdiction. Their decisions

shall be final in case the penalty imposed is suspension for not more than thirty days
or a fine in an amount not exceeding thirty days' salary. In case the decision
rendered by a bureau or office head is appealable to the (Civil Service) Commission,
the same may be initially appealed to the department and finally to the Commission
and pending appeal, the same shall be executory except when the penalty is
removal, in which case the same shall be executory only after confirmation by the
Secretary concerned.
1wphi1.nt

19

Jacinto v. Court of Appeals, supra at 680.

20

G.R. No. 131012, April 21, 1999.

21

Id., at 12-13.

22

282 SCRA 256 (1997).

23

Id. at 273.

Esber v. Sto. Tomas, 225 SCRA 664 (1993); Cebu Stevedoring Co., Inc. v. Regional
Director/Minister of Labor, 168 SCRA 315 (1988); B. Sta. Rita & Company, Inc. v. Arroyo, 168
SCRA 581 (1988); Rosales v. Court of Appeals, 165 SCRA 344 (1988); Sumpang v. Inciong,
137 SCRA 56 (1985).
24

7. Employees of International Organizations


* International Catholic Migration Commission v. Ferrer-Calleja, 190 SCRA 130
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 85750 September 28, 1990


INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner
vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR
RELATIONS AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS)
WFTU respondents.
G.R. No. 89331 September 28, 1990
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE
INDUSTRIES AND AGRICULTURE, petitioner,
vs

SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH


INSTITUTE, INC.,respondents.
Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.
Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.
Jimenez & Associates for IRRI.
Alfredo L. Bentulan for private respondent in 85750.

MELENCIO-HERRERA, J.:
Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by
the International Catholic Migration Commission (ICMC) and the International Rice Research
Institute, Inc. (IRRI) from the application of Philippine labor laws.
I
Facts and Issues
A. G.R. No. 85750 the International Catholic Migration Commission (ICMC) Case.
As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's
communist rule confronted the international community.
In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine
Government and the United Nations High Commissioner for Refugees whereby an operating center
for processing Indo-Chinese refugees for eventual resettlement to other countries was to be
established in Bataan (Annex "A", Rollo, pp. 22-32).
ICMC was one of those accredited by the Philippine Government to operate the refugee processing
center in Morong, Bataan. It was incorporated in New York, USA, at the request of the Holy See, as
a non-profit agency involved in international humanitarian and voluntary work. It is duly registered
with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status,
Category II. As an international organization rendering voluntary and humanitarian services in the
Philippines, its activities are parallel to those of the International Committee for Migration (ICM) and
the International Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-6287, ICMC v. Calleja, Vol. 1].
On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then
Ministry of Labor and Employment a Petition for Certification Election among the rank and file
members employed by ICMC The latter opposed the petition on the ground that it is an international
organization registered with the United Nations and, hence, enjoys diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for
lack of jurisdiction.

On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the
Med-Arbiter's Decision and ordered the immediate conduct of a certification election. At that time,
ICMC's request for recognition as a specialized agency was still pending with the Department of
Foreign Affairs (DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF,
granted ICMC the status of a specialized agency with corresponding diplomatic privileges and
immunities, as evidenced by a Memorandum of Agreement between the Government and ICMC
(Annex "E", Petition, Rollo, pp. 41-43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking
the immunity expressly granted but the same was denied by respondent BLR Director who, again,
ordered the immediate conduct of a pre-election conference. ICMC's two Motions for
Reconsideration were denied despite an opinion rendered by DEFORAF on 17 October 1988 that
said BLR Order violated ICMC's diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction
assailing the BLR Order.
On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the
certification election.
On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the
Court of Appeals, filed a Motion for Intervention alleging that, as the highest executive department
with the competence and authority to act on matters involving diplomatic immunity and privileges,
and tasked with the conduct of Philippine diplomatic and consular relations with foreign governments
and UN organizations, it has a legal interest in the outcome of this case.
Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.
On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the
submittal of memoranda by the parties, which has been complied with.
As initially stated, the issue is whether or not the grant of diplomatic privileges and immunites to
ICMC extends to immunity from the application of Philippine labor laws.
ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the
Philippine Government giving it the status of a specialized agency, (infra); (2) the Convention on the
Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21
November 1947 and concurred in by the Philippine Senate through Resolution No. 91 on 17 May
1949 (the Philippine Instrument of Ratification was signed by the President on 30 August 1949 and
deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution,
which declares that the Philippines adopts the generally accepted principles of international law as
part of the law of the land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the
DEFORAF determination that the BLR Order for a certification election among the ICMC employees
is violative of the diplomatic immunity of said organization.

Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State
policy and Philippine labor laws to justify its assailed Order, particularly, Article II, Section 18 and
Article III, Section 8 of the 1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as
amended, ibid. In addition, she contends that a certification election is not a litigation but a mere
investigation of a non-adversary, fact-finding character. It is not a suit against ICMC its property,
funds or assets, but is the sole concern of the workers themselves.
B. G.R. No. 89331 (The International Rice Research Institute [IRRI] Case).
Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989,
resolved to consolidate G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered
case pending with the Second Division, upon manifestation by the Solicitor General that both cases
involve similar issues.
The facts disclose that on 9 December 1959, the Philippine Government and the Ford and
Rockefeller Foundations signed a Memorandum of Understanding establishing the International Rice
Research Institute (IRRI) at Los Baos, Laguna. It was intended to be an autonomous, philanthropic,
tax-free, non-profit, non-stock organization designed to carry out the principal objective of conducting
"basic research on the rice plant, on all phases of rice production, management, distribution and
utilization with a view to attaining nutritive and economic advantage or benefit for the people of Asia
and other major rice-growing areas through improvement in quality and quantity of rice."
Initially, IRRI was organized and registered with the Securities and Exchange Commission as a
private corporation subject to all laws and regulations. However, by virtue of Pres. Decree No. 1620,
promulgated on 19 April 1979, IRRI was granted the status, prerogatives, privileges and immunities
of an international organization.
The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor
organization with an existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI
(Kapisanan, for short) in respondent IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV,
Regional Office of the Department of Labor and Employment (DOLE).
IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an
international organization and granting it immunity from all civil, criminal and administrative
proceedings under Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres.
Decree No. 1620 and dismissed the Petition for Direct Certification.
On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the MedArbiter's Order and authorized the calling of a certification election among the rank-and-file
employees of IRRI. Said Director relied on Article 243 of the Labor Code, as amended, infra and
Article XIII, Section 3 of the 1987 Constitution, 1and held that "the immunities and privileges granted to
IRRI do not include exemption from coverage of our Labor Laws." Reconsideration sought by IRRI was
denied.

On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's
Order, dismissed the Petition for Certification Election, and held that the grant of specialized agency
status by the Philippine Government to the IRRI bars DOLE from assuming and exercising
jurisdiction over IRRI Said Resolution reads in part as follows:
Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives,
privileges and immunities of an international organization is clear and explicit. It
provides in categorical terms that:
Art. 3 The Institute shall enjoy immunity from any penal, civil and administrative
proceedings, except insofar as immunity has been expressly waived by the DirectorGeneral of the Institution or his authorized representative.
Verily, unless and until the Institute expressly waives its immunity, no summons,
subpoena, orders, decisions or proceedings ordered by any court or administrative
or quasi-judicial agency are enforceable as against the Institute. In the case at bar
there was no such waiver made by the Director-General of the Institute. Indeed, the
Institute, at the very first opportunity already vehemently questioned the jurisdiction
of this Department by filing an ex-parte motion to dismiss the case.
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by
respondent Secretary of Labor in upholding IRRI's diplomatic immunity.
The Third Division, to which the case was originally assigned, required the respondents to comment
on the petition. In a Manifestation filed on 4 August 1990, the Secretary of Labor declared that it
was "not adopting as his own" the decision of the BLR Director in the ICMC Case as well as the
Comment of the Solicitor General sustaining said Director. The last pleading was filed by IRRI on 14
August 1990.
Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be
excused from filing a comment "it appearing that in the earlier case of International Catholic
Migration Commission v. Hon. Pura Calleja, G.R. No. 85750. the Office of the Solicitor General had
sustained the stand of Director Calleja on the very same issue now before it, which position has
been superseded by respondent Secretary of Labor in G.R. No. 89331," the present case. The Court
acceded to the Solicitor General's prayer.
The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse
of discretion in dismissing the Petition for Certification Election filed by Kapisanan.
Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges,
prerogatives and immunities of an international organization, invoked by the Secretary of Labor, is
unconstitutional in so far as it deprives the Filipino workers of their fundamental and constitutional
right to form trade unions for the purpose of collective bargaining as enshrined in the 1987
Constitution.
A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining
IRRI'S appeal from the Order of the Director of the Bureau of Labor Relations directing the holding of
a certification election. Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the

Omnibus Rules Implementing the Labor Code, the Order of the BLR Director had become final and
unappeable and that, therefore, the Secretary of Labor had no more jurisdiction over the said appeal.

On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep.
Act. No. 6715, which took effect on 21 March 1989, providing for the direct filing of appeal from the
Med-Arbiter to the Office of the Secretary of Labor and Employment instead of to the Director of the
Bureau of Labor Relations in cases involving certification election orders.
III
Findings in Both Cases.
There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.
Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides
that ICMC shall have a status "similar to that of a specialized agency." Article III, Sections 4 and 5 of
the Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN
General Assembly on 21 November 1947 and concurred in by the Philippine Senate through
Resolution No. 19 on 17 May 1949, explicitly provides:
Art. III, Section 4. The specialized agencies, their property and assets, wherever
located and by whomsoever held, shall enjoy immunity from every form of legal
process except insofar as in any particular case they have expressly waived their
immunity. It is, however, understood that no waiver of immunity shall extend to any
measure of execution.
Sec. 5. The premises of the specialized agencies shall be inviolable. The property
and assets of the specialized agencies, wherever located and by whomsoever held
shall be immune from search, requisition, confiscation, expropriation and any other
form of interference, whether by executive, administrative, judicial or legislative
action. (Emphasis supplied).
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus:
Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any
penal, civil and administrative proceedings, except insofar as that immunity has been
expressly waived by the Director-General of the Institute or his authorized
representatives.
Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation of immunity
when in a Memorandum, dated 17 October 1988, it expressed the view that "the Order of the
Director of the Bureau of Labor Relations dated 21 September 1988 for the conduct of Certification
Election within ICMC violates the diplomatic immunity of the organization." Similarly, in respect of
IRRI, the DEFORAF speaking through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a
letter, dated 17 June 1987, to the Secretary of Labor, maintained that "IRRI enjoys immunity from the
jurisdiction of DOLE in this particular instance."
The foregoing opinions constitute a categorical recognition by the Executive Branch of the
Government that ICMC and IRRI enjoy immunities accorded to international organizations, which

determination has been held to be a political question conclusive upon the Courts in order not to
embarrass a political department of Government.
It is a recognized principle of international law and under our system of separation of
powers that diplomatic immunity is essentially a political question and courts should
refuse to look beyond a determination by the executive branch of the government,
and where the plea of diplomatic immunity is recognized and affirmed by the
executive branch of the government as in the case at bar, it is then the duty of the
courts to accept the claim of immunity upon appropriate suggestion by the principal
law officer of the government . . . or other officer acting under his direction. Hence, in
adherence to the settled principle that courts may not so exercise their
jurisdiction . . . as to embarrass the executive arm of the government in conducting
foreign relations, it is accepted doctrine that in such cases the judicial department of
(this) government follows the action of the political branch and will not embarrass the
latter by assuming an antagonistic jurisdiction. 3
A brief look into the nature of international organizations and specialized agencies is in order. The
term "international organization" is generally used to describe an organization set up by agreement
between two or more states. 4 Under contemporary international law, such organizations are endowed
with some degree of international legal personality 5 such that they are capable of exercising specific
rights, duties and powers. 6 They are organized mainly as a means for conducting general international
business in which the member states have an interest. 7 The United Nations, for instance, is an
international organization dedicated to the propagation of world peace.
"Specialized agencies" are international organizations having functions in particular fields. The term
appears in Articles 57 8 and 63 9 of the Charter of the United Nations:
The Charter, while it invests the United Nations with the general task of promoting
progress and international cooperation in economic, social, health, cultural,
educational and related matters, contemplates that these tasks will be mainly fulfilled
not by organs of the United Nations itself but by autonomous international
organizations established by inter-governmental agreements outside the United
Nations. There are now many such international agencies having functions in many
different fields, e.g. in posts, telecommunications, railways, canals, rivers, sea
transport, civil aviation, meteorology, atomic energy, finance, trade, education and
culture, health and refugees. Some are virtually world-wide in their membership,
some are regional or otherwise limited in their membership. The Charter provides
that those agencies which have "wide international responsibilities" are to be brought
into relationship with the United Nations by agreements entered into between them
and the Economic and Social Council, are then to be known as "specialized
agencies." 10
The rapid growth of international organizations under contemporary international law has paved the
way for the development of the concept of international immunities.
It is now usual for the constitutions of international organizations to contain
provisions conferring certain immunities on the organizations themselves,
representatives of their member states and persons acting on behalf of the
organizations. A series of conventions, agreements and protocols defining the

immunities of various international organizations in relation to their members


generally are now widely in force; . . . 11
There are basically three propositions underlying the grant of international immunities to international
organizations. These principles, contained in the ILO Memorandum are stated thus: 1) international
institutions should have a status which protects them against control or interference by any one
government in the performance of functions for the effective discharge of which they are responsible
to democratically constituted international bodies in which all the nations concerned are represented;
2) no country should derive any national financial advantage by levying fiscal charges on common
international funds; and 3) the international organization should, as a collectivity of States members,
be accorded the facilities for the conduct of its official business customarily extended to each other
by its individual member States. 12 The theory behind all three propositions is said to be essentially
institutional in character. "It is not concerned with the status, dignity or privileges of individuals, but with
the elements of functional independence necessary to free international institutions from national control
and to enable them to discharge their responsibilities impartially on behalf of all their
members. 13 The raison d'etre for these immunities is the assurance of unimpeded performance of their
functions by the agencies concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their
international character and respective purposes. The objective is to avoid the danger of partiality and
interference by the host country in their internal workings. The exercise of jurisdiction by the
Department of Labor in these instances would defeat the very purpose of immunity, which is to
shield the affairs of international organizations, in accordance with international practice, from
political pressure or control by the host country to the prejudice of member States of the
organization, and to ensure the unhampered performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights,
which are guaranteed by Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3
(supra), of the 1987 Constitution; and implemented by Articles 243 and 246 of the Labor Code, 16 relied on
by the BLR Director and by Kapisanan.
For, ICMC employees are not without recourse whenever there are disputes to be settled. Section
31 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United
Nations 17 provides that "each specialized agency shall make provision for appropriate modes of
settlement of: (a) disputes arising out of contracts or other disputes of private character to which the
specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement
between ICMC the the Philippine Government, whenever there is any abuse of privilege by ICMC, the
Government is free to withdraw the privileges and immunities accorded. Thus:
Art. IV. Cooperation with Government Authorities. 1. The Commission shall
cooperate at all times with the appropriate authorities of the Government to ensure
the observance of Philippine laws, rules and regulations, facilitate the proper
administration of justice and prevent the occurrences of any abuse of the privileges
and immunities granted its officials and alien employees in Article III of this
Agreement to the Commission.
2. In the event that the Government determines that there has been an abuse of the
privileges and immunities granted under this Agreement, consultations shall be held
between the Government and the Commission to determine whether any such abuse

has occurred and, if so, the Government shall withdraw the privileges and immunities
granted the Commission and its officials.
Neither are the employees of IRRI without remedy in case of dispute with management as, in fact,
there had been organized a forum for better management-employee relationship as evidenced by
the formation of the Council of IRRI Employees and Management (CIEM) wherein "both
management and employees were and still are represented for purposes of maintaining mutual and
beneficial cooperation between IRRI and its employees." The existence of this Union factually and
tellingly belies the argument that Pres. Decree No. 1620, which grants to IRRI the status, privileges
and immunities of an international organization, deprives its employees of the right to selforganization.
The immunity granted being "from every form of legal process except in so far as in any particular
case they have expressly waived their immunity," it is inaccurate to state that a certification election
is beyond the scope of that immunity for the reason that it is not a suit against ICMC. A certification
election cannot be viewed as an independent or isolated process. It could tugger off a series of
events in the collective bargaining process together with related incidents and/or concerted activities,
which could inevitably involve ICMC in the "legal process," which includes "any penal, civil and
administrative proceedings." The eventuality of Court litigation is neither remote and from which
international organizations are precisely shielded to safeguard them from the disruption of their
functions. Clauses on jurisdictional immunity are said to be standard provisions in the constitutions
of international Organizations. "The immunity covers the organization concerned, its property and its
assets. It is equally applicable to proceedings in personam and proceedings in rem." 18
We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo),
wherein TUPAS calls attention to the case entitled "International Catholic Migration Commission v.
NLRC, et als., (G.R. No. 72222, 30 January 1989, 169 SCRA 606), and claims that, having taken
cognizance of that dispute (on the issue of payment of salary for the unexpired portion of a sixmonth probationary employment), the Court is now estopped from passing upon the question of
DOLE jurisdiction petition over ICMC.
We find no merit to said submission. Not only did the facts of said controversy occur between 19831985, or before the grant to ICMC on 15 July 1988 of the status of a specialized agency with
corresponding immunities, but also because ICMC in that case did not invoke its immunity and,
therefore, may be deemed to have waived it, assuming that during that period (1983-1985) it was
tacitly recognized as enjoying such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR
Director, dated 15 February 1989, had not become final because of a Motion for Reconsideration
filed by IRRI Said Motion was acted upon only on 30 March 1989 when Rep. Act No. 6715, which
provides for direct appeals from the Orders of the Med-Arbiter to the Secretary of Labor in
certification election cases either from the order or the results of the election itself, was already in
effect, specifically since 21 March 1989. Hence, no grave abuse of discretion may be imputed to
respondent Secretary of Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's
allegations. The pertinent portion of that law provides:
Art. 259. Any party to an election may appeal the order or results of the election as
determined by the Med-Arbiter directly to the Secretary of Labor and Employment on
the ground that the rules and regulations or parts thereof established by the

Secretary of Labor and Employment for the conduct of the election have been
violated. Such appeal shall be decided within 15 calendar days (Emphasis supplied).
En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two
departments of the executive branch of government have been rectified and the resultant
embarrassment to the Philippine Government in the eyes of the international community now,
hopefully, effaced.
WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the
Bureau of Labor Relations for certification election is SET ASIDE, and the Temporary Restraining
Order earlier issued is made PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having
been committed by the Secretary of Labor and Employment in dismissing the Petition for
Certification Election.
No pronouncement as to costs.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Paras, J., is on leave.

8. Non-Employees: Art. 252[243]


* Republic Planters Bank v. Laguesma, 264 SCRA 637

SECOND DIVISION
[G.R. No. 119675. November 21, 1996]

REPUBLIC PLANTERS BANK GENERAL SERVICES EMPLOYEES


UNION NATIONAL ASSOCIATION OF TRADE UNIONS, petitioner,
vs. BIENVENIDO LAGUESMA and REPUBLIC PLANTERS BANK,
respondents.
DECISION
PUNO, J.:

Republic Planters bank General Services Employees Union-National Association of


Trade Unions (petitioner) seeks to annul the resolution rendered by Undersecretary
Bienvenido Laguesma, dismissing its petition for certification election for lack of merit.

The facts show that on January 21, 1991, petitioner filed a petition for certification
election to determine the sole and exclusive bargaining representative of all regular
employees outside the bargaining unit of Republic Planters Bank. [1] The proposed
bargaining unit is composed of clerks, messengers, janitors, plumbers, telex operators,
mailing and printing personnel, drivers, mechanics and computer personnel. Allegedly,
these employees are regular employees but are considered as contractual employees
by private respondent bank. They are excluded from the existing collective bargaining
agreement between private respondent and Republic Planters Bank Employees Union
(RPBEU), the duly certified bargaining representative of the regular employees of
private respondent.
Private respondent filed its position paper and moved to dismiss the petition for
certification election. Firstly, it contended that petitioner union is comprised of some
thirty (30) employees of Superior Maintenance Services, Inc. (SMSI) [2] who are assigned
to the bank as messengers and janitors under a Contract of Services. The other
employees in the proposed bargaining unit are employed on contractual basis and are
not members of petitioner. Secondly, it stressed the existence of a bargaining unit
represented by Republic Planters Bank Employees Union (RPBEU). Thirdly, it alleged
that the petition failed to state the number of employees in the proposed bargaining unit
and there is no prior determination that the members of petitioner are employees of
private respondent.
Petitioner opposed the motion to dismiss and averred that the proposed unit is not
part of the existing bargaining unit. Petitioner further argued that some of its members
had been in the employ of private respondent for more than six (6) months. Allegedly,
they perform services that are necessary and desirable to the usual business operations
of private respondent. As to its members performing janitorial and messengerial
services for private respondent, petitioner contended that Superior Maintenance
Services, Inc. (SMSI) is engaged in labor-only contracting.
Med-Arbiter Anastacio Bactin dismissed the petition for certification election on the
ground that there is already a certified bargaining agent representing the appropriate
bargaining unit within private respondent. Thus, if qualified, the employees who were
excluded from the existing collective bargaining agreement may join the existing
bargaining unit in accord with the one-union, one-company policy of the Department of
Labor and Employment. The dispositive portion of the Med-Arbiters Order [3] states:

WHEREFORE, premises considered, the petition for certification election is hereby


DISMISSED for lack of legal basis.
The employees who are rendering services to the respondent Bank as clerks,
messengers, plumbers, teles operators, mailing and printing personnel, drivers,
mechanics, and computer personnel are hereby DECLARED

as employees Republic Planters Bank. Since they are employees of the bank, they
may join the existing bargaining agent of the rank and file employees of the
respondent bank.
However, the janitors who are tasked to clean the premises of the bank are classified
as employees of Superior Maintenance Services, Incorporated since their job is not
related to the main business of the respondent bank.
SO ORDERED.
Private respondent interposed an appeal protesting the finding of employeremployee relationship. On December 21, 1992, Undersecretary Bienvenido Laguesma
reversed the Order of the Med-arbiter.[4]
Petitioner filed a Motion for Reconsideration. [5] It submitted additional documentary
evidence prepared by some of the contractual employees, namely, Concepcion L.
Garcia (messenger), Noel Guevarra (machine operator), Consuelo David (clerk typist),
Maria Trinita M. Samson ((clerk typist), and Rodelio Tabernilla (messenger). [6]
Private respondent opposed the motion for reconsideration on the ground that the
documents submitted for the first time on appeal are inadmissible in evidence. The
documents were also denounced as self-serving.
On May 10, 1993, Undersecretary Laguesma modified the December 21,
1992 Resolution, thus:

WHEREFORE, the questioned Order is hereby modified by declaring that


Concepcion L. Garcia, Noel Gavarra, Consuelo David, Maria Trinita M. Samson, and
Rodelio Tabernilla are regular employees of respondent bank and therefore, part of the
existing rank and file unit.
SO ORDERED.
Both parties moved for reconsideration of the May 10, 1993 Order. Petitioner sought
a ruling that the other workers in the proposed bargaining unit should also be
considered regular employees of private respondents since they perform duties
necessary to the banks business operations. Petitioner submitted additional documents
containing the job descriptions of eleven (11) employees assigned at private
respondent, most of whom were performing messengerial services. Private respondent
reiterated its objection to the admissibility of the new evidence.

On February 24, 1995, Undersecretary Laguesma issued another Order, setting


aside the May 10, 1993 Order and reinstating the Resolution dated December 21,
1992. The pertinent portion of the Order states:

Indeed, the documents submitted by petitioner, including those appended to its present
motion, which purportedly are the job descriptions of the subject workers, may not be
given weight for being self-serving. It is quite obvious that they were prepared by the
workers themselves and was not approved by their supposed employer. Being so, they
are mere scraps of paper having no evidentiary value.
Moreover, respondent correctly pointed out that petitioner submitted the said
documents for the said documents for the first time on a motion for reconsideration,
after this Office ruled that the questioned finding of the Med-Arbiter is not supported
by any evidence. To our mind, such belated submission should not be tolerated nor
encouraged, otherwise there will be no end to the proceedings.
WHEREFORE, the motion for reconsideration of petitioner is hereby denied for lack
of merit while the motion of respondent is hereby granted. Accordingly, our Order
dated 10 May 1993 is hereby set aside and our Order (Resolution) dated
10 [sic] December 1992, dismissing the petition, is hereby reinstated.
SO ORDERED.
Hence, this petition for certiorari.
Petitioner contends grave abuse of discretion on the part of public respondent when
(1) it allowed private respondent to participate or intervene in the certification election,
contrary to our decision in Golden Farms Inc. vs. Secretary of Labor; and (2) it did not
give value to the documents it submitted on appeal.
The petition lacks merit.
We start with the restatement of the rule that no petition for certification election
may be entertained if filed outside the sixty-day period immediately before the expiration
of the collective bargaining agreement. [7] The purpose of the prohibition against the filing
of a petition for certification election outside the so-called freedom period is to ensure
industrial peace between the employer and its employees during the existence of the
CBA.[8] Thus, in Trade Unions of the Philippines vs. Laguesma, [9] we held that when a
legitimate labor organization has been certified as the sole and exclusive bargaining
agent of the rank-and-file employees of a given employer, it means that it shall remain
as such during the existence of the CBA, to the exclusion of other labor organizations,
and no petition questioning the majority status of said incumbent agent or any

certification election be conducted outside the sixty-day freedom period immediately


before the expiry date of the CBA.
In the case at bar, the petition for certification election was filed on January 21,
1991. The collective bargaining agreement between the duly certified bargaining agent,
Republic Planters Bank Employees Union, and private respondent was effective from
June 30, 1988 to June 30, 1991. [10] It is crystal clear that the filing of the petition for
certification election was premature.
Petitioner tries to tilt the balance in its favor by assailing the legal standing of private
respondent in intervening in the certification election. The attempt is futile. To begin with,
petitioner did not raise this issue in the proceedings below. It is too late to litigate the
issue on appeal. Besides, our ruling in Golden Farms, Inc. vs. Secretary of
Labor[11] cannot be invoked by petitioner. In Golden Farms Inc., we upheld the general
rule that an employer has no legal standing to question a certification election since this
is the sole concern of the workers. Its facts, however, are different for in said case, the
existence of employer-employee relationship was not disputed. Likewise, the petition for
certification election was filed within the freedom period. The main issue involved
therein was also different, i.e., the propriety of forming a separate bargaining unit for the
monthly paid office employees despite the existence of a bargaining unit for the daily
paid rank-and-file workers assigned at the banana fields. Considering the dissimilarity of
interest between the two groups of employees in terms of duties and obligations,
working conditions, salary rates and skills, we allowed the formation of a separate and
distinct bargaining unit for the monthly paid employees of Golden Farms, Inc.
The more applicable case is Singer Sewing Machine Company vs. Drilon, et al.,
where we ruled that if the union members are not employees, no right to organized
for purposes of bargaining, nor to be certified as bargaining agent can be
recognized. Since the persons involved are not employees of the company, we held that
they are not entitled to the constitutional right to join or form a labor organization for
purposes of collective bargaining. Singer reiterated our earlier pronouncement in La
Suerte Cigar and Cigarette Factory v. Director of Labor Relations (123 SCRA 679
[1983]), thus:
[12]

The question of whether employer-employee relationship exist is a primordial


consideration before extending labor benefits under the workmens compensation,
social security, medicare, termination pay and labor relations law. It is important in the
determination of who shall be included in the 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."

Finally, the public respondent did not commit grave abuse of discretion when it
rejected the documents submitted by petitioner for the first time on appeal. Truly,
technical rules of procedure need not be strictly followed by the public respondent in
rendering decisions if they are impediments in giving justice and equity to the
litigants. In the case at bar, the public respondent rejected the documents defining the
duties of the members of petitioner union in question less because they were belatedly
submitted only on appeal but more because they were self-serving and did not bear the
approval of their employer. The rejection is based on sound reason and we are not free
to modify the findings of respondent public official.
IN VIEW WHEREOF, the present petition for certiorari is DISMISSED for lack of
merit.
SO ORDERED.
Regalado, (Chairman), Romero, Mendoza, and Torres, Jr., JJ., concur.

C. Acquisition and Retention of Membership: Union Security Agreements: Art. 291


(c) [277(c)]
* Libery Four Mills Employees v. Liberty Flour Mills, Inc., December 29, 1989
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 58768-70 December 29, 1989
LIBERTY FLOUR MILLS EMPLOYEES, ANTONIO EVARISTO and POLICARPIO
BIASCAN, petitioners,
vs.
LIBERTY FLOUR MILLS, INC. PHILIPPINE LABOR ALLIANCE COUNCIL (PLAC) and
NATIONAL LABOR RELATIONS COMMISSION, (NLRC), respondents.
Julius A. Magno for petitioners.
De Leon, Diokno & Associates for respondent Liberty Flour Mills, Inc.

CRUZ, J.:
In this petition for certiorari, the resolution of the public respondent dated August 3, 1978, is faulted
for: (a) affirming the decision of the labor arbiter dismissing the employees' claim for emergency

allowance for lack of jurisdiction; and (b) modifying the said decision by disallowing the award of
back wages to petitioners Policarpio Biascan and Antonio Evaristo.
The basic facts are as follows:
On February 6, 1974, respondent Philippine Labor Alliance Council (PLAC) and respondent Liberty
Flour Mills, Inc. entered into a three-year collective bargaining agreement effective January 1, 1974,
providing for a daily wage increase of P2.00 for 1974, Pl.00 for 1975 and another Pl.00 for 1976. The
agreement contained a compliance clause, which will be explained later in this opinion. Additionally,
the parties agreed to establish a union shop by imposing "membership in good standing for the
duration of the CBA as a condition for continued employment" of workers. 1
On October 18, 1974, PLAC filed a complaint against the respondent company for non-payment of
the emergency cost of living allowance under P.D. No. 525. 2 A similar complaint was filed on March 4,
1975, this time by the petitioners, who apparently were already veering away from PLAC. 3
On March 20, 1975, petitioners Evaristo and Biascan, after organizing a union caged the Federation
of National Democratic Labor Unions, filed with the Bureau of Labor Relations a petition for
certification election among the rank-and-file employees of the respondent company 4 PLAC then
expelled the two for disloyalty and demanded their dismissal by the respondent company, which complied
on May 20, 1975. 5
The objection of Evaristo and Biascan to their termination were certified for compulsory arbitration
and assigned to Labor Arbiter Apolinario N. Lomabao, Jr. Meanwhile, the claims for emergency
allowance were referred for voluntary arbitration to Edmundo Cabal, who eventually dismissed the
same on the ground that the allowances were already absorbed by the wage increases. This latter
case was ultimately also certified for compulsory arbitration and consolidated with the termination
case being heard by Lomabao. His decision was, on appeal, dealt with by the NLRC as above
stated, 6 and the motion for reconsideration was denied on August 26, 1981. 7
At the outset, we note that the petitioners are taking an ambivalent position concerning the CBA
concluded in 1974. While claiming that this was entered into in bad faith and to forestall the payment
of the emergency allowances expected to be decreed, they nonetheless invoke the same agreement
to support their contention that their complaint for emergency allowances was invalidly referred to
voluntary arbitrator Cabal rather than Froilan M. Bacungan.
We find there was no such violation as the choice of the voluntary arbitrator was not limited to
Bacungan although he was probably the first preference. Moreover, the petitioners are estopped
from raising this objection now because they did not seasonably interpose it and instead willingly
submitted to Cabal's jurisdiction when he undertook to hear their complaint.
In sustaining Labor Arbiter Lomabao, the NLRC agreed that the decision of voluntary Arbiter Cabal
was final and unappealable under Article 262-A of the Labor Code and so could no longer be
reviewed by it. True enough. However, it is equally true that the same decision is not binding on this
Court, as we held in Oceanic Bic Division (FFW) v. Romero 8 and reiterated in Mantrade/FMMC
Division Employees and Workers Union v. Bacungan. 9 The rule as announced in these cases is reflected
in the following statements:

In spite of statutory provisions making "final" the decision of certain administrative


agencies, we have taken cognizance of petitions questioning these decisions where
want of jurisdiction, grave abuse of discretion, violation of due process, denial of
substantial justice, or erroneous interpretation of the law were brought to our
attention.
xxx xxx xxx
A voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity.
There is no reason why her decisions involving interpretation of law should be
beyond this Court's review. Administrative officials are presumed to act in accordance
with law and yet we do not hesitate to pass upon their work where a question of law
is involved or where a showing of abuse of authority or discretion in their official acts
is properly raised in petitions for certiorari.
Accordingly, the validity of the voluntary arbiter's finding that the emergency allowance sought by the
petitioners are already absorbed in the stipulated wage increases will now be examined by the Court
itself.
The position of the company is that the emergency allowance required by P.D. No. 525 is already
covered by the wage increases prescribed in the said CBA. Furthermore, pursuant to its Article VIII,
such allowances also include all other statutory minimum wage increases that might be decreed
during the lifetime of the said agreement.
That agreement provided in Section 2 thereof as follows:
Section 2. The wage increase in the amounts and during the period above set forth
shall, in the event of any statutory increase of the minimum wage, either as
allowance or as basic wage, during the life of this Agreement, be considered
compliance and payment of such required statutory increase as far as it will go and
under no circumstances will it be cumulative nor duplication to the differential amount
involved consequent to such statutory wage increase.
The Court holds that such allowances are indeed absorbed by the wage increases required under
the agreement. This is because Section 6 of the Interpretative Bulletin on LOI No. 174 specifically
provides:
Sec. 6. Allowances under LOI. -All allowances, bonuses, wage adjustments and
other benefits given by employers to their employees shall be treated by the
Department of Labor as in substantial compliance with the minimum standards set
forth in LOI No. 174 if:
(a) they conform with at least the minimum allowances scales
specified in the immediately preceding Section; and
(b) they are given in response to the appeal of the President in his
speech on 4 January 1974, or to countervail the quantum jump in the
cost of living as a result of the energy crisis starting in November

1973, or pursuant to Presidential Decree No. 390; Provided, That the


payment is retroactive to 18 February 1974 or earlier.
The allowances and other benefits may be granted unilaterally by the employer or
through collective bargaining, and may be paid at the same time as the regular
wages of the employees.
Allowances and other benefits which are not given in substantial compliance with the
LOI as interpreted herein shall not be treated by the Department of Labor as
emergency allowances in the contemplation of the LOI unless otherwise shown by
sufficient proof. Thus, without such proof, escalation clauses in collective bargaining
agreements concluded before the appeal of the President providing for automatic or
periodic wage increases shall not be considered allowances for purposes of the LOI.
(Emphasis supplied.)
The "immediately preceding section" referred to above states:
SEC. 5. Determination of Amount of Allowances. In determining the amount of allowances that
should be given by employers to meet the recommended minimum standards, the LOI has classified
employers into three general categories. As an implementation policy, the Department of Labor shall
consider as sufficient compliance with the scales of allowances recommended by the LOI if the
following monthly allowances are given by employers:
(a) P50.00 or higher where the authorized capital stock of the
corporation, or the total assets in the case of other undertakings,
exceeds P 1 million;
(b) P 30.00 or higher where the authorized capital stock of the
corporation, or the total assets in the case of other undertakings, is
not less than P100,000.00 but not more than P1million; and
(c) P15.00 or higher where the authorized capital stock or total
assets, as the case may be, is less than P100,000.00.
It is not denied that the company falls under paragraph (a), as it has a capitalization of more than P l
million, 10and so must pay a minimum allowance of P50.00 a month. This amount is clearly covered by
the increases prescribed in the CBA, which required a monthly increase (on the basis of 30 days) of
P60.00 for 1974, to be increased by P30.00 in 1975 (to P90.00) and another P 30.00 in 1976 (to
P120.00). The first increase in 1974 was already above the minimum allowance of P50.00, which was
exceeded even more with the increases of Pl.00 for each of the next two years.
Even if the basis used were 26 days a month (excluding Sundays), the conclusion would remain
unchanged as the raise in wage would be P52.00 for 1974, which amount was increased to P78.00
in 1975 and to P104.00 in 1976.
But the petitioners contend that the wage increases were the result of negotiation undertaken long
before the promulgation of P.D. No. 525 and so should not be considered part of the emergency
allowance decreed. In support of this contention, they cite Section 15 of the Rules implementing P.D.
No. 525, providing as follows:

Nothing herein shall prevent the employer and his employees, from entering into any
agreement with terms more favorable to the employees than those provided herein,
or be construed to sanction the diminution of any benefits granted to the employees
under existing laws, agreements, and voluntary practice.
Obviously, this section should not be read in isolation but must be related to the other sections
above-quoted, to give effect to the intent and spirit of the decree. The meaning of the section simply
is that any benefit over and above the prescribed allowances may still be agreed upon by the
employees and the employer or, if already granted, may no longer be withdrawn or diminished.
The petitioners also maintain that the above-quoted Section 2 of CBA is invalid because it
constitutes a waiver by the laborers of future benefits that may be granted them by law. They
contend this cannot be done because it is contrary to public policy.
While the principle is correct, the application is not, for there are no benefits being waived under the
provision. The benefits are already included in the wage increases. It is the law itself that considers
these increases, under the conditions prescribed in LOI No. 174, as equivalent to, or in lieu of, the
emergency allowance granted by P.D. No. 525.
In fact, the company agreed to grant the emergency allowance even before the obligation was
imposed by the government. What the petitioners claim they are being made to waive is the
additional P50.00 allowance but the truth is that they are not entitled to this because they are already
enjoying the stipulated increases. There is no waiver of these increases.
Moreover, Section 2 provides that the wage increase shall be considered payment of any statutory
increase of the minimum wage "as far as it will go," which means that any amount not covered by
such wage increase will have to be made good by the company. In short, the difference between the
stipulated wage increase and the statutory minimum wage will have to be paid by the company
notwithstanding and, indeed, pursuant to the said article. There is no waiver as to this.
Curiously, Article 2 was produced verbatim in the collective bargaining agreement concluded by the
petitioners with the company in 1977 after PLAC had been replaced by the new labor union formed
by petitioners Evaristo and Biascan. 11 It is difficult to understand the petitioners' position when they blow
hot and cold like this.
Coming now to the second issue, we find that it must also be resolved against the petitioners.
Evaristo and Biascan claim they were illegally dismissed for organizing another labor union opposed
to PLAC, which they describe as a company union. Arguing that they were only exercising the right
to self organization as guaranteed by the Constitution, they insist they are entitled to the back wages
which the NLRC disallowed while affirming their reinstatement.
In its challenged decision, the public respondent held that in demanding the dismissal of Evaristo
and Biascan, PLAC had acted prematurely because the 1974 CBA providing for union shop and
pursuant to which the two petitioners were dismissed had not yet been certified. 12 The implication is
that it was not yet in effect and so could not be the basis of the action taken against the two petitioners.
This conclusion is erroneous. It disregards the ruling of this Court in Tanduay Distillery Labor Union v.
NLRC, 13 were we held:

The fact, therefore, that the Bureau of Labor Relations (BLR) failed to certify or act
on TDLU's request for certification of the CBA in question is of no moment to the
resolution of the issues presented in this case. The BLR itself found in its order of
July 8, 1982, that the (un)certified CBA was duly filed and submitted on October 29,
1980, to last until June 30, 1982 is certifiable for having complied with all the
requirements for certification. (Emphasis supplied.)
The CBA concluded in 1974 was certifiable and was in fact certified on April 11, 1975, It bears
stressing that Evaristo and Biascan were dismissed only on May 20, 1975, more than a month after
the said certification.
The correct view is that expressed by Commissioner Cecilio P. Seno in his concurring and dissenting
opinion, 14viz.:
I cannot however subscribe to the majority view that the 'dismissal of complainants
Biascan and Evaristo, ... was, to say the least, a premature action on the part of the
respondents because at the time they were expelled by PLAC the contract containing
the union security clause upon which the action was based was yet to be certified
and the representation status of the contracting union was still in question.
Evidence on record show that after the cancellation of the registration certificate of
the Federation of Democratic Labor Unions, no other union contested the exclusive
representation of the Philippine Labor Alliance Council (PLAC), consequently, there
was no more legal impediment that stood on the way as to the validity and
enforceability of the provisions of the collective bargaining agreement entered into by
and between respondent corporation and respondent union. The certification of the
collective bargaining agreement by the Bureau of Labor Relations is not required to
put a stamp of validity to such contract. Once it is duly entered into and signed by the
parties, a collective bargaining agreement becomes effective as between the parties
regardless of whether or not the same has been certified by the BLR.
To be fair, it must be mentioned that in the certification election held at the Liberty Flour Mills, Inc. on
December 27, 1976, the Ilaw at Buklod ng Manggagawa, with which the union organized by Biascan
and Evaristo was affiliated, won overwhelmingly with 441 votes as against the 5 votes cast for
PLAC. 15 However, this does not excuse the fact that the two disaffiliated from PLAC as early as March
1975 and thus rendered themselves subject to dismissal under the union shop clause in the CBA.
The petitioners say that the reinstatement issue of Evaristo and Biascan has become academic
because the former has been readmitted and the latter has chosen to await the resolution of this
case. However, they still insist on the payment of their back wages on the ground that their dismissal
was illegal. This claim must be denied for the reasons already given. The union shop clause was
validly enforced against them and justified the termination of their services.
It is the policy of the State to promote unionism to enable the workers to negotiate with management
on the same level and with more persuasiveness than if they were to individually and independently
bargain for the improvement of their respective conditions. To this end, the Constitution guarantees
to them the rights "to self-organization, collective bargaining and negotiations and peaceful
concerted actions including the right to strike in accordance with law." There is no question that
these purposes could be thwarted if every worker were to choose to go his own separate way

instead of joining his co-employees in planning collective action and presenting a united front when
they sit down to bargain with their employers. It is for this reason that the law has sanctioned
stipulations for the union shop and the closed shop as a means of encouraging the workers to join
and support the labor union of their own choice as their representative in the negotiation of their
demands and the protection of their interest vis-a-vis the employer.
The Court would have preferred to resolve this case in favor of the petitioners, but the law and the
facts are against them. For all the concern of the State, for the well-being of the worker, we must at
all times conform to the requirements of the law as long as such law has not been shown to be
violative of the Constitution. No such violation has been shown here.
WHEREFORE, the petition is DISMISSED, without any pronouncement as to costs. It is so ordered.
Narvasa, Gancayco, Grio-Aquino Medialdea, JJ., concur.

* Victoriano v. Elizalde Rope Workers Union, 59 SCRA 54


Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-25246 September 12, 1974
BENJAMIN VICTORIANO, plaintiff-appellee,
vs.
ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC., defendants,
ELIZALDE ROPE WORKERS' UNION, defendant-appellant.
Salonga, Ordonez, Yap, Sicat & Associates for plaintiff-appellee.
Cipriano Cid & Associates for defendant-appellant.

ZALDIVAR, J.:p
Appeal to this Court on purely questions of law from the decision of the Court of First Instance of
Manila in its Civil Case No. 58894.
The undisputed facts that spawned the instant case follow:
Benjamin Victoriano (hereinafter referred to as Appellee), a member of the religious sect known as
the "Iglesia ni Cristo", had been in the employ of the Elizalde Rope Factory, Inc. (hereinafter referred

to as Company) since 1958. As such employee, he was a member of the Elizalde Rope Workers'
Union (hereinafter referred to as Union) which had with the Company a collective bargaining
agreement containing a closed shop provision which reads as follows:
Membership in the Union shall be required as a condition of employment for all
permanent employees workers covered by this Agreement.
The collective bargaining agreement expired on March 3, 1964 but was renewed the following day,
March 4, 1964.
Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its amendment by Republic Act
No. 3350, the employer was not precluded "from making an agreement with a labor organization to
require as a condition of employment membership therein, if such labor organization is the
representative of the employees." On June 18, 1961, however, Republic Act No. 3350 was enacted,
introducing an amendment to paragraph (4) subsection (a) of section 4 of Republic Act No. 875,
as follows: ... "but such agreement shall not cover members of any religious sects which prohibit
affiliation of their members in any such labor organization".
Being a member of a religious sect that prohibits the affiliation of its members with any labor
organization, Appellee presented his resignation to appellant Union in 1962, and when no action was
taken thereon, he reiterated his resignation on September 3, 1974. Thereupon, the Union wrote a
formal letter to the Company asking the latter to separate Appellee from the service in view of the
fact that he was resigning from the Union as a member. The management of the Company in turn
notified Appellee and his counsel that unless the Appellee could achieve a satisfactory arrangement
with the Union, the Company would be constrained to dismiss him from the service. This prompted
Appellee to file an action for injunction, docketed as Civil Case No. 58894 in the Court of First
Instance of Manila to enjoin the Company and the Union from dismissing Appellee. 1 In its answer, the
Union invoked the "union security clause" of the collective bargaining agreement; assailed the
constitutionality of Republic Act No. 3350; and contended that the Court had no jurisdiction over the case,
pursuant to Republic Act No. 875, Sections 24 and 9 (d) and (e). 2 Upon the facts agreed upon by the
parties during the pre-trial conference, the Court a quo rendered its decision on August 26, 1965, the
dispositive portion of which reads:
IN VIEW OF THE FOREGOING, judgment is rendered enjoining the defendant
Elizalde Rope Factory, Inc. from dismissing the plaintiff from his present employment
and sentencing the defendant Elizalde Rope Workers' Union to pay the plaintiff P500
for attorney's fees and the costs of this action.3
From this decision, the Union appealed directly to this Court on purely questions of law, assigning
the following errors:
I. That the lower court erred when it did not rule that Republic Act No. 3350 is
unconstitutional.
II. That the lower court erred when it sentenced appellant herein to pay plaintiff the
sum of P500 as attorney's fees and the cost thereof.
In support of the alleged unconstitutionality of Republic Act No. 3350, the Union contented, firstly,
that the Act infringes on the fundamental right to form lawful associations; that "the very phraseology

of said Republic Act 3350, that membership in a labor organization is banned to all those belonging
to such religious sect prohibiting affiliation with any labor organization" 4 , "prohibits all the members of
a given religious sect from joining any labor union if such sect prohibits affiliations of their members
thereto" 5 ; and, consequently, deprives said members of their constitutional right to form or join lawful
associations or organizations guaranteed by the Bill of Rights, and thus becomes obnoxious to Article III,
Section 1 (6) of the 1935 Constitution. 6
Secondly, the Union contended that Republic Act No. 3350 is unconstitutional for impairing the
obligation of contracts in that, while the Union is obliged to comply with its collective bargaining
agreement containing a "closed shop provision," the Act relieves the employer from its reciprocal
obligation of cooperating in the maintenance of union membership as a condition of employment;
and that said Act, furthermore, impairs the Union's rights as it deprives the union of dues from
members who, under the Act, are relieved from the obligation to continue as such members. 7
Thirdly, the Union contended that Republic Act No. 3350 discriminatorily favors those religious sects
which ban their members from joining labor unions, in violation of Article Ill, Section 1 (7) of the 1935
Constitution; and while said Act unduly protects certain religious sects, it leaves no rights or
protection to labor organizations. 8
Fourthly, Republic Act No. 3350, asserted the Union, violates the constitutional provision that "no
religious test shall be required for the exercise of a civil right," in that the laborer's exercise of his civil
right to join associations for purposes not contrary to law has to be determined under the Act by his
affiliation with a religious sect; that conversely, if a worker has to sever his religious connection with
a sect that prohibits membership in a labor organization in order to be able to join a labor
organization, said Act would violate religious freedom. 9
Fifthly, the Union contended that Republic Act No. 3350, violates the "equal protection of laws"
clause of the Constitution, it being a discriminately legislation, inasmuch as by exempting from the
operation of closed shop agreement the members of the "Iglesia ni Cristo", it has granted said
members undue advantages over their fellow workers, for while the Act exempts them from union
obligation and liability, it nevertheless entitles them at the same time to the enjoyment of all
concessions, benefits and other emoluments that the union might secure from the employer. 10
Sixthly, the Union contended that Republic Act No. 3350 violates the constitutional provision
regarding the promotion of social justice. 11
Appellant Union, furthermore, asserted that a "closed shop provision" in a collective bargaining
agreement cannot be considered violative of religious freedom, as to call for the amendment
introduced by Republic Act No. 3350; 12and that unless Republic Act No. 3350 is declared
unconstitutional, trade unionism in this country would be wiped out as employers would prefer to hire or
employ members of the Iglesia ni Cristo in order to do away with labor organizations. 13
Appellee, assailing appellant's arguments, contended that Republic Act No. 3350 does not violate
the right to form lawful associations, for the right to join associations includes the right not to join or
to resign from a labor organization, if one's conscience does not allow his membership therein, and
the Act has given substance to such right by prohibiting the compulsion of workers to join labor
organizations; 14 that said Act does not impair the obligation of contracts for said law formed part of, and
was incorporated into, the terms of the closed shop agreement; 15that the Act does not violate the
establishment of religion clause or separation of Church and State, for Congress, in enacting said law,
merely accommodated the religious needs of those workers whose religion prohibits its members from

joining labor unions, and balanced the collective rights of organized labor with the constitutional right of an
individual to freely exercise his chosen religion; that the constitutional right to the free exercise of one's
religion has primacy and preference over union security measures which are merely contractual 16 ; that
said Act does not violate the constitutional provision of equal protection, for the classification of workers
under the Act depending on their religious tenets is based on substantial distinction, is germane to the
purpose of the law, and applies to all the members of a given class; 17 that said Act, finally, does not
violate the social justice policy of the Constitution, for said Act was enacted precisely to equalize
employment opportunities for all citizens in the midst of the diversities of their religious beliefs." 18

I. Before We proceed to the discussion of the first assigned error, it is necessary to premise that
there are some thoroughly established principles which must be followed in all cases where
questions of constitutionality as obtains in the instant case are involved. All presumptions are
indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must
prove its invalidity beyond a reasonable doubt, that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports the statute, it will be
upheld, and the challenger must negate all possible bases; that the courts are not concerned with
the wisdom, justice, policy, or expediency of a statute; and that a liberal interpretation of the
constitution in favor of the constitutionality of legislation should be adopted. 19
1. Appellant Union's contention that Republic Act No. 3350 prohibits and bans the members of such
religious sects that forbid affiliation of their members with labor unions from joining labor unions
appears nowhere in the wording of Republic Act No. 3350; neither can the same be deduced by
necessary implication therefrom. It is not surprising, therefore, that appellant, having thus misread
the Act, committed the error of contending that said Act is obnoxious to the constitutional provision
on freedom of association.
Both the Constitution and Republic Act No. 875 recognize freedom of association. Section 1 (6) of
Article III of the Constitution of 1935, as well as Section 7 of Article IV of the Constitution of 1973,
provide that the right to form associations or societies for purposes not contrary to law shall not be
abridged. Section 3 of Republic Act No. 875 provides that employees shall have the right to selforganization and to form, join of assist labor organizations of their own choosing for the purpose of
collective bargaining and to engage in concerted activities for the purpose of collective bargaining
and other mutual aid or protection. What the Constitution and the Industrial Peace Act recognize and
guarantee is the "right" to form or join associations. Notwithstanding the different theories
propounded by the different schools of jurisprudence regarding the nature and contents of a "right", it
can be safely said that whatever theory one subscribes to, a right comprehends at least two broad
notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee
may act for himself without being prevented by law; and second, power, whereby an employee may,
as he pleases, join or refrain from Joining an association. It is, therefore, the employee who should
decide for himself whether he should join or not an association; and should he choose to join, he
himself makes up his mind as to which association he would join; and even after he has joined, he
still retains the liberty and the power to leave and cancel his membership with said organization at
any time. 20 It is clear, therefore, that the right to join a union includes the right to abstain from joining any
union. 21 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, and
guaranteed to the employee, is the "right" to join associations of his choice, it would be absurd to say that
the law also imposes, in the same breath, upon the employee the duty to join associations. The law does
not enjoin an employee to sign up with any association.
The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace
Act is, however, limited. The legal protection granted to such right to refrain from joining is withdrawn

by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of
which the employer may employ only member of the collective bargaining union, and the employees
must continue to be members of the union for the duration of the contract in order to keep their jobs.
Thus Section 4 (a) (4) of the Industrial Peace Act, before its amendment by Republic Act No. 3350,
provides that although it would be an unfair labor practice for an employer "to discriminate in regard
to hire or tenure of employment or any term or condition of employment to encourage or discourage
membership in any labor organization" the employer is, however, not precluded "from making an
agreement with a labor organization to require as a condition of employment membership therein, if
such labor organization is the representative of the employees". By virtue, therefore, of a closed
shop agreement, before the enactment of Republic Act No. 3350, if any person, regardless of his
religious beliefs, wishes to be employed or to keep his employment, he must become a member of
the collective bargaining union. Hence, the right of said employee not to join the labor union is
curtailed and withdrawn.
To that all-embracing coverage of the closed shop arrangement, Republic Act No. 3350 introduced
an exception, when it added to Section 4 (a) (4) of the Industrial Peace Act the following proviso: "but
such agreement shall not cover members of any religious sects which prohibit affiliation of their
members in any such labor organization". Republic Act No. 3350 merely excludes ipso jure from the
application and coverage of the closed shop agreement the employees belonging to any religious
sects which prohibit affiliation of their members with any labor organization. What the exception
provides, therefore, is that members of said religious sects cannot be compelled or coerced to join
labor unions even when said unions have closed shop agreements with the employers; that in spite
of any closed shop agreement, members of said religious sects cannot be refused employment or
dismissed from their jobs on the sole ground that they are not members of the collective bargaining
union. It is clear, therefore, that the assailed Act, far from infringing the constitutional provision on
freedom of association, upholds and reinforces it. It does not prohibit the members of said religious
sects from affiliating with labor unions. It still leaves to said members the liberty and the power to
affiliate, or not to affiliate, with labor unions. If, notwithstanding their religious beliefs, the members of
said religious sects prefer to sign up with the labor union, they can do so. If in deference and fealty
to their religious faith, they refuse to sign up, they can do so; the law does not coerce them to join;
neither does the law prohibit them from joining; and neither may the employer or labor union compel
them to join. Republic Act No. 3350, therefore, does not violate the constitutional provision on
freedom of association.
2. Appellant Union also contends that the Act is unconstitutional for impairing the obligation of its
contract, specifically, the "union security clause" embodied in its Collective Bargaining Agreement
with the Company, by virtue of which "membership in the union was required as a condition for
employment for all permanent employees workers". This agreement was already in existence at the
time Republic Act No. 3350 was enacted on June 18, 1961, and it cannot, therefore, be deemed to
have been incorporated into the agreement. But by reason of this amendment, Appellee, as well as
others similarly situated, could no longer be dismissed from his job even if he should cease to be a
member, or disaffiliate from the Union, and the Company could continue employing him
notwithstanding his disaffiliation from the Union. The Act, therefore, introduced a change into the
express terms of the union security clause; the Company was partly absolved by law from the
contractual obligation it had with the Union of employing only Union members in permanent
positions, It cannot be denied, therefore, that there was indeed an impairment of said union security
clause.
According to Black, any statute which introduces a change into the express terms of the contract, or
its legal construction, or its validity, or its discharge, or the remedy for its enforcement, impairs the

contract. The extent of the change is not material. It is not a question of degree or manner or cause,
but of encroaching in any respect on its obligation or dispensing with any part of its force. There is
an impairment of the contract if either party is absolved by law from its performance. 22 Impairment
has also been predicated on laws which, without destroying contracts, derogate from substantial
contractual rights. 23
It should not be overlooked, however, that the prohibition to impair the obligation of contracts is not
absolute and unqualified. The prohibition is general, affording a broad outline and requiring
construction to fill in the details. The prohibition is not to be read with literal exactness like a
mathematical formula, for it prohibits unreasonable impairment only. 24 In spite of the constitutional
prohibition, the State continues to possess authority to safeguard the vital interests of its people.
Legislation appropriate to safeguarding said interests may modify or abrogate contracts already in
effect. 25 For not only are existing laws read into contracts in order to fix the obligations as between the
parties, but the reservation of essential attributes of sovereign power is also read into contracts as a
postulate of the legal order. All contracts made with reference to any matter that is subject to regulation
under the police power must be understood as made in reference to the possible exercise of that
power. 26 Otherwise, important and valuable reforms may be precluded by the simple device of entering
into contracts for the purpose of doing that which otherwise may be prohibited. The policy of protecting
contracts against impairment presupposes the maintenance of a government by virtue of which
contractual relations are worthwhile a government which retains adequate authority to secure the peace
and good order of society. The contract clause of the Constitution must, therefore, be not only in harmony
with, but also in subordination to, in appropriate instances, the reserved power of the state to safeguard
the vital interests of the people. It follows that not all legislations, which have the effect of impairing a
contract, are obnoxious to the constitutional prohibition as to impairment, and a statute passed in the
legitimate exercise of police power, although it incidentally destroys existing contract rights, must be
upheld by the courts. This has special application to contracts regulating relations between capital and
labor which are not merely contractual, and said labor contracts, for being impressed with public interest,
must yield to the common good. 27
In several occasions this Court declared that the prohibition against impairing the obligations of
contracts has no application to statutes relating to public subjects within the domain of the general
legislative powers of the state involving public welfare. 28 Thus, this Court also held that the Blue
Sunday Law was not an infringement of the obligation of a contract that required the employer to furnish
work on Sundays to his employees, the law having been enacted to secure the well-being and happiness
of the laboring class, and being, furthermore, a legitimate exercise of the police power. 29
In order to determine whether legislation unconstitutionally impairs contract obligations, no
unchanging yardstick, applicable at all times and under all circumstances, by which the validity of
each statute may be measured or determined, has been fashioned, but every case must be
determined upon its own circumstances. Legislation impairing the obligation of contracts can be
sustained when it is enacted for the promotion of the general good of the people, and when the
means adopted to secure that end are reasonable. Both the end sought and the means adopted
must be legitimate, i.e., within the scope of the reserved power of the state construed in harmony
with the constitutional limitation of that power. 30
What then was the purpose sought to be achieved by Republic Act No. 3350? Its purpose was to
insure freedom of belief and religion, and to promote the general welfare by preventing
discrimination against those members of religious sects which prohibit their members from joining
labor unions, confirming thereby their natural, statutory and constitutional right to work, the fruits of
which work are usually the only means whereby they can maintain their own life and the life of their
dependents. It cannot be gainsaid that said purpose is legitimate.

The questioned Act also provides protection to members of said religious sects against two
aggregates of group strength from which the individual needs protection. The individual employee, at
various times in his working life, is confronted by two aggregates of power collective labor,
directed by a union, and collective capital, directed by management. The union, an institution
developed to organize labor into a collective force and thus protect the individual employee from the
power of collective capital, is, paradoxically, both the champion of employee rights, and a new
source of their frustration. Moreover, when the Union interacts with management, it produces yet a
third aggregate of group strength from which the individual also needs protection the collective
bargaining relationship. 31
The aforementioned purpose of the amendatory law is clearly seen in the Explanatory Note to House
Bill No. 5859, which later became Republic Act No. 3350, as follows:
It would be unthinkable indeed to refuse employing a person who, on account of his
religious beliefs and convictions, cannot accept membership in a labor organization
although he possesses all the qualifications for the job. This is tantamount to
punishing such person for believing in a doctrine he has a right under the law to
believe in. The law would not allow discrimination to flourish to the detriment of those
whose religion discards membership in any labor organization. Likewise, the law
would not commend the deprivation of their right to work and pursue a modest
means of livelihood, without in any manner violating their religious faith and/or
belief. 32
It cannot be denied, furthermore, that the means adopted by the Act to achieve that purpose
exempting the members of said religious sects from coverage of union security agreements is
reasonable.
It may not be amiss to point out here that the free exercise of religious profession or belief is superior
to contract rights. In case of conflict, the latter must, therefore, yield to the former. The Supreme
Court of the United States has also declared on several occasions that the rights in the First
Amendment, which include freedom of religion, enjoy a preferred position in the constitutional
system. 33 Religious freedom, although not unlimited, is a fundamental personal right and liberty, 34 and
has a preferred position in the hierarchy of values. Contractual rights, therefore, must yield to freedom of
religion. It is only where unavoidably necessary to prevent an immediate and grave danger to the security
and welfare of the community that infringement of religious freedom may be justified, and only to the
smallest extent necessary to avoid the danger.
3. In further support of its contention that Republic Act No. 3350 is unconstitutional, appellant Union
averred that said Act discriminates in favor of members of said religious sects in violation of Section
1 (7) of Article Ill of the 1935 Constitution, and which is now Section 8 of Article IV of the 1973
Constitution, which provides:
No law shall be made respecting an establishment of religion, or prohibiting the free
exercise thereof, and the free exercise and enjoyment of religious profession and
worship, without discrimination and preference, shall forever be allowed. No religious
test shall be required for the exercise of civil or political rights.
The constitutional provision into only prohibits legislation for the support of any religious tenets or the
modes of worship of any sect, thus forestalling compulsion by law of the acceptance of any creed or

the practice of any form of worship, 35 but also assures the free exercise of one's chosen form of religion
within limits of utmost amplitude. It has been said that the religion clauses of the Constitution are all
designed to protect the broadest possible liberty of conscience, to allow each man to believe as his
conscience directs, to profess his beliefs, and to live as he believes he ought to live, consistent with the
liberty of others and with the common good. 36 Any legislation whose effect or purpose is to impede the
observance of one or all religions, or to discriminate invidiously between the religions, is invalid, even
though the burden may be characterized as being only indirect. 37 But if the stage regulates conduct by
enacting, within its power, a general law which has for its purpose and effect to advance the state's
secular goals, the statute is valid despite its indirect burden on religious observance, unless the state can
accomplish its purpose without imposing such burden. 38
In Aglipay v. Ruiz 39 , this Court had occasion to state that the government should not be precluded from
pursuing valid objectives secular in character even if the incidental result would be favorable to a religion
or sect. It has likewise been held that the statute, in order to withstand the strictures of constitutional
prohibition, must have a secular legislative purpose and a primary effect that neither advances nor inhibits
religion. 40 Assessed by these criteria, Republic Act No. 3350 cannot be said to violate the constitutional
inhibition of the "no-establishment" (of religion) clause of the Constitution.
The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not spiritual or religious or
holy and eternal. It was intended to serve the secular purpose of advancing the constitutional right to
the free exercise of religion, by averting that certain persons be refused work, or be dismissed from
work, or be dispossessed of their right to work and of being impeded to pursue a modest means of
livelihood, by reason of union security agreements. To help its citizens to find gainful employment
whereby they can make a living to support themselves and their families is a valid objective of the
state. In fact, the state is enjoined, in the 1935 Constitution, to afford protection to labor, and regulate
the relations between labor and capital and industry. 41 More so now in the 1973 Constitution where it is
mandated that "the State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relation
between workers and employers. 42
The primary effects of the exemption from closed shop agreements in favor of members of religious
sects that prohibit their members from affiliating with a labor organization, is the protection of said
employees against the aggregate force of the collective bargaining agreement, and relieving certain
citizens of a burden on their religious beliefs; and by eliminating to a certain extent economic
insecurity due to unemployment, which is a serious menace to the health, morals, and welfare of the
people of the State, the Act also promotes the well-being of society. It is our view that the exemption
from the effects of closed shop agreement does not directly advance, or diminish, the interests of
any particular religion. Although the exemption may benefit those who are members of religious
sects that prohibit their members from joining labor unions, the benefit upon the religious sects is
merely incidental and indirect. The "establishment clause" (of religion) does not ban regulation on
conduct whose reason or effect merely happens to coincide or harmonize with the tenets of some or
all religions. 43 The free exercise clause of the Constitution has been interpreted to require that religious
exercise be preferentially aided. 44
We believe that in enacting Republic Act No. 3350, Congress acted consistently with the spirit of the
constitutional provision. It acted merely to relieve the exercise of religion, by certain persons, of a
burden that is imposed by union security agreements. It was Congress itself that imposed that
burden when it enacted the Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it so
deems advisable, could take away the same burden. It is certain that not every conscience can be
accommodated by all the laws of the land; but when general laws conflict with scrupples of

conscience, exemptions ought to be granted unless some "compelling state interest" intervenes. 45 In
the instant case, We see no such compelling state interest to withhold exemption.
Appellant bewails that while Republic Act No. 3350 protects members of certain religious sects, it
leaves no right to, and is silent as to the protection of, labor organizations. The purpose of Republic
Act No. 3350 was not to grant rights to labor unions. The rights of labor unions are amply provided
for in Republic Act No. 875 and the new Labor Code. As to the lamented silence of the Act regarding
the rights and protection of labor unions, suffice it to say, first, that the validity of a statute is
determined by its provisions, not by its silence 46 ; and, second, the fact that the law may work hardship
does not render it unconstitutional. 47
It would not be amiss to state, regarding this matter, that to compel persons to join and remain
members of a union to keep their jobs in violation of their religious scrupples, would hurt, rather than
help, labor unions, Congress has seen it fit to exempt religious objectors lest their resistance spread
to other workers, for religious objections have contagious potentialities more than political and
philosophic objections.
Furthermore, let it be noted that coerced unity and loyalty even to the country, and a fortiori to a
labor union assuming that such unity and loyalty can be attained through coercion is not a goal
that is constitutionally obtainable at the expense of religious liberty. 48 A desirable end cannot be
promoted by prohibited means.
4. Appellants' fourth contention, that Republic Act No. 3350 violates the constitutional prohibition
against requiring a religious test for the exercise of a civil right or a political right, is not well taken.
The Act does not require as a qualification, or condition, for joining any lawful association
membership in any particular religion or in any religious sect; neither does the Act require affiliation
with a religious sect that prohibits its members from joining a labor union as a condition or
qualification for withdrawing from a labor union. Joining or withdrawing from a labor union requires a
positive act. Republic Act No. 3350 only exempts members with such religious affiliation from the
coverage of closed shop agreements. So, under this Act, a religious objector is not required to do a
positive act to exercise the right to join or to resign from the union. He is exempted ipso
jure without need of any positive act on his part. A conscientious religious objector need not perform
a positive act or exercise the right of resigning from the labor union he is exempted from the
coverage of any closed shop agreement that a labor union may have entered into. How then can
there be a religious test required for the exercise of a right when no right need be exercised?
We have said that it was within the police power of the State to enact Republic Act No. 3350, and
that its purpose was legal and in consonance with the Constitution. It is never an illegal evasion of a
constitutional provision or prohibition to accomplish a desired result, which is lawful in itself, by
discovering or following a legal way to do it.49
5. Appellant avers as its fifth ground that Republic Act No. 3350 is a discriminatory legislation,
inasmuch as it grants to the members of certain religious sects undue advantages over other
workers, thus violating Section 1 of Article III of the 1935 Constitution which forbids the denial to any
person of the equal protection of the laws. 50
The guaranty of equal protection of the laws is not a guaranty of equality in the application of the
laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that every man, woman and child should be affected

alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The Constitution does not require that things which are
different in fact be treated in law as though they were the same. The equal protection clause does
not forbid discrimination as to things that are different. 51 It does not prohibit legislation which is limited
either in the object to which it is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification. Classification in law,
as in the other departments of knowledge or practice, is the grouping of things in speculation or
practice because they agree with one another in certain particulars. A law is not invalid because of
simple inequality. 52 The very idea of classification is that of inequality, so that it goes without saying that
the mere fact of inequality in no manner determines the matter of constitutionality. 53 All that is required of
a valid classification is that it be reasonable, which means that the classification should be based on
substantial distinctions which make for real differences; that it must be germane to the purpose of the law;
that it must not be limited to existing conditions only; and that it must apply equally to each member of the
class. 54 This Court has held that the standard is satisfied if the classification or distinction is based on a
reasonable foundation or rational basis and is not palpably arbitrary. 55
In the exercise of its power to make classifications for the purpose of enacting laws over matters
within its jurisdiction, the state is recognized as enjoying a wide range of discretion. 56 It is not
necessary that the classification be based on scientific or marked differences of things or in their
relation. 57 Neither is it necessary that the classification be made with mathematical nicety. 58 Hence
legislative classification may in many cases properly rest on narrow distinctions, 59 for the equal protection
guaranty does not preclude the legislature from recognizing degrees of evil or harm, and legislation is
addressed to evils as they may appear.
We believe that Republic Act No. 3350 satisfies the aforementioned requirements. The Act classifies
employees and workers, as to the effect and coverage of union shop security agreements, into those
who by reason of their religious beliefs and convictions cannot sign up with a labor union, and those
whose religion does not prohibit membership in labor unions. Tile classification rests on real or
substantial, not merely imaginary or whimsical, distinctions. There is such real distinction in the
beliefs, feelings and sentiments of employees. Employees do not believe in the same religious faith
and different religions differ in their dogmas and cannons. Religious beliefs, manifestations and
practices, though they are found in all places, and in all times, take so many varied forms as to be
almost beyond imagination. There are many views that comprise the broad spectrum of religious
beliefs among the people. There are diverse manners in which beliefs, equally paramount in the
lives of their possessors, may be articulated. Today the country is far more heterogenous in religion
than before, differences in religion do exist, and these differences are important and should not be
ignored.
Even from the phychological point of view, the classification is based on real and important
differences. Religious beliefs are not mere beliefs, mere ideas existing only in the mind, for they
carry with them practical consequences and are the motives of certain rules. of human conduct and
the justification of certain acts. 60 Religious sentiment makes a man view things and events in their
relation to his God. It gives to human life its distinctive character, its tone, its happiness or unhappiness its
enjoyment or irksomeness. Usually, a strong and passionate desire is involved in a religious belief. To
certain persons, no single factor of their experience is more important to them than their religion, or their
not having any religion. Because of differences in religious belief and sentiments, a very poor person may
consider himself better than the rich, and the man who even lacks the necessities of life may be more
cheerful than the one who has all possible luxuries. Due to their religious beliefs people, like the martyrs,

became resigned to the inevitable and accepted cheerfully even the most painful and excruciating pains.
Because of differences in religious beliefs, the world has witnessed turmoil, civil strife, persecution,
hatred, bloodshed and war, generated to a large extent by members of sects who were intolerant of other
religious beliefs. The classification, introduced by Republic Act No. 3350, therefore, rests on substantial
distinctions.

The classification introduced by said Act is also germane to its purpose. The purpose of the law is
precisely to avoid those who cannot, because of their religious belief, join labor unions, from being
deprived of their right to work and from being dismissed from their work because of union shop
security agreements.
Republic Act No. 3350, furthermore, is not limited in its application to conditions existing at the time
of its enactment. The law does not provide that it is to be effective for a certain period of time only. It
is intended to apply for all times as long as the conditions to which the law is applicable exist. As
long as there are closed shop agreements between an employer and a labor union, and there are
employees who are prohibited by their religion from affiliating with labor unions, their exemption from
the coverage of said agreements continues.
Finally, the Act applies equally to all members of said religious sects; this is evident from its
provision. The fact that the law grants a privilege to members of said religious sects cannot by itself
render the Act unconstitutional, for as We have adverted to, the Act only restores to them their
freedom of association which closed shop agreements have taken away, and puts them in the same
plane as the other workers who are not prohibited by their religion from joining labor unions. The
circumstance, that the other employees, because they are differently situated, are not granted the
same privilege, does not render the law unconstitutional, for every classification allowed by the
Constitution by its nature involves inequality.
The mere fact that the legislative classification may result in actual inequality is not violative of the
right to equal protection, for every classification of persons or things for regulation by law produces
inequality in some degree, but the law is not thereby rendered invalid. A classification otherwise
reasonable does not offend the constitution simply because in practice it results in some
inequality. 61 Anent this matter, it has been said that whenever it is apparent from the scope of the law
that its object is for the benefit of the public and the means by which the benefit is to be obtained are of
public character, the law will be upheld even though incidental advantage may occur to individuals beyond
those enjoyed by the general public. 62
6. Appellant's further contention that Republic Act No. 3350 violates the constitutional provision on
social justice is also baseless. Social justice is intended to promote the welfare of all the
people. 63 Republic Act No. 3350 promotes that welfare insofar as it looks after the welfare of those who,
because of their religious belief, cannot join labor unions; the Act prevents their being deprived of work
and of the means of livelihood. In determining whether any particular measure is for public advantage, it is
not necessary that the entire state be directly benefited it is sufficient that a portion of the state be
benefited thereby.
Social justice also means the adoption by the Government of measures calculated to insure
economic stability of all component elements of society, through the maintenance of a proper
economic and social equilibrium in the inter-relations of the members of the community. 64 Republic
Act No. 3350 insures economic stability to the members of a religious sect, like the Iglesia ni Cristo, who
are also component elements of society, for it insures security in their employment, notwithstanding their
failure to join a labor union having a closed shop agreement with the employer. The Act also advances the

proper economic and social equilibrium between labor unions and employees who cannot join labor
unions, for it exempts the latter from the compelling necessity of joining labor unions that have closed
shop agreements and equalizes, in so far as opportunity to work is concerned, those whose religion
prohibits membership in labor unions with those whose religion does not prohibit said membership. Social
justice does not imply social equality, because social inequality will always exist as long as social relations
depend on personal or subjective proclivities. Social justice does not require legal equality because legal
equality, being a relative term, is necessarily premised on differentiations based on personal or natural
conditions. 65 Social justice guarantees equality of opportunity 66 , and this is precisely what Republic Act
No. 3350 proposes to accomplish it gives laborers, irrespective of their religious scrupples, equal
opportunity for work.

7. As its last ground, appellant contends that the amendment introduced by Republic Act No. 3350 is
not called for in other words, the Act is not proper, necessary or desirable. Anent this matter, it has
been held that a statute which is not necessary is not, for that reason, unconstitutional; that in
determining the constitutional validity of legislation, the courts are unconcerned with issues as to the
necessity for the enactment of the legislation in question. 67 Courts do inquire into the wisdom of
laws. 68 Moreover, legislatures, being chosen by the people, are presumed to understand and correctly
appreciate the needs of the people, and it may change the laws accordingly. 69The fear is entertained by
appellant that unless the Act is declared unconstitutional, employers will prefer employing members of
religious sects that prohibit their members from joining labor unions, and thus be a fatal blow to unionism.
We do not agree. The threat to unionism will depend on the number of employees who are members of
the religious sects that control the demands of the labor market. But there is really no occasion now to go
further and anticipate problems We cannot judge with the material now before Us. At any rate, the validity
of a statute is to be determined from its general purpose and its efficacy to accomplish the end desired,
not from its effects on a particular case. 70 The essential basis for the exercise of power, and not a mere
incidental result arising from its exertion, is the criterion by which the validity of a statute is to be
measured. 71
II. We now pass on the second assignment of error, in support of which the Union argued that the
decision of the trial court ordering the Union to pay P500 for attorney's fees directly contravenes
Section 24 of Republic Act No. 875, for the instant action involves an industrial dispute wherein the
Union was a party, and said Union merely acted in the exercise of its rights under the union shop
provision of its existing collective bargaining contract with the Company; that said order also
contravenes Article 2208 of the Civil Code; that, furthermore, Appellee was never actually dismissed
by the defendant Company and did not therefore suffer any damage at all . 72
In refuting appellant Union's arguments, Appellee claimed that in the instant case there was really no
industrial dispute involved in the attempt to compel Appellee to maintain its membership in the union
under pain of dismissal, and that the Union, by its act, inflicted intentional harm on Appellee; that
since Appellee was compelled to institute an action to protect his right to work, appellant could
legally be ordered to pay attorney's fees under Articles 1704 and 2208 of the Civil Code. 73
The second paragraph of Section 24 of Republic Act No. 875 which is relied upon by appellant
provides that:
No suit, action or other proceedings shall be maintainable in any court against a
labor organization or any officer or member thereof for any act done by or on behalf
of such organization in furtherance of an industrial dispute to which it is a party, on
the ground only that such act induces some other person to break a contract of
employment or that it is in restraint of trade or interferes with the trade, business or

employment of some other person or with the right of some other person to dispose
of his capital or labor. (Emphasis supplied)
That there was a labor dispute in the instant case cannot be disputed for appellant sought the
discharge of respondent by virtue of the closed shop agreement and under Section 2 (j) of Republic
Act No. 875 a question involving tenure of employment is included in the term "labor dispute". 74 The
discharge or the act of seeking it is the labor dispute itself. It being the labor dispute itself, that very same
act of the Union in asking the employer to dismiss Appellee cannot be "an act done ... in furtherance of an
industrial dispute". The mere fact that appellant is a labor union does not necessarily mean that all its acts
are in furtherance of an industrial dispute. 75 Appellant Union, therefore, cannot invoke in its favor Section
24 of Republic Act No. 875. This case is not intertwined with any unfair labor practice case existing at the
time when Appellee filed his complaint before the lower court.
Neither does Article 2208 of the Civil Code, invoked by the Union, serve as its shield. The article
provides that attorney's fees and expenses of litigation may be awarded "when the defendant's act
or omission has compelled the plaintiff ... to incur expenses to protect his interest"; and "in any other
case where the court deems it just and equitable that attorney's fees and expenses of litigation
should be recovered". In the instant case, it cannot be gainsaid that appellant Union's act in
demanding Appellee's dismissal caused Appellee to incur expenses to prevent his being dismissed
from his job. Costs according to Section 1, Rule 142, of the Rules of Court, shall be allowed as a
matter of course to the prevailing party.
WHEREFORE, the instant appeal is dismissed, and the decision, dated August 26, 1965, of the
Court of First Instance of Manila, in its Civil Case No. 58894, appealed from is affirmed, with costs
against appellant Union. It is so ordered.
Makalintal, C.J, Castro, Teehankee, Barredo, Makasiar, Antonio, Esguerra, Muoz Palma and
Aquino, JJ., concur.

Separate Opinions

FERNANDO, J, concurring:
The decision arrived at unanimously by this Court that Republic Act No. 3350 is free from the
constitutional infirmities imputed to it was demonstrated in a manner wellnigh conclusive in the
learned, scholarly, and comprehensive opinion so typical of the efforts of the ponente, Justice
Zaldivar. Like the rest of my brethren, I concur fully. Considering moreover, the detailed attention
paid to each and every objection raised as to its validity and the clarity and persuasiveness with
which it was shown to be devoid of support in authoritative doctrines, it would appear that the last
word has been written on this particular subject. Nonetheless, I deem it proper to submit this brief

expression of my views on the transcendent character of religious freedom 1 and its primacy even as
against the claims of protection to labor, 2 also one of the fundamental principles of the Constitution.
1. Religious freedom is identified with the liberty every individual possesses to worship or not a
Supreme Being, and if a devotee of any sect, to act in accordance with its creed. Thus is
constitutionally safeguarded, according to Justice Laurel, that "profession of faith to an active power
that binds and elevates man to his Creator ...." 3 The choice of what a man wishes to believe in is his
and his alone. That is a domain left untouched, where intrusion is not allowed, a citadel to which the law is
denied entry, whatever be his thoughts or hopes. In that sphere, what he wills reigns supreme. The
doctrine to which he pays fealty may for some be unsupported by evidence, devoid of rational foundation.
No matter. There is no requirement as to its conformity to what has found acceptance. It suffices that for
him such a concept holds undisputed sway. That is a recognition of man's freedom. That for him is one of
the ways of self- realization. It would be to disregard the dignity that attaches to every human being to
deprive him of such an attribute. The "fixed star on our constitutional constellation," to borrow the
felicitous phrase of Justice Jackson, is that no official, not excluding the highest, has it in his power to
prescribe what shall be orthodox in matters of conscience or to mundane affairs, for that matter.
Gerona v. Secretary of Education 4 speaks similarly. In the language of its ponente, Justice Montemayor: "The realm of belief
and creed is infinite and limitless bounded only by one's imagination and thought. So is the freedom of belief, including religious belief,
limitless and without bounds. One may believe in most anything, however strange, bizarre and unreasonable the same may appear to

There was this qualification though:


"But between the freedom of belief and the exercise of said belief, there is quite a stretch of road to travel.
If the exercise of said religious belief clashes with the established institutions of society and with the law,
then the former must yield and give way to the latter. The Government steps in and either restrains said
exercise or even prosecutes the one exercising it." 6 It was on that basis that the daily compulsory flag
ceremony in accordance with a statute 7 was found free from the constitutional objection on the part of a
religious sect, the Jehovah's Witnesses, whose members alleged that their participation would be
offensive to their religious beliefs. In a case not dissimilar, West Virginia State Board of Education v.
Barnette, 8 the American Supreme Court reached a contrary conclusion. Justice Jackson's eloquent
opinion is, for this writer, highly persuasive. Thus: "The case is made difficult not because the principles of
its decision are obscure but because the flag involved is our own. Nevertheless, we apply the limitations
of the Constitution with no fear that freedom to be intellectually and spiritually diverse or even contrary will
disintegrate the social organization. To believe that patriotism will not flourish if patriotic ceremonies are
voluntary and spontaneous instead of a compulsory routine is to make an unflattering estimate of the
appeal of our institutions to free minds. We can have intellectual individualism and the rich cultural
diversities that we owe to exceptional minds only at the price of occasional eccentricity and abnormal
attitudes. When they are so harmless to others or to the State as those we deal with here, the price is not
too great. But freedom to differ is not limited to things that do not matter much. That would be a mere
shadow of freedom. The test of its substance is the right to differ as to things that touch the heart of the
existing order." 9
others, even heretical when weighed in the scales of orthodoxy or doctrinal standards." 5

There is moreover this ringing affirmation by Chief Justice Hughes of the primacy of religious
freedom in the forum of conscience even as against the command of the State itself: "Much has
been said of the paramount duty to the state, a duty to be recognized, it is urged, even though it
conflicts with convictions of duty to God. Undoubtedly that duty to the state exists within the domain
of power, for government may enforce obedience to laws regardless of scruples. When one's belief
collides with the power of the state, the latter is supreme within its sphere and submission or
punishment follows. But, in the forum of conscience, duty to a moral power higher than the state has
always been maintained. The reservation of that supreme obligation, as a matter of principle, would
unquestionably be made by many of our conscientious and law-abiding citizens. The essence of
religion is belief in a relation to God involving duties superior to those arising from any human

relation." 10 The American Chief Justice spoke in dissent, it is true, but with him in agreement were three
of the foremost jurists who ever sat in that Tribunal, Justices Holmes, Brandeis, and Stone.
2. As I view Justice Zaldivar's opinion in that light, my concurrence, as set forth earlier, is
wholehearted and entire. With such a cardinal postulate as the basis of our polity, it has a message
that cannot be misread. Thus is intoned with a reverberating clang, to paraphrase Cardozo, a
fundamental principle that drowns all weaker sounds. The labored effort to cast doubt on the validity
of the statutory provision in question is far from persuasive. It is attended by futility. It is not for this
Court, as I conceive of the judicial function, to restrict the scope of a preferred freedom.
3. There is, however, the question of whether such an exception possesses an implication that
lessens the effectiveness of state efforts to protect labor, likewise, as noted, constitutionally
ordained. Such a view, on the surface, may not be lacking in plausibility, but upon closer analysis, it
cannot stand scrutiny. Thought must be given to the freedom of association, likewise an aspect of
intellectual liberty. For the late Professor Howe a constitutionalist and in his lifetime the biographer of
the great Holmes, it even partakes of the political theory of pluralistic sovereignty. So great is the
respect for the autonomy accorded voluntary societies. 11 Such a right implies at the very least that one
can determine for himself whether or not he should join or refrain from joining a labor organization, an
institutional device for promoting the welfare of the working man. A closed shop, on the other hand, is
inherently coercive. That is why, as is unmistakably reflected in our decisions, the latest of which
is Guijarno v. Court of Industrial Relations, 12 it is far from being a favorite of the law. For a statutory
provision then to further curtail its operation, is precisely to follow the dictates of sound public policy.
The exhaustive and well-researched opinion of Justice Zaldivar thus is in the mainstream of
constitutional tradition. That, for me, is the channel to follow.

Separate Opinions
FERNANDO, J, concurring:
The decision arrived at unanimously by this Court that Republic Act No. 3350 is free from the
constitutional infirmities imputed to it was demonstrated in a manner wellnigh conclusive in the
learned, scholarly, and comprehensive opinion so typical of the efforts of the ponente, Justice
Zaldivar. Like the rest of my brethren, I concur fully. Considering moreover, the detailed attention
paid to each and every objection raised as to its validity and the clarity and persuasiveness with
which it was shown to be devoid of support in authoritative doctrines, it would appear that the last
word has been written on this particular subject. Nonetheless, I deem it proper to submit this brief
expression of my views on the transcendent character of religious freedom 1 and its primacy even as
against the claims of protection to labor, 2 also one of the fundamental principles of the Constitution.
1. Religious freedom is identified with the liberty every individual possesses to worship or not a
Supreme Being, and if a devotee of any sect, to act in accordance with its creed. Thus is
constitutionally safeguarded, according to Justice Laurel, that "profession of faith to an active power
that binds and elevates man to his Creator ...." 3 The choice of what a man wishes to believe in is his
and his alone. That is a domain left untouched, where intrusion is not allowed, a citadel to which the law is

denied entry, whatever be his thoughts or hopes. In that sphere, what he wills reigns supreme. The
doctrine to which he pays fealty may for some be unsupported by evidence, devoid of rational foundation.
No matter. There is no requirement as to its conformity to what has found acceptance. It suffices that for
him such a concept holds undisputed sway. That is a recognition of man's freedom. That for him is one of
the ways of self- realization. It would be to disregard the dignity that attaches to every human being to
deprive him of such an attribute. The "fixed star on our constitutional constellation," to borrow the
felicitous phrase of Justice Jackson, is that no official, not excluding the highest, has it in his power to
prescribe what shall be orthodox in matters of conscience or to mundane affairs, for that matter.

Gerona v. Secretary of Education 4 speaks similarly. In the language of its ponente, Justice Montemayor: "The realm of belief
and creed is infinite and limitless bounded only by one's imagination and thought. So is the freedom of belief, including religious belief,
limitless and without bounds. One may believe in most anything, however strange, bizarre and unreasonable the same may appear to

There was this qualification though:


"But between the freedom of belief and the exercise of said belief, there is quite a stretch of road to travel.
If the exercise of said religious belief clashes with the established institutions of society and with the law,
then the former must yield and give way to the latter. The Government steps in and either restrains said
exercise or even prosecutes the one exercising it." 6 It was on that basis that the daily compulsory flag
ceremony in accordance with a statute 7 was found free from the constitutional objection on the part of a
religious sect, the Jehovah's Witnesses, whose members alleged that their participation would be
offensive to their religious beliefs. In a case not dissimilar, West Virginia State Board of Education v.
Barnette, 8 the American Supreme Court reached a contrary conclusion. Justice Jackson's eloquent
opinion is, for this writer, highly persuasive. Thus: "The case is made difficult not because the principles of
its decision are obscure but because the flag involved is our own. Nevertheless, we apply the limitations
of the Constitution with no fear that freedom to be intellectually and spiritually diverse or even contrary will
disintegrate the social organization. To believe that patriotism will not flourish if patriotic ceremonies are
voluntary and spontaneous instead of a compulsory routine is to make an unflattering estimate of the
appeal of our institutions to free minds. We can have intellectual individualism and the rich cultural
diversities that we owe to exceptional minds only at the price of occasional eccentricity and abnormal
attitudes. When they are so harmless to others or to the State as those we deal with here, the price is not
too great. But freedom to differ is not limited to things that do not matter much. That would be a mere
shadow of freedom. The test of its substance is the right to differ as to things that touch the heart of the
existing order." 9
others, even heretical when weighed in the scales of orthodoxy or doctrinal standards." 5

There is moreover this ringing affirmation by Chief Justice Hughes of the primacy of religious
freedom in the forum of conscience even as against the command of the State itself: "Much has
been said of the paramount duty to the state, a duty to be recognized, it is urged, even though it
conflicts with convictions of duty to God. Undoubtedly that duty to the state exists within the domain
of power, for government may enforce obedience to laws regardless of scruples. When one's belief
collides with the power of the state, the latter is supreme within its sphere and submission or
punishment follows. But, in the forum of conscience, duty to a moral power higher than the state has
always been maintained. The reservation of that supreme obligation, as a matter of principle, would
unquestionably be made by many of our conscientious and law-abiding citizens. The essence of
religion is belief in a relation to God involving duties superior to those arising from any human
relation." 10 The American Chief Justice spoke in dissent, it is true, but with him in agreement were three
of the foremost jurists who ever sat in that Tribunal, Justices Holmes, Brandeis, and Stone.
2. As I view Justice Zaldivar's opinion in that light, my concurrence, as set forth earlier, is
wholehearted and entire. With such a cardinal postulate as the basis of our polity, it has a message
that cannot be misread. Thus is intoned with a reverberating clang, to paraphrase Cardozo, a
fundamental principle that drowns all weaker sounds. The labored effort to cast doubt on the validity

of the statutory provision in question is far from persuasive. It is attended by futility. It is not for this
Court, as I conceive of the judicial function, to restrict the scope of a preferred freedom.
3. There is, however, the question of whether such an exception possesses an implication that
lessens the effectiveness of state efforts to protect labor, likewise, as noted, constitutionally
ordained. Such a view, on the surface, may not be lacking in plausibility, but upon closer analysis, it
cannot stand scrutiny. Thought must be given to the freedom of association, likewise an aspect of
intellectual liberty. For the late Professor Howe a constitutionalist and in his lifetime the biographer of
the great Holmes, it even partakes of the political theory of pluralistic sovereignty. So great is the
respect for the autonomy accorded voluntary societies. 11 Such a right implies at the very least that one
can determine for himself whether or not he should join or refrain from joining a labor organization, an
institutional device for promoting the welfare of the working man. A closed shop, on the other hand, is
inherently coercive. That is why, as is unmistakably reflected in our decisions, the latest of which
is Guijarno v. Court of Industrial Relations, 12 it is far from being a favorite of the law. For a statutory
provision then to further curtail its operation, is precisely to follow the dictates of sound public policy.
The exhaustive and well-researched opinion of Justice Zaldivar thus is in the mainstream of
constitutional tradition. That, for me, is the channel to follow.

* Santos-Juat v. CIR, 15 SCRA 391


Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20764

November 29, 1965

SANTOS JUAT, petitioner,


vs.
COURT OF INDUSTRIAL RELATIONS, BULAKLAK PUBLICATIONS and JUAN
EVANGELISTA, respondents.
Vicente T. Ocampo for petitioner.
Mariano B. Tuason for respondent Court of Industrial Relations.
Rufo B. Albor for other respondents.
ZALDIVAR, J.:
This is a petition for certiorari to review the decision dated August 15, 1962 and the resolution en
banc dated October 30, 1962, of the Court of Industrial Relations in its Case No. 2889-ULP.
After investigating charges of unfair labor practice filed by petitioner Santos Juat before the Court of
Industrial Relations against respondents Bulaklak Publications and its Executive Officer, Acting
Prosecutor Alberto Cruz of the Court of Industrial Relations filed a complaint, docketed as Case No.
2889-ULP, charging Bulaklak Publications and/or Juan N. Evangelista of unfair labor practice within
the meaning of Section 4 (a) subsections 1, 4 and 5 of Republic Act 875, alleging, among others,

that complainant Santos Juat was an employee of the respondent company since August 1953; that
on or about July 15, 1960, and on several occasions thereafter, complainant Santos Juat was asked
by his respondent employer to join the Busocope Labor Union, but he refused to do so; that
respondent employer suspended him without justifiable cause; that two separate cases were filed by
complainant against the respondents one on March 13, 1961 for unfair labor practice, and
another on March 18, 1961 for payment of wages for overtime work and work on Sundays and
holidays, the filing of which cases had come to the knowledge of the respondents; that on March 15,
1961, respondent employer dismissed him from the service without justifiable cause and that from
the time of his dismissal up to the filing of the complaint he had not found any substantial
employment for himself.
In their answer, dated August 3, 1961, respondent alleged, among others, that complainant Santos
Juat was suspended for cause; that while Case No. 1462-V was filed with the Court of Industrial
Relations on March 13, 1961, the same came to the knowledge of respondents only when they
received the summons and a copy of the petition on March 24, 1961, and while case No. 2789-ULP
was filed on April 3, 1961, the same became known to respondents long after the employeremployee relationship between respondent employer and Santos Juat had been terminated, so that
the suspension of the complainant on March 1, 1961 and his subsequent separation from the service
were not acts of reprisal because of the filing of those two cases; that it was complainant Juat who
had caused his separation when he ignored the letter sent to him by Juan N. Evangelista, executive
officer of respondent company, requiring him to report for work; that the principal reason why
complainant refused to work with respondent company was because he was occupied with his work
in the Juat Printing Press Co. of which he was a stockholder and the treasurer. Respondent
company thereby made a counterclaim for damages because of complainant's having filed an
unwarranted and malicious action against it.
On August 15, 1962, after hearing, Associate Judge Baltazar N. Villanueva of the Court of Industrial
Relations rendered a decision dismissing the complaint but made no pronouncement regarding
respondent's counterclaim.
Petitioner filed a motion for reconsideration of the decision, and in a resolution dated October 30,
1962, the Court of Industrial Relations en banc denied the motion for reconsideration. Hence, this
petition for certiorari to review said decision and resolution.
The facts of this case may best be gathered from the findings and conclusions of the Court of
Industrial Relations in its decision, as follows:
On December 1, 1959, a collective bargaining agreement was entered into between the
Bulaklak Publications and the BUSOCOPE LABOR UNION, to remain in effect for 3 years,
and renewable for another term of 3 years. Section 4 of said agreement contains a closed
shop proviso. On December 27, 1960, said Section 4 of said agreement was amended to
read as follows:
"All employees and/or workers who on January 1, 1960 are members of the Union in
good standing in accordance with its Constitution and By-Laws and all members who
become members after that date shall, as a condition of employment, maintain their
membership in the Union for the duration of this Agreement. All employees and/or
workers who on January 1, 1961 are not yet members of the Union shall, as a
condition of maintaining their employment, become members of such union."

It is clear that it was by virtue of the above-mentioned closed shop provision of the collective
bargaining agreement between the Busocope Labor Union and the Bulaklak Publications
that the management of the latter required Santos Juat to become a member of the former.
In requiring Santos Juat to become a member of said Union, it was only obeying the law
between the parties, which is their collective bargaining agreement.
Because of the refusal of Santos Juat to become a member of said Union, Mr. Juan N.
Evangelists, the executive officer of respondent company, suspended him for 15 days. After
the expiration of the suspension of Santos Juat, Mr. Evangelista addressed a letter to the
former, ordering him to report back for duty, and in spite of said letter, Santos Juat did not
report for work, consequently, Santos Juat was dropped from the service of the company.
Juat could afford not to report for duty because he has his own business by the name of
JUAT PRINTING PRESS CO., INC. The refusal of Santos Juat to become a member of the
Busocope Labor Union as well as his refusal to report for work when ordered by his superior
officer, shows the lack of respect on the part of Santos Juat toward his superior officer. With
such attitude, the continuation in the service of the company of Santos Juat is indeed
inimical to the interest of his employer.
The charge of complainant to the effect that on March 13, 1961, he filed a petition with this
Court against respondent company which was docketed as Case No. 1462-V is of no
moment, because according to the decision of the Supreme Court in Case G.R. No. L11745, Royal Interocean Lines, et al. vs. Hon. Court of Industrial Relations, et al.,
Promulgated October 31, 1960, it was held that an employee's having filed charges or
having given testimony or being about to give testimony has no relation to union activities.
With respect to Case No. 2789-ULP, Mr. Evangelista stated that he did not know anything
about its having been filed in Court.
It is now contended by the petitioner before this Court that:
1. The Court of Industrial Relations erred, or committed a grave abuse of discretion, when it
applied to the petitioner the collective bargaining agreement with closed shop proviso
between the respondent Bulaklak Publications and the Busocope Labor Union, he being an
old employee;
2. The Court of Industrial Relations erred, or committed a grave abuse of discretion, in
holding that the respondent Bulaklak Publications did not commit unfair labor practice when
it dismissed petitioner for his refusal to join the Busocope Labor Union; and
3. The Court of Industrial Relations committed a grave abuse of discretion when it dismissed
the complaint of petitioner because its allegations; are not supported by substantial
evidence.
The contentions of the petitioner are without merit, The closed-shop proviso in a collective
bargaining agreement between employer and employee is sanctioned by law. The pertinent
provision of the law, in this connection, says:
Provided, that nothing in this Act or in any Act or statute of the Republic of the Philippines
shall preclude an employer from making an agreement with a labor organization to require
as a condition of employment membership therein, if such labor organization is the

representative of the employees as provided in said section twelve; ... ." (Section 4,
subsection [a] par. 4 of Republic Act No. 875, known as the Industrial Peace Act).
The validity of a closed-shop agreement has been upheld by this Court. In one particular case this
Court held:
There is no need for us to take sides and give reasons because our Congress, in the
exercise of its policy-making power, has chosen to approve the closed-shop, when it
legalized in Sec. 4, sub-section (a) paragraph 4 of Republic Act 875 (Magna Charta of Labor)
"any agreement of the employer with a labor organization requiring membership in such
organization as condition of employment," provided such labor organization properly
represents the employees (National Labor Union vs. Aguinaldo's Echague, et al., G.R. No. L7358, May 31, 1955.)
The foregoing pronouncement of this Court had been reiterated in the cases of Tolentino, et al. vs.
Angeles, et al., G.R. No. L-8150, May 30, 1956; Ang Malayang Manggagawa Ng Ang Tibay
Enterprises, et al., vs. Ang Tibay, et al., G.R. No. L-8259, Dec. 23, 1957; Confederated Sons of
Labor vs. Anakan Lumber Co., et al., G.R. No. L-12503, April 20, 1960; Bacolod-Murcia Milling Co.,
et al. vs. National Employees Workers Security Union, 53 O.G. 615.
A closed-shop agreement has been considered as one form of union security whereby only union
members can be hired and workers must remain union members as a condition of continued
employment. The requirement for employees or workers to become members of a union as a
condition for employment redounds to the benefit and advantage of said employees because by
holding out to loyal members a promise of employment in the closed-shop the union wields group
solidarity. In fact, it is said that "the closed-shop contract is the most prized achievement of
unionism" (National Labor Union vs. Aguinaldo's-Echague, Inc. et al., supra).
Coming now to the closed-shop proviso of the collective bargaining agreement between the
respondent Bulaklak Publications and the Busocope Labor Union, it is clearly provided that "All
employees and/or workers who on January 1, 1961 are not yet members of the Union shall, as
condition of maintaining their employment, become members of such Union." The question now
before Us is whether the above-quoted proviso of the said collective bargaining agreement applies
to the petitioner Santos Juat. The contention of said petitioner is that the said proviso cannot apply,
and should not be applied to him because he is an old employee of the Bulaklak Publications. It is
not disputed that petitioner had been employed with the Bulaklak Publications since 1953, and the
collective bargaining agreement embodying the closed-shop proviso in question was entered into
only on December 1, 1959 and amended on December 27, 1960. It has been established, however,
that said petitioner was not a member of any labor union when that collective bargaining agreement
was entered into, and in fact he had never been a member of any labor union.
This Court had categorically held in the case of Freeman Shirt Manufacturing Co., Inc., et al. vs.
Court of Industrial Relations, et al., G.R. No. L-16561, Jan. 28, 1961, that the closed-shop proviso of
a collective bargaining agreement entered into between an employer and a duly authorized labor
union is applicable not only to the employees or laborers that are employed after the collective
bargaining agreement had been entered into but also to old employees who are not members of any
labor union at the time the said collective bargaining agreement was entered into. In other words, if
an employee or laborer is already a member of a labor union different from the union that entered
into a collective bargaining agreement with the employer providing for a closed-shop, said employee

or worker cannot be obliged to become a member of that union which had entered into a collective
bargaining agreement with the employer as a condition for his continued employment. This Court in
that Freeman case made this clear pronouncement:
The closed-shop agreement authorized under Sec. 4 sub-sec. a (4) of the Industrial Peace
Act above-quoted should, however, apply only to persons to be hired or to employees who
are not yet members of any labor organization. It is inapplicable to those already in the
service who are members of another union. To hold otherwise, i.e., that the employees in a
company who are members of a minority union may be compelled to disaffiliate from their
union and join the majority or contracting union, would render nugatory the right of all
employees to self-organization and to form, joint or assist labor organizations of their own
choosing, a right guaranteed by the Industrial Peace Act (sec. 3, Rep. Act No. 875) as well
as by the Constitution (Art. III, see. 1 [6]).
Section 12 of the Industrial Peace Act, providing that when there is reasonable doubt as to
who the employees have chosen as their representative the Industrial Court can order a
certification election, would also become useless. For once a union has been certified by the
court and enters into a collective bargaining agreement with the employer a closed-shop
clause applicable to all employees be they union or non-union members, the question of
majority representation among the members would be closed forever. Certainly, there can no
longer exist any petition for certification election, since eventually the majority or contracting
union will become a perpetual labor union. This alarming result could not have been the
intention of Congress. The Industrial Peace Act was enacted precisely for the promotion of
unionism in this country. (Emphasis supplied)
The above-quoted ruling was reaffirmed by this Court in its decision in the case of Findlay Miller
Timber Co. vs. PLASLU, et al., G.R. Nos. L-18217 & L-18222, Sept. 29, 1962.
It should be declared, therefore, as a settled doctrine, that the closed-shop proviso of a collective
bargaining agreement entered into between an employer and a duly authorized labor union applies,
and should be applied, to old employees or workers who are non-members of any labor union at the
time the collective bargaining agreement was entered into. In other words, the old employees or
workers can be obliged by his employer to join the labor union which had entered into a collective
bargaining agreement that provides for a closed-shop as a condition for his continuance in his
employment, otherwise his refusal to join the contracting labor union would constitute a justifiable
basis for his dismissal.
It being established by the evidence that petitioner Santos Juat, although an old employee of the
respondent Bulaklak Publications, was not a member of any labor union at the time when the
collective bargaining agreement in question was entered into he could be obliged by the respondent
Bulaklak Publications to become a member of the Busocope Labor Union. And because petitioner
refused to join the Busocope Labor Union respondent Bulaklak Publications was justified in
dismissing him from the service on the ground that he had refused to join said union.
We, therefore, hold that the respondent Court of Industrial Relations did not err, nor did it commit a
grave abuse of discretion, when it decided that the respondent Bulaklak Publications did not commit
unfair labor practice when it dismissed petitioner because of his refusal to join the Busocope labor
union. Moreover, as found by the respondent Court of Industrial Relations, petitioner Santos Juat
had furnished another ground for his dismissal and that was because he refused to return to work

after the end of his suspension even when he was ordered to do so by his employer, the respondent
Bulaklak Publications. The respondent Court of Industrial Relations further found that the reason
why the petitioner did not want to return to work was because he was already working in his own
establishment known as the "Juat Printing Press Co. Inc." of which he was a stockholder and the
treasurer.
Neither did the respondent Court of Industrial Relations commit a grave abuse of discretion when it
dismissed the complaint on the ground that the petitioner had not adduced substantial evidence to
support the allegations in the complaint. We have carefully examined the records, and we believe
that the factual findings of the respondent court should not be disturbed.
IN VIEW OF THE FOREGOING, the decision and resolution appealed from are affirmed, with costs
against the petitioner.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal and
Bengzon, J.P., JJ.,concur.
Barrera, J., took no part.

* Manila Cordage Co. v. CIR, 78 SCRA 398


Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-27079 August 31, 1977
MANILA CORDAGE COMPANY, petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS AND MANILA CORDAGE WORKERS
UNION, respondents.
G.R. No. L-27080 August 31, 1977
MANCO LABOR UNION (NLU), petitioner,
vs.
MANILA CORDAGE WORKERS UNION and THE COURT OF INDUSTRIAL
RELATIONS, respondents.
G.R. No. L-27080 August 31, 1977
MANCI LABOR UNION (NLU), petitioner,
vs.

MANILA CORDAGE WORKERS UNION and THE COURT OF INDUSTRIAL


RELATIONS, respondents.
Sycip, Salazar, Luna & Associates for petitioner Manila Cordage Company.
Eulogio R. Lerum for petitioner Manco Labor Union (NLU)
B. C. Pineda & Associates for private respondent.

FERNANDEZ, J.:
These are petitions to review the decision dated May 4, 1966 1 and the resolution dated October 19,
1966 2 of the respondent Court of Industrial Relations (CIR) in Case No. 2728-ULP entitled "Manila
Cordage Workers Union, complainant, vs. Manila Cordage Company and Manco Labor Union,
respondents."
The dispositive part of the decision reads:
FOREGOING PREMISES CONSIDERED, this Court finds substantial evidence to
sustain the charge of unfair labor practice against respondent Manila Cordage
Company in violation of Section 4(a), paragraphs 1, 2 and 4 of the Industrial Peace
Act, and against respondent Manco Labor Union in violation of Section 4(b),
paragraphs 1 and 2 of the same Act and, therefore, orders both respondents their
officials or agents:
1. To cease and desist from restraining and coersing complainants in the exercise of
their rights guaranteed by Section 3 of Republic Act No. 875;
2. To cease and desist from further committing the unfair labor practice complained
of; and
3. To reinstate complainants Silvino Rabago, Natalio Nisperos and Ricardo Trajano
to their former positions and with all the rights and privileges formerly appertaining
thereto and to pay jointly and salary their back wages from the time of their
respective dismissal on January 27, 1961, February 3, 1961, and May 2, 1961 up to
the date of their actual re-instatements, minus their earnings elsewhere, if any.
To facilitate the payment of back wages due the complainants, the Chief of the
Examining Division of this Court and/or his duly authorized assistant is hereby
directed to examine the payrolls, daily time records and other pertinent documents
relative to complainants services with respondent company and to submit the
corresponding report and computation for further disposition.
SO ORDERED.
Manila, Philippines, May 4, 1966.

AMANDO C. BUGAYONG Associate Judge 3


The resolution dated October 19, 1966 denied the two (2) separate motions filed by Manila Cordage
Company and Manco Labor Union for the reconsideration of the decision dated May 4,1966.
On February 1, 1967 the petitioner Manco Labor Union filed the following Motion in G.R. No. L27080 (Manco Labor Union [NLU] vs. Manila Cordage Workers Union, et al.):
MOTION TO CONSOLIDATE THIS CASE WITH G.R. NO. L-27079 AND TO ADOPT
THE PETITION THEREIN AS THE PETITION IN THIS CASE
Comes now the petitioner Manco Labor Union NLU by the undersigned attorney, and
to this Honorable Court, respectfully states:
That in Case No. 2728-ULP of the Court of Industrial Relations. entitled "Manila
Cordage Company and Manco Labor Union NLU respondents", said Court rendered
its Decision and Resolution on May 4, 1966 and October 19, 1966, respectively,
against the respondents;
That the Manila Cordage Company had appealed said Decision and Resolution in
Case No. 2728-ULP before this Honorable Court by certiorari and in the resolution of
this Court dated January 23, 1967, in G.R. No. L-27079 (Manila Cordage Company
vs. The Court of Industrial Relations, et al.), the same was given due course by this
Court.
That since the issues to be brought by the herein petitioner in this case are similar to
the issues raised in the petition for certiorari in G.R. No. L-27079, in order to avoid a
multiplicity of cases, it is desirable that the present case be consolidated with the
said case;
That in order to avoid repetitions and a voluminous record, herein petitioner is
adopting the petition for review filed in G.R. No. L- Z7079 as its own in the present
case, and by reference, is made a part hereof;
That this motion is timely because copy of the resolution of the Court of Industrial
Relations in this case was received on January 6, 1967, notice of appeal and a
petition for extension for 15 days was filed with this Court on January 16, 1967,
which was granted, and today is the last day for the filing of our petition for review in
this case.
WHEREFORE, it is respectfully prayed of this Honorable Court:
1. That the present case be consolidated with G.R. No. L- 27079, entitled "Manila
Cordage Company vs. The Court of Industrial Relations and Manila Cordage
Workers Union;
2. That herein petitioner be allowed to adopt the petition for review in G.R. No. L27079 as its own, and by reference made a part hereof;

3. That upon notice in accordance with the Rules of this Court, herein petitioner will
deposit the amount of P80.40 in payment of costs.
4. That in case this motion will be denied, that herein petitioner be given five (15)
days from notice to file its own petition for review. Manila, January 31, 1967.
EULOGIO R. LERUM
Attorney for Petitioner
Manco Labor Union (NLU)
3199 Magsaysay Blvd., Manila
The Court issued on February 15, 1967 the following resolution:
Considering the motion of attorney for petitioner in L-27080 (Manco Labor Union
[NLU] vs. Manila Cordage Workers Union, et al.) praying (a) that this case be
consolidated with L-27079 (Manila cordage Company vs. The Court of Industrial
Relations, et al. (b) that petitioner be allowed to adopt the petition for review in
aforesaid case L-27079 as its own, and by reference made a part thereof; (c) that
upon notice in accordance with the Rules of Court, petitioner will deposit the amount
of P80.40 for costs; and (d) in case the motion is denied, petitioner be given five days
from notice to file its own petition for review THE COURT RESOLVED to grant the
first three prayers of the motion, provided that docket and other fees are paid.
Very truly yours,
BIENVENIDO EJERCITO
Clerk of Court
On October 24, 1967 the petitioner Manco Labor Union submitted the following motion:
MOTION TO ADOPT THE BRIEF OF
PETITIONER MANILA CORDAGE CO.
Comes now the petitioner Manco Labor Union NLU by the undersigned attorney, and
to this Honorable Court, respectfully moves that in view of the fact that said Union
could not afford the printing of its brief due to poor finances, that it be allowed to
adopt as its own, the brief of the Manila Cordage Co.
That in addition to the arguments contained in said brief, this petitioner would like to
emphasize the following:
1. That complainants in the Court below, namely, Silvino Rabago, Natalio Nisperos
and Ricardo Trajano, by resigning from the Manco Labor Union NLU violated the

provision of the collective bargaining agreement then in force, which reads as


follows: IV MAINTENANCE OF MEMBERSHIP
'Both parties agree that all employees of the COMPANY who are
already members of the UNION at the time of the signing of this
AGREEMENT shall continue to remain members of the UNION for
the duration of this AGREEMENT' (Exhibits '5-B' and '6- B'
Company).
Having violated said agreement, these complainants are liable to dismissal in the
same manner as strikers who violate a no strike clause in a contract could be
dismissed although said contract is silent regarding the penalty for breach thereof.
Hence, the Manco Labor Union NLU should not be the one penalized for its effort to
secure compliance with the terms of its central with petitioning company,
2. That said agreement could not be susceptible of any other interpretation except
that violation thereof would result in dismissal because as found out by the Court
below, the said provision was explained to the members before and after the same
was signed.
3. Petitioner Manco Labor Union (NLU) could not be held guilty of discriminating
against Rabago, Nisperos and Trajano because of heir union activities, The record
shows that besides these three, Vicente Untalan Ruperto Balsams and 40 others
resigned. In the case of Untalan and Balsamo after the Manila Cordage Co. had
dismissed them on request of the petitioning Union, this Union was also the one who
asked for their reinstatement when they withdrew their resignation from the union, In
the case of the other 40 members who resigned (Exhs. 'A', A-l to 'A-49') when they
withdrew their resignations, the Manco Labor Union did not do anything to them,
although it had full knowledge that they have joined the rival union.
WHEREFORE, considering that Silvino Rabago, Natalio Nisperos and Ricardo
Traiano had violated the Collective Bargaining Agreement whereas the action of the
petitioner was one in good faith in what it believes to be its right under said contract,
we respectfully pray of this Honorable Court that the decision appealed from be set
aside and case No. 2728-ULP of the Court of Industrial Relations be ordered
dismissed.
Manila, October 24, 1967.
EULOGIO R. LERUM
Attorney for the Petitioner
3199 Magsaysay Blvd., Manila
The petitioner, Manila Cordage Company, is a corporation duly organized and existing under the
laws of the Philippines.

The petitioner, Manco Labor Union, is a legitimate labor organization.


The respondent, Manila Cordage Workers Union, is also a legitimate labor organization. Said
respondent union is composed of employees of the petitioner company.
Sometime in 1957, the Manila Cordage Company and the Manco Labor Union, then acting as the
exclusive bargaining representative of the former's employees, entered into a collective bargaining
agreement which contained, among others, the following stipulations:
WHEREAS, the parties hereto decided to enter into an agreement relating to the
terms and conditions of employment, with reference to those members to whom the
provisions of this agreement applies.
xxx xxx xxx
Both parties agree that all employees of the COMPANY who are already members of
the UNION at the time of the signing of this AGREEMENT shall continue to remain
members of the UNION for the duration of this AGREEMENT. 4
The foregoing stipulations were also embodied in the collective bargaining agreement entered into
between the Manila Cordage Company and the Manco Labor Union in 1959.
When the collective bargaining agreements were entered into, the employees. Silvino Rabago,
Ricardo Trajano and Natalio Nisperos were already members of Manco Labor Union.
Shortly after 1959, some employees of Manila Cordage Company formed the Manila Cordage
Workers Union. The usual campaign for membership of the new union took place. Some employees
who were members of the Manco Labor Union resigned from said union and joined the Manila
Cordage Workers Union. At the instance of the Manco Labor Union, the Manila Cordage Company
dismissed those who resigned from the Manco Labor Union, among them, Silvino Rabago, Vicente
Untalan, Ruperto Balsamo, Natalio Nisperos, Ricardo Traiano, Roque Ruby and Salvador de Leon. It
is alleged that the Manco Labor Union held meetings wherein the members were informed that
under the above-quoted stipulations of the collective bargaining agreement, continued membership
in the Manco Labor Union was a condition precedent to employment in the Manila Cordage
Company. As a consequence, some of those who resigned from the Manco Labor Union withdrew
their resignations and were re-employed by the Manila Cordage Company.
At the behest of the Manila Cordage Workers Union, an acting prosecutor of the Court of Industrial
Relations filed a complaint dated March 28, 1961 for unfair labor practice against Manila Cordage
Company and the Manco Labor Union in behalf of the Manila Cordage Workers Union and its
members namely, Silvino Rabago, Vicente Untalan Ruperto Balsams rid Natalio Nisperos The
complaint was docketed as Case No. Z728-ULP of the Court of Industrial Relations. 5
The acting prosecutor of the Court of Industrial Relations filed an amended complaint in Case No.
2728-ULP dated July 14, 1961 adding as complainants Ricardo Trajano and Salvador de Leon. 6
It was alleged in the amended complaint that the Manco Labor Union, through its President, for no
other valid cause except for the resignation of some of its members and the active campaign of the
Manila Cordage Workers Union in recruiting members, knowingly and unlawfully influenced and

connived with officers of the Manila Cordage Company in the dismissal of Silvino Rabago, Vicente
Untalan Ruperto Balsams Natalio Nisperos Ricardo Trajano and Salvador de Leon, who had
resigned from the Manco Labor Union and joined the Manila Cordage Workers Union.
The Manco Labor Union averred in its answer that the complainants were dismissed on the basis of
an existing collective bargaining contract between said union and the Manila Cordage Company. 7
The Manila Cordage Company alleged that said company had entered into a valid collective
bargaining contract with the Manco Labor Union, a bona fide legitimate labor organization, then
recognized as the sole and exclusive bargaining agent for all the employees of the respondent
company; that one of the conditions of employment provided in said collective bargaining agreement
is the maintenance-of-membership clause requiring all members of the Manco Labor Union to
remain as such members thereof during the life of the contract; that the Manco Labor Union
demanded of the Manila Cordage Company the dismissal of the individual complainants from
employment for the reason that said complainants had failed to continue and maintain their
membership in the union; that acting in good faith and in pursuance of its obligations under the said
contract, respondent company had to terminate the employment of said complainants, otherwise the
Manila Cordage Company would be charged with contractual breach and confronted with the Manco
Labor Union's reprisal. 8
After trial the respondent Court of Industrial Relations rendered a decision dated May 4, 1966
ordering the petitioner, Cordage Company, and the Manco Labor Union "To reinstate complainants
Silvino Rabago, Natalio Nisperos and Ricardo Trajano to their former positions and with all the rights
and privileges formerly appertaining thereto and to pay jointly and severally their back wages from
the time of their respective dismissals on January 27, 1961, February 3, 1961, and May 2, 1961 tip
to the date of their actual reinstatements, minus their hearings elsewhere, if any. 9
The motions for reconsideration of the Manila Cordage Company and the Manco Labor Union were
denied by the Court of Industrial Relations in a resolution en banc dated October 19,
1966. 10 However, the Presiding Judge voted for the modification of the decision dated May 4, 1966 by
eliminating therefrom the award of back wages. He concurred in the reinstatement of complainants
Nisperos Trajano and Rabago. 11
The petitioner Manila Cordage Company assigns the following errors:
I
THE LOWER COURT ERRED IN NOT HOLDING THAT, UNDER THE
MAINTENANCE-OF-MEMBERSHIP' CLAUSE IN THE COLLECTIVE BARGAINING
AGREEMENT BETWEEN THE PETITIONER ('COMPANY') AND MANCO LABOR
UNION MANCO EMPLOYEES OF THE COMPANY WHO ARE ALREADY
MEMBERS OF MANCO WHEN SAID AGREEMENT TOOK EFFECT WERE
REQUIRED TO REMAIN SUCH MEMBERS AS A CONDITION OF CONTINUED
EMPLOYMENT IN THE COMPANY.
II
THE LOWER COURT ERRED IN NOT HOLDING THAT INDIVIDUALS, WHOSE
EMPLOYMENT HAS CEASED DUE TO ALLEGED UNFAIR LABOR PRACTICES

AND WHO HAVE NOT SOUGHT OTHER SUBSTANTIALLY EQUIVALENT AND


REGULAR EMPLOYMENT, CEASE TO BE 'EMPLOYEES' WITHIN THE MEANING
OF SECTION 2 (d) OF REPUBLIC ACT NO. 875, AS AMENDED, AND HENCE, ARE
NOT ENTITLED TO PROTECTION AND RELIEF UNDER This ACT.
III
THE LOWER COURT ERRED IN NOT HOLDING THAT INDIVIDUALS DISMISSED
PURSUANT TO A UNION SECURITY CLAUSE ARE NOT ENTITLED TO BACK
WAGES, WHEN THEIR EMPLOYER EFFECTED THEIR DISMISSAL IN GOOD
FAITH AND IN AN HONEST BELIEF THAT THE CLAUSE AUTHORIZED SUCH
DISMISSAL.
IV
THE LOWER COURT ERRED IN NOT DISMISSING THE COMPLAINT. 12
Anent the first error assigned, the petitioner avers:
It should be emphasized strongly that this is virtually a case of first impression in this
jurisdiction, We are not aware of any decision of this Tribunal squarely determinative
of the principal issue in this petition. For this reason, it should be appropriate to
consider American jurisprudence which is the source of most of our law on labor
relations. (Flores vs. San Pedro, L-8580, September 30, 1957.)
Decisions of American federal and state courts as well as the comments of
recognized American treatise writers uniformly define a maintenance-of-membership
provision as one which requires all employees who are already members of the
union at the time the provision takes effect to remain such members during the life
thereof -is a condition of continued employment. (NLRB vs. Eaton Mfg. Co. [6th Cir.
1949]175 F2d 292, 16 Lab Cas 75, 761; Markham & Callow vs. International
Woodworkers, 175 P2d 727, 170 or 517 [1943]; Walter vs. State, 38 Sold 609, 34
AlaApp 268 [1949]; Colonial Press vs. Ellis 74 NE2d 1, 321 Mass 495; Rothenberg
on Labor Relations, 49-50; Mathews Labor Relations and the Law 448; Prentice-Hall
Labor Course, Par. 12, 204, also at 914; 3 CCH Labor Law Reporter [Labor
Relations], Pat. 4520. ) 13
It is not necessary to consider American jurisprudence. The issue of whether or not the so-called
"maintenance-of membership" clause requires all employees who were already members of the
Manco Labor Union at the time the said clause took effect to remain members of the union during
the life of the collection bargaining agreement as a condition of continued employment may be
resolved under the constitution and relevant Philippine jurisprudence.
It is a fact that the complainants were employees of the Manila Cordage Company and members of
the Manco Labor Union when the following stipulation was included in the collective bargaining
agreement:
IV MAINTENANCE OF MEMBERSHIP

Both parties agree that all employees of the COMPANY who are already members of
the UNION at the time of the signing of this AGREEMENT shall continue to remain
members of the UNION for the duration- of this AGREEMENT" (Exhibits '5-B' and '6B' Company ). 14
The foregoing stipulation, however, does not clearly state that maintenance of membership in the
Manco Labor Union is a condition of continuous employment in the Manila Labor Cordage Company.
In consonance with the ruling in Confederated Sons of Labor vs. Anakan Lumber Co., et al., 107
Phil. 915, in order that the Manila Cordage Company may be deemed bound to dismiss employees
who do not maintain their membership in the Manco Labor Union, the stipulation to this effect must
be so clear as to leave no room for doubt thereon An undertaking of this nature is so harsh that it
must be strictly construed and doubts must be resolved against the existence of the right to dismiss.
Apparently aware of the deficiency of the maintenance- of membership clause, the petitioner urges
that the same should be construed together with the "Whereas" provision of the contract which
reads:
WHEREAS, the parties hereto nave decided to enter into an agreement relating to
the terms and conditions of employment and reference to those employees to whom
7 the provisions of this AGREEMENT apply." (Exhibits '5-A' and '?-A-Company) 15
Anent this point, the Court of Industrial Relations through 'Judge Amando Bugayong ruled:
But whether read disjunctively or conjunctively, these two provisions would not justify
the interpretation which respondent company would want to attribute to the same.
For said whereas' proviso neither refers to tenure of duration of employment which is
tile issue in the case at bar but only to terms and conditions of employment such as
working hours. wages, other benefits and privileges clearly specified therein. We
need not stretch our imagination too far to know the difference between or duration of
employment from terms and conditions of employment. Besides even on the
assumption that 'terms and conditions of employment' covers continuity or period of
employment, the ambiguity of the provision should not adversely affect complainants.
Hence, even with the conjuctive interpretation, these two provisions can not supplant
the omission of and said maintenance of membership clause, let alone cure the act
of the same This is especially so if the rule which states that in case of inconsistency
a particular provision like the disputed maintenance of membership clause prevails
over or controls a general provision, such as 'WHEREAS' proviso, invoked by
respondents, is to be applied to the interpretation of this doubtful provision (Rule
130(4), Section 10, New Rules of Court). 16
To construe the stipulations above-quoted as imposing as a condition to continued employment in
the Manila Cordage Company the maintenance of membership in the Manco Labor Union is to
violate the natural and constitutional right of the laborer to organize freely. 17 Such interpretation would
be inconsistent with the constitutional mandate that the State shall afford protection to labor. 18
The respondent Court of Industrial Relations correctly found that the disputed "maintenance-ofmembership" clause in question did not give the Manila Cordage Company the right to dismiss just
because they resigned as members of the Manco Labor Union.

There is a showing that the dismissed complainants sought our substantially equivalent and regular
employment. They failed to find any.
The contention n of the petitioners that they acted in good faith in dismissing the complainants and,
therefore, should not be field liable to pay their back wages has no merit. The dismissal of the
complainants by the petitioners was precipitate and done with undue haste. Considering that the socalled "maintenance to membership' clause did it clearly the petitioners the right to dismiss the
complainants if said complainants did not maintain their membership in the Manco Labor Union, the
petitioners should have raised the issue before the Court of Industrial Relations in a petition for
permission to dismiss the complainants.
However, considering the circumstances and equity of the case, the petitioners should be held liable
to pay the back wages of the complainants for a period of two years only from the date they were
respectively dismissed. 19
The reinstatement order of respondent Court of Industrial Relations of complainants Silvino Rabago,
Natalio Nisperos and Ricardo Trajano to their former positions and with all the rights arid privileges
formerly appertaining thereto is correct (supra, p. 2). Such reinstatement now is of course subject to
said complainants still being within the required physical and age requirements, but any physical or
medical examination to which they may be subjected is to be given them as old reinstated workers,
but not as a precondition to their reinstatement. Our ruling in Davao Free Workers Front vs. CIR, 60
SCRA 408, 425, is fully applicable mutatis mutandis in the case at bar as follows:
... The filing and pendency of an unfair labor practice case as in the case at bar
presupposes a continuing employer-employee relationship and when the case is
decided in favor of the workers, this relationship is in law deemed to have continued
uninterruptedly notwithstanding their unlawful dismissal or the lawful strike and
stoppage of work, and hence, seniority and other privileges are preserved in their
favor, To require them to undergo a physical or medical examination ad a
precondition of reinstatement or return to work simply because of the long pendency
of their case which is due to no fault of theirs would not only defeat the purpose of
the law and the constitutional and statutory mandates to protect labor but would work
to their unfair prejudice as aggrieved parties and give an undue advantage to
employers as the offenders who have the means and resources to wage attrition and
withstand the bane of protracted litigation.
Hence, the aggrieved workers may be subjected to periodic physical or medical
examination as old reinstated workers, but not as a precondition to their
reinstatement or return to work with the important consequence that if they are found
to be ill or suffering from some disability, they would be entitled to all the benefits that
the laws and company practices provide by way of compensation, medical care,
disability benefits and gratuities. etc. to employees and workers.
WHEREFORE, the decision appealed from is hereby affirmed with the sole modification that the
backwages which both the petitioners are ordered, jointly and severally, to pay the complainants
Silvino Rabago, Natalio Nisperos and Ricardo Trajano are hereby fixed at the equivalent of two
years pay without deduction or qualification computed on the basis of their wages at the time of their
respective dismissals on January 27, 1961, February 3, 1961 and May 2, 1961. Without
pronouncement as to costs.

SO ORDERED.
Teehankee (Chairman), Makasiar, Mu;oz-Palma, Martin and Guerrero, JJ., concur.