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Republic of the Philippines

UNIVERSITY OF NORTHERN PHILIPPINES


Vigan City

COLLEGE OF LAW
LABOR LAW CASES 3RD SET
ATTY. ALWYN S. ARROCENA
1. HOLY CROSS OF DAVAO COLLEGE, INC. VS. JOAQUIN
GR NO. 110007, OCTOBER 18, 1996
2. BARBIZON PHILIPPINES, INC. VS. NAGKAKAISANG SUPERVISOR NG
BARBIZON PHILIPPINES, INC.
GR NO. 113204-05, SEPTEMBER 16, 1996
3. BULLETIN PUBLISHING CORPORATION VS. SANCHEZ
GR NO. 74425, OCTOBER 7, 1986
4. BENGUET ELECTRIC COOPERATIVE, INC. VS. FERRER-CALLEJA
GR NO. 79025, DECEMBER 29, 1989
5. MERALCO VS. SECRETARY OF LABOR
GR NO. 91902, MAY 20, 1991
6. GSIS VS. KAPISANAN NG MGA MANGGAGAWA SA GSIS
GR NO. 170132, DECEMBER 6, 2006
7. PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES VS.
LAGUESMA
GR NO. 101738, APRIL 12, 2000
8. DLSU

MEDICAL

CENTER

AND

LAGUESMA
GR NO. 102084, AUGUST 12, 1998

COLLEGE

OF

MEDICINE

VS.

9. PHILCOM

EMPLOYEES

UNION

VS.

PHILIPPINE

GLOBAL

COMMUNICATIONS
GR NO. 144315, JULY 17, 2006
10.
MABEZA VS. NLRC
GR NO. 118506, APRIL 18, 1997
11.
TANDUAY DISTILLERY LABOR UNION VS. NLRC
GR NO. 75037, APRIL 30, 1987
12.
LIRAG TEXTILE MILLS, INC. VS. BLANCO
GR NO. L-27029, NOVEMBER 12, 1981
13.

FLOUR MILLS EMPLOYEES VS. LIBERTY FLOUR MILLS, INC.,

PHIL. LABOR ALLIANCE COUNCIL (PLAC)


GR NOS. 58768-70, DECEMBER 29, 1989
14.
REYES VS. TRAJANO
GR NO. 8443, JUNE 2, 1992

HOLY CROSS OF DAVAO COLLEGE, INC. VS. JOAQUIN


GR NO. 110007, OCTOBER 18, 1996
NARVASA, C.J.:p
A collective bargaining agreement, effective from June 1, 1986 to May 31, 1989 was entered into between
petitioner Holy Cross of Davao College, Inc. (hereafter Holy Cross), an educational institution, and the
affiliate labor organization representing its employees, respondent Holy Cross of Davao College UnionKAMAPI (hereafter KAMAPI). Shortly before the expiration of the agreement, KAMAPI President, Jose
Lagahit, wrote Holy Cross under date of April 12, 1989 expressing his union's desire to renew the
agreement, withal seeking its extension for two months, or until July 31, 1989, on the ground that the
teachers were still on summer vacation and union activities necessary or incident to the negotiation of a
new agreement could not yet be conducted. 1 Holy Cross President Emilio P. Palma-Gil replied that he had
no objection to the extension sought, it being allowable under the collective bargaining agreement. 2
On July 24, 1989, Jose Lagahit convoked a meeting of the KAMAPI membership for the purpose of electing
a new set of union officers, at which Rodolfo Gallera won election as president. To the surprise of many,
and with resultant dissension among the membership, Gallera forthwith initiated discussions for the union's
disaffiliation from the KAMAPI Federation.
Gallera's group subsequently formed a separate organization known as the Holy Cross of Davao College
Teachers Union, and elected its own officers. For its part, the existing union, KAMAPI, sent to the School its
proposals for a new collective bargaining contract; this it did on July 31, 1989, the expiry date of the twomonth extension it had sought. 3
Holy Cross thereafter stopped deducting from the salaries and wages of its teachers and employees the
corresponding union dues and special assessments (payable by union members), and agency fees
(payable by non-members), in accordance with the check-off clause of the CBA, 4 prompting KAMAPI, on
September 1, 1989, to demand an explanation.

In the meantime, there ensued between the two unions a full-blown action on the basic issue of
representation, which was to last for some two years. It began with the filing by the new union (headed by
Gallera) of a petition for certification election in the Office of the Med-Arbiter. 5 KAMAPI responded by filing
a motion asking the Med-Arbiter to dismiss the petition. On August 31, 1989, KAMAPI also advised Holy
Cross of the election of a new set officers who would also comprise its negotiating panel. 6
The Med-Arbiter denied KAMAPI's motion to dismiss, and ordered the holding of a certification election. On
appeal, however, the Secretary of Labor reversed the Med-Arbiter's ruling and ordered the dismissal of the
petition for certification election, which action was eventually sustained by this Court in appropriate
proceedings.
After its success in the certification election case KAMAPI presented, on April 11, 1991, revised bargaining
proposals to Holy Cross; 7 and on July 11, 1991, it sent a letter to the School asking for its counterproposals. The School replied, that it did not know if the Supreme Court had in fact affirmed the Labor
Secretary's decision in favor of KAMAPI as the exclusive bargaining representative of the School
employees, whereupon KAMAPI's counsel furnished it with a copy of the Court's resolution to that effect;
and on September 7, 1991, KAMAPI again wrote to Holy Cross asking for its counter-proposals as regards
the terms of a new CBA.
In response, Holy Cross declared that it would take no action towards a new CBA without a "definitive
ruling" on the proper interpretation of Article I of the old CBA which should have expired on May 31, 1989
(but, as above stated, had been extended for two months at the KAMAPI's request). Said Article
provides inter alia for the automatic extension of the CBA for another period of three (3) years counted from
its expiration, if the parties fail to agree on a renewal, modification or amendment thereof. It appears, in
fact, that the opinion of the DOLE Regional Director on the meaning and import of said Article I had earlier
been sought by the College president, Emilio Palma Gil. 8
KAMAPI then sent another letter to Holy Cross, this time accusing it of unfair labor practice for refusing to
bargain despite the former's repeated demands; and on the following day, it filed a notice of strike with the
National Mediation and Conciliation Board. 9
KAMAPI and Holy Cross were ordered to appear before Conciliator-Mediator Agapito J. Adipen on October
2, 1991. Several conciliation meetings were thereafter held between them, and when these failed to bring
about any amicable settlement, the parties agreed to submit the case to voluntary arbitration. 10 Both
parties being of the view that the dispute did indeed revolve around the interpretation of 1 and 2 of Article
I of the CBA, they submitted position papers explicitly dealing with the following issues presented by them
for resolution to the voluntary arbitrator:
a. Whether or not the CBA which expired on May 31, 1989 was automatically renewed and
did not serve merely as a holdover CBA; and

b. Whether or not there was refusal to negotiate on the part of the Holy Cross of Davao
College.
On both issues, Voluntary Arbitrator Jerome C. Joaquin found in favor of KAMAPI.
Respecting the matter of the automatic renewal of the bargaining agreement, the Voluntary Arbitrator ruled
that the request for extension filed by KAMAPI constituted seasonable notice of its intention to renew,
modify or amend the agreement, which it could not however pursue because of the absence of the
teachers who were then on summer vacation. 11 He rejected the contention of Holy Cross that KAMAPI had
unreasonably delayed (until July 31, 1989) the submission of bargaining proposals, opining that the delay
was partly attributable to the School's prolonged inaction on KAMAPI's request for extension of the CBA.
He also ruled that Holy Cross was estopped from claiming automatic renewal of the CBA because it ceased
to implement the check-off provision embodied in the CBA, declaring said School's argument that a
"definitive ruling" by the DOLE on the correct interpretation of the automatic-extension clause of the old
CBA was a condition precedent to negotiations for a new CBA to be a mere afterthought set up to justify
its refusal to bargain with KAMAPI after the latter had proven that it was the legally-empowered bargaining
agent of the school employees. In the dispositive portion of his award, the Voluntary Arbitrator ordered Holy
Cross to:
1. sit down, negotiate and conclude (an agreement) with the Holy Cross of Davao College
Faculty Union-KAMAPI, which, by Resolution of the Supreme Court, remains the collective
bargaining agent of the permanent and regular teachers of said educational institution;
(and)
2. pay to the Union the amount equivalent to the uncollected union dues from August 1989
up to the time respondent shall have concluded a new CBA with the Union, it appearing
that respondent stopped complying with the CBA's check-off provisions as of said date. 12
The Voluntary Arbitrator also requested the Fiscal Examiner of the NLRC, Region XI, Davao City, to
make the proper computation of the union dues to be paid by management to the complainant
union.
Dissatisfied, Holy Cross filed the petition at bar, challenging the Voluntary Arbitrator's decision on the
following grounds, viz.: 13
1. That the voluntary arbitrator erred and acted in grave abuse of discretion amounting to
lack or excess of jurisdiction in ordering petitioner to pay the union the uncollected union
dues to private respondent which was not even an issue submitted for voluntary
arbitration, resulting in serious violation of due process.

2. That the voluntary arbitrator erred in considering that petitioner refused to negotiate with
(the) Union, contrary to the records and evidence presented in the case.
The Voluntary Arbitrator's conclusion that petitioner Holy Cross had, in light of the evidence on record,
failed to negotiate with KAMAPI, adjudged as the collective bargaining agent of the school's permanent and
regular
teachers is a conclusion of fact that the Court will not review, the inquiry at bar being limited to the issue
of whether or not said Voluntary Arbitrator had acted without or in excess of his jurisdiction, or with grave
abuse of discretion; nor does the Court see its way clear, after analyzing the record, to pronouncing that
reasoned conclusion to have been made so whimsically, capriciously, oppressively, or unjustifiably in
other words, attended by grave abuse of discretion amounting to lack or excess of jurisdiction as to call
for extension of the Court's correcting hand through the extraordinary writ of certiorari. Said finding should
therefore be, and is hereby, sustained.
Now, concerning its alleged failure to observe the check-off provisions of the collective bargaining
agreement, Holy Cross contends that this was not one of the issues raised in the arbitration proceedings;
that said issue was therefore extraneous and improper; and that even assuming the contrary, it (Holy
Cross) had not in truth violated the CBA.
Holy Cross asserts that it could not comply with the check-off provision because contrary to established
practice prior to August, 1989, KAMAPI failed to submit to the college comptroller every 8th day of the
month, a list of employees from whom union dues and the corresponding agency fees were to be deducted;
further, that there was an uncertainty as to the recognized bargaining agent with whom it would deal a
matter settled only upon its receipt of a copy of this Court's Resolution on July 18, 1991 and in any case,
the Voluntary Arbitrator's order for it to pay to the union the uncollected employees' dues or agency fees
would amount to the union's unjust enrichment. 14
KAMAPI maintains, on the other hand, that the check-off issue was raised in the position paper it submitted
in the voluntary arbitration proceedings; and that in any case, the issue was intimately connected with those
submitted for resolution and necessary for complete adjudication of the rights and obligations of the
parties; 15 and that said position paper had alleged the manifest bad faith of management in not providing
information as to who were regular employees, thereby precluding determination of teachers eligible for
union membership.
Disregarding the objection of failure to seasonably set up the check-off question the factual premises
thereof not being indisputable, and technical objections of this sort being generally inconsequential in
quasi-judicial proceedings the issues here ultimately boil down to whether or not an employer is liable to
pay to the union of its employees, the amounts it failed to deduct from their salaries as union dues (with
respect to union members) or agency fees (as regards those not union members) in accordance with the
check-off provisions of the collective bargaining contract (CBA) which it claims to have been automatically
extended.

A check-off is a process or device whereby the employer, on agreement with the union recognized as the
proper bargaining representative, or on prior authorization from its employees, deducts union dues or
agency fees from the latter's wages and remits them directly to the union. 16 Its desirability to a labor
organization is quite evident; by it, it is assured of continuous funding. Indeed, this Court has acknowledged
that the system of check-off is primarily for the benefit of the union and, only indirectly, of the individual
laborers. 17 When so stipulated in a collective bargaining agreement, or authorized in writing by the
employees concerned the Labor Code and its Implementing Rules recognize it to be the duty of the
employer to deduct sums equivalent to the amount of union dues from the employees' wages for direct
remittance to the union, in order to facilitate the collection of funds vital to the role of the union as
representative of employees in a bargaining unit if not, indeed, to its very existence. And it may be
mentioned in this connection that the right to union dues deducted pursuant to a check-off, pertains to the
local union which continues to represent the employees under the terms of a CBA, and not to the parent
association from which it has disaffiliated. 18
The legal basis of check-off is thus found in statute or in contract. 19 Statutory limitations on check-offs
generally require written authorization from each employee to deduct wages; however, a resolution
approved and adopted by a majority to the union members at a general meeting will suffice when the right
to check-off has been recognized by the employer, including collection of reasonable assessments in
connection with mandatory activities of the union, or other special assessments and extraordinary fees. 20
Authorization to effect a check-off of union dues is co-terminous with the union affiliation or membership of
employees. 21 On the other hand, the collection of agency fees in an amount equivalent to union dues and
fees, from employees who are not union members, is recognized by Article 248 (e) of the Labor Code. No
requirement of written authorization from the non-union employee is imposed. The employee's acceptance
of benefits resulting from a collective bargaining agreement justifies the deduction of agency fees from his
pay and the union's entitlement thereto. In this aspect, the legal basis of the union's right to agency fees is
neither contractual nor statutory, but quasi-contractual, deriving from the established principle that nonunion employees may not unjustly enrich themselves by benefiting from employment conditions negotiated
by the bargaining union. 22
No provision of law makes the employer directly liable for the payment to the labor organization of union
dues and assessments that the former fails to deduct from its employees' salaries and wages pursuant to a
check-off stipulation. The employer's failure to make the requisite deductions may constitute a violation of a
contractual commitment for which it may incur liability for unfair labor practice. 23 But it does not by that
omission, incur liability to the union for the aggregate of dues or assessments uncollected from the union
members, or agency fees for non-union employees.
Check-offs in truth impose an extra burden on the employer in the form of additional administrative and
bookkeeping costs. It is a burden assumed by management at the instance of the union and for its benefit,
in order to facilitate the collection of dues necessary for the latter's life and sustenance. But the obligation
to pay union dues and agency fees obviously devolves not upon the employer, but the individual employee.

It is a personal obligation not demandable from the employer upon default or refusal of the employee to
consent to a check-off. The only obligation of the employer under a check-off is to effect the deductions and
remit the collections to the union. The principle of unjust enrichment necessarily precludes recovery of
union dues or agency fees from the employer, these being, to repeat, obligations pertaining to the
individual worker in favor of the bargaining union. Where the employer fails or refuses to implement a
check-off agreement, logic and prudence dictate that the union itself undertake the collection of union dues
and assessments from its members (and agency fees from non-union employees); this, of course, without
prejudice to suing the employer for unfair labor practice.
There was thus no basis for the Voluntary Arbitrator to require Holy Cross to assume liability for the union
dues and assessments, and agency fees that it had failed to deduct from its employees' salaries on the
proffered plea that contrary to established practice, KAMAPI had failed to submit to the college comptroller
every 8th day of the month, a list of employees from whose pay union dues and the corresponding agency
fees were to be deducted.
WHEREFORE, the requirement imposed on petitioner Holy Cross by the challenged decision of the
Voluntary Arbitrator, to pay respondent KAMAPI the amount equivalent to the uncollected union dues and
agency fees from August 1989 up to the time a new collective bargaining agreement is concluded, is
NULLIFIED and SET ASIDE; but in all other respects, the decision of the Voluntary Arbitrator is hereby
AFFIRMED.

BARBIZON PHILIPPINES, INC. VS. NAGKAKAISANG SUPERVISOR NG


BARBIZON PHILIPPINES, INC.NAFLU
GR NO. 113204-05, SEPTEMBER 16, 1996
KAPUNAN, J.:

This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court to set aside and
annul the decision and orders of the public respondent dated 11 February 1993, 4 March 1993, 16 June
1993 and 25 November 1993, respectively.
The facts which gave rise to the present petition are as follows:
On 27 June 1988, petitioner (formerly the Philippine Lingerie Corporation) filed a petition for certification
election among its rank-and-file employees (docketed as NCR-OD-M-6-349-88). As a consequence thereof,
two (2) unions sought recognition, namely: PHILIPPINE LINGERIE WORKERS UNION-ALAB and
BUKLOD NG MANGGAGAWA NG PHILIPPINE LINGERIE CORPORATION.
In one of the pre-election conferences, PHILIPPINE LINGERIE WORKERS UNION-ALAB moved for the
exclusion of a number of employees who were allegedly holding supervisory positions.
Only 28 July 1988, Med-Arbiter Rasidali C. Abdullah issued an order denying the motion of PHILIPPINE
LINGERIE CORPORATION WORKERS UNION-ALAB for lack of merit. Said order was appealed to the
Bureau of Labor Relations (BLR) which issued an Order on 16 November 1988, the dispositive portion of
which declares:
WHEREFORE, premises considered, the Order dated 28 July 1988 is hereby affirmed.
Accordingly, to ensure fairness to all the parties and in order to hasten the proceedings, let
the election be conducted under the supervision of the Labor Organization Division, this
Office, which is hereby directed to immediately set this case for pre-election conference.
SO ORDERED. 1
PHILIPPINE LINGERIE WORKERS UNION-ALAB filed two (2) separate motions for reconsideration of the
above order which were consolidated and treated in an Order dated 22 December 1988, the decretal
portion of which reads:
WHEREFORE, premises considered, the twin motions for reconsideration are hereby
deemed denied for lack of merit. Accordingly, let the pre-election conference preparatory to
the certification election proceed without further delay.
No further motion of similar nature shall be hereafter entertained.
SO ORDERED. 2
No further appeal of the above-quoted order was interposed, thus it became final and executory.
On 3 May 1989, a certification election was conducted with the votes of "supervisors and confidential"
employees being challenged. Thus, the certification election showed the following results:

1. Philippine Lingerie Workers Union-ALAB 318 votes


2. Buklod Ng Manggagawa Ng Philippine
Lingerie Corporation 412 votes
3 No Union 17 votes
4. Challenged Supervisors/Confidential
Employees 99 votes

TOTAL VALID VOTES CAST 855 votes


SPOILED BALLOTS 12 votes
PHILIPPINE LINGERIE WORKERS UNION-ALAB filed an election protest which was later formalized on
25 May 1989. In the meantime, on 9 May 1989, BUKLOD moved for the opening of the challenged ballots.
On 20 July 1989, the BLR, through its director Pura Ferrer-Calleja, issued an Order, the dispositive portion
of which reads:
WHEREFORE, premises considered, the protest and challenged (sic) of the Alyansang
Likha Ng Mga Anak Ng Bayan (ALAB) are hereby denied for lack of merit.
Accordingly, let the challenged votes of the supervisors and confidential employees be
opened in the presence of the parties under the supervision of the Labor Organization
Division (LOD) on 26 July 1989 at 9:00 A.M., Bureau of Labor Relations.
SO ORDERED. 3
With the above-quoted order, the challenged votes were opened on 3 August 1989 and the results were as
follows:
Philippine Lingerie Workers Union-ALAB 4 votes
Buklod Ng Manggagawa Ng Phil. Lingerie
Corp. 84 votes
No Union 6 votes
Spoiled 5 votes
TOTAL VOTES CAST 99 votes
PHILIPPINE LINGERIE WORKERS UNION-ALAB filed a motion for reconsideration of the BLR's Order of
20 July 1989 which, however, was denied in an Order dated 22 August 1989, the pertinent portion of which
states:

This time movant should now be convinced that the alleged supervisory and confidential
employees are more rank-and-file employees.
As early as Resolution dated 16 November 1988, the Bureau had already ruled that the
alleged supervisors are not managerial employees (rec. p. 154, First Folder). On motion
for reconsideration the Bureau affirmed the aforementioned Resolution in its Order dated
22 December 1988 (rec. p. 302. First Folder). And on 20 July 1989, when R.A. 6715 was
already in full force and effect, the Bureau in resolving the protest of ALAB declared that
the job descriptions of the alleged supervisors and confidential employees do not in any
way suggest that they are indeed supervisors or managerial employees (rec. p. 39,
Second Folder).
WHEREFORE, the motion for reconsideration is hereby denied and the Buklod Ng
Manggagawa Ng Philippine Lingerie Corporation (now, Barbizon Philippines, Inc.) is
hereby certified as the sole and exclusive bargaining representative of all the regular rankand-file employees of Barbizon Philippines, Inc. (formerly Philippine Lingerie Corporation).
The management of Barbizon Philippines, Inc. is hereby directed to immediately start
negotiating for a collective bargaining agreement (CBA) with the said union.
No further motion of any nature shall hereinafter be entertained by this Office.
SO ORDERED. 4
Not satisfied with the aforequoted order, PHILIPPINE LINGERIE WORKERS UNION-ALAB appealed to the
Secretary of Labor but on 26 September 1989, the same was withdrawn and a motion to dismiss appeal
with prejudice was filed by the same union. There being no more obstacle to collective bargaining,
petitioner negotiated with BUKLOD as the sole and exclusive bargaining representative.
A Collective Bargaining Agreement (CBA) was signed by petitioner and BUKLOD which was effective for
five (5) years or until 18 November 1994. 5
While the CBA was still in force, several employees organized themselves into the Nagkakaisang
Supervisors Ng Barbizon Philippines, Inc. (NSBPI) and the 0Nagkakaisang Excluded Monthly Paid
Employees Ng Barbizon, Philippines, Inc. (NEMPEBPI) allegedly because they were excluded from the
coverage of the existing CBA between petitioner and BUKLOD.
Two (2) separate petitions for certification election were filed by NSBPI and NEMPEBPI. The petition of the
former was raffled to Med-Arbiter Renato D. Parungo and the latter to Med-Arbiter Paterno D. Adap. Both
cases were dismissed 6

NSBPI appealed to the Office of the Secretary of Labor. On 29 December 1992, public respondent
Undersecretary Bienvenido Laguesma denied the same for lack of merit. NSBPI moved for reconsideration
on 15 January 1993.
On 11 February 1993, the Office of the Secretary of Labor, through public respondent rendered the
questioned Decision, the dispositive portion of which reads:
WHEREFORE the Motion for Reconsideration of Nagkakaisang Superbisor ng Barbizon
Philippines, Inc. (NSBPI) and the appeal of Nagkakaisang Excluded Monthly Paid
Employees ng Barbizon Philippines, Inc. (NEMPEBPI) are hereby granted and the Orders
of this Office and the Med-Arbiter dated 29 December 1992 and 01 September 1992,
respectively, are hereby SET ASIDE.
Accordingly, a new Order is hereby entered in the above-captioned cases directing the
conduct of certification election among the subject employees excluded from the coverage
of the bargaining unit of the existing CBA of rank and file employees aforestated, not
otherwise excluded/disqualified by law. The choices are as follows:
1. Nagkakaisang Superbisor ng Barbizon Philippines, Inc. (NSBPI)
2. Nagkakaisang Excluded Monthly Paid Employees ng Barbizon Philippines, Inc.
(NEMPEBPI); and,
3. No Union.
Let, therefore, the entire records of these consolidated cases be forwarded to the Regional
Office of origin for the immediate conduct of certification election, subject to the usual preelection conference.
SO ORDERED. 7
Petitioner filed a motion for reconsideration but the same was denied 8 A second motion for reconsideration
was filed by petitioner but it was likewise denied, this time, with finality. 9 Undaunted, petitioner filed a third
motion for reconsideration which was also denied for lack of merit. 10
Hence, this petition wherein the following issues were raised:
A. THE RESPONDENT "SUPERVISORS" LOCAL UNION CANNOT FORM A SUPERVISORS
UNION, WHEN THEIR MEMBERS ARE INCOMPATIBLY "RANK-AND-FILE EMPLOYEES"; MUCH
LESS, CAN IT SEEK REPRESENTATION STATUS FOR SUPERVISORS, WHEN THE
EMPLOYEES THEY WANT TO REPRESENT FOR COLLECTIVE BARGAINING PURPOSES
BELONG IN THE "APPROPRIATE BARGAINING UNIT" OF RANK-AND-FILE EMPLOYEES ON

THE "EMPLOYER WIDE UNIT", WHICH ALREADY HAS A CERTIFIED BARGAINING AGENT:
BUKLOD NG MANGGAGAWA NG PHILIPPINE LINGERIE CORPORATION.
B. WORSE, SINCE THE MEMBERS OF THE RESPONDENT LOCAL UNION BELONG TO THE
APPROPRIATE BARGAINING UNIT OF RANK-AND-FILE EMPLOYEES, THE EXISTING
COLLECTIVE BARGAINING AGREEMENT WHICH COVERS THEM, IS (A) "BAR" TO ITS
CERTIFICATION ELECTION PETITION 11
Barbizon Philippines, Inc. alleges that this petition only assails the resolution of the public respondent
regarding NSBPI and does not include the NEMPEBPI, the union of the excluded monthly paid employees
because the separate motion for reconsideration it filed in connection with the latter has not yet been
resolved by the NLRC.
On 8 February 1994, this Court issued a temporary restraining order, enjoining the Bureau of Labor
Relations from setting the pre-election conference in Case No. OS-MA-A-215-92-93 entitled "In Re: Petition
for Certification Election among the Supervisory Employees of Barbizon Philippines, Inc., Nagkakaisang
Supervisor Ng Barbizon Philippines, Inc. OBRERO" and from conducting further proceedings in the
aforesaid cases. 12
During the pendency of the petition, the CBA expired. However, no other agreement between the parties
was made known to this Court, thus, in accordance with Article XX of the CBA, it continues to be in force
and shall govern the relations between the parties thereto. 13
We find no merit in the petition.
Petitioner maintains its stance that the petition for certification election filed by the Nagkakaisang
Supervisor ng Barbizon Philippines, Inc. NAFLU (NSBPI) must necessarily fail because the employees
designated as "supervisors" cannot legally form a supervisors' union by virtue of the BLR's final decision
dated 22 August 1989 declaring the abovementioned employees mere rank and file workers. Being part of
the rank and file, petitioner avers that said employees belong to the "employer wide unit," which is the
appropriate bargaining unit of all its rank and file employees and which is represented by the Buklod ng
Manggagawa ng Philippine Lingerie Corporation (BUKLOD) as the sole certified bargaining agent.
Petitioner further asserts that the Undersecretary of Labor committed grave abuse of discretion in granting
NSBPI's petition for certification election as this was tantamount to an unjustifiable reversal of the BLR's
final ruling that the subject employees are not supervisory employees, but merely rank and file, due to the
nature of their duties and functions.
Petitioner's reasoning is flawed, proceeding as it does from the wrong premise. Petitioner obstinately
believes that NSBPI's petition for certification election was granted because the employees carrying the
appellation "supervisor" were deemed supervisory employees. The status of the subject employees,

however, is not the issue in the case at bar. Their status as "supervisors" is not in dispute. The aforestated
decision of the BLR dated 22 August 1989 has settled with finality that said employees are merely rank and
file and this fact has been accepted by the petitioning union NSBPI. 14 NSBPI's petition for certification
election was granted because the subject employees, including petitioner's monthly paid employees, were
expressly excluded from the bargaining unit and from the coverage of the CBA executed between petitioner
and BUKLOD, as clearly stated therein. 15 This is the real reason behind the certification election in
question. Unfortunately, this was not successfully debunked by petitioner, which chose to focus, albeit
erroneously, on the status of the subject employees.
The exclusion of petitioner's "supervisors" from the bargaining unit of the rank-and-file employees
indiscriminately curtailed the right to these employees to self-organization and representation for purposes
of collective bargaining, a right explicitly mandated by our labor laws 16 and "accorded the highest
consideration." 17 In the recent case of Golden Farms, Inc. v. Secretary of Labor, 18 we aptly declared:
In the case at bench, the evidence established that the monthly paid rank-and-file
employees of petitioner primarily perform administrative or clerical work. In
contradistinction, the petitioner's daily paid rank-and-file employees mainly work in the
cultivation of bananas in the fields. It is crystal clear the monthly paid rank-and-file
employees of petitioner have very little in common with its daily paid rank-and file
employees in terms of duties and obligations, working conditions, salary rates, and
skills. To be sure, the said monthly paid rank-and-file employees have even been excluded
from the bargaining unit of the daily paid rank-and-file employees. This dissimilarity of
interests warrants the formation of a separate and distinct bargaining unit for the monthly
paid rank-and-file employees of the petitioner. To rule otherwise would deny this distinct
class of employees the right to self-organization for purposes of collective bargaining.
Without the shield of an organization, it will also expose them to the exploitations of
management. . . . (Emphasis ours)
In the case at bar, BUKLOD cannot successfully act as the bargaining agent of and duly represent
petitioner's "supervisor" employees since the latter were expressly excluded from the appropriate
bargaining unit.
Petitioner's reliance on the case of Pagkakaisa ng mga Manggagawa sa Triumph Int'l.-United Lumber and
General Workers of the Phils. v. Ferrer-Calleja 19 is misplaced. The aforecited case upholds the "one unionone company" policy, thus:
Once again, we enunciate that the proliferation of unions in an employer unit is
discouraged as a matter of policy unless compelling reasons exist which deny a certain
and distinct class of employees the right to self-organization for purpose of collective
bargaining. (See General Rubber & Footwear Corporation v. Bureau of Labor Relations,
155 SCRA 283 [1987].) 20 (Emphasis ours.)

As clearly indicated in the aforequoted decision, the "one union one company" rule is not without
exception. The exclusion of the subject employees from the rank-and-file bargaining unit and the CBA is
indefinitely a "compelling reason" for it completely deprived them of the chance to bargain collectively with
petitioner and are thus left with no recourse but to group themselves into a separate and distinct bargaining
unit and form their own organization. The rationale behind the exception to the aforementioned policy is
further elucidated in Knitjoy Manufacturing, Inc. v. Ferrer-Calleja: 21
1. The suggested bias of the Labor Code in favor of the one company-one union policy,
anchored on the greater mutual benefits which the parties could derive, especially in the
case of employees whose bargaining strength could undeniably be enhanced by their unity
and solidarity but diminished by their disunity, division and dissension, is not without
exceptions.
The usual exception, of course, is where the employer unit has to give way to the other
units like the craft unit, plant unit, or a subdivision thereof; the recognition of these
exceptions takes into accountant the policy to assure employees of the fullest freedom in
exercising their rights. Otherwise stated, the one company-one union policy must yield to
the right of the employees to form unions or associations for purposes not contrary to law,
to self-organization and to enter into collective bargaining negotiations, among others,
which the Constitution guarantees. (Emphasis ours.)
The receipt by petitioner's "supervisor" employees of certain benefits under the CBA between BUKLOD and
petitioner is not sufficient to deny the petition for certification election filed by the labor organization formed
by the excluded employees. It is not equivalent to and does not compensate for the denial of the right of the
excluded employees to self-organization and collective bargaining. We concur with the findings of the
Undersecretary of Labor, thus:
It is not disputed that the members of both petitioning unions NSBPI and NEMPEBPI are
excluded from the coverage of the existing CBA entered into between the respondent BPI
and Buklod ng mga Manggagawa ng Barbizons Philippines, Inc. (BUKLOD) (pp. 84-85,
folder II, records). Thus, respondent BPI being privy to the said exclusion has to accept the
inescapable consequences of its act of depriving the excluded employees of their right to
self-organization for the purpose of collective bargaining. We find immaterial and irrelevant
the allegation of hereby respondent BPI to the effect that the benefit being enjoyed by the
rank and file employees covered by the existing CBA are extended/accorded to the
excluded employees. Indeed, what is crucial and of paramount consideration is the fact
that the excluded rank and file employees are afforded the right to bargain collectively.
The Supreme Court in the cases of General Rubber and Footwear Corporation vs. Bureau
of Labor Relations, et al., G.R. No. 74262, October 29, 1987; and Manila Bay Spinning
Mills, J and P Coats, Manila Bay, Inc. vs. Hon. Pura Ferrer-Calleja, G.R. No. 80910, August

1, 1988, ruled that the employees excluded from the coverage of the CBA, who not being
excluded by law, have the right to bargain collectively. Further, the Supreme Court aptly
stated that:
The allegation that some benefits under the existing CBA were extended
to the monthly paid employees, even if true will not preclude them from
entering into a CBA of their own. Neither is the inconvenience that may
befall petitioner for having to administer two CBAs an excuse for depriving
the monthly paid employees of their constitutionally guaranteed right to
collective bargaining. (Emphasis supplied.) 22
The petition for certification election cannot likewise be deterred by the "contract-bar rule," 23 which finds no
application in the present case. The petitioning union NSBPI is not questioning the majority status of Buklod
as the incumbent bargaining agent of petitioner's rank and file employees. The petition for certification
election is addressed to a separate bargaining unit the excluded employees of petitioner. We agree with
the ruling of the Undersecretary of Labor, thus:
Certainly, one who has been instrumental in the denial of a right otherwise enjoyable by a
rank and file, as in membership in its appropriate bargaining unit, cannot now say that he
ought to be included in the existing bargaining unit of the rank and file just because that
"rank and file" employee is now seeking representation for himself as well as those who
like him were specifically excluded from the coverage of the CBA. A rank and file
employee, irrespective of his job designation and in whatever form his wages are paid has
the unbridled right to the exercise of self-organization. This right cannot, like a chattel, be
compromised in the bargaining table so as to deprive him of the same in violation of the
constitutional mandate. In this wise, the claim as to the applicability of the contract bar
doctrine could have not gained ground. A contract bar applies in a situation where the
petition is directed towards one and the same bargaining unit. This does not appear to be
so in the case considering the built-in-limitation in the CBA excluding the workers sought to
be represented by herein petitioner from its coverage, albeit, their being admittedly rank
and file employees. On the same line of reasoning, neither would the substantial mutual
interest test hold. So too, is the claim against union turncoatism. In the latter case, the
emergence thereof is farfetched considering the defined boundaries of the bargaining units
concerned. Let it be stressed, that the certification election as ordered would only affect
those rank and file employees who are excluded from the coverage of the existing CBA.
Those who are already represented in the existing collective bargaining agreement may
rest secured in the bargaining unit that considers them as members of its
family. 24 (Emphasis ours.)

The right to self organization and collective bargaining is an integral part of the protection to labor provision
embodied in our Constitution, the essence of which is aptly expressed in Tropical Hut Employees' UnionCGW v.Tropical Hut Food Market, Inc.: 25
All employees enjoy the right to self-organization and to form and join labor organizations
of their own choosing for the purpose of collective bargaining and to engage in concerted
activities for their mutual aid or protection. This is a fundamental right of labor that derives
its existence from the Constitution. In interpreting the protection to labor and social justice
provisions of the Constitution and the labor laws or rules or regulations, we have always
adopted the liberal approach which favors the exercise of labor rights.
Finally, we take this opportunity to reiterate the standing rule that a certification election is the sole concern
of the workers, hence, an employer lacks the personality to dispute the same. In Golden Farms,
Inc. v. Secretary of Labor, 26 we held:
Finally, we note that it was petitioner company that filed the motion to dismiss the petition
for election. The general rule is that an employer has no standing to question a certification
election since this is the sole concern of the workers. Law and policy demand that
employers take a strict, hands-off stance in certification elections. The bargaining
representative of employees should be chosen free from any extraneous influence of
management. A labor bargaining representative, to be effective, must owe its loyalty to the
employees alone and to no other.
WHEREFORE, premises considered, the petition for certiorari is DISMISSED and the Temporary
Restraining Order issued on 8 February 1994 is hereby LIFTED.

BULLETIN PUBLISHING CORPORATION VS. SANCHEZ


GR NO. 74425, OCTOBER 7, 1986
ALAMPAY, J.:
Petitioner Bulletin Publishing Corporation invokes the equity jurisdiction of this Court in this case for certiorari,
prohibition, and for preliminary injunction, with a plea for the issuance of an ex-parte restraining order prohibiting
private respondents from declaring a strike. The purpose of Petitioner is to prevent the private respondents, members

of the Bulletin Publishing Corporation Supervisors Union (BSU), from staging a strike against the said publishing
company.
Petitioner also prays that this Court declare null and void Registration Certificate No. 10547 issued by the Ministry of
Labor and Employment to the aforestated Supervisors Union or BSU.
The crux of the dispute in the present case is whether or not supervisors in petitioner company may, for purposes of
collective bargaining, form a union separate and distinct from the existing union organized by the rank-and-file
employees of the same company.
Petitioner corporation has been engaged in the business of newspaper and magazine publishing for over half a
century. its current publications include the national daily "Bulletin Today" (now Manila Daily Bulletin), the tabloid
"Tempo", and a weekly magazine called "Panorama". The total number of the personnel complement of the said firm
(exclusive of the editorial staff, contract workers and casuals, etc.), constituting the rank-and-file regular members, is
said to be over three hundred persons. The supervisory employees number forty-eight. About three hundred
employees belonging to the rank-and-file had previously formed the Bulletin Employees Union. This labor
organization (BEU) presently administers their current Collective Bargaining Agreement which began on July 15,
1984 and remain effective up to July 15, 1987. Ever since, there has been only one bargaining unit in the petitioner
company and this is the BEU - the union of the rank-and-file employees. Supervisory employees were never included
in said bargaining unit nor had they ever sought inclusion in the said BEU labor union, much less registered any
protest or challenged to their non-inclusion therein.
On March 12, 1986, 25 out of 48 supervisors in the Bulletin Publishing Corporation formed a labor union and adopted
a charter therefor, calling themselves members of the "Bulletin Publishing Corporation Supervisors Union" or BSU. A
petition for registration of BSU, was filed with the Ministry of Labor and Employment. On March 26, 1986,
Registration Certificate No. 10547-LC was issued. On March 31, 1986, a letter was sent to the management of
petitioner corporation by BSU giving notice of the registration of the BSU and demanding its recognition as the sole
bargaining agent of all the supervisors in the company. BSU supervisors union, is, at present, an affiliate of the
National Federation of Labor Unions (NAFLU) and the Kilusang Mayo Union (KMU). BSU is alleged to be supported
in its strike move by the said groups. (Petition, p. 13, Rollo, p. 10).
On April 8, 1986, a petition for direct certification was filed by the BSU as the bargaining representative of the
supervisors. On April 12, 1986, a notice of strike by BSU was filed with the Ministry of Labor due to certain acts
allegedly performed by petitioner which BSU claims, in effect, to be union busting and unfair labor practices. Refusing
to recognize the BSU, the Bulletin Publishing Corporation filed a petition dated April 25, 1986, seeking cancellation of
the registration of the BSU on the ground that Article 246 of the Labor Code and Section 11 of Rule II, Book V of the
Implementing Rules thereof, prohibit supervisors from forming labor organizations.
As the supervisors threatened to strike on May 12, 1986, following the expiration of the fifteen-day cooling-off period,
petitioner was prompted to file a petition with the Ministry of Labor, urging therein that said office assume jurisdiction
in the matter of the impending strike. When the Minister of Labor failed to exercise his jurisdiction or act on the
matter, petitioner then felt that the remedy it seeks should be sought from this Court because, further resort to the
Ministry of Labor may be construed as a tacit recognition by petitioner of the supervisors union (BSU) which would be
inconsistent with petitioner's challenge to the assertion of BSU to exist as a legitimate labor union.

Petitioner invokes the equity jurisdiction of this Court, claiming that a strike by the BSU which it considers a bogus
union and whose registration and operation is challenged as against public policy and legal prohibitions, will cause
untold harm on herein petitioner which is engaged in publishing daily periodicals.
In accordance with our Resolution dated May 12, 1986, a hearing of petitioner's motion for preliminary injunction was
scheduled for May 14, 1986, with a temporary restraining order being then issued. This Court enjoined the private
respondents from proceeding with their contemplated strike. Respondents were likewise required to comment on the
petition. The corresponding separate Comment of the public and private respondents were later timely submitted to
the Court.
Considering the allegations contained in the petition, the issues raised, and the arguments adduced by the parties,
the Court resolves to give due course to the petition, and to consider the separate Comment of both private and
public respondents as their Answer to the petition.
In the light of the factual background of this case, We are constrained to hold that the supervisory employees of
petitioner firm may not, under the law, form a supervisors union, separate and distinct from the existing bargaining
unit (BEU), composed of the rank-and-file employees of the Bulletin Publishing Corporation. It is evident that most of
the private respondents are considered managerial employees. Also it is distinctly stated in Section 11, Rule I I, of the
Ommibus Rules Implementing the Labor Code, that supervisory unions are presently no longer recognized nor
allowed to exist and operate as such.
Article 246 of the Labor Code explicitly excludes managerial employees from the right of self-organization, the right to
form, join and assist labor organizations. A perusal of the job descriptions corresponding to the private respondents
as outlined in the petition, clearly reveals the private respondents to be managers, purchasing officers, personnel
officers, property officers, supervisors, cashiers, heads of various sections and the like. The nature of their duties
gives rise to the irresistible conclusion that most of the herein private respondents are performing managerial
functions (Petition, pp. 5-6; Rollo, pp. 6-7). Their responsibilities inherently require the exercise' of discretion and
independent judgment as supervisors. They possess the power and authority to lay down or exercise management
policies. Managerial employees are those vested with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively
recommend such managerial actions. All employees not falling within this definition are considered rank-and file
employees (Article 212 (k), Labor Code). We further find very plainly stressed in Section 11, Rule II, Book V of the
Omnibus Rules implementing the same Labor Code, that "All existing supervisory unions and unions of security
guards shall, upon the effectivity of the Code, cease to operate as such and their registration certificates shall be
deemed automatically cancelled ... Members of supervisory unions who do not fall within the definition of managerial
employees shall become eligible to join or assist the rank-and- file labor organization and if none exists, to form or
assist in the forming of such rank-and-file organizations." (Emphasis supplied).
It is, therefore, evident that while mention is made of supervisors unions with reference to those existing before the
enactment of the Labor Code, greater significance must attach to the fact that under the present Labor Code all these
supervisory unions should, after the effectivity of the Labor Code on January 1, 1975, cease to operate and that the
registration certificate of any such supervisors union should even be deemed to be automatically cancelled. It is also
clear that such of those supervisory employees who do not assume any managerial function may join or assist an
existing rank-and-file union or if none exists, to join or assist in the formation of such rank-and-file organization.

It follows as a logical conclusion that the members of the Bulletin Supervisory Union, wholly composed of supervisors
employed by petitioner corporation, are not QUALIFIED to organize a Labor Union of their own. Aside from this
reason, is the fact that there is already an existing legitimate labor union, the BEU, which enjoys a current collective
bargaining agreement with the petitioner publishing company.
What is pointed out under the law, is that employees who discharge managerial functions, as well as the supervisory
employees who do not yet fall within the definition of managerial employees, are prohibited from organizing
themselves into a labor union constituted for the purpose of acting as a collective bargaining unit. To sanction the
recognition of the Supervisors Union of private respondents, which paradoxically or inadvertently received a
registration certificate from the Ministry of Labor, would be for this Court to accept and tolerate a manifest violation of
the Labor Code. The rationale for this inhibition has been stated to be, because 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.
The submission of the private respondents that they do not actually perform duties which are managerial in character
is untenable. Firstly, the status of respondents as "managerial employees" is readily reflected by their long years of
acquiescence to their exclusion: (a) from the rank-and-file unit of employees and from membership in the Bulletin
Publishing Corporation Employees Union; and (b) from their coverage in the current and past Collective Bargaining
Agreements.
Acquiescence by private respondents to a classification and situation far different from the rank-and-file employees
for a long and unceasing period of time obviously indicates that their exclusion from the rank-and-file union was upon
their awareness that their duties place them in a category different from those to which the rank-and-file employees
pertain. It is significant that only 25 of the 48 employees who are said to be managers and/or supervisors, belatedly
insist in forming a new and separate union.
Petitioner surmises that the motivation behind this belated move is possibly because private respondents herein are
apprehensive that they might be adversely affected by policies which the new management of petitioner corporation
introduced to streamline its business operation and eliminates weaknesses in the corporate structure affecting
revenue and profitability. Understandably, the purpose behind the formation of the Union would be to gain leverage to
pressure Management to desist from the contemplated measures.
Private respondents are incorrect when they manifest in their comment to the petition that they "could be
appropriately classified as supervisory employees and, therefore, are eligible to organize their own union but are
ineligible to join the union of their subordinates", citing Adamson and Adamson versus CIR, L-35120, January 31,
1984, 127 SCRA 268 (Private Respondents' Comment to the Petition, p. 2, dated May 23, 1986, Rollo, p. 83).
The reference made by private respondents to said case of Adamson and Adamson versus CIR (supra), and the
pronouncements made therein that "supervisory employees of an employer cannot join any labor organization of
employees under their supervision but may validly form a separate organization of their own" no longer can be
invoked for the benefit of private respondents. As aptly countered by the petitioner in its manifestation dated June 2,
1986, submitted through its counsel:

2. Adamson & Adamson vs. CIR, 127 SCRA 268. In quoting from this decision of this Honorable
Court, private respondents intentionally deleted the phrase "under the Industrial Peace Act"
obviously to mislead this Honorable Court into believing that up to now supervisors still have the
right to form unions. This right has been disallowed, disauthorized and discontinued under Article
246 of the New Labor Code and Section 11, Rule II. Book Five of the Implementing Rules. (Rollo,
p. 106)
Indeed, the Industrial Peace Act or Republic Act 875, referred to in said Adamson, et al. vs. CIR case, became
effective on January 17, 1953. It has, however, been superseded and supplanted by the present Labor Code which
took effect on January 1, 1975. What should be applied now are the specific provisins of the Omnibus Rules
Implementing the Labor Code which have been already above-quoted (supra). In fact, no less than the public
respondents herein, represented by the present Solicitor General, in this regard, even state in their Comment to the
Petition, the following:
The only issue determinative of the present controversy is whether or not the supervisors in
petitioner company may form a union for purposes of collective bargaining separate and distinct
from that of the rank-and-file unit.
It is our submission that they may not. The New Labor Code recognizes two principal groups of
employees, namely, managerial and the rank-and- file group. Thus, Art. 212 (k) provides:
Managerial employee' is one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall,, discharge, assign or
discipline employees, or to effectively recommend such managerial actions. All employees not
falling within this definition are considered rank and file employees for purposes of this Book.
(Emphasis supplied)
In amplification of the aforequoted provisions of the law, Sec. 11 of Rule II, Book V of the Omnibus
Rules Implementing the Labor Code did away with existing Supervisors Union, classifying the
members thereof as neither managerial or rank-and-file employees depending on the work they
perform. If they discharge managerial functions they are prohibited from forming or joining any
labor organization. If they do not perform managerial work, they may join or assist the rank- and-file
union and, if none exists, they may form one such rank-and-file organization. From these, one can
readily infer that the law no longer recognizes supervisory Unions.
A perusal of the job descriptions of private respondents as outlined in the petition shows that most
of them do not perform managerial work. Hence, although not qualified to organize a labor union of
their own, they may join the certified rank-and-file organization in the Company, which has a
current collective bargaining agreement to expire on July 15, 1987.
On the query of this Honorable Court regarding the new policy of the MOLE, if any, with respect to
Supervisory Unions, the BLR Director in his reply letter dated May 21, 1986 to our letter of May 14,
1986 (copy of said letter is hereto attached as Annex "A") supports the view that under the Labor
Code and its implementing rules, supervisory unions cannot organize as a labor unit separate from
that of the rank-and-file organization. (Emphasis supplied)

However, he points out that on a number of occasions, the Bureau has allowed the registration of
certain categories of non-managerial employees which include supervisors who are not performing
managerial functions similar to that of the non-managerial members of the Bulletin Publishing
Corporation Supervisors Union (BPCSU) At any rate, he states that "there is as yet no decree,
executive order or issuance, whether draft or in force, which expressly modified the provision of the
Labor Code on supervisory unions. (Rollo, pp. 89-91)
The foregoing discussion of public respondents will reflect and emphasize the lack of any legal basis of the
assumption made by private respondents that they may organize a supervisory union of their own, distinct and
separate from the existing union of the rank-and-file employees of the Bulletin Publishing Corporation.
In view of these premises, and considering the stand taken no less by respondent director Cresenciano B. Trajano, in
his aforestated reply-letter to Assistant Solicitor General Amado D. Aquino, dated May 21, 1986 (Rollo, pp. 93-' 95),
as disclosed to this Court, the petition for cancellation of Certificate No. 10547, issued on March 26, 1986 by the
Ministry of Labor and Employment, said to be still pending in that office, ought therefore to be now acted upon
thereat.
Finally, it is averred by petitioner that the resort to strike by private respondents is untimely and premature because of
the pendency of a case with the Ministry of Labor docketed as NCR-LRD-4-166-88 which private respondents
themselves filed and which is for direct certification of said supervisors union as the bargaining representative of the
supervisors. This assertion of petitioner should be up held. Article 265, paragraph 2 of the Labor Code expressly
provides that "no stake or lock-out shall be declared ... during the pendency of cases involving the same grounds for
the strike or lock-out." (Emphasis supplied).
Private respondents declare that the primary reasons which prompted their filing of a notice of strike on April 8, 1986,
are the arbitrary and discriminatory retirement of four (4) members of the supervisors union effective April 17, 1986,
namely: Jose B. Bernal, Ramiro A. Nebres, Alcantara S. de la Paz and Luis F. Garcia, who were among those who
initiated the formation of their union; as well as the immediate promotion of some members of the union to executive
positions in order to remove the said persons promoted from the coverage of, or membership from the supervisory
union. Private respondents charge that these acts are tantamount to union busting tactics and constitute unfair labor
practices that warrant a strike.
Furthermore, private respondents claim that petitioner does not have any definite policy governing the retirement
of supervisory employees as distinguished from rank-and-file employees. Under the Collective Bargaining Agreement
currently in effect, rank-and- file employees may be retired upon reaching 25 years of service or 60 years of age, at
the management's option. It is claimed that this policy cannot or has never been applied to supervisors who are not
members of the rank-and-file Bulletin Employees union.
We are not persuaded by private respondents' submissions. The main issues in this case are the legality of a
supervisory union and the certificate of registration issued therefor, and the validity of a threatened strike by members
of such union. The matter of the retirement of the four retirees is only an incident to the case. It may not be used to
skirt the real question of the legality of the organization of a supervisors union. Parenthetically, it is said that three out
of the retirees, Messrs. Garcia, de la Paz and Bernal collected their retirement benefits (Rollo, p. 65), rendering the
alleged ill-motives behind their retirement untenable. This matter cannot be invoked by private respondents herein as
an indication of union busting practice of petitioner, absent any showing of protest by the said retirees themselves.

Respondents make much ado that petitioner does not have a definite policy regarding the retirement of supervisory
employees. Petitioner has satisfactorily shown to this Court that it has been management policy to likewise apply the
provisions of the Collective Bargaining Agreement (CBA) between petitioner and the rank-and-file union (BEU), also
to supervisors. According to the uncontroverted submission of petitioner, the provisions of Section 4 in relation to
Section 1 of Article X of the said CBA, have been repeatedly applied to supervisory personnel even if they are not
included in the scope of the CBA. The pertinent. provisions on retirement are as follows:
Section 4. The COMPANY, at its option retire an employee or worker who has rendered 25
years of service or who has reached the age of 60 years in his last birthday by paying him full
benefits provided in Section 1 of this Article.
Section 1. Any employee in the active service of the COMPANY as of the date of signing of this
Agreement whose service with the COMPANY is terminated for any reason other than those
enumerated in A article 283 of Presidential Decree No. 442 as amended, shall be entitled to
gratuity pay in an amount equivalent to one month's pay for every year of continuous service based
on the salary as of the date of termination. Such gratuity shall not be in addition to, but shall be in
lieu of, the termination pay benefits to which the employee or worker is entitled under the Labor
Code of the Philippines, or any similar legislation, provided that if the benefits to which the
employee or worker may be entitled under such statute are greater than that provided in the Article,
the employee or worker shall receive the greater amount. (Emphasis ours).
The aforestated sections explicitly declare, in no uncertain terms, that retirement of an employee may be done upon
initiative and option of the management. And where there are cases of voluntary retirement, the same is effective
only upon the approval of management. The fact that there are some supervisory employees who have not yet been
retired after 25 years with the company or have reached the age of sixty merely confirms that it is the singular
prerogative of management, at its option, to retired supervisors or rank-and-file members when it deems fit. There
should be no unfair labor practice committed by management if the retirement of private respondents were made in
accord with the agreed option. That there were numerous instances wherein management exercised its option to
retire employees pursuant to the aforementioned provisions, appears to be a fact which private respondents have not
controverted. It seems only now when the question of the legality of a supervisors union has arisen that private
respondents attempt to inject the dubious theory that the private respondents are entitled to form a union or go on
strike because there is allegedly no retirement policy provided for their benefit. As above noted, this assertion does
not appear to have any factual basis.
It is even more untenable for private respondents to suggest that the "sudden promotion" of the supervisors union
members to executive positions was intended to remove them from the coverage of or from membership in the
supervisory union. The promotion of employees to managerial or executive positions rests upon the discretion of
management. Managerial positions are offices which can only be held by persons who have the trust of the
corporation and its officers. It is the prerogative of management to promote any individual working within the
company to a higher position. It should not be inhibited or prevented from doing so. A promotion which is manifestely
beneficial to an employee should not give rise to a gratuitous speculation that such a promotion was made simply to
deprive the union of the membership of the promoted employee, who after all appears to have accepted his
promotion.

We find nothing improper in the promotions made by the petitioner company. These were but in implementation of
petitioner's well-considered policy on retirement and promotions intended to improve the morale of lower and middle
management ranks by promoting those specially deserving before they are eventually retired. This then would allow
subsequent promotions of their replacements from lower ranks. As petitioner explains, these retirements and
promotions were but in accord with a carefully studied and pre-established policy which had been implemented
during the past years and unrelated to and without connection with the organization of private respondents' Union,
BSU.
In sum, where concerted activities are aimed at compelling an employer to ignore the clear mandate of the Labor
Code, as in the instant case, grounds based on equity may be invoked from the courts in order to restrain the
questioned activities. We cannot remain oblivious to the fact that a strike, as that contemplated by the supervisors
union against petitioner can cause irreparable injury to its publications, diminish goodwill and seriously affect its
continuity with its regular readers.
Trade unionism and strikes are legitimate weapons of labor granted by our statutes. But when these instruments are
utilized by managerial/supervisory employees in violation of existing labor laws, the misuse of these tactics can be
the subject of judicial intervention to forestall grave injury to a business enterprise.
WHEREFORE, the temporary restraining order issued by this Court, dated May 12, 1986, enjoining the private
respondents from declaring or staging a strike against the petitioner herein, in all its forms, including walk-out, mass
leave, or any kind of activity that will lead to a work stoppage, is hereby made permanent. The public respondents
are also directed to act upon and resolve, at the earliest possible time and in the light of the discussion and
pronouncements made by the Court in this case, the petition dated April 25, 1986, submitted by the petitioner herein
for the cancellation of Bulletin Publishing Corporation Supervisors Union Registration Certificate No. 105-47-LC.

BENGUET ELECTRIC COOPERATIVE, INC. VS. FERRER-CALLEJA


GR NO. 79025, DECEMBER 29, 1989
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 ninetyeight (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 membersconsumers 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 membersemployees 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. 99-100].
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 coowner 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 coowners 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 membersemployees 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 eightythree (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.

MERALCO VS. SECRETARY OF LABOR


GR NO. 91902, MAY 20, 1991

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 "STEAMPCWF") 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) non-managerial 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, 1 there is no other labor organization except STEAMPCWF claiming to represent the MERALCO employees.
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
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

(p. 19, Rollo)


MERALCO moved for the dismissal of the petition on the following grounds:
I.

II.
III.

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.
The petition for certification election will disturb the administration of the existing Collective
Bargaining Agreement in violation of Art. 232 of the Labor Code.
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:
(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)
(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 STEAMPCWF, 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 Med-Arbiter 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, STEAM-PCWF
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 MedArbiter, 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 employee-ranks 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-and-file 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 rankand-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. . . .


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; . . .
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
REPRESENTATION
INTERNAL-UNION CONFLICTS

CASES

V.
AND

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:
(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;
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 above-cited
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. 2 Section 18 thereof amended Art. 245, to read
as follows:
Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees.Managerial employees are not eligible to join, assist or form any labor

organization. Supervisory employees shall not be eligible for membership in 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.

GSIS VS. KAPISANAN NG MGA MANGGAGAWA SA GSIS


GR NO. 170132, DECEMBER 6, 2006
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, the Government Service
Insurance System (GSIS) and its President and General Manager Winston F. Garcia (Garcia, for short)
assail and seek to nullify the Decision 1 dated June 16, 2005 of the Court of Appeals (CA) in CA-G.R. SP
No. 87220, as reiterated in its Resolution2 of October 18, 2005 denying Garcia's motion for reconsideration.
The recourse is cast against the following setting:
A four-day October 2004 concerted demonstration, rallies and en masse walkout waged/held in front of the
GSIS main office in Roxas Boulevard, Pasay City, started it all. Forming a huge part of the October 4 to
October 7, 2004 mass action participants were GSIS personnel, among them members of the herein
respondent Kapisanan Ng Mga Manggagawa sa GSIS ("KMG" or the "Union"), a public sector union of
GSIS rank-and-file employees. Contingents from other government agencies joined causes with the GSIS
group. The mass action's target appeared to have been herein petitioner Garcia and his management style.
While the Mayor of Pasay City allegedly issued a rally permit, the absence of the participating GSIS
employees was not covered by a prior approved leave. 3

On or about October 10, 2004, the manager of the GSIS Investigating Unit issued a memorandum directing
131 union and non-union members to show cause why they should not be charged administratively for their
participation in said rally. In reaction, KMG's counsel, Atty. Manuel Molina, sought reconsideration of said
directive on the ground, among others, that the subject employees resumed work on October 8, 2004 in
obedience to the return-to-work order thus issued. The plea for reconsideration was, however, effectively
denied by the filing, on October 25, 2004, of administrative charges against some 110 KMG members for
grave misconduct and conduct prejudicial to the best interest of the service. 4
What happened next is summarized by the CA in its challenged decision of June 16, 2005, albeit the herein
petitioners would except from some of the details of the appellate court's narration:
Ignoring said formal charges, KMG, thru its President, Albert Velasco, commenced the instant suit
on November 2, 2004, with the filing of the Petition for Prohibition at bench. On the ground that its
members should not be made to explain why they supported their union's cause, petitioner [KMG]
faulted respondent [Garcia] with blatant disregard of Civil Service Resolution No. 021316,
otherwise known as the Guidelines for Prohibited Mass Action, Section 10 of which exhorts
government agencies to "harness all means within their capacity to accord due regard and
attention to employees' grievances and facilitate their speedy and amicable disposition through the
use of grievance machinery or any other modes of settlement sanctioned by law and existing civil
service rules." Two supplements to the foregoing petition were eventually filed by KMG. The first,
apprised [the CA] of the supposed fact that its Speaker, Atty. Molina, had been placed under
preventive suspension for 90 days and that the formal charges thus filed will not only deprive its
members of the privileges and benefits due them but will also disqualify them from promotion, step
increment adjustments and receipt of monetary benefits, including their 13th month pay and
Christmas bonuses. The second, xxx manifested that, on December 17, 2004, respondent [Garcia]
served a spate of additional formal charges against 230 of KMG's members for their participation in
the aforesaid grievance demonstrations.
In his December 14, 2004 comment to the foregoing petition, respondent [Garcia] averred that the
case at bench was filed by an unauthorized representative in view of the fact that Albert Velasco
had already been dropped from the GSIS rolls and, by said token, had ceased to be a member
much less the President of KMG. Invoking the rule against forum shopping, respondent [Garcia]
called [the CA's] attention to the supposed fact that the allegations in the subject petition merely
duplicated those already set forth in two petitions for certiorari and prohibition earlier filed by Albert
Velasco . Because said petitions are, in point of fact, pending before this court as CA-G.R. SP
Nos. 86130 and 86365, respondent [Garcia] prayed for the dismissal of the petition at bench
.5 (Words in bracket added.)
It appears that pending resolution by the CA of the KMG petition for prohibition in this case, the GSIS
management proceeded with the investigation of the administrative cases filed. As represented in a
pleading before the CA, as of May 18, 2005, two hundred seven (207) out of the two hundred seventy eight
(278) cases filed had been resolved, resulting in the exoneration of twenty (20) respondent-employees, the
reprimand of one hundred eighty two (182) and the suspension for one month of five (5). 6

On June 16, 2005, the CA rendered the herein assailed decision 7 holding that Garcia's "filing of
administrative charges against 361 of [KMG's] members is tantamount to grave abuse of discretion which
may be the proper subject of the writ of prohibition." Dispositively, the decision reads:
WHEREFORE, premises considered, the petition [of KMG] is GRANTED and respondent [Winston
F. Garcia] is hereby PERPETUALLY ENJOINED from implementing the issued formal charges and
from issuing other formal charges arising from the same facts and events.
SO ORDERED. (Emphasis in the original)
Unable to accept the above ruling and the purported speculative factual and erroneous legal premises
holding it together, petitioner Garcia sought reconsideration. In its equally assailed Resolution 8 of October
18, 2005, however, the appellate court denied reconsideration of its decision.
Hence, this recourse by the petitioners ascribing serious errors on the appellate court in granting the
petition for prohibition absent an instance of grave abuse of authority on their part.
We resolve to GRANT the petition.
It should be stressed right off that the civil service encompasses all branches and agencies of the
Government, including government-owned or controlled corporations (GOCCs) with original charters, like
the GSIS,9 or those created by special law. 10 As such, employees of covered GOCCs are part of the civil
service system and are subject to circulars, rules and regulations issued by the Civil Service Commission
(CSC) on discipline, attendance and general terms/conditions of employment, inclusive of matters involving
self-organization, strikes, demonstrations and like concerted actions. In fact, policies established on public
sector unionism and rules issued on mass action have been noted and cited by the Court in at least a
case.11 Among these issuances is Executive Order (EO) No. 180, series of 1987, providing guidelines for
the exercise of the right to organize of government employees. Relevant also is CSC Resolution No.
021316 which provides rules on prohibited concerted mass actions in the public sector.
There is hardly any dispute about the formal charges against the 278 affected GSIS employees a mix of
KMG union and non-union members - having arose from their having gone on unauthorized leave of
absence (AWOL) for at least a day or two in the October 4 to 7, 2004 stretch to join the ranks of the
demonstrators /rallyists at that time. As stated in each of the formal charges, the employee's act of
attending, joining, participating and taking part in the strike/rally is a transgression of the rules on strike in
the public sector. The question that immediately comes to the fore, therefore, is whether or not the mass
action staged by or participated in by said GSIS employees partook of a strike or prohibited concerted
mass action. If in the affirmative, then the denounced filing of the administrative charges would be prima
facie tenable, inasmuch as engaging in mass actions resulting in work stoppage or service disruption
constitutes, in the minimum, the punishable offense of acting prejudicial to the best interest of the
service.12 If in the negative, then such filing would indeed smack of arbitrariness and justify the issuance of
a corrective or preventive writ.
Petitioners assert that the filing of the formal charges are but a natural consequence of the servicedisrupting rallies and demonstrations staged during office hours by the absenting GSIS employees, there
being appropriate issuances outlawing such kinds of mass action. On the other hand, the CA, agreeing with

the respondent's argument, assumed the view and held that the organized demonstrating employees did
nothing more than air their grievances in the exercise of their "broader rights of free expression" 13 and are,
therefore, not amenable to administrative sanctions. For perspective, following is what the CA said:
Although the filing of administrative charges against [respondent KMG's] members is well within
[petitioner Garcia's] official [disciplinary] prerogatives, [his] exercise of the power vested under
Section 45 of Republic Act No. 8291 was tainted with arbitrariness and vindictiveness against
which prohibition was sought by [respondent]. xxx the fact that the subject mass demonstrations
were directed against [Garcia's] supposed mismanagement of the financial resources of the GSIS,
by and of itself, renders the filing of administrative charges against [KMG's] member suspect. More
significantly, we find the gravity of the offenses and the sheer number of persons charged
administratively to be, at the very least, antithetical to the best interest of the service.
It matters little that, instead of the 361 alleged by petitioner, only 278 charges were actually filed
[and] in the meantime, disposed of and of the said number, 20 resulted to exoneration, 182 to
reprimand and 5 to the imposition of a penalty of one month suspension. Irrespective of their
outcome, the severe penalties prescribed for the offense with which petitioner's members were
charged, to our mind, bespeak of bellicose and castigatory reaction . The fact that most of the
employees [Garcia] administratively charged were eventually meted with what appears to be a
virtual slap on the wrist even makes us wonder why respondent even bothered to file said charges
at all. xxx.
Alongside the consequences of the right of government employees to form, join or assist
employees organization, we have already mentioned how the broader rights of free
expression cast its long shadow over the case. xxx we find [petitioner Garcia's] assailed acts, on
the whole, anathema to said right which has been aptly characterized as preferred, one which
stands on a higher level than substantive economic and other liberties, the matrix of other
important rights of our people. xxx.14 (Underscoring and words in bracket added; citations omitted.)
While its decision and resolution do not explicitly say so, the CA equated the right to form associations with
the right to engage in strike and similar activities available to workers in the private sector. In the concrete,
the appellate court concluded that inasmuch as GSIS employees are not barred from forming, joining or
assisting employees' organization, petitioner Garcia could not validly initiate charges against GSIS
employees waging or joining rallies and demonstrations notwithstanding the service-disruptive effect of
such mass action. Citing what Justice Isagani Cruz said in Manila Public School Teachers Association
[MPSTA] v. Laguio, Jr.,15 the appellate court declared:
It is already evident from the aforesaid provisions of Resolution No. 021316 that employees of the
GSIS are not among those specifically barred from forming, joining or assisting employees
organization such as [KMG]. If only for this ineluctable fact, the merit of the petition at bench is
readily discernible.16
We are unable to lend concurrence to the above CA posture. For, let alone the fact that it ignores what the
Court has uniformly held all along, the appellate court's position is contrary to what Section 4 in relation to
Section 5 of CSC Resolution No. 021316 17 provides. Besides, the appellate court's invocation of Justice
Cruz's opinion inMPSTA is clearly off-tangent, the good Justice's opinion thereat being a dissent. It may be,

as the appellate court urged that the freedom of expression and assembly and the right to petition the
government for a redress of grievances stand on a level higher than economic and other liberties. Any
suggestion, however, about these rights as including the right on the part of government personnel to strike
ought to be, as it has been, trashed. We have made this abundantly clear in our past determinations. For
instance, in Alliance of Government Workers v. Minister of Labor and Employment,18 a case decided under
the aegis of the 1973 Constitution, an en banc Court declared that it would be unfair to allow employees of
government corporations to resort to concerted activity with the ever present threat of a strike to wring
benefits from Government. Then came the 1987 Constitution expressly guaranteeing, for the first time, the
right of government personnel to self-organization 19 to complement the provision according workers the
right to engage in "peaceful concerted activities, including the right to strike in accordance with law."20
It was against the backdrop of the aforesaid provisions of the 1987 Constitution that the Court
resolvedBangalisan v. Court of Appeals.21 In it, we held, citing MPSTA v. Laguio, Jr.,22 that employees in the
public service may not engage in strikes or in concerted and unauthorized stoppage of work; that the right
of government employees to organize is limited to the formation of unions or associations, without including
the right to strike.
Jacinto v. Court of Appeals23 came next and there we explained:
Specifically, the right of civil servants to organize themselves was positively recognized in
Association of Court of Appeals Employees vs. Ferrer-Caleja. But, as in the exercise of the rights of
free expression and of assembly, there are standards for allowable limitations such as the
legitimacy of the purpose of the association, [and] the overriding considerations of national security
....
As regards the right to strike, the Constitution itself qualifies its exercise with the provision "in
accordance with law." This is a clear manifestation that the state may, by law, regulate the use of
this right, or even deny certain sectors such right. Executive Order 180 which provides guidelines
for the exercise of the right of government workers to organize, for instance, implicitly endorsed an
earlier CSC circular which "enjoins under pain of administrative sanctions, all government officers
and employees from staging strikes, demonstrations, mass leaves, walkouts and other forms of
mass action which will result in temporary stoppage or disruption of public service" by stating that
the Civil Service law and rules governing concerted activities and strikes in government service
shall be observed. (Emphasis and words in bracket added; citations omitted)
And in the fairly recent case of Gesite v. Court of Appeals,24 the Court defined the limits of the right of
government employees to organize in the following wise:
It is relevant to state at this point that the settled rule in this jurisdiction is that employees in the
public service may not engage in strikes, mass leaves, walkouts, and other forms of mass action
that will lead in the temporary stoppage or disruption of public service. The right of government
employees to organize is limited to the formation of unions or associations only, without including
the right to strike,
adding that public employees going on disruptive unauthorized absences to join concerted mass actions
may be held liable for conduct prejudicial to the best interest of the service.

Significantly, 1986 Constitutional Commission member Eulogio Lerum, answering in the negative the poser
of whether or not the right of government employees to self-organization also includes the right to strike,
stated:
When we proposed this amendment providing for self organization of government employees, it
does not mean that because they have the right to organize, they have also the right to strike. That
is a different matter. xxx25
With the view we take of the events that transpired on October 4-7, 2004, what respondent's members
launched or participated in during that time partook of a strike or, what contextually amounts to the same
thing, a prohibited concerted activity. The phrase "prohibited concerted activity" refers to any collective
activity undertaken by government employees, by themselves or through their employees' organization,
with the intent of effecting work stoppage or service disruption in order to realize their demands or force
concessions, economic or otherwise; it includes mass leaves, walkouts, pickets and acts of similar
nature.26 Indeed, for four straight days, participating KMG members and other GSIS employees staged a
walk out and waged or participated in a mass protest or demonstration right at the very doorstep of the
GSIS main office building. The record of attendance 27 for the period material shows that, on the first day of
the protest, 851 employees, or forty eight per cent (48%) of the total number of employees in the main
office (1,756) took to the streets during office hours, from 6 a.m. to 2 p.m., 28leaving the other employees to
fend for themselves in an office where a host of transactions take place every business day. On the second
day, 707 employees left their respective work stations, while 538 participated in the mass action on the third
day. A smaller number, i.e., 306 employees, but by no means an insignificant few, joined the fourth day
activity.
To say that there was no work disruption or that the delivery of services remained at the usual level of
efficiency at the GSIS main office during those four (4) days of massive walkouts and wholesale absences
would be to understate things. And to place the erring employees beyond the reach of administrative
accountability would be to trivialize the civil service rules, not to mention the compelling spirit of
professionalism exacted of civil servants by the Code of Conduct and Ethical Standards for Public Officials
and Employees. 29
The appellate court made specific reference to the "parliament of the streets," obviously to lend
concurrence to respondent's pretension that the gathering of GSIS employees on October 4-7, 2004 was
an "assembly of citizens" out only to air grievances, not a striking crowd. According to the respondent, a
strike presupposes a mass action undertaken to press for some economic demands or secure additional
material employment benefits.
We are not convinced.
In whatever name respondent desires to call the four-day mass action in October 2004, the stubborn fact
remains that the erring employees, instead of exploring non-crippling activities during their free time, had
taken a disruptive approach to attain whatever it was they were specifically after. As events evolved, they
assembled in front of the GSIS main office building during office hours and staged rallies and protests, and
even tried to convince others to join their cause, thus provoking work stoppage and service-delivery
disruption, the very evil sought to be forestalled by the prohibition against strikes by government
personnel.30

The Court can concede hypothetically that the protest rally and gathering in question did not involve some
specific material demand. But then the absence of such economic-related demand, even if true, did not,
under the premises, make such mass action less of a prohibited concerted activity. For, as articulated
earlier, any collective activity undertaken by government employees with the intent of effecting work
stoppage or service disruption in order to realize their demands or force concessions, economic or
otherwise,
is
a
prohibited
concerted
mass
action 31 and
doubtless
actionable
administratively. Bangalisan even went further to say the following: "[i]n the absence of statute, public
employees do not have the right to engage in concerted work stoppages for any purpose."
To petitioner Garcia, as President and General Manager of GSIS, rests the authority and responsibility,
under Section 45 of Republic Act No. 8291, the GSIS Act of 1997, to remove, suspend or otherwise
discipline GSIS personnel for cause.32 At bottom then, petitioner Garcia, by filing or causing the filing of
administrative charges against the absenting participants of the October 4-7, 2004 mass action, merely
performed a duty expected of him and enjoined by law. Regardless of the mood petitioner Garcia was in
when he signed the charge sheet, his act can easily be sustained as legally correct and doubtless within his
jurisdiction.
It bears to reiterate at this point that the GSIS employees concerned were proceeded against - and
eventually either exonerated, reprimanded or meted a one-month suspension, as the case may be - not for
the exercise of their right to assemble peacefully and to petition for redress of grievance, but for engaging
in what appeared to be a prohibited concerted activity. Respondent no less admitted that its members and
other GSIS employees might have disrupted public service. 33
To be sure, arbitrariness and whimsical exercise of power or, in fine, grave abuse of discretion on the part
of petitioner Garcia cannot be simplistically inferred from the sheer number of those charged as well as the
gravity or the dire consequences of the charge of grave misconduct and conduct prejudicial to the best
interest of the service, as the appellate court made it to appear. The principle of accountability demands
that every erring government employee be made answerable for any malfeasance or misfeasance
committed. And lest it be overlooked, the mere filing of formal administrative case, regardless of the gravity
of the offense charged, does not overcome the presumptive innocence of the persons complained of nor
does it shift the burden of evidence to prove guilt of an administrative offense from the complainant.
Moreover, the Court invites attention to its holding in MPSTA v. Laguio, Jr., a case involving over 800 public
school teachers who took part in mass actions for which the then Secretary of Education filed
administrative complaints on assorted charges, such as gross misconduct. Of those charged, 650 were
dismissed and 195 suspended for at least six (6) months The Court, however, did not consider the element
of number of respondents thereat and/or the dire consequences of the charge/s as fatally vitiating or
beclouding the bona fidesof the Secretary of Education's challenged action. Then as now, the Court finds
the filing of charges against a large number of persons and/or the likelihood that they will be suspended or,
worse, dismissed from the service for the offense as indicating a strong and clear case of grave abuse of
authority to justify the issuance of a writ of prohibition.
The appellate court faulted petitioner Garcia for not first taping existing grievance machinery and other
modes of settlement agreed upon in the GSIS-KMG Collective Negotiations Agreement (CAN) before going
full steam ahead with his formal charges. 34

The Court can plausibly accord cogency to the CA's angle on grievance procedure but for the fact that it
conveniently disregarded what appears to be the more relevant provision of the CNA. We refer to Article VI
which reads:
The GSIS Management and the KMG have mutually agreed to promote the principle of shared
responsibility on all matters and decisions affecting the rights, benefits and interests of all GSIS
employees . Accordingly, the parties also mutually agree that the KMG shall not declare a
strike nor stage any concerted action which will disrupt public service and the GSIS management
shall not lockoutemployees who are members of the KMG during the term of this agreement. GSIS
Management shall also respect the rights of the employees to air their sentiments through peaceful
concerted activities during allowable hours, subject to reasonable office rules .... 35 (Underscoring
added)
If the finger of blame, therefore, is to be pointed at someone for non-exhaustion of less confrontational
remedies, it should be at the respondent union for spearheading a concerted mass action without resorting
to available settlement mechanism. As it were, it was KMG, under Atty. Alberto Velasco, which opened fire
first. That none of the parties bothered to avail of the grievance procedures under the GSIS-KMG CNA
should not be taken against the GSIS. At best, both GSIS management and the Union should be
considered as in pari delicto.
With the foregoing disquisitions, the Court finds it unnecessary to discuss at length the legal standing of
Alberto Velasco to represent the herein respondent union and to initiate the underlying petition for
prohibition. Suffice it to state that Velasco, per Joint Resolution No. 04-10-01 approved on October 5, 2004
by the KMG Joint Executive-Legislative Assembly, had ceased to be member, let alone president, of the
KMG, having previously been dropped from the rolls of GSIS employees. 36 While the dropping from the
rolls is alleged to have been the subject of a CA-issued temporary restraining order (TRO), the injunction
came after Atty. Velasco had in fact been separated from the service and it appears that the TRO had
already expired.
As a final consideration, the Court notes or reiterates the following relevant incidents surrounding the
disposition of the case below:
1. The CA had invoked as part of its ratio decidendi a dissenting opinion in MPSTA, even going to
the extent of describing as "instructive and timely" a portion, when the majority opinion thereat,
which the appellate court ignored, is the controlling jurisprudence.
2. The CA gave prominence to dispositions and rattled off holdings 37 of the Court, which
appropriately apply only to strikes in the private industry labor sector, and utilized the same as
springboard to justify an inference of grave abuse of discretion. On the other hand, it only gave
perfunctory treatment if not totally ignored jurisprudence that squarely dealt with strikes in the
public sector, as if the right to strike given to unions in private corporations/entities is necessarily
applicable to civil service employees.
3. As couched, the assailed CA decision perpetually bars respondent Garcia and necessarily
whoever succeeds him as GSIS President not only from implementing the formal charges against
GSIS employees who participated in the October 4 - 7, 2004 mass action but also from issuing

other formal charges arising from the same events. The injunction was predicated on a finding that
grave abuse of discretion attended the exercise of petitioner Garcia's disciplinary power vested him
under Section 45 of RA 8291.38 At bottom then, the assailed decision struck down as a nullity,
owing to the alleged attendant arbitrariness, not only acts that have already been done, but those
yet to be done. In net effect, any formal charge arising from the October 4-7, 2004 incident is,
under any and all circumstances, prejudged as necessarily tainted with arbitrariness to be slain at
sight.
The absurdities and ironies easily deducible from the foregoing situations are not lost on the Court.
We close with the observation that the assailed decision and resolution, if allowed to remain undisturbed,
would likely pave the way to the legitimization of mass actions undertaken by civil servants, regardless of
their deleterious effects on the interest of the public they have sworn to serve with loyalty and efficiency.
Worse still, it would permit the emergence of a system where public sector workers are, as the petitioners
aptly put it, "immune from the minimum reckoning for acts that [under settled jurisprudence] are concededly
unlawful." This aberration would be intolerable.
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are REVERSED and SET
ASIDE and the writ of prohibition issued by that court is NULLIFIED

PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES VS. LAGUESMA


GR NO. 101738, APRIL 12, 2000
DE LEON, JR., J.:
Before us is a petition for certiorari seeking to annul the Resolution 1 and the Order2 dated April 17, 1991
and August 7, 1991, respectively, of public respondent Bienvenido E. Laguesma, acting then as
Undersecretary, now the Secretary, of the Department of Labor and Employment (DOLE), which reversed
the Order dated March 27, 1990 3 of Med-Arbiter Phibun D. Pura declaring that supervisors and section
heads of petitioner under its new organizational structure are managerial employees and should be
excluded from the list of voters for the purpose of a certification election among supervisory and technical
staff employees of petitioner.4
The facts of the case are the following:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of paper
and timber products, with principal place of operations at Tabon, Bislig, Surigao del Sur. It has over
9,0005employees, 9446 of whom are supervisory and technical staff employees. More or less 487 of these
supervisory and technical staff employees are signatory members of the private respondent PICOP-Bislig
Supervisory and Technical Staff Employees Union (PBSTSEU). 7

On August 9, 1989, PBSTSEU instituted a Petition 8 for Certification Election to determine the sole and
exclusive bargaining agent of the supervisory and technical staff employees of PICOP for collective
bargaining agreement (CBA) purposes.
In a Notice9 dated August 10, 1989, the initial hearing of the petition was set on August 18, 1989 but it was
reset to August 25, 1989, at the instance of PICOP, as it requested a fifteen (15) day period within which to
file its comments and/or position paper. But PICOP failed to file any comment or position paper. Meanwhile,
private respondents Federation of Free Workers (FFW) and Associated Labor Union (ALU) filed their
respective petitions for intervention.
On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order 10 granting the petitions for
interventions of the FFW and ALU. Another Order 11 issued on the same day set the holding of a
certification election among PICOP's supervisory and technical staff employees in Tabon, Bislig, Surigao
del Sur, with four (4) choices, namely: (1) PBSTSEU; (2) FFW; (3) ALU; and (4) no union.
On September 21, 1989, PICOP appealed 12 the Order which set the holding of the certification election
contending that the Med-Arbiter committed grave abuse of discretion in deciding the case without giving
PICOP the opportunity to file its comments/answer, and that PBSTSEU had no personality to file the
petition for certification election.
After PBSTSEU filed its Comments 13 to petitioner's appeal, the Secretary of the Labor 14 issued a
Resolution 15dated November 17, 1989 which upheld the Med-Arbiter's Order dated September 17, 1989,
with modification allowing the supervising and staff employees in Cebu, Davao and Iligan City to participate
in the certification election.
During the pre-election conference on January 18, 1990, PICOP questioned and objected to the inclusion
of some section heads and supervisors in the list of voters whose positions it averred were reclassified as
managerial employees in the light of the reorganization effected by it. 16 Under the Revised Organizational
Structure of the PICOP, the company was divided into four (4) main business groups, namely: Paper
Products Business, Timber Products Business, Forest Resource Business and Support Services Business.
A vice- president or assistant vice-president heads each of these business groups. A division manager
heads the divisions comprising each business group. A department manager heads the departments
comprising each division. Section heads and supervisors, now called section managers and unit managers,
head the sections and independent units, respectively, comprising each department. 17 PICOP advanced
the view that considering the alleged present authority of these section managers and unit managers to hire
and fire, they are classified as managerial employees, and hence, ineligible to form or join any labor
organization. 18
Following the submission by the parties of their respective position papers 19 and evidence 20 on this issue,
Med-Arbiter Phibun D. Pura issued an Order 21 dated March 27, 1990, holding that supervisors and section
heads of the petitioner are managerial employees and therefore excluded from the list of voters for
purposes of certification election.
PBSTSEU appealed 22 the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU likewise
appealed.23 PICOP submitted evidence militating against the appeal. 24 Public respondent Bienvenido E.
Laguesma, acting as the then Undersecretary of Labor, issued the assailed Order 25 dated April 17, 1991

setting aside the Order dated March 27, 1990 of the Med-Arbiter and declaring that the subject supervisors
and section heads are supervisory employees eligible to vote in the certification election.
PICOP sought 26 reconsideration of the Order dated April 7, 1991. However, public respondent in his
Order 27dated August 7, 1991 denied PICOP's motion for reconsideration.
Hence, this petition.
PICOP anchors its petition on two (2) grounds, to wit:
I.

II.

THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA,


UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND
WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION, TANTAMOUNT TO ACTING WITHOUT OR IN EXCESS OF JURISDICTION
WHEN HE DENIED YOUR PETITIONER'S PLEA TO PRESENT ADDITIONAL EVIDENCE TO
PROVE THAT SOME OF ITS MANAGERIAL EMPLOYEES ARE DISQUALIFIED FROM
JOINING OR FORMING A UNION REPRESENTED BY CO-RESPONDENT PBSTSEU, IN
VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE CHANGES IN THE
ORGANIZATIONAL STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY
IMPLEMENTED IN JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL AND
SUBMITTED FOR DECISION.
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, ALSO ERRED
AND COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ARBITRARILY
ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE TOTALLY
DISREGARDED THE DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY YOUR
PETITIONER AND RELIED MAINLY ON THE UNSUBSTANTIATED CLAIM AND MERE
ALLEGATIONS OF PRIVATE RESPONDENT, PBSTSEU, THAT THE REORGANIZATION OF
YOUR PETITIONER WAS A SHAM AND CALCULATED MERELY TO FRUSTRATE THE
UNIONIZATION OF YOUR PETITIONER'S SUPERVISORY PERSONNEL; AND SOLELY ON
THIS
BASIS, DENIED YOUR PETITIONER'S URGENT MOTION FOR
RECONSIDERATION. 28

PICOP's main thesis is that the positions Section Heads and Supervisors, who have been designated as
Section Managers and Unit Managers, as the case may be, were converted to managerial employees
under the decentralization and reorganization program it implemented in 1989. Being managerial
employees, with alleged authority to hire and fire employees, they are ineligible for union membership
under Article 245 29 of the Labor Code. Furthermore, PICOP contends that no malice should be imputed
against it for implementing its decentralization program only after the petition for certification election was
filed inasmuch as the same is a valid exercise of its management prerogative, and that said program has
long been in the drawing boards of the company, which was realized only in 1989 and fully implemented in
1991. PICOP emphatically stresses that it could not have conceptualized the decentralization program only
for the purpose of "thwarting the right of the concerned employees to self-organization."
The petition, not being meritorious, must fail and the same should be as it is hereby dismissed.

First. In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, 30 we had occasion to elucidate on the
term "managerial employees." Managerial employees are ranked as Top Managers, Middle Managers and
First Line Managers. Top and Middle Managers have the authority to devise, implement and control
strategic and operational policies while the task of First-Line Managers is simply to ensure that such
policies are carried out by the rank-and- file employees of an organization. Under this distinction,
"managerial employees" therefore fall in two (2) categories, namely, the "managers" per se composed of
Top and Middle Managers, and the "supervisors" composed of First-Line Managers. 31 Thus, the mere fact
that an employee is designated "manager" does notipso facto make him one. Designation should be
reconciled with the actual job description of the employee, 32 for it is the job description that determines the
nature of employment. 33
In the petition before us, a thorough dissection of the job description 34 of the concerned supervisory
employees and section heads indisputably show that they are not actually managerial but only supervisory
employees since they do not lay down company policies. PICOP's contention that the subject section
heads and unit managers exercise the authority to hire and fire 35 is ambiguous and quite misleading for the
reason that any authority they exercise is not supreme but merely advisory in character. Theirs is not a final
determination of the company policies inasmuch as any action taken by them on matters relative to hiring,
promotion, transfer, suspension and termination of employees is still subject to confirmation and approval
by their respective superior. 36 Thus, where such power, which is in effect recommendatory in character, is
subject to evaluation, review and final action by the department heads and other higher executives of the
company, the same, although present, is not effective and not an exercise of independent judgment as
required by law. 37
Second. No denial of due process can be ascribed to public respondent Undersecretary Laguesma for the
latter's denial to allow PICOP to present additional evidence on the implementation of its program inasmuch
as in the appeal before the said public respondent, PICOP even then had already submitted voluminous
supporting documents. 38 The record of the case is replete with position papers and exhibits that dealt with
the main thesis it relied upon. What the law prohibits is the lack of opportunity to be heard. 39 PICOP has
long harped on its contentions and these were dealt upon and resolved in detail by public respondent
Laguesma. We see no reason or justification to deviate from his assailed resolutions for the reason that law
and jurisprudence aptly support them.1wphi1
Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the holding of
certification election, despite numerous opportunities to ventilate the same, only after respondent
Undersecretary of Labor affirmed the holding thereof, simply bolstered the public respondents' conclusion
that PICOP raised the issue merely to prevent and thwart the concerned section heads and supervisory
employees from exercising a right granted them by law. Needless to stress, no obstacle must be placed to
the holding of certification elections, for it is a statutory policy that should not be circumvented. 40
WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public respondent
Bienvenido E. Laguesma dated April 17, 1991 and August 17, 1991, respectively, finding the subject
supervisors and section heads as supervisory employees eligible to vote in the certification election are
AFFIRMED. Costs against petitioner.

DLSU MEDICAL CENTER AND COLLEGE OF MEDICINE VS. LAGUESMA


GR NO. 102084, AUGUST 12, 1998
MENDOZA, J.:
Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a hospital and
medical school at Dasmarias, Cavite. Private respondent Federation of Free Workers-De La Salle
University Medical Center and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC),
on the other hand, is a labor organization composed of the supervisory employees of petitioner
DLSUMCCM.
On April 17, 1991, the Federation of Free Workers (FFW), a national federation of labor unions, issued a
certificate to private respondent FFW-DLSUMCCMSUC recognizing it as a local chapter. On the same day,
it filed on behalf of private respondent FFW-DLSUMCCMSUC a petition for certification election among the
supervisory employees of petitioner DLSUMCCM. Its petition was opposed by petitioner DLSUMCCM on
the grounds that several employees who signed the petition for certification election were managerial
employees and that the FFW-DLSUMCCMSUC was composed of both supervisory and rank-and-file
employees in the company. 1

In its reply dated May 29, 1991, private respondent FFW-DLSUMCCMSUC denied petitioner's
allegations. It contended that
2. Herein petition seeks for the holding of a certification election among the supervisory
employees of herein respondent. It does not intend to include managerial employees.
xxx xxx xxx
6. It is not true that supervisory employees are joining the rank-and-file employees' union.
While it is true that both regular rank-and-file employees and supervisory employees of
herein respondent have affiliated with FFW, yet there are two separate unions organized
by FFW. The supervisory employees have a separate charter certificate issued by FFW. 2
On July 5, 1991, respondent Rolando S. de la Cruz, med-arbiter of the Department of Labor and
Employment Regional Office No. IV, issued an order granting respondent union's petition for
certification election. He said;
. . . [petitioner] . . . claims that based on the job descriptions which will be presented at the
hearing, the covered employees who are considered managers occupy the positions of
purchasing officers, personnel officers, property officers, cashiers, heads of various
sections and the like.
[Petitioner] also argues that assuming that some of the employees concerned are not
managerial but mere supervisory employees, the Federation of Free Workers (FFW)
cannot extend a charter certificate to this group of employees without violating the express
provision of Article 245 which provides 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 organizations of their own" because the FFW had similarly issued a
charter certificate to its rank-and-file employees.
In its position paper, [petitioner] stated that most, if not all, of the employees listed in . . .
the petition are considered managerial employees, thereby admitting that it has
supervisory employees who are undoubtedly qualified to join or form a labor organization
of their own. The record likewise shows that [petitioner] promised to present the job
descriptions of the concerned employees during the hearing but failed to do so. Thus, this
office has no basis in determining at this point in time who among them are considered
managerial or supervisory employees. At any rate, there is now no question that
[petitioner] has in its employ supervisory employees who are qualified to join or form a
labor union. Consequently, this office is left with no alternative but to order the holding of
certification election pursuant to Article 257 of the Labor Code, as amended, which

mandates the holding of certification election if a petition is filed by a legitimate labor


organization involving an unorganized establishment, as in the case of herein respondent.
As to the allegation of [petitioner] that the act of the supervisory employees in affiliating
with FFW to whom the rank-and-file employees are also affiliated is violative of Article 245
of the Labor Code, suffice it to state that the two groups are considered separate
bargaining units and local chapters of FFW. They are, for all intents and purposes,
separate with each other and their affiliation with FFW would not make them members of
the same labor union. This must be the case because it is settled that the locals are
considered the basic unit or principal with the labor federation assuming the role of an
agent. The mere fact, therefore, that they are represented by or under the same agent is of
no moment. They are still considered separate with each other. 3
On July 30, 1991, petitioner DLSUMCCM appealed to the Secretary of Labor and
Employment, citing substantially the same arguments it had raised before the med-arbiter.
However, its appeal was dismissed. In his resolution, dated August 30, 1991, respondent
Undersecretary of Labor and Employment Bienvenido E. Laguesma found the evidence presented
by petitioner DLSUMCCM concerning the alleged managerial status of several employees to be
insufficient. He also held that, following the ruling of this Court in Adamson & Adamson, Inc. v.
CIR, 4 unions formed independently by supervisory and rank-and-file employees of a company may
legally affiliate with the same national federation.
Petitioner moved for a reconsideration but its motion was denied. In his order dated September 19, 1991,
respondent Laguesma stated:
We reviewed the records once more, and find that the issues and arguments adduced by
movant have been squarely passed upon in the Resolution sought to be reconsidered.
Accordingly, we find no legal justification to alter, much less set aside, the aforesaid
resolution. Perforce, the motion for reconsideration must fail.
WHEREFORE, the instant motion for reconsideration is hereby denied for lack of merit and
the resolution of this office dated 30 August 1991 STANDS.
No further motions of a similar nature shall hereinafter be entertained. 5
Hence, this petition for certiorari.
Petitioner DLSUMCCM contends that respondent Laguesma gravely abused his discretion. While it does
not anymore insist that several of those who joined the petition for certification election are holding
managerial positions in the company, petitioner nonetheless pursues the question whether unions formed

independently by supervisory and rank-and-file employees of a company may validly affiliate with the same
national federation. With respect to this question, it argues:
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY
OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE
OF POWER ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED THE PETITIONER'S
APPEAL AND ORDERED THE HOLDING OF A CERTIFICATION ELECTION AMONG THE
MEMBERS OF THE SUPERVISORY UNION EMPLOYED IN PETITIONER'S COMPANY
DESPITE THE FACT THAT SAID SUPERVISORY UNION WAS AFFILIATED WITH THE
FEDERATION OF FREE WORKERS TO WHICH THE RANK-AND-FILE EMPLOYEES OF THE
SAME COMPANY ARE LIKEWISE AFFILIATED, CONTRARY TO THE EXPRESS PROVISIONS
OF ARTICLE 245 OF THE LABOR CODE, AS AMENDED. 6

The contention has no merit.


Supervisory employees have the right to self-organization as do other classes of employees save only
managerial ones. The Constitution states that "the right of the people, including those employed in the
public and private sectors, to form unions, associations or societies for purposes not contrary to law, shall
not be abridged." 7 As we recently held in United Pepsi-Cola Supervisory Union v. Loguesma, 8 the
framers of the Constitution intended, by this provision, to restore the right of supervisory
employees to self-organization which had been withdrawn from them during the period of martial
law. Thus:
Commissioner Lerum sought to amend the draft of what was later to become Art. 111, 8
of the present Constitution:
MR. LERUM. . . . Also, we have unions of supervisory employees and of
security guards. But what is tragic about this is that after the 1973
Constitution was approved and in spite of an express recognition of the
right to organize in P.D. No. 442, known as the Labor Code, the right of
government workers, supervisory employees and security guards to form
unions was abolished.We are afraid that without any corresponding
provision covering the private sector, the security guards, the supervisory
employees . . . will still be excluded and that is the purpose of this
amendment.
In sum, Lerum's proposal to amend Art. III, 8 of the draft Constitution by
including labor unions in the guarantee of organizational right should be
taken in the context of statements that his aim was the removal of the
statutory ban against security guards and supervisory employees joining
labor organizations. The approval by the Constitutional Commission of his

proposal can only mean, therefore, that the Commission intended the
absolute right to organize of government workers, supervisory employees,
and security guards to be constitutionally guaranteed. 9
Conformably with the constitutional mandate, Art. 245 of the Labor Code now provides for the right
of supervisory employees to self-organization, subject to the limitation that they cannot join an
organization of rank-and-file employees:
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.
The reason for the segregation of supervisory and rank-and-file employees of a company with respect to
the exercise of the right to self-organization is the difference in their interests. Supervisory employees are
more closely identified with the employer than with the rank-and-file employees. If supervisory and rankand-file employees in a company are allowed to form a single union, the conflicting interests of these
groups impair their relationship and adversely affect discipline, collective bargaining and strikes. 10 These
consequences can obtain not only in cases where supervisory and rank-and-file employees in the
same company belong to a single union but also where unions formed independently by
supervisory and rank-and-file employees of a company are allowed to affiliate with the same
national federation. Consequently, this Court has held in Atlas Lithographic Services Inc. v.
Laguesma 11 that
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 a national federation of unions of
rank-and-file employees where that federation actively participates in union activities in the
company.
As we explained in that case, however, such a situation would obtain only where two conditions concur:
First, the rank-and-file employees are directly under the authority of supervisory employees. 12 Second, the
national federation is actively involved in union activities in the company. 13 Indeed, it is the
presence of these two conditions which distinguished Atlas Lithographic Services, Inc. v.
Laguesma from Adamson & Adamson, Inc. v. CIR 14 where a different conclusion was reached.
The affiliation of two local unions in a company with the same national federation is not by itself a negation
of their independence since in relation to the employer, the local unions are considered as the principals,
while the federation is deemed to be merely their agent. This conclusion is in accord with the policy that any
limitation on the exercise by employees of the right to self-organization guaranteed in the Constitution must
be construed strictly. Workers should be allowed the practice of this freedom to the extent recognized in the
fundamental law. As held in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.: 15

The locals are separate and distinct units primarily designed to secure and maintain an
equality of bargaining power between the employer and their employee members in the
economic struggle for the fruits of the joint productive effort of labor and capital; and the
association of locals into the national union . . . was in furtherance of the same end. These
associations are consensual entities capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the local unions into a common
enterprise to increase by collective action the common bargaining power in respect of the
terms and conditions of labor. Yet the locals remained the basic units of association, free to
serve their own and the common interest of all, . . . and free also to renounce the affiliation
for mutual welfare upon the terms laid down in the agreement which brought it to
existence. 16
The questions in this case, therefore, are whether the rank-and-file employees of petitioner
DLSUMCCM who compose a labor union are directly under the supervisory employees whose own
union is affiliated with the same national federation (Federation of Free Workers) and whether such
national federation is actively involved in union activities in the company so as to make the two
unions in the same company, in reality, just one union.
Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file
employees of petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW,
petitioner DLSUMCCM has not presented any evidence showing that the rank-and-file employees
composing the other union are directly under the authority of the supervisory employees. As held
in Adamson & Adamson, Inc. v. CIR, 17 the fact that the two groups of workers are employed by the
same company and the fact that they are affiliated with a common national federation are not
sufficient to justify the conclusion that their organizations are actually just one. Their immediate
professional relationship must be established. To borrow the language of Adamson & Adamson,
Inc. v. CIR: 18
We find without merit the contention of petitioner that if affiliation will be allowed, only one
union will in fact represent both supervisors and rank-and-file employees of the petitioner;
that there would be an indirect affiliation of supervisors and rank-and-file employees with
one labor organization; that there would be a merging of the two bargaining units; and that
the respondent union will lose its independence because it becomes an alter ego of the
federation. 19
Mention has already been made of the fact that the petition for certification election in this case was
filed by the FFW on behalf of the local union. This circumstance, while showing active involvement
by the FFW in union activities at the company, is by itself insufficient to justify a finding of violation
of Art. 245 since there is no proof that the supervisors who compose the local union have direct
authority over the rank-and-file employees composing the other local union which is also affiliated
with the FFW. This fact differentiates the case from Atlas Lithographic Services. Inc. v.

Laguesma, 20 in which, in addition to the fact that the petition for certification election had been filed
by the national federation, it was shown that the rank-and-file employees were directly under the
supervisors organized by the same federation.
It follows that respondent labor officials did not gravely abuse their discretion.
WHEREFORE, the petition is DISMISSED.
PHILCOM EMPLOYEES UNION VS. PHIL GLOBAL COMMUNICATIONS
GR NO. 144315, JULY 17, 2006
CARPIO, J.:
The Case. This is a petition for review 1 to annul the Decision2 dated 31 July 2000 of the Court of Appeals in
CA-G.R. SP No. 53989. The Court of Appeals affirmed the assailed portions of the 2 October 1998 and 27
November 1998 Orders of the Secretary of Labor and Employment in OS-AJ-0022-97.
The Facts. The facts, as summarized by the Court of Appeals, are as follows:
Upon the expiration of the Collective Bargaining Agreement (CBA) between petitioner Philcom
Employees Union (PEU or union, for brevity) and private respondent Philippine Global
Communications, Inc. (Philcom, Inc.) on June 30, 1997, the parties started negotiations for the
renewal of their CBA in July 1997. While negotiations were ongoing, PEU filed on October 21, 1997
with the National Conciliation and Mediation Board (NCMB) National Capital Region, a Notice of
Strike, docketed as NCMB-NCR-NS No. 10-435-97, due to perceived unfair labor practice
committed by the company (Annex "1", Comment, p. 565, ibid.). In view of the filing of the Notice of
Strike, the company suspended negotiations on the CBA which moved the union to file on
November 4, 1997 another Notice of Strike, docketed as NCMB-NCR-NS No. 11-465-97, on the
ground of bargaining deadlock (Annex "2", Comment, p. 566, ibid.)
On November 11, 1997, at a conciliation conference held at the NCMB-NCR office, the parties
agreed to consolidate the two (2) Notices of Strike filed by the union and to maintain the
status quo during the pendency of the proceedings (Annex "3", Comment, p. 567, ibid.).
On November 17, 1997, however, while the union and the company officers and representatives
were meeting, the remaining union officers and members staged a strike at the company premises,
barricading the entrances and egresses thereof and setting up a stationary picket at the main
entrance of the building. The following day, the company immediately filed a petition for the
Secretary of Labor and Employment to assume jurisdiction over the labor dispute in accordance
with Article 263(g) of the Labor Code.

On November 19, 1997, then Acting Labor Secretary Cresenciano B. Trajano issued an Order
assuming jurisdiction over the dispute, enjoining any strike or lockout, whether threatened or
actual, directing the parties to cease and desist from committing any act that may exacerbate the
situation, directing the striking workers to return to work within twenty-four (24) hours from receipt
of the Secretary's Order and for management to resume normal operations, as well as accept the
workers back under the same terms and conditions prior to the strike. The parties were likewise
required to submit their respective position papers and evidence within ten (10) days from receipt
of said order (Annex "4", Comment, pp. 610-611, ibid.). On November 28, 1997, a second order
was issued reiterating the previous directive to all striking employees to return to work immediately.
On November 27, 1997, the union filed a Motion for Reconsideration assailing, among others, the
authority of then Acting Secretary Trajano to assume jurisdiction over the labor dispute. Said
motion was denied in an Order dated January 7, 1998.
As directed, the parties submitted their respective position papers. In its position paper, the union
raised the issue of the alleged unfair labor practice of the company hereunder enumerated as
follows:
"(a) PABX transfer and contractualization of PABX service and position;
"(b) Massive contractualization;
"(c) Flexible labor and additional work/function;
"(d) Disallowance of union leave intended for union seminar;
"(e) Misimplementation and/or non-implementation of employees' benefits like shoe
allowance, rainboots, raincoats, OIC shift allowance, P450.00 monthly allowance, driving
allowance, motorcycle award and full-time physician;
"(f) Non-payment, discrimination and/or deprivation of overtime, restday work,
waiting/stand by time and staff meetings;
"(g) Economic inducement by promotion during CBA negotiation;
"(h) Disinformation scheme, surveillance and interference with union affairs;
"(i) Issuance of memorandum/notice to employees without giving copy to union, change in
work schedule at Traffic Records Section and ITTO policies; and
"(j) Inadequate transportation allowance, water and facilities."

(Annex A, Petition; pp. 110-182, ibid.)


The company, on the other hand, raised in its position paper the sole issue of the illegality of the
strike staged by the union (Annex B, Petition; pp. 302-320, ibid.).
On the premise that public respondent Labor Secretary cannot rule on the issue of the strike since
there was no petition to declare the same illegal, petitioner union filed on March 4, 1998 a
Manifestation/Motion to Strike Out Portions of & Attachments in Philcom's Position Paper for being
irrelevant, immaterial and impertinent to the issues assumed for resolution (Annex C, Petition; pp.
330-333, ibid.).
In opposition to PEU's Manifestation/Motion, the company argued that it was precisely due to the
strike suddenly staged by the union on November 17, 1997 that the dispute was assumed by the
Labor Secretary. Hence, the case would necessarily include the issue of the legality of the strike
(Opposition to PEU'S Motion to Strike Out; Annex F, Petition; pp. 389-393, ibid.).3
On 2 October 1998, the Secretary of Labor and Employment ("Secretary") issued the first assailed order.
The pertinent parts of the Order read:
Going now to the first issue at hand, a reading of the complaints charged by the Union as unfair
labor practices would reveal that these are not so within the legal connotation of Article 248 of the
Labor Code. On the contrary, these complaints are actually mere grievances which should have
been processed through the grievance machinery or voluntary arbitration outlined under the CBA.
The issues of flexible labor and additional functions, misimplementation or non-implementation of
employee benefits, non-payment of overtime and other monetary claims and inadequate
transportation allowance, are all a matter of implementation or interpretation of the economic
provisions of the CBA subject to the grievance procedure.
Neither do these complaints amount to gross violations which, thus, may be treated as unfair labor
practices outside of the coverage of Article 261. The Union failed to convincingly show that there is
flagrant and/or malicious refusal by the Company to comply with the economic provisions
stipulated in the CBA.
With respect to the charges of contractualization and economic inducement, this Office is
convinced that the acts of said company qualify as a valid exercise of management prerogative.
The act of the Company in contracting out work or certain services being performed by Union
members should not be seen as an unfair labor practice act per se. First, the charge of massive
contractualization has not been substantiated while the contractualization of the position of PABX
operator is an isolated instance. Secondly, in the latter case, there was no proof that such
contracting out interfered with, restrained or coerced the employees in the exercise of their right to

self-organization. Thus, it is not unfair labor practice to contract out work for reason of reduction of
labor cost through the acquisition of automatic machines.
Likewise, the promotion of certain employees, who are incidentally members of the Union, to
managerial positions is a prerogative of management. A promotion which is manifestly beneficial to
an employee should not give rise to a gratuitous speculation that such a promotion was made
simply to deprive the union of the membership of the promoted employee (Bulletin Publishing Co.
v. Sanchez, et. al., G.R. No. 74425, October 7, 1986).
There remains the issue on bargaining deadlock. The Company has denied the existence of any
impasse in its CBA negotiations with the Union and instead maintains that it has been negotiating
with the latter in good faith until the strike was initiated. The Union, on the other hand, contends
otherwise and further prays that the remaining CBA proposals of the Union be declared reasonable
and equitable and thus be ordered incorporated in the new CBA to be executed.
As pointed out by the Union, there are already thirty-seven (37) items agreed upon by the parties
during the CBA negotiations even before these were suspended. Prior to this Office's assumption
over the case, the Company furnished the Union its improved CBA counter-proposal on the matter
of promotional and wage increases which however was rejected by the Union as divisive. Even as
the Union has submitted its remaining CBA proposals for resolution, the Company remains silent
on the matter. In the absence of any basis, other than the Union's position paper, on which this
Office may make its determination of the reasonableness and equitableness of these remaining
CBA proposals, this Office finds it proper to defer deciding on the matter and first allow the
Company to submit its position thereon.
We now come to the question of whether or not the strike staged by the Union on November 17,
1997 is illegal. The Company claims it is, having been held on grounds which are non-strikeable,
during the pendency of preventive mediation proceedings in the NCMB, after this Office has
assumed jurisdiction over the dispute, and with the strikers committing prohibited and illegal acts.
The Company further prays for the termination of some 20 Union officers who were positively
identified to have initiated the alleged illegal strike. The Union, on the other hand, refuses to submit
this issue for resolution.
Considering the precipitous nature of the sanctions sought by the Company, i.e., declaration of
illegality of the strike and the corresponding termination of the errant Union officers, this Office
deems it wise to defer the summary resolution of the same until both parties have been afforded
due process. The non-compliance of the strikers with the return-to-work orders, while it may
warrant dismissal, is not by itself conclusive to hold the strikers liable. Moreover, the Union's
position on the alleged commission of illegal acts by the strikers during the strike is still to be heard.
Only after a full-blown hearing may the respective liabilities of Union officers and members be
determined. The case of Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor

and Employment and Temic Telefunken Micro-Electronics (Phils.), Inc. (G.R. No. 122743 and
127215, December 12, 1997) is instructive on this point:
It may be true that the workers struck after the Secretary of Labor and Employment had
assumed jurisdiction over the case and that they may have failed to immediately return to
work even after the issuance of a return-to-work order, making their continued strike illegal.
For, a return-to-work order is immediately effective and executory notwithstanding the filing
of a motion for reconsideration. But, the liability of each of the union officers and the
workers, if any, has yet to be determined. xxx xxx xxx. 4
The dispositive portion of the Order reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered as follows:
The Union's Manifestation/Motion to Implead Philcom Corporation is hereby granted. Let summons
be issued to respondent Philcom Corporation to appear before any hearing that may hereafter be
scheduled and to submit its position paper as may be required.
The Union's Manifestation/Motion to Strike Out Portions of and Attachments in Philcom's Position
Paper is hereby denied for lack of merit.
The Union's charges of unfair labor practice against the Company are hereby dismissed.
Pending resolution of the issues of illegal strike and bargaining deadlock which are yet to be heard,
all the striking workers are directed to return to work within twenty-four (24) hours from receipt of
this Order and Philcom and/or Philcom Corporation are hereby directed to unconditionally accept
back to work all striking Union officers and members under the same terms and conditions prior to
the strike. The parties are directed to cease and desist from committing any acts that may
aggravate the situation.
Atty. Lita V. Aglibut, Officer-In-Charge of the Legal Service, this Department is hereby designated
as the Hearing Officer to hear and receive evidence on all matters and issues arising from the
present labor dispute and, thereafter, to submit a report/recommendation within twenty (20) days
from the termination of the proceedings.
The parties are further directed to file their respective position papers with Atty. Lita V. Aglibut within
ten (10) days from receipt of this Order.
SO ORDERED.5
Philcom Corporation ("Philcom") filed a motion for reconsideration. Philcom prayed for reconsideration of
the Order impleading it as party-litigant in the present case and directing it to accept back to work

unconditionally all the officers and members of the union who participated in the strike. 6 Philcom also filed a
Motion to Certify Labor Dispute to the National Labor Relations Commission for Compulsory Arbitration. 7
For its part, Philcom Employees Union (PEU) filed a Motion for Partial Reconsideration. PEU asked the
Secretary to "partially reconsider" the 2 October 1998 Order insofar as it dismissed the unfair labor
practices charges against Philcom and included the illegal strike issue in the labor dispute. 8
The Secretary denied both motions for reconsideration of Philcom and PEU in its assailed Order of 27
November 1998. The pertinent parts of the Order read:
The question of whether or not Philcom Corporation should be impleaded has been properly
disposed of in the assailed Order. We reiterate that neither the Company herein nor its
predecessor was able to convincingly establish that each is a separate entity in the absence of any
proof that there was indeed an actual closure and cessation of the operations of the predecessorcompany. We would have accommodated the Company for a hearing on the matter had it been
willing and prepared to submit evidence to controvert the finding that there was a mere merger. As
it now stands, nothing on record would prove that the two (2) companies are separate and distinct
from each other.
Having established that what took place was a mere merger, we correspondingly conclude that the
employer-employee relations between the Company and the Union officers and members was
never severed. And in merger, the employees of the merged companies or entities are deemed
absorbed by the new company (Filipinas Port Services, Inc. v. NLRC, et. al., G.R. No. 97237,
August 16, 1991). Considering that the Company failed miserably to adduce any evidence to
provide a basis for a contrary ruling, allegations to the effect that employer-employee relations and
positions previously occupied by the workers no longer exist remain just that mere allegations.
Consequently, the Company cannot now exempt itself from compliance with the Order. Neither can
it successfully argue that the employees were validly dismissed. As held in Telefunken
Semiconductor Employees Union-FFW v. Secretary of Labor and Employment (G.R. Nos. 122743
and 122715, December 12, 1997), to exclude the workers without first ascertaining the extent of
their individual participation in the strike or non-compliance with the return-to-work orders will be
tantamount to dismissal without due process of law.
With respect to the unfair labor practice charges against the Company, we have carefully reviewed
the records and found no reason to depart from the findings previously rendered. The issues now
being raised by the Union are the same issues discussed and passed upon in our earlier Order.
Finally, it is our determination that the issue of the legality of the strike is well within the jurisdiction
of this Office. The same has been properly submitted and assumed jurisdiction by the Office for
resolution.9

The dispositive portion of the Order reads:


WHEREFORE, there being no merit in the remaining Motions for Reconsideration filed by both
parties, the same are hereby DENIED. Our 2 October 1998 Order STANDS. To expedite the
resolution of the Motion to Certify Labor Dispute to the NLRC for Compulsory Arbitration, Philcom
Employees Union is hereby directed to submit its Opposition thereto within ten (10) days from
receipt of the copy of this Order.
SO ORDERED.10
PEU filed with this Court a petition for certiorari and prohibition under Rule 65 of the Rules of Court
assailing the Secretary's Orders of 2 October 1998 and 27 November 1998. This Court, in accordance with
its Decision of 10 March 1999 in G.R. No. 123426 entitled National Federation of Labor (NFL) vs. Hon.
Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment, and Alliance of
Nationalist Genuine Labor Organization, Kilusang Mayo Uno (ANGLO-KMU),11 referred the case to the
Court of Appeals.12
The Ruling of the Court of Appeals
On 31 July 2000, the Court of Appeals rendered judgment as follows:
WHEREFORE, PREMISES CONSIDERED, this petition is hereby DENIED. The assailed portions
of the Orders of the Secretary of Labor and Employment dated October 2, 1998 and November 27,
1998 are AFFIRMED.
SO ORDERED.13
The Court of Appeals ruled that, contrary to PEU's view, the Secretary could take cognizance of an issue,
even only incidental to the labor dispute, provided the issue must be involved in the labor dispute itself or
otherwise submitted to him for resolution.
The Court of Appeals pointed out that the Secretary assumed jurisdiction over the labor dispute upon
Philcom's petition as a consequence of the strike that PEU had declared and not because of the notices of
strike that PEU filed with the National Conciliation and Mediation Board (NCMB).
The Court of Appeals stated that the reason of the Secretary's assumption of jurisdiction over the labor
dispute was the staging of the strike. Consequently, any issue regarding the strike is not merely incidental
to the labor dispute between PEU and Philcom, but also part of the labor dispute itself. Thus, the Court of
Appeals held that it was proper for the Secretary to take cognizance of the issue on the legality of the
strike.

The Court of Appeals also ruled that for an employee to claim an unfair labor practice by the employer, the
employee must show that the act charged as unfair labor practice falls under Article 248 of the Labor Code.
The Court of Appeals held that the acts enumerated in Article 248 relate to the workers' right to selforganization. The Court of Appeals stated that if the act complained of has nothing to do with the acts
enumerated in Article 248, there is no unfair labor practice.
The Court of Appeals held that Philcom's acts, which PEU complained of as unfair labor practices, were not
in any way related to the workers' right to self-organization under Article 248 of the Labor Code. The Court
of Appeals held that PEU's complaint constitutes an enumeration of mere grievances which should have
been threshed out through the grievance machinery or voluntary arbitration outlined in the Collective
Bargaining Agreement (CBA).
The Court of Appeals also held that even if by Philcom's acts, Philcom had violated the provisions of the
CBA, still those acts do not constitute unfair labor practices under Article 248 of the Labor Code. The Court
of Appeals held that PEU failed to show that those violations were gross or that there was flagrant or
malicious refusal on the part of Philcom to comply with the economic provisions of the CBA.
The Court of Appeals stated that as of 21 March 1989, as held in PAL vs. NLRC, 14 violations of CBAs will
no longer be deemed unfair labor practices, except those gross in character. Violations of CBAs, except
those gross in character, are mere grievances resolvable through the appropriate grievance machinery or
voluntary arbitration as provided in the CBAs.
Hence, this petition.
The Issues
In assailing the Decision of the Court of Appeals, petitioner contends that:
1. The Honorable Court of Appeals has failed to faithfully adhere with the decisions of the Supreme
Court when it affirmed the order/resolution of the Secretary of Labor denying the Union's
Manifestation/Motion to Strike Out Portions of & Attachments in Philcom's Position Paper and
including the issue of illegal strike notwithstanding the absence of any petition to declare the strike
illegal.
2. The Honorable Court of Appeals has decided a question of substance in a way not in accord
with law and jurisprudence when it affirmed the order/resolution of the Secretary of Labor
dismissing the Union's charges of unfair labor practices.
3. The Honorable Court of Appeals has departed from the edict of applicable law and jurisprudence
when it failed to issue such order mandating/directing the issuance of a writ of execution directing
the Company to unconditionally accept back to work the Union officers and members under the

same terms and conditions prior to the strike and as well as to pay their salaries/backwages and
the monetary equivalent of their other benefits from October 6, 1998 to date. 15
The Ruling of the Court
The petition must fail.
PEU contends that the Secretary should not have taken cognizance of the issue on the alleged illegal strike
because it was not properly submitted to the Secretary for resolution. PEU asserts that after Philcom
submitted its position paper where it raised the issue of the legality of the strike, PEU immediately opposed
the same by filing its Manifestation/Motion to Strike Out Portions of and Attachments in Philcom's Position
Paper. PEU asserts that it stated in its Manifestation/Motion that certain portions of Philcom's position
paper and some of its attachments were "irrelevant, immaterial and impertinent to the issues assumed for
resolution." Thus, PEU asserts that the Court of Appeals should not have affirmed the Secretary's order
denying PEU's Manifestation/Motion.
PEU also contends that, contrary to the findings of the Court of Appeals, the Secretary's assumption of
jurisdiction over the labor dispute was based on the two notices of strike that PEU filed with the NCMB.
PEU asserts that only the issues on unfair labor practice and bargaining deadlock should be resolved in the
present case.
PEU insists that to include the issue on the legality of the strike despite its opposition would convert the
case into a petition to declare the strike illegal.
PEU's contentions are untenable.
The Secretary properly took cognizance of the issue on the legality of the strike. As the Court of Appeals
correctly pointed out, since the very reason of the Secretary's assumption of jurisdiction was PEU's
declaration of the strike, any issue regarding the strike is not merely incidental to, but is essentially involved
in, the labor dispute itself.
Article 263(g) of the Labor Code provides:
When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the assumption or certification
order. If one has already taken place at the time of assumption or certification, all striking or locked
out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the
strike or lockout. The Secretary of Labor and Employment or the Commission may seek the

assistance of law enforcement agencies to ensure the compliance with this provision as well as
with such orders as he may issue to enforce the same.
The powers granted to the Secretary under Article 263(g) of the Labor Code have been characterized as an
exercise of the police power of the State, with the aim of promoting public good. 16 When the Secretary
exercises these powers, he is granted "great breadth of discretion" in order to find a solution to a
labor dispute. The most obvious of these powers is the automatic enjoining of an impending strike or
lockout or its lifting if one has already taken place. 17
In this case, the Secretary assumed jurisdiction over the dispute because it falls in an industry
indispensable to the national interest. As noted by the Secretary.
[T]he Company has been a vital part of the telecommunications industry for 73 years. It is
particularly noted for its expertise and dominance in the area of international telecommunications.
Thus, it performs a vital role in providing critical services indispensable to the national interest. It is
for this very reason that this Office strongly opines that any concerted action, particularly a
prolonged work stoppage is fraught with dire consequences. Surely, the on-going strike will
adversely affect not only the livelihood of workers and their dependents, but also the company's
suppliers and dealers, both in the public and private sectors who depend on the company's
facilities in the day-to-day operations of their businesses and commercial transactions. The
operational viability of the company is likewise adversely affected, especially its expansion program
for which it has incurred debts in the approximate amount of P2 Billion. Any prolonged work
stoppage will also bring about substantial losses in terms of lost tax revenue for the government
and would surely pose a serious set back in the company's modernization program.
At this critical time when government is working to sustain the economic gains already achieved, it
is the paramount concern of this Office to avert any unnecessary work stoppage and, if one has
already occurred, to minimize its deleterious effect on the workers, the company, the industry and
national economy as a whole.18
It is of no moment that PEU never acquiesced to the submission for resolution of the issue on the legality of
the strike. PEU cannot prevent resolution of the legality of the strike by merely refusing to submit the issue
for resolution. It is also immaterial that this issue, as PEU asserts, was not properly submitted for resolution
of the Secretary.
The authority of the Secretary to assume jurisdiction over a labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to national interest includes and extends to all questions and
controversies arising from such labor dispute. The power is plenary and discretionary in nature to
enable him to effectively and efficiently dispose of the dispute.19

Besides, it was upon Philcom's petition that the Secretary immediately assumed jurisdiction over the labor
dispute on 19 November 1997. 20 If petitioner's notices of strike filed on 21 October and 4 November 1997
were what prompted the assumption of jurisdiction, the Secretary would have issued the assumption order
as early as those dates.
Moreover, after an examination of the position paper 21 Philcom submitted to the Secretary, we see no
reason to strike out those portions which PEU seek to expunge from the records. A careful study of all the
facts alleged, issues raised, and arguments presented in the position paper leads us to hold that the
portions PEU seek to expunge are necessary in the resolution of the present case.
On the documents attached to Philcom's position paper, except for Annexes MM-2 to MM-22
inclusive22 which deal with the supposed consolidation of Philippine Global Communications, Inc. and
Philcom Corporation, we find the other annexes relevant and material in the resolution of the issues that
have emerged in this case.
PEU also claims that Philcom has committed several unfair labor practices. PEU asserts that there are
"factual and evidentiary bases" for the charge of unfair labor practices against Philcom.
On unfair labor practices of employers, Article 248 of the Labor Code provides:
Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the
following unfair labor practice:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
(b) To require as a condition of employment that a person or an employee shall not join a labor
organization or shall withdraw from one to which he belongs;
(c) To contract out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their rights to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any
labor organization, including the giving of financial or other support to it or its organizers or
supporters;
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization. x x x
(f) To dismiss, discharge, or otherwise prejudice or discriminate against an employee for having
given or being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;

(h) To pay negotiation or attorney's fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
Unfair labor practice refers to acts that violate the workers' right to organize. The prohibited acts are related
to the workers' right to self-organization and to the observance of a CBA. Without that element, the acts, no
matter how unfair, are not unfair labor practices. 23 The only exception is Article 248(f), which in any case is
not one of the acts specified in PEU's charge of unfair labor practice.
A review of the acts complained of as unfair labor practices of Philcom convinces us that they do not fall
under any of the prohibited acts defined and enumerated in Article 248 of the Labor Code. The issues of
misimplementation or non-implementation of employee benefits, non-payment of overtime and other
monetary claims, inadequate transportation allowance, water, and other facilities, are all a matter of
implementation or interpretation of the economic provisions of the CBA between Philcom and PEU subject
to the grievance procedure.
We find it pertinent to quote certain portions of the assailed Decision, thus
A reading of private respondent's justification for the acts complained of would reveal that they
were actually legitimate reasons and not in anyway related to union busting. Hence, as to
compelling employees to render flexible labor and additional work without additional compensation,
it is the company's explanation that the employees themselves voluntarily took on work pertaining
to other assignments but closely related to their job description when there was slack in the
business which caused them to be idle. This was the case of the International Telephone Operators
who tried telemarketing when they found themselves with so much free time due to the slowdown
in the demand for international line services. With respect to the Senior Combination Technician at
the Cebu branch who was allegedly made to do all around work, the same happened only once
when the lineman was absent and the lineman's duty was his ultimate concern. Moreover, the new
assignment of the technicians at CTSS who were promoted to QCE were based on the job
description of QCE, while those of the other technicians were merely temporary due to the
promotion of several technicians to QCE (pars. 9-12, Philcom's Reply to PEU's Position Paper;
Annex "E", Petition; pp. 350-351, ibid.).
On the alleged misimplementation and/or non-implementation of employees' benefits, such as
shoe allowance, rainboots, raincoats, OIC shift allowance, P450.00 monthly allowance, driving
allowance, motorcycle award and full-time physician, the company gave the following explanation
which this Court finds plausible, to wit:
16. The employees at CTSS were given One Thousand Pesos (P1,000.00) cash or its
equivalent in purchase orders because it was their own demand that they be given the

option to buy the pair of leather boots they want. For the Cebu branch, the employees
themselves failed to include these benefits in the list of their demands during the
preparation of the budget for the year 1997 despite the instruction given to them by the
branch manager. According to the employees, they were not aware that they were entitled
to these benefits. They thought that because they have been provided with two vans to get
to their respective assignments, these benefits are available only to collectors,
messengers and technicians in motorcycles.
17. The P450.00 monthly allowance was provided by the CBA to be given to counter
clerks. However, the position of counter clerks had been abolished in accordance with the
reorganization plan undertaken by the company in April 1995, with the full knowledge of
the Union membership. As a result of the abolition of the position of counter clerks, there
was no more reason for granting the subject allowance.
18. The company more than satisfied the provision in the CBA to engage the services of a
physician and provided adequate medical services. Aside from a part time physician who
reports for duty everyday, the company has secured the services of Prolab Diagnostics,
which has complete medical facilities and personnel, to serve the medical needs of the
employees. x x x
19. The Union demands that a full-time physician to be assigned at the Head Office. This
practice, is not provided in the CBA and, moreover is too costly to maintain. The medical
services offered by Prolab [D]iagnostics are even better and more comprehensive than any
full time physician can give. It places at the employees' disposal numerous specialists in
various fields of medicine. It is beyond understanding why the Union would insist on having
a full-time physician when they could avail of better services from Prolab Diagnostics.
(Philcom's Reply to PEU's Position Paper, pp.352, 354, ibid.)
On the issue of non-payment, discrimination and/or deprivation of overtime, restday work,
waiting/stand by time and staff meeting allowance, suffice it to state that there is nothing on record
to prove the same. Petitioner did not present evidence substantial enough to support its claim.
As to the alleged inadequate transportation allowance and facilities, the company posits that:
30. The transportation allowances given to the Dasmarinas and Pinugay employees are
more than adequate to defray their daily transportation cost. Hence, there is absolutely no
justification for an increase in the said allowance. In fact, said employees at Dasmarinas
and Pinugay, who are only residing in areas near their place of work, are more privileged
as they receive transportation expenses while the rest of the company workers do not.

31. As to the demand for clean drinking water, the company has installed sufficient and
potable water inside the Head Office even before the strike was staged by the Union. Any
person who visits the Makati Head Office can attest to this fact.
(Philcom's Reply to PEU's Position Paper, p. 357, ibid.)
Anent the allegation of PABX transfer and contractualization of PABX service and position, these
were done in anticipation of the company to switch to an automatic PABX machine which requires
no operator. This cannot be treated as ULP since management is at liberty, absent any malice on
its part, to abolish positions which it deems no longer necessary (Arrieta vs. National Labor
Relations Commission, 279 SCRA 326, 332). Besides, at the time the company hired a temporary
employee to man the machine during daytime, the subject position was vacant while the
assumption of the function by the company guard during nighttime was only for a brief period.
With respect to the perceived massive contractualization of the company, said charge cannot be
considered as ULP since the hiring of contractual workers did not threaten the security of tenure of
regular employees or union members. That only 160 employees out of 400 employees in the
company's payroll were considered rank and file does not of itself indicate unfair labor practice
since this is but a company prerogative in connection with its business concerns.
Likewise, the offer or promotions to a few union members is neither unlawful nor an economic
inducement. These offers were made in accordance with the legitimate need of the company for
the services of these employees to fill positions left vacant by either retirement or resignation of
other employees. Besides, a promotion is part of the career growth of employees found competent
in their work. Thus, in Bulletin Publishing Corporation vs. Sanchez (144 SCRA 628, 641), the
Supreme Court held that "(T)he promotion of employees to managerial or executive positions rests
upon the discretion of management. Managerial positions are offices which can only be held by
persons who have the trust of the corporation and its officers. It is the prerogative of management
to promote any individual working within the company to a higher position. It should not be inhibited
or prevented from doing so. A promotion which is manifestly beneficial to an employee should not
give rise to a gratuitous speculation that such a promotion was made simply to deprive the union of
the membership of the promoted employee, who after all appears to have accepted his promotion."
That the promotions were made near or around the time when CBA negotiations were about to be
held does not make the company's action an unfair labor practice. As explained by the company,
these promotions were based on the availability of the position and the qualification of the
employees promoted (p. 6, Annex "4", Philcom's Reply to PEU's Position Paper; p. 380, ibid.)
On the union's charge that management disallowed leave of union officers and members to attend
union seminar, this is belied by the evidence submitted by the union itself. In a letter to PEU's
President, the company granted the leave of several union officers and members to attend a

seminar notwithstanding that its request to be given more details about the affair was left unheeded
by the union (Annex "Y", PEU's Position Paper; p. 222, ibid.). Those who were denied leave were
urgently needed for the operation of the company.
On the ULP issue of disinformation scheme, surveillance and interference with union affairs, these
are mere allegations unsupported by facts. The charge of "black propaganda" allegedly committed
by the company when it supposedly posted two (2) letters addressed to the Union President is
totally baseless. Petitioner presents no proof that it was the company which was behind the
incident. On the purported disallowance of union members to observe the July 27, 1997 CBA
meeting, the company explained that it only allowed one (1) employee from ITTO, instead of two
(2), as it would adversely affect the operation of the group. It also took into consideration the fact
that ITTO members represent only 20% of the union. Other union members from other
departments of the company should have equal representation (Annex "L", Position Paper for the
Union; pp. 205-206, ibid.). As to the alleged surveillance of the company guards during a union
seminar, We find the idea of sending guards to spy on a mere union seminar quite preposterous. It
is thus not likely for the company which can gain nothing from it to waste its resources in such a
scheme.
On the issuance of memorandum/notice to employees without giving copy to union, change in work
schedule at Traffic Records Section and ITTO policies, the company has sufficiently rebutted the
same, thus:
27. The Union also whines about the failure of the company to furnish copies of
memoranda or notices sent to employees and change of work schedules at the Traffic
Records Section and ITTO policies. The CBA, however, does not obligate the Company to
give the Union a copy of each and every memorandum or notice sent to employees. This
would be unreasonable and impractical. Neither did the Union demand that they be
furnished copies of the same. This is clearly a non-issue as copies of all memoranda or
notices issued by management are readily available upon request by any employee or the
Union.
28. Contrary to the allegations of the Union, the rationale and mechanics for the
abolishment of the midnight schedule at the Traffic Record Services had been thoroughly
and adequately discussed with the Union's President, Robert Benosa, and the staff of
Traffic Record Services in the meeting held on May 9, 1997. The midnight services were
abolished for purely economic reasons. The company realized that the midnight work can
be handled in the morning without hampering normal operations. At the same time, the
company will be able to save on cost. For this objective, the employees concerned agreed
to create a manning and shifting schedule starting at 6:00 a.m. up to 10:00 p.m., with each
employee rendering only eight hours of work every day without violating any provision of
the labor laws or the CBA.24

The Court has always respected a company's exercise of its prerogative to devise means to improve its
operations. Thus, we have held that management is free to regulate, according to its own discretion and
judgment, all aspects of employment, including hiring, work assignments, supervision and transfer of
employees, working methods, time, place and manner of work. 25
This is so because the law on unfair labor practices is not intended to deprive employers of their
fundamental right to prescribe and enforce such rules as they honestly believe to be necessary to the
proper, productive and profitable operation of their business. 26
Even assuming arguendo that Philcom had violated some provisions in the CBA, there was no showing that
the same was a flagrant or malicious refusal to comply with its economic provisions. The law mandates that
such violations should not be treated as unfair labor practices. 27
PEU also asserts that the Court of Appeals should have issued an order directing the issuance of a writ of
execution ordering Philcom to accept back to work unconditionally the striking union officers and members
under the same terms and conditions prevailing before the strike. PEU asserts that the union officers and
members should be paid their salaries or backwages and monetary equivalent of other benefits beginning 6
October 1998 when PEU received a copy of the Secretary's 2 October 1998 return-to-work order.
PEU claims that even if the "issue of illegal strike can be included in the assailed orders and that the union
officers and members have been terminated as a result of the alleged illegal strike, still, the Secretary has
to rule on the illegality of the strike and the liability of each striker." PEU asserts that the union officers and
members should first be accepted back to work because a return-to-work order is immediately executory. 28
We rule on the legality of the strike if only to put an end to this protracted labor dispute. The facts necessary
to resolve the legality of the strike are not in dispute.
The strike and the strike activities that PEU had undertaken were patently illegal for the following reasons:
1. Philcom is engaged in a vital industry protected by Presidential Decree No. 823 (PD 823), as amended
by Presidential Decree No. 849, from strikes and lockouts. PD 823, as amended, provides:
Sec. 1. It is the policy of the State to encourage free trade unionism and free collective bargaining
within the framework of compulsory and voluntary arbitration. Therefore, all forms of strikes,
picketings and lockouts are hereby strictly prohibited in vital industries, such as in public utilities,
including transportation andcommunications, x x x. (Emphasis supplied)
Enumerating the industries considered as vital, Letter of Instruction No. 368 provides:
For the guidance of workers and employers, some of whom have been led into filing notices of
strikes and lockouts even in vital industries, you are hereby instructed to consider the following as
vital industries and companies or firms under PD 823 as amended:

1. Public Utilities:
B. Communications:
1) Wire or wireless telecommunications such as telephone, telegraph,
telex, and cable companies or firms; (Emphasis supplied)
It is therefore clear that the striking employees violated the no-strike policy of the State in regard to vital
industries.
2. The Secretary had already assumed jurisdiction over the dispute. Despite the issuance of the returnto-work orders dated 19 November and 28 November 1997, the striking employees failed to return to
work and continued with their strike.
Regardless of their motives, or the validity of their claims, the striking employees should have ceased or
desisted from all acts that would undermine the authority given the Secretary under Article 263(g) of the
Labor Code. They could not defy the return-to-work orders by citing Philcom's alleged unfair labor practices
to justify such defiance.29
PEU could not have validly anchored its defiance to the return-to-work orders on the motion for
reconsideration that it had filed on the assumption of jurisdiction order. A return-to-work order is
immediately effective and executory despite the filing of a motion for reconsideration. It must be
strictly complied with even during the pendency of any petition questioning its validity.30
The records show that on 22 November 1997, Philcom published in the Philippine Daily Inquirer a notice to
striking employees to return to work. 31 These employees did not report back to work but continued their
mass action. In fact, they lifted their picket lines only on 22 December 1997. 32 Philcom formally
notified twice these employees to explain in writing why they should not be dismissed for defying the
return-to-work order.33 Philcom held administrative hearings on these disciplinary cases. 34 Thereafter,
Philcom dismissed these employees for abandonment of work in defiance of the return-to-work order. 35
A return-to-work order imposes a duty that must be discharged more than it confers a right that may be
waived. While the workers may choose not to obey, they do so at the risk of severing their relationship with
their employer.36
The following provision of the Labor Code governs the effects of defying a return-to-work order:
ART. 264. Prohibited activities. (a) x x x x
No strike or lockout shall be declared after assumption of jurisdiction by the President or
the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration
or during the pendency of cases involving the same grounds for the strike or lockout x x x x

Any union officer who knowingly participates in illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to
have lost his employment status: Provided, That mere participation of a worker in a lawful strike,
shall not constitute sufficient ground for termination of his employment, even if a replacement had
been hired by the employer during such lawful strike. (Emphasis supplied)
A strike undertaken despite the Secretary's issuance of an assumption or certification order becomes a
prohibited activity, and thus, illegal, under Article 264(a) of the Labor Code. The union officers who
knowingly participate in the illegal strike are deemed to have lost their employment status. The union
members, including union officers, who commit specific illegal acts or who knowingly defy a return-to-work
order are also deemed to have lost their employment status. 37 Otherwise, the workers will simply refuse to
return to their work and cause a standstill in the company operations while retaining the positions they
refuse to discharge and preventing management to fill up their positions. 38
Hence, the failure of PEU's officers and members to comply immediately with the return-to-work orders
dated 19 November and 28 November 1997 cannot be condoned. Defiance of the return-to-work orders
of the Secretary constitutes a valid ground for dismissal.39
3. PEU staged the strike using unlawful means and methods.
Even if the strike in the present case was not illegal per se, the strike activities that PEU had undertaken,
especially the establishment of human barricades at all entrances to and egresses from the company
premises and the use of coercive methods to prevent company officials and other personnel from leaving
the company premises, were definitely illegal. 40 PEU is deemed to have admitted that its officers and
members had committed these illegal acts, as it never disputed Philcom's assertions of PEU's unlawful
strike activities in all the pleadings that PEU submitted to the Secretary and to this Court.
PEU's picketing officers and members prohibited other tenants at the Philcom building from entering and
leaving the premises. Leonida S. Rabe, Country Manager of Societe Internationale De Telecommunications
Aeronautiques (SITA), a tenant at the Philcom building, wrote two letters addressed to PEU President
Roberto B. Benosa. She told Benosa that PEU's act of obstructing the free ingress to and egress from the
company premises "has badly disrupted normal operations of their organization." 41
The right to strike, while constitutionally recognized, is not without legal constrictions. Article 264(e) of the
Labor Code, on prohibited activities, provides:
No person engaged in picketing shall commit any act of violence, coercion or intimidation or
obstruct the free ingress to or egress from the employer's premises for lawful purposes, or obstruct
public thoroughfares.

The Labor Code is emphatic against the use of violence, coercion, and intimidation during a strike and to
this end prohibits the obstruction of free passage to and from the employer's premises for lawful purposes.
A picketing labor union has no right to prevent employees of another company from getting in and out of its
rented premises, otherwise, it will be held liable for damages for its acts against an innocent by-stander. 42
The sanction provided in Article 264(a) is so severe that any worker or union officer who knowingly
participates in the commission of illegal acts during a strike may be declared to have lost his employment
status.43
By insisting on staging the prohibited strike and defiantly picketing Philcom's premises to prevent the
resumption of company operations, the striking employees have forfeited their right to be readmitted. 44
4. PEU declared the strike during the pendency of preventive mediation proceedings at the NCMB.
On 17 November 1997, while a conciliation meeting was being held at the NCMB in NCMB-NCR-NS 10435-97, PEU went on strike. It should be noted that in their meeting on 11 November 1997, both Philcom
and PEU were even "advised to maintain the status quo." 45 Such disregard of the mediation proceedings
was a blatant violation of Section 6, Book V, Rule XXII of the Omnibus Rules Implementing the Labor Code,
which explicitly obliges the parties to bargain collectively in good faith and prohibits them from impeding or
disrupting the proceedings.46 The relevant provision of the Implementing Rules provides:
Section 6. Conciliation. x x x x
During the proceedings, the parties shall not do any act which may disrupt or impede the early
settlement of dispute. They are obliged, as part of their duty, to bargain collectively in good faith, to
participate fully and promptly in the conciliation meetings called by the regional branch of the
Board. x x x x
Article 264(a) of the Labor Code also considers it a prohibited activity to declare a strike "during the
pendency of cases involving the same grounds for the same strike."
Lamentably, PEU defiantly proceeded with their strike during the pendency of the conciliation proceedings.
5. PEU staged the strike in utter disregard of the grievance procedure established in the CBA.
By PEU's own admission, "the Union's complaints to the management began in June 1997 even before the
start of the 1997 CBA renegotiations." 47 Their CBA expired on 30 June 1997. 48 PEU could have just taken
up their grievances in their negotiations for the new CBA. This is what a Philcom officer had suggested to
the Dasmarias staff when the latter requested on 16 June 1997 for an increase in transportation
allowance.49 In fact, when PEU declared the strike, Philcom and PEU had already agreed on 37 items in
their negotiations for the new CBA.50

The bottom line is that PEU should have immediately resorted to the grievance machinery provided for in
the CBA.51 In disregarding this procedure, the union leaders who knowingly participated in the strike have
acted unreasonably. The law cannot interpose its hand to protect them from the consequences of their
illegal acts.52
A strike declared on the basis of grievances which have not been submitted to the grievance committee as
stipulated in the CBA of the parties is premature and illegal. 53
Having held the strike illegal and having found that PEU's officers and members have committed illegal acts
during the strike, we hold that no writ of execution should issue for the return to work of PEU officers who
participated in the illegal strike, and PEU members who committed illegal acts or who defied the return-towork orders that the Secretary issued on 19 November 1997 and 28 November 1997. The issue of who
participated in the illegal strike, committed illegal acts, or defied the return-to-work orders is a question of
fact that must be resolved in the appropriate proceedings before the Secretary of Labor.
WHEREFORE, we DISMISS the petition and AFFIRM the Decision of the Court of Appeals in CA-G.R. SP
No. 53989, with the MODIFICATION that the Secretary of Labor is directed to determine who among the
Philcom Employees Union officers participated in the illegal strike, and who among the union members
committed illegal acts or defied the return-to-work orders of 19 November 1997 and 28 November 1997. No
pronouncement as to costs.

MABEZA VS. NLRC


GR NO. 118506, APRIL 18, 1997

KAPUNAN, J.:
This petition seeking the nullification of a resolution of public respondent National Labor Relations
Commission dated April 28, 1994 vividly illustrates why courts should be ever vigilant in the preservation of
the constitutionally enshrined rights of the working class. Without the protection accorded by our laws and
the tempering of courts, the natural and historical inclination of capital to ride roughshod over the rights of
labor would run unabated.
The facts of the case at bar, culled from the conflicting versions of petitioner and private respondent, are
illustrative.
Petitioner Norma Mabeza contends that around the first week of May, 1991, she and her co-employees at
the Hotel Supreme in Baguio City were asked by the hotel's management to sign an instrument attesting to
the latter's compliance with minimum wage and other labor standard provisions of law. 1 The instrument
provides: 2
JOINT AFFIDAVIT
We, SYLVIA IGANA, HERMINIGILDO AQUINO, EVELYN OGOY, MACARIA JUGUETA,
ADELAIDA NONOG, NORMA MABEZA, JONATHAN PICART and JOSE DIZON, all of
legal ages (sic), Filipinos and residents of Baguio City, under oath, depose and say:
1. That we are employees of Mr. Peter L. Ng of his Hotel Supreme situated at No. 416
Magsaysay Ave., Baguio City.
2. That the said Hotel is separately operated from the Ivy's Grill and Restaurant;
3. That we are all (8) employees in the hotel and assigned in each respective shifts;
4. That we have no complaints against the management of the Hotel Supreme as we are
paid accordingly and that we are treated well.
5. That we are executing this affidavit voluntarily without any force or intimidation and for
the purpose of informing the authorities concerned and to dispute the alleged report of the
Labor Inspector of the Department of Labor and Employment conducted on the said
establishment on February 2, 1991.
IN WITNESS WHEREOF, we have hereunto set our hands this 7th day of May, 1991 at
Baguio City, Philippines.
(Sgd.) (Sgd.) (Sgd.)
SYLVIA IGAMA HERMINIGILDO AQUINO EVELYN OGOY

(Sgd.) (Sgd.) (Sgd.)


MACARIA JUGUETA ADELAIDA NONOG NORMA MABEZA.
(Sgd.) (Sgd.)
JONATHAN PICART JOSE DIZON
SUBSCRIBED AND SWORN to before me this 7th day of May, 1991, at Baguio City, Philippines.
Asst. City Prosecutor
Petitioner signed the affidavit but refused to go to the City Prosecutor's Office to swear to the veracity and
contents of the affidavit as instructed by management. The affidavit was nevertheless submitted on the
same day to the Regional Office of the Department of Labor and Employment in Baguio City.
As gleaned from the affidavit, the same was drawn by management for the sole purpose of refuting findings
of the Labor Inspector of DOLE (in an inspection of respondent's establishment on February 2, 1991)
apparently adverse to the private respondent. 3
After she refused to proceed to the City Prosecutor's Office on the same day the affidavit was submitted
to the Cordillera Regional Office of DOLE petitioner avers that she was ordered by the hotel
management to turn over the keys to her living quarters and to remove her belongings from the hotel
premises. 4 According to her, respondent strongly chided her for refusing to proceed to the City
Prosecutor's Office to attest to the affidavit. 5 She thereafter reluctantly filed a leave of absence from her job
which was denied by management. When she attempted to return to work on May 10, 1991, the hotel's
cashier, Margarita Choy, informed her that she should not report to work and, instead, continue with her
unofficial leave of absence. Consequently, on May 13, 1991, three days after her attempt to return to work,
petitioner filed a complaint for illegal dismissal before the Arbitration Branch of the National Labor Relations
Commission CAR Baguio City. In addition to her complaint for illegal dismissal, she alleged
underpayment of wages, non-payment of holiday pay, service incentive leave pay, 13th month pay, night
differential and other benefits. The complaint was docketed as NLRC Case No. RAB-CAR-05-0198-91 and
assigned to Labor Arbiter Felipe P. Pati.
Responding to the allegations made in support of petitioner's complaint for illegal dismissal, private
respondent Peter Ng alleged before Labor Arbiter Pati that petitioner "surreptitiously left (her job) without
notice to the management" 6 and that she actually abandoned her work. He maintained that there was no
basis for the money claims for underpayment and other benefits as these were paid in the form of facilities
to petitioner and the hotel's other employee. 7Pointing to the Affidavit of May 7, 1991, the private
respondent asserted that his employees actually have no problems with management. In a supplemental
answer submitted eleven (11) months after the original complaint for illegal dismissal was filed, private
respondent raised a new ground, loss of confidence, which was supported by a criminal complaint for

Qualified Theft he filed before the prosecutor's office of the City of Baguio against petitioner on July 4,
1991. 8
On May 14, 1993, Labor Arbiter Pati rendered a decision dismissing petitioner's complaint on the ground of
loss of confidence. His disquisitions in support of his conclusion read as follows:
It appears from the evidence of respondent that complainant carted away or stole one (1)
blanket, 1 piece bedsheet, 1 piece thermos, 2 pieces towel (Exhibits "9", "9-A," "9-B," "9-C"
and "10" pages 12-14 TSN, December 1, 1992).
In fact, this was the reason why respondent Peter Ng lodged a criminal complaint against
complainant for qualified theft and perjury. The fiscal's office finding a prima facie evidence
that complainant committed the crime of qualified theft issued a resolution for its filing in
court but dismissing the charge of perjury (Exhibit "4" for respondent and Exhibit "B-7" for
complainant). As a consequence, complainant was charged in court for the said crime
(Exhibit "5" for respondent and Exhibit "B-6" for the complainant).
With these pieces of evidence, complainant committed serious misconduct against her
employer which is one of the just and valid grounds for an employer to terminate an
employee (Article 282 of the Labor Code as amended). 9
On
April
28,
1994,
respondent
NLRC
promulgated
its
assailed
10
Resolution affirming the Labor Arbiter's decision. The resolution substantially incorporated the findings
of the Labor Arbiter. 11 Unsatisfied, petitioner instituted the instant special civil action for certiorari under
Rule 65 of the Rules of Court on the following grounds: 12
1. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS
COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO
GRAVE ABUSE OF DISCRETION IN ITS FAILURE TO CONSIDER THAT THE ALLEGED
LOSS OF CONFIDENCE IS A FALSE CAUSE AND AN AFTERTHOUGHT ON THE PART
OF THE RESPONDENT-EMPLOYER TO JUSTIFY, ALBEIT ILLEGALLY, THE DISMISSAL
OF THE COMPLAINANT FROM HER EMPLOYMENT;
2. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS
COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO
GRAVE ABUSE OF DISCRETION IN ADOPTING THE RULING OF THE LABOR
ARBITER THAT THERE WAS NO UNDERPAYMENT OF WAGES AND BENEFITS ON
THE BASIS OF EXHIBIT "8" (AN UNDATED SUMMARY OF COMPUTATION PREPARED
BY ALLEGEDLY BY RESPONDENT'S EXTERNAL ACCOUNTANT) WHICH IS TOTALLY
INADMISSIBLE AS AN EVIDENCE TO PROVE PAYMENT OF WAGES AND BENEFITS;

3. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS


COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO
GRAVE ABUSE OF DISCRETION IN FAILING TO CONSIDER THE EVIDENCE
ADDUCED BEFORE THE LABOR ARBITER AS CONSTITUTING UNFAIR LABOR
PRACTICE COMMITTED BY THE RESPONDENT.
The Solicitor General, in a Manifestation in lieu of Comment dated August 8, 1995 rejects private
respondent's principal claims and defenses and urges this Court to set aside the public respondent's
assailed resolution. 13
We agree.
It is settled that in termination cases the employer bears the burden of proof to show that the dismissal is
for just cause, the failure of which would mean that the dismissal is not justified and the employee is
entitled to reinstatement. 14
In the case at bar, the private respondent initially claimed that petitioner abandoned her job when she failed
to return to work on May 8, 1991. Additionally, in order to strengthen his contention that there existed
sufficient cause for the termination of petitioner, he belatedly included a complaint for loss of confidence,
supporting this with charges that petitioner had stolen a blanket, a bedsheet and two towels from the
hotel. 15 Appended to his last complaint was a suit for qualified theft filed with the Baguio City prosecutor's
office.
From the evidence on record, it is crystal clear that the circumstances upon which private respondent
anchored his claim that petitioner "abandoned" her job were not enough to constitute just cause to sanction
the termination of her services under Article 283 of the Labor Code. For abandonment to arise, there must
be concurrence of two things: 1) lack of intention to work; 16 and 2) the presence of overt acts signifying the
employee's intention not to work. 17
In the instant case, respondent does not dispute the fact that petitioner tried to file a leave of absence when
she learned that the hotel management was displeased with her refusal to attest to the affidavit. The fact
that she made this attempt clearly indicates not an intention to abandon but an intention to return to work
after the period of her leave of absence, had it been granted, shall have expired.
Furthermore, while absence from work for a prolonged period may suggest abandonment in certain
instances, mere absence of one or two days would not be enough to sustain such a claim. The overt act
(absence)
ought
18
to unerringly point to the fact that the employee has no intention to return to work, which is patently not
the case here. In fact, several days after she had been advised to take an informal leave, petitioner tried to
resume working with the hotel, to no avail. It was only after she had been repeatedly rebuffed that she filed

a case for illegal dismissal. These acts militate against the private respondent's claim that petitioner
abandoned her job. As the Solicitor General in his manifestation observed:
Petitioner's absence on that day should not be construed as abandonment of her job. She
did not report because the cashier told her not to report anymore, and that private
respondent Ng did not want to see her in the hotel premises. But two days later or on the
10th of May, after realizing that she had to clarify her employment status, she again
reported for work. However, she was prevented from working by private respondents. 19
We now come to the second cause raised by private respondent to support his contention that petitioner
was validly dismissed from her job.
Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank
check for terminating their employees. Such a vague, all-encompassing pretext as loss of confidence, if
unqualifiedly given the seal of approval by this Court, could readily reduce to barren form the words of the
constitutional guarantee of security of tenure. Having this in mind, loss of confidence should ideally apply
only to cases involving employees occupying positions of trust and confidence or to those situations where
the employee is routinely charged with the care and custody of the employer's money or property. To the
first class belong managerial employees, i.e., those vested with the powers or prerogatives to lay down
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial actions; and to the second class belong cashiers,
auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions,
regularly handle significant amounts of money or property. Evidently, an ordinary chambermaid who has to
sign out for linen and other hotel property from the property custodian each day and who has to account for
each and every towel or bedsheet utilized by the hotel's guests at the end of her shift would not fall under
any of these two classes of employees for which loss of confidence, if ably supported by evidence, would
normally apply. Illustrating this distinction, this Court in Marina Port Services, Inc. vs. NLRC, 20has stated
that:
To be sure, every employee must enjoy some degree of trust and confidence from the
employer as that is one reason why he was employed in the first place. One certainly does
not employ a person he distrusts. Indeed, even the lowly janitor must enjoy that trust and
confidence in some measure if only because he is the one who opens the office in the
morning and closes it at night and in this sense is entrusted with the care or protection of
the employer's property. The keys he holds are the symbol of that trust and confidence.
By the same token, the security guard must also be considered as enjoying the trust and
confidence of his employer, whose property he is safeguarding. Like the janitor, he has
access to this property. He too, is charged with its care and protection.

Notably, however, and like the janitor again, he is entrusted only with the physical task of
protecting that property. The employer's trust and confidence in him is limited to that
ministerial function. He is not entrusted, in the Labor Arbiter's words, with the duties of
safekeeping and safeguarding company policies, management instructions, and company
secrets such as operation devices. He is not privy to these confidential matters, which are
shared only in the higher echelons of management. It is the persons on such levels who,
because they discharge these sensitive duties, may be considered holding positions of
trust and confidence. The security guard does not belong in such category. 21
More importantly, we have repeatedly held that loss of confidence should not be simulated in order to justify
what would otherwise be, under the provisions of law, an illegal dismissal. "It should not be used as a
subterfuge for causes which are illegal, improper and unjustified. It must be genuine, not a mere
afterthought to justify an earlier action taken in bad faith." 22
In the case at bar, the suspicious delay in private respondent's filing of qualified theft charges against
petitioner long after the latter exposed the hotel's scheme (to avoid its obligations as employer under the
Labor Code) by her act of filing illegal dismissal charges against the private respondent would hardly
warrant serious consideration of loss of confidence as a valid ground for dismissal. Notably, the Solicitor
General has himself taken a position opposite the public respondent and has observed that:
If petitioner had really committed the acts charged against her by private respondents
(stealing supplies of respondent hotel), private respondents should have confronted her
before dismissing her on that ground. Private respondents did not do so. In fact, private
respondent Ng did not raise the matter when petitioner went to see him on May 9, 1991,
and handed him her application for leave. It took private respondents 52 days or up to July
4, 1991 before finally deciding to file a criminal complaint against petitioner, in an obvious
attempt to build a case against her.
The manipulations of private respondents should not be countenanced. 23
Clearly, the efforts to justify petitioner's dismissal on top of the private respondent's scheme of inducing
his employees to sign an affidavit absolving him from possible violations of the Labor Code taints with
evident bad faith and deliberate malice petitioner's summary termination from employment.
Having said this, we turn to the important question of whether or not the dismissal by the private
respondent of petitioner constitutes an unfair labor practice.
The answer in this case must inevitably be in the affirmative.
The pivotal question in any case where unfair labor practice on the part of the employer is alleged is
whether or not the employer has exerted pressure, in the form of restraint, interference or coercion, against

his employee's right to institute concerted action for better terms and conditions of employment. Without
doubt, the act of compelling employees to sign an instrument indicating that the employer observed labor
standards provisions of law when he might have not, together with the act of terminating or coercing those
who refuse to cooperate with the employer's scheme constitutes unfair labor practice. The first act clearly
preempts the right of the hotel's workers to seek better terms and conditions of employment through
concerted action.
We agree with the Solicitor General's observation in his manifestation that "[t]his actuation . . . is analogous
to the situation envisaged in paragraph (f) of Article 248 of the Labor Code" 24 which distinctly makes it an
unfair labor practice "to dismiss, discharge or otherwise prejudice or discriminate against an employee for
having given or being about to give testimony" 25 under the Labor Code. For in not giving positive testimony
in favor of her employer, petitioner had reserved not only her right to dispute the claim and proffer evidence
in support thereof but also to work for better terms and conditions of employment.
For refusing to cooperate with the private respondent's scheme, petitioner was obviously held up as an
example to all of the hotel's employees, that they could only cause trouble to management at great
personal inconvenience. Implicit in the act of petitioner's termination and the subsequent filing of charges
against her was the warning that they would not only be deprived of their means of livelihood, but also
possibly, their personal liberty.
This Court does not normally overturn findings and conclusions of quasi-judicial agencies when the same
are ably supported by the evidence on record. However, where such conclusions are based on a
misperception of facts or where they patently fly in the face of reason and logic, we will not hesitate to set
aside those conclusions. Going into the issue of petitioner's money claims, we find one more salient reason
in this case to set things right: the labor arbiter's evaluation of the money claims in this case incredibly
ignores existing law and jurisprudence on the matter. Its blatant one-sidedness simply raises the suspicion
that something more than the facts, the law and jurisprudence may have influenced the decision at the level
of the Arbiter.
Labor Arbiter Pati accepted hook, line and sinker the private respondent's bare claim that the reason the
monetary benefits received by petitioner between 1981 to 1987 were less than minimum wage was
because petitioner did not factor in the meals, lodging, electric consumption and water she received during
the period in her computations. 26 Granting that meals and lodging were provided and indeed constituted
facilities, such facilities could not be deducted without the employer complying first with certain legal
requirements. Without satisfying these requirements, the employer simply cannot deduct the value from the
employee's ages. First, proof must be shown that such facilities are customarily furnished by the trade.
Second, the provision of deductible facilities must be voluntarily accepted in writing by the employee.
Finally, facilities must be charged at fair and reasonable value. 27

These requirements were not met in the instant case. Private respondent "failed to present any company
policy or guideline to show that the meal and lodging . . . (are) part of the salary;" 28 he failed to provide
proof of the employee's written authorization; and, he failed to show how he arrived at the valuations. 29
Curiously, in the case at bench, the only valuations relied upon by the labor arbiter in his decision were
figures furnished by the private respondent's own accountant, without corroborative evidence. On the
pretext that records prior to the July 16, 1990 earthquake were lost or destroyed, respondent failed to
produce payroll records, receipts and other relevant documents, where he could have, as has been pointed
out in the Solicitor General's manifestation, "secured certified copies thereof from the nearest regional
office of the Department of Labor, the SSS or the BIR." 30
More significantly, the food and lodging, or the electricity and water consumed by the petitioner were not
facilities but supplements. A benefit or privilege granted to an employee for the convenience of the
employer is not a facility. The criterion in making a distinction between the two not so much lies in the kind
(food, lodging) but the purpose. 31 Considering, therefore, that hotel workers are required to work different
shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in
the operations of a small hotel, such as the private respondent's hotel.
It is therefore evident that petitioner is entitled to the payment of the deficiency in her wages equivalent to
the fullwage applicable from May 13, 1988 up to the date of her illegal dismissal.
Additionally, petitioner is entitled to payment of service incentive leave pay, emergency cost of living
allowance, night differential pay, and 13th month pay for the periods alleged by the petitioner as the private
respondent has never been able to adduce proof that petitioner was paid the aforestated benefits.
However, the claims covering the period of October 1987 up to the time of filing the case on May 13, 1988
are barred by prescription as P.D. 442 (as amended) and its implementing rules limit all money claims
arising out of employer-employee relationship to three (3) years from the time the cause of action
accrues. 32
We depart from the settled rule that an employee who is unjustly dismissed from work normally should be
reinstated without loss of seniority rights and other privileges. Owing to the strained relations between
petitioner and private respondent, allowing the former to return to her job would only subject her to possible
harassment and future embarrassment. In the instant case, separation pay equivalent to one month's
salary for every year of continuous service with the private respondent would be proper, starting with her
job at the Belfront Hotel.
In addition to separation pay, backwages are in order. Pursuant to R.A. 6715 and our decision in Osmalik
Bustamante, et al. vs. National Labor Relations Commission, 33 petitioner is entitled to full backwages from
the time of her illegal dismissal up to the date of promulgation of this decision without qualification or
deduction.

Finally, in dismissal cases, the law requires that the employer must furnish the employee sought to be
terminated from employment with two written notices before the same may be legally effected. The first is a
written notice containing a statement of the cause(s) for dismissal; the second is a notice informing the
employee of the employer's decision to terminate him stating the basis of the dismissal. During the process
leading to the second notice, the employer must give the employee ample opportunity to be heard and
defend himself, with the assistance of counsel if he so desires.
Given the seriousness of the second cause (qualified theft) of the petitioner's dismissal, it is noteworthy that
the private respondent never even bothered to inform petitioner of the charges against her. Neither was
petitioner given the opportunity to explain the loss of the articles. It was only almost two months after
petitioner had filed a complaint for illegal dismissal, as an afterthought, that the loss was reported to the
police and added as a supplemental answer to petitioner's complaint. Clearly, the dismissal of petitioner
without the benefit of notice and hearing prior to her termination violated her constitutional right to due
process. Under the circumstance an award of One Thousand Pesos (P1,000.00) on top of payment of the
deficiency in wages and benefits for the period aforestated would be proper.
WHEREFORE, premises considered, the RESOLUTION of the National Labor Relations Commission
dated April 24, 1994 is REVERSED and SET ASIDE, with costs. For clarity, the economic benefits due the
petitioner are hereby summarized as follows:
1) Deficiency wages and the applicable ECOLA from May 13, 1988 up to the date of petitioner's illegal
dismissal;
2) Service incentive leave pay; night differential pay and 13th month pay for the same period;
3) Separation pay equal to one month's salary for every year of petitioner's continuous service with the
private respondent starting with her job at the Belfront Hotel;
4) Full backwages, without qualification or deduction, from the date of petitioner's illegal dismissal up to the
date of promulgation of this decision pursuant to our ruling in Bustamante vs. NLRC. 34
5) P1,000.00.

TANDUAY DISTILLERY LABOR UNION VS. NLRC


GR NO. 75037, APRIL 30, 1987
GUTIERREZ, JR.:
These consolidated petitions for certiorari seek the review and setting aside of respondent National Labor
Relations Commission's decision in NLRC Case No. AB-6-11685-81 dated May 26, 1986, affirming the
October 12, 1984 decision of the Labor Arbiter, and of the NLRC resolution dated June 28, 1986, which
denied the motion for reconsideration of the petitioners.
The facts of the case are as follows:
Private respondents were all employees of Tanduay Distillery, Inc., (TDI) and members of the Tanduay
Distillery Labor Union (TDLU), a duly organized and registered labor organization and the exclusive
bargaining agent of the rank and file employees of the petitioner company.
On March 11, 1980, a Collective Bargaining Agreement (CBA), was executed between TDI and TDLU. The
CBA was duly ratified by a majority of the workers in TDI including herein private respondents, and a copy
was filed with the Ministry of Labor and Employment (MOLE) on October 29, 1980 for certification. The
CBA had a term of three (3) years from July 1, 1979 to June 30, 1982. It also contained a union security
clause. which provides:
All workers who are or may during the effectivity of this Contract, become members of the
Union in accordance with its Constitution and By-Laws shall, as a condition of their
continued employment, maintain membership in good standing in the Union for the
duration of the agreement.
On or about the early part of October 1980, while the CBA was in effect and within the contract bar
period the private respondents joined another union, the Kaisahan Ng Manggagawang Pilipino KAMPIL)
and organized its local chapter in TDI, with private respondents Pedro Esteral and Lamberts Santos being
elected President and Vice-President, respectively.
On November 7, 1980, KAMPIL filed a petition for certification election to determine union representation in
TDI, which development compelled TDI to file a grievance with TDLU on November 7, 1980 pursuant to
Article XV of the CBA.
Acting on the grievance of TDI, TDLU wrote the private respondents on December 23, 1980 requiring them
to explain why TDLU should not take disciplinary action against them for, among other things
Disloyalty to the Tanduay Distillery Labor Union (T.D.L.U.) by forming and joining another
union with a complete takeover intent as the sole and exclusive bargaining representative
of all rank and file employees at TDI. (p. 16, Rollo)

TDLU created a committee to investigate its erring members in accordance with its by-laws which are not
disputed by the private respondents. Except for Josefino Paguyo who, despite due notice, was absent
during the investigation conducted on January 2, 1981, all the private respondents were present and given
a chance to explain their side. Thereafter, in a resolution dated January 9, 1981, TDLU, through the
Investigating Committee and approved by TDLU's Board of Directors, expelled the private respondents
from TDLU for disloyalty to the Union effective January 16, 1981. By letter dated January 10, 1981, TDLU
notified TDI that private respondents had been expelled from TDLU and demanded that TDI terminate the
employment of private, respondents because they had lost their membership with TDLU.
Acting on the demand of TDLU, TDI, in a Memorandum dated January 13, 1981, notified "that effective
January 16, 1981, we shall file the usual application for clearance (with preventive suspension to take effect
on the same day) to terminate your services on the basis of the union security clause of our CBA.
Accordingly, TDI filed with the MOLE on January 14, 1981 its application for clearance to terminate the
employment of private respondents. This application docketed as Case No. NCR-AC-1-435-81 specifically
stated that the action applied for was preventive suspension which will result in termination of
employment, ... due to (T)hreat to (P)roduction traceable to rival (U)nion activity. The private respondents
then filed with the MOLE a complaint for illegal dismissal against TDI and Benjamin Agaloos, in his capacity
as President of TDLU, which complaint was docketed as Case No. STF-1-333-91. The cases were jointly
heard and tried by Labor Arbiter Teodorico Dogelio.
However, on January 26, 1981, the Med-Arbiter granted the private respondents' petition calling for a
certification election among the rank and file employees of TDI. The Med-Arbiter's Order stated, interalia that the existence of an uncertified CBA cannot be availed of as a bar to the holding of a certification
election (Emphasis supplied). On appeal of TDI and TDLU to the Bureau of Labor Relations (BLR), the
order for the holding of a certification election was reversed and set aside by the BLR on July 8,1982, thus:
A careful perusal of the records of the case will reveal that the uncertified CBA was duly
filed and submitted on 29 October 1980, to last until June 30, 1982. Indeed, said CBA
is certifiable for havingcomplied with all the necessary requirements for
certification. Consistent with the intent and spirit of P.D. 1391 and its implementing rules,
the contract bar rule should have been applied in this case. The representation issue
cannot be entertained except within the last sixty (60) days of the collective agreement.
(Emphasis supplied) (p. 243, Rollo)
The last 60 days in a collective bargaining agreement is referred to as the "freedom period" when rival
union representation can be entertained during the existence of a valid CBA. In this case, the "freedom
period" was May 1 to June 30, 1982. After the term of the CBA lapsed, KAMPIL moved for a
reconsideration of the July 8, 1982 decision of the BLR on July 23, 1982 on the same ground that since the
CBA then in question was uncertified, the contract bar rule could not be made to apply. On December 3,
1982, the BLR reversed itself, but for a different reason and held that:

Movant union (Kampil) now seeks for the reconsideration of that Order on the ground,
among others, that the CBA in question is not certifiable and, hence, the contract bar rule
cannot properly apply in this case.
After a more careful examination of the records, this Bureau is of the view that the instant
motion should be given due course, not necessarily for the arguments raised by herein
movant.
It should be noted that the alleged CBA has now expired. Its expiry date being 30 June
1982. Consequently; there appears to be no more obstacle in allowing a certification
election to be conducted among the rank and file of respondent. The contract bar rule will
no longer apply in view of the supervening event, that is, the expiration of the contract.
(Emphasis supplied) (pp. 244-245, Rollo)
TDLU filed a petition for review of the BLR decision with the Supreme Court, docketed as Case No. G.R.
No. 63995 TDI argued that KAMPIL did not have a cause of action when the petition for certification was
filed on November 7, 1980 because the freedom period was not yet in effect. The fact that the BLR issued
its order when the 60-day freedom period had supervened, did not cure this defect. Moreover, the BLR
decision completely overlooked or ignored the fact that on September 21, 1982, a new CBA had been
executed between the TDLU and TDI so that when the BLR allowed a certification election in its order
dated December 3, 1982, the contract bar rule was applicable again. This Court denied TDLU's petition in a
minute resolution on November 14,1983.
Using the foregoing as relevant and applicable to the consolidated cases for the clearance application for
termination filed by TDI and the illegal dismissal case filed by the private respondents on October 12, 1984,
Labor Arbiter Teodorico Dogelio rendered a decision denying TDI's application to terminate the private
respondents and ordering TDI to reinstate the complainants with backwages. It should be noted that the
Labor Arbiter rendered the decision even before the petitioner company could file its memorandum, formal
offer of exhibits and its manifestation and motion to correct tentative markings of exhibits. This decision of
the arbiter was upheld by the respondent NLRC in NLRC Case No. AB-6-11685-81 in its decision dated
May 20,1986.
TDI and TDLU moved for reconsideration of the questioned decision, In its motion, TDI alleged, inter alia,
that respondent NLRC did not rule on the validity of the CBA as a contract, neither did it resolve squarely
the validity of the enforcement of the union security clause of the CBA. TDI stated further that respondent
NLRC failed to consider the fact that at the time the private respondents were expelled by TDLU and
consequently terminated by TDI, the union security clause of the CBA was in full force and effect, binding
TDI and TDLU.
For its part, TDLU said that the decision of the Supreme Court in the certification case could not be used by
respondent NLRC to justify its decision in the dismissal case because the issues on the cases are entirely

different and miles apart. It is for this reason that there are two (2) cases that are involved. TDLU explained
that the Supreme Court decided to dismiss the petition for certiorari of TDI and TDLU in the certification
case because the original CBA existing at the time the private respondents formed and joined KAMPIL had
already expired. However, TDLU made it clear that when the private respondents organized KAMPIL in
TDI, the same CBA was still in force and the disaffiliation did not take place within the freedom period.
Hence, at that point in time, the private respondents committed disloyalty against the union.
On June 26, 1986, respondent NLRC denied the motion for reconsideration filed by TDI and TDLU for lack
of merit. In its petition, TDI alleged that:
I. RESPONDENT COMMISSION ACTED IN EXCESS AND WITH GRAVE ABUSE OF ITS
DISCRETION AND IN A MANNER CONTRARY TO LAW IN RENDERING ITS DECISION
EN BANC OF MAY 20, 1986 AND IN DENYING PETITIONER'S MOTION FOR
RECONSIDERATION THEREOF IN ITS RESOLUTION SOLUTION DATED JUNE 26,
1986 BECAUSE
1. THE RESPONDENT COMMISSION HAS IGNORED THE FACT THAT
THE PRIVATE RESPONDENTS WERE EXPELLED BY TDLU FROM ITS
MEMBERSHIP ON JANUARY 16, 1981 AND, CONSEQUENTLY, TDLU
HAD DEMANDED OF THE PETITIONER OF THE ENFORCEMENT OF
THE UNION SECURITY CLAUSE OF THE CBA, THE SAID CBA WAS AN
EXISTING AND A VALID CONTRACT BETWEEN THE PETITIONER AND
TDLU, AND EFFECTIVE BETWEEN THE PARTIES;
2. IT IS FUNDAMENTAL THAT A UNION SECURITY CLAUSE
PROVISION IN COLLECTIVE BARGAINING AGREEMENT IS BINDING
BETWEEN THE PARTIES TO THE CBA UNDER THE LAWS;
3. THE EXPULSION OF THE PRIVATE RESPONDENTS FROM TDLU
WAS THE UNION'S OWN DECISION. HENCE, WHEN TDLU
DEMANDED OF THE PETITIONER THE ENFORCEMENT OF THE
SECURITY CLAUSE PROVISION OF THE CBA BY SEPARATING
PRIVATE RESPONDENTS FROM THEIR EMPLOYMENT, FOR HAVING
LOST THEIR MEMBERSHIP IN THE UNION, THE PETITIONER WAS
DUTY BOUND TO DO SO;
4. THE ALLUSION THAT THE CBA WAS NOT CERTIFIED BY THE
BUREAU OF LABOR RELATIONS (BLR) HAS NOTHING TO DO WITH
ITS EFFECTIVENESS AS A VALID CONTRACT BETWEEN ALL
PARTIES THERETO.

II. RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AND IN EXCESS OF
ITS JURISDICTION IN HOLDING THAT PRIVATE RESPONDENTS DID NOT COMMIT ACTS
PREJUDICIAL TO THE PETITIONER'S PRODUCTION EFFORTS TO BE SUFFICIENT BASIS FOR
THEIR PREVENTIVE SUSPENSION AND EVENTUAL REMOVAL.
On the other hand, petitioner TDLU in essence contends that:
THE CBA IS VALID AND BINDING NOT ONLY ON TDI AND TDLU BUT LIKEWISE ON PRIVATE
RESPONDENTS WHO HAVE RATIFIED THE SAME IN THEIR INDIVIDUAL CAPACITIES AS MEMBERS
OF TDLU; HENCE, THE UNION SECURITY CLAUSE IS VALID AND BINDING ON THEM;
THE ACTION OF TDLU IN REQUESTING FOR THE ENFORCEMENT OF THE UNION SECURITY
CLAUSE OF THE CBA BETWEEN TDI AND TDLU IS PART OF THE INHERENT RIGHT TO SELFORGANIZATION;
TDLU CANNOT BE MADE LIABLE FOR THE PAYMENT OF BACKWAGES BECAUSE ALL THAT IT DID
WAS ASK FOR THE ENFORCEMENT OF A CBA, WHICH CBA HAS NEVER BEEN DECLARED NULL
AND VOID AND THE UNION SECURITY CLAUSE SOUGHT TO BE ENFORCED WAS NOT ALSO
DECLARED NULL AND VOID;
PRIVATE RESPONDENTS DISAFFILIATED THEMSELVES FROM TDLU BY ORGANIZING THE LOCAL
CHAPTER OF KAMPIL IN TDI IN OCTOBER 1980, BUT THE ACT OF DISAFFILIATION WAS
COMMITTED OUTSIDE THE FREEDOM PERIOD PROVIDED UNDER PRESIDENTIAL DECREE 1391
WHICH LIMIT ALL PETITIONS FOR CERTIFICATION ELECTION, DISAFFILIATION AND INTERVENTION
TO THE 60 DAY FREEDOM PERIOD PRECEDING THE EXPIRATION OF THE CBA. HENCE, PRIVATE
RESPONDENTS COULD BE EXPELLED FROM MEMBERSHIP FOR DISLOYALTY AND OTHER
INIMICAL ACTS AGAINST THE INTEREST OF TDLU.
The private respondents admit that the root of the whole controversy in the instant case is the organization
of a Local Union Chapter of KAMPIL at TDI and the subsequent filing of a petition for certification election
with the MOLE by said local chapter. This local chapter of KAMPIL was organized with the help of, among
others, the private respondents some of whom were elected union officers of said chapter. They contend
that their act of organizing a local chapter of KAMPIL and eventual filing of a petition for certification
election was pursuant to their constitutional right to self-organization.
The issues to be resolved are the following: (a) whether or not TDI was justified in terminating private
respondents' employment in the company on the basis of TDLU's demand for the enforcement of the Union
Security Clause of the CBA between TDI and TDLU; and (b) whether or not TDI is guilty of unfair labor
practice in complying with TDLU's demand for the dismissal of private respondents.

We enforce basic principles essential to a strong and dynamic labor movement. An established postulate in
labor relations firmly rooted in this jurisdiction is that the dismissal of an employee pursuant to a demand of
the majority union in accordance with a union security agreement following the loss of seniority rights is
valid and privileged and does not constitute an unfair labor practice.
Article 249 (e) of the Labor Code as amended specifically recognizes the closed shop arrangement as a
form of union security. The closed shop, the union shop, the maintenance of membership shop, the
preferential shop, the maintenance of treasury shop, and check-off provisions are valid forms of union
security and strength. They do not constitute unfair labor practice nor are they violations of the freedom of
association clause of the Constitution. (See Pascual, Labor Relations Law, 1986 Edition, pp. 221-225 and
cases cited therein.) There is no showing in these petitions of any arbitrariness or a violation of the
safeguards enunciated in the decisions of this Court interpreting union security arrangements brought to us
for review.
In this light, the petitioner points out that embedded at the very core and as raison d'etre for the doctrine
which enforces the closed-shop, the union shop, and other forms of union security clauses in the collective
bargaining agreement is the principle of sanctity and inviolability of contracts guaranteed by the
Constitution.
This Court speaking thru Mr. Justice Labrador, in Victorias Milling Co., Inc., v. Victorias-Manapia Workers
Organization (9 SCRA 154), ruled:
Another reason for enforcing the closed-shop agreement is the principle of sanctity or
inviolability of contracts guaranteed by the Constitution. As a matter of principle the
provision of the Industrial Peace Act relating freedom to employees to organize themselves
and set their representative for entering into bargaining agreements, should be
subordinate to the constitutional provision protecting the sanctity of contracts. We can not
conceive how freedom to contract, which should be allowed to be exercised without
limitation may be subordinated to the freedom of laborers to choose the organization they
desire to represent them. And even if the legislature had intended to do so and made such
freedom of the laborer paramount to the sanctity of obligation of contracts, such attempt to
override the constitutional provision would necessarily and ipso facto be null and void.
xxx xxx xxx
[T]he action of the respondent company in enforcing the terms of the closed-shop
agreement is a valid exercise of its rights and obligations under the contract. The dismissal
by virtue thereof cannot constitute an unfair labor practice, as it was in pursuance of an
agreement that has been found to be regular and of a closed-shop agreement which under
our laws is valid and binding.

In the instant case, the CBA in question provides for a Union Security Clause requiring:
(c) All workers who are or may during the effectivity of this contract become members of
the union in accordance with its constitution and by-laws shall as a condition of their
continued employment, maintain membership in good standing in the union for the
duration of the agreement. (Emphasis supplied)
Having ratified that CBA and being then members of the TDLU, the private respondents owe fealty and are
required under the Union Security Clause to maintain their membership in good standing with it during the
term thereof, a requirement which ceases to be binding only during the 60-day freedom period immediately
preceding the expiration of the CBA. When the private respondents organized and joined the KAMPIL
Chapter in TDI and filed the corresponding petition for certification election in November 1980, there was
no freedom period to speak of yet. For under Presidential Decree No. 1391, promulgated May 29, 1978, the
law applicable in this instance provides:
No petition for certification election for intervention disaffiliation shall be entertained or
given due course except within the 60 day freedom period immediately preceding the
execution of the Collective Bargaining Agreement.
and under Section 21, Rule 3 of the Rules Implementing PD 1391 "... pending certification of a duly filed
collective bargaining agreement no petition for certification election in the same bargaining unit shall be
entertained or processed." (promulgated September 19, 1978). The Labor Code further mandates that "no
certification election shall be entertained if a Collective Bargaining Agreement which has been submitted in
accordance with Article 231 of the Code exists between the employer and a legitimate labor organization
except within sixty (60) days prior to the expiration of the life of such collective agreement (Art. 257).
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 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.
The validity of the CBA is not here assailed by private respondents. They admitted having organized the
local chapter of KAMPIL at TDI, although it is claimed that this was done when there was no certified CBA
between TDI and TDLU that would constitute a bar to the certification election. Of significance is the ruling
in Manalang v. Artex Development Co., Inc., (21 SCRA 561, 569) decided on a factual setting where the
petitioners had affiliated themselves with another labor union, Artex Free Workers, without first terminating
their membership with Bagong Buhay Labor Union (BBLU) and without the knowledge of the officers of the
latter union, for which reason the petitioners were expelled from the BBLU for acts of disloyalty; and the
company, upon the behest of BBLU dismissed them from employment pursuant to the closed-shop
stipulation in a Collective Bargaining Agreement. This Court ruled:

The validity of the Collective Bargaining Agreement of March 4, 1960 is not assailed by the
petitioners. Nor do they deny that they were members of the BBLU prior to March 4, 1960
and until they were expelled from the union. ...
The petitioners further contention that the closed-shop provision in the collective
Bargaining Agreement is illegal because it is unreasonable,restrictive of right of freedom of
association guaranteed by the Constitution is a futile exercise in argumentation of this
Court has in a number of cases sustained closed-shop as valid union security.
Finally, even if we assume, in gratia argumenti,that the petition were unaware of the
stipulation set forth in the collective bargaining agreement since their membership in the
BBLU prior to t the expulsion thereform is undenied there can be no question that as long
as the agreement with closed-shop provision was in force they were bound by it. Neither
their ignorance of,nor their dissatisfaction with, its terms and condition would justify breach
thereof or the formation by them of a union of their own.As has been aptly said the
collective bargaining agreement entered into by officers of a union as agent of the
member,and an employer,gives rise to valid inforcible contractual relation against the
individual union members in matters that affect the entire membership or large classes of
its member who employed under an agreement between the union and his employer is
bound by the provision thereof,since it is a joint and several contract of the members of the
union and entered into by the union as their agent.
In an earlier case, this Court held:
Nor can it be said that the stipulation providing that the employer may dismiss an
employee whenever the union recommends his expulsion either for disloyalty or for any
violation of its by-laws and constitution is illegal or constitute of unfair labor practice, for
such is one of the matters on which management and labor can agree in order to bring
about harmonious relations between them and the union, and cohesion and integrity of
their organization And as an act of loyalty a union may certainly require its members not to
affiliate with any other labor union and to consider its infringement as a reasonable cause
for separation. This is what was done by respondent union. And the respondent employer
did nothing but to put in force their agreement when it separated the herein complainants
upon the recommendation of said union. Such a stipulation is not only necessary to
maintain loyalty and preserve the integrity of the union but is allowed by the Magna Charta
of Labor when it provided that while it is recognized that an employee shall have the right
to self-organization, it is at the same time postulated that such right shall not injure the
right of the labor organization to prescribe its own rules with respect to the acquisition or
retention of membership therein (Section 41(b) par. 1, Republic Act 875). This provision is
significant. It is an indirect restriction on the right of an employee to self-organization. It is a
solemn pronouncement of a policy that while an employee is given the right to join a labor

organization, such right should only be asserted in a manner that will not spell the
destruction of the same organization The law requires loyalty to the union on the part of its
members in order to obtain to the full extent its cohesion and integrity. We therefore, see
nothing improper in the disputed provisions of the collective bargaining agreement entered
into between the parties. (Ang Malayang Manggagawa ng Ang Tibay Enterprises, et al. v.
Ang Tibay, et al. 102 Phil. 669) (Emphasis supplied)
We agree with petitioner TDLU that the dismissal of the petition for certiorari in G.R. No. 63995
entitled TDLU v. Kaisahan ng Manggagawang Pilipina could not be construed as to extinguish the right of
TDLU to expel private respondents for acts of disloyalty when they organized a local chapter of KAMPIL in
October 1980 in TDI. The subject matter brought to this Court in G.R. No. 63995 was the decision of the
Bureau of Labor Relations dated December 3, 1982 requiring the holding of certification election in TDI
within twenty (20) days from receipt of said BLR's decision which reads:
Movant union (KAMPIL) now seeks for the reconsideration of that order on the ground,
among others, that the CBA in question is not certifiable and, hence, the contract bar rule
cannot properly apply to this case.
After a careful examination of the records, this Bureau is of the view that the instant motion
should be given due course, not necessarily for the arguments raised by herein movant.
It should be noted that alleged CBA has now expired, its expiry date being 30 June 1982.
Consequently, there appears to be no more obstacle in allowing a certification election to
be conducted among the rank and file of respondent. The contract bar rule will no longer
apply in view of the supervening even that is, the expiration of the contract. (ANNEX C,
TDI's Memorandum dated November 28,1986; Emphasis supplied).
It is clearly apparent that the BLR aforesaid Order which this Court upheld in G.R. No. 63995 when it
dismissed TDLU's petition in a minute resolution, did not pass upon the question of legality or illegality of
the dismissal of private respondents from TDI by reason of their expulsion from TDLU for disloyalty. That
question was neither raised nor passed upon in the certification case, and was not a proper issue therein
because a petition for certification election is not a litigation but a mere investigation of a non-adversary
character to determine the bargaining unit to represent the employees (George Peter Lines, Inc. v.
Associated Labor Union, 134 SCRA 82). Hence, no inference could be derived from the dismissal of said
petition that either the BLR or this Court has decided in favor of private respondents insofar as the question
of union disloyalty and their suspension and termination from employment of TDI is concerned.
Simply put, the BLR ordered the holding of a certification election because the CBA in question had already
expired, its expiry date being June 30, 1982. Consequently, there appears to be no more obstacle in
allowing a certification election. "... [T]he contract bar rule will not apply in view of the supervening event,
that is, the expiration of the CBA."

But the fact that the CBA had expired on June 30, 1982 and the BLR, because of such supervening event,
ordered the holding of a certification election could not and did not wipe out or cleanse private respondents
from the acts of disloyalty committed in October 1980 when they organized KAMPIL's local chapter in TDI
while still members of TDLU. The ineluctable fact is that private respondents committed acts of disloyalty
against TDLU while the CBA was in force and existing for which they have to face the necessary sanctions
lawfully imposed by TDLU.
In Villar v. Inciong (121 SCRA 444), we held that "petitioners, although entitled to disaffiliation from their
union and to form a new organization of their own must however, suffer the consequences of their
separation from the union under the security clause of the CBA: "
Inherent in every labor union, or any organization for that matter, is the right of selfpreservation. When members of a labor union, therefore, sow the seeds of dissension and
strife within the union; when they seek the disintegration and destruction of the very union
to which they belong; they thereby forfeit their rights to remain as members of the union
which they seek to destroy. Prudence and equity, as well as the dictates of law and justice,
therefore, compelling mandate the adoption by the labor union of such corrective and
remedial measures, in keeping with its laws and regulations, for its preservation and
continued existence; lest by its folly and inaction, the labor union crumble and fall. (Idem.,
p. 458)
The private respondents cannot, therefore, escape the effects of the security clause of their own applicable
collective bargaining agreement.
WHEREFORE, the decision dated May 26, 1986 and the resolution dated June 26, 1986 of respondent
National Labor Relations Commission in NLRC Case No. AB-11685-81 are hereby SET ASIDE. The
expulsion of private respondents from TANDUAY DISTILLERY LABOR UNION and their consequent
suspension and termination from employment with TANDUAY DISTILLERY, INC., without reinstatement
and backwages, are hereby SUSTAINED. No cost.

LIRAG TEXTILE MILLS, INC. VS. BLANCO


GR NO. L-27029, NOVEMBER 12, 1981

MELENCIO-HERRERA, J.:
Submitted for review is the Resolution of the Court of Industrial Relations en banc affirming the Decision in
Case No. 4219-ULP finding petitioner Lirag Textile Mills, Inc. (LITEX, for brevity) to have committed an
unfair labor practice act in dismissing its employee, respondent Epifanio D. Blanco, for union activities and
ordering his restatement with back wages.
The records disclose that since 1957 there had existed in LITEX a union known as Litex Employees
Association (LEA, for short). Private respondent Epifanio D. Blanco, who was employed by LITEX on April
3, 1959, joined that union a few months thereafter. On January 2, 1960, LEA entered into its first collective
bargaining agreement with LITEX for a period of two (2) years, which was subsequently renewed for three
(3) years, or up to March 31, 1965. The agreement contained a closed-shop provision as follows:
Section 1. Union Security. The COMPANY recognizes the UNION AS THE SOLE and
exclusive collective bargaining representative of all its employees and/or members.
Section 2. Union Shop. It is mutually agreed between the COMPANY and the UNION
that newly-hired employees on probationary basis in accordance with Section 2, Article III
of this AGREEMENT, are required as a condition or prerequisite of continued employment
on a regular basis to join and be member of the UNION in good standing. It is a continuing
condition of employment with the COMPANY that employees coming under this
AGREEMENT should be and must remain as good standing members of the UNION. The
UNION therefore may from time to time recommend to the COMPANY, the separation from
the service of any of its members for reasons that he or she is no longer a member of the
UNION in good standing. Accordingly, those losing their membership in the UNION could
not be retained in the employ of the COMPANY.
The constitution and by-laws of the union also provided, inter alia:
Sec. 5, Art. III Expulsion By a majority vote of the Board of Officers, including the
President's, any member of the union may be expelled therefrom for any of the following
grounds:
1. Being affiliated with other labor union.
2. Refusal to obey constitution and by-laws and the duly enacted rules and regulations of
the union.
3. Acts prejudicial to the interest of the union and/or its members.

Sometime in January, 1964, BLANCO and several employees organized the Confederation of Industrial
and Allied Labor Organization (CIALO). On April 1, 1964, CIALO filed a petition for certification election at
LITEX before the Court of Industrial Relations (Case No. 1332-MC) The petition was dismissed, however,
and said Court certified LEA as the sole bargaining representative of the rank and file employees of
LITEX. 2
In the same month of April, 1964, LEA's grievance committee conducted an investigation of its members
suspected of having joined CIALO.
On April 24, 1964, BLANCO was dismissed by LITEX for violation of company rules and regulations in a
letter reading as follows:
Dear Mr. Blanco,
This is to inform you that as per report of the Security Guards, dated April 10, 1964, you
were a) found distributing leaflets and reading materials inside the Service Bus, b)
subsequently apprehended at the gate with several other leaflets and an envelope with
leaflets for distribution to company employees and c) refused to be searched upon
entrance at the gate, in violation of existing company rules and regulations.
Inasmuch as you were previously warned for misconduct and inefficiency on September
27, 1961 and June 1, 1963, respectively, and suspended twice on June 29, 1961 for act of
f resulting in injury to a co-employee and on July 29, 1963 for refusal to be searched and
utterance of bad words against the guards and other offenses contained in our letter of
July 10, 1963, we have decided after giving you a definite last warning on July 11, 1963, to
terminate your services effective on Friday, April 24, 1964.
Very truly yours,
KHRISNAMURTI A. AFRICANO
Personnel Officer 3
On April 27, 1964, LEA addressed a letter to LITEX recommending the immediate dismissal of 18 members
named therein, who had been found to have violated the Union's constitution and by laws and the Revised
Collective Bargaining Agreement by joining CIALO 4, attaching thereto the minutes of a meeting held by the
Board of Officers of LEA on April 24, 1964 adopting a resolution of expulsion. 5 BLANCO's name was not
included in the list presumably because he had been dismissed by the company on April 24, 1964, or three
days before.

On April 27, 1964, LITEX advised LEA of its reluctance to effect the termination from the service of the 18
employees, and asked for reconsideration. 6 LEA insisted on the dismissal of the 18 employees threatening
to go to Court should LITEX refuse to honor its commitment under their collective bargaining agreement. 7
The 18 employees were dismissed on different dates. They filed separate complaints against LITEX. After
investigation, Case No. 4219-ULP for Unfair Labor Practice against LITEX was filed before the CIR on
behalf of BLANCO and six others upon the following allegations:
4. That the respondent company thru Khrisnamurti Africano, discriminated against the
complaints with regards to their tenure of employment by dismissing them on the dates
appearing opposite their names listed hereunder for no other reason than their willingness
to join the complainant union and/or affiliation therein and union activities so as to
discourage membership thereto, as follows:
1) Francisco Pineda April 24, 1964
2) Antonio S. Lalucis April 29, 1964
3) Eduardo Canlas April 28, 1964
4) Leovigildo Roldan April 28, 1964
5) Romeo Florentino April 28, 1964
6) Daniel Fontaina April 28, 1964
7) Epifanio Blanco April 24, 1964 8
In its Answer, LITEX denied the charge and raised defenses. The case was subsequently heard on the
merits.
LEA endeavored to intervene but its Motion was denied by respondent Court for lack of legal basis.
On October 17, 1966, the Court of Industrial Relations rendered judgment, the dispositive portion of which
reads:
WHEREFORE, in the case of complainant Epifanio Blanco, the court finds respondents to
have violated the Industrial Peace Act and hereby orders them to cease and desist from
committing the censurable acts herein found, to reinstate him to his former or equivalent
position without loss of seniority and other privileges, and to pay him backwages at the
rate of fifty (50) per cent from the time of his dismissal up to his reinstatement.

With respect to all the other complainants, for lack of merit and insufficiency of evidence,
the complaint is hereby DISMISSED.
Respondent court rationalized its holding in respect of BLANCO, thus:
Exhibit "A Blanco", an unobjected piece of material evidence, shows beyond doubt that
the consequent act of respondent company interfered with the exercise of the employee's
right to self-organization. Blanco was not even investigated by the company to find out
whether or not he did refuse to be searched, as this is the only regulation alleged to have
been violated (Exhibit "A-Blanco"). Under the circumstances, the concurrence of other
grounds, stale as they were, reeks with pretext and cannot justify the dismissal. It is
explicitly clear that the prevailing reason for his separation from the service was his union
activities. 9
LITEX moved for reconsideration, but this was denied by respondent Court en banc on November 16,
1966. LITEX appealed to this instance assigning the following errors to respondent CIR:
I.

The Respondent Court erred in holding that the Litex Employees Association
(LEA) did not demand the dismissal of the respondent Epifanio Blanco pursuant to
the Union Shop provision of the Collective Bargaining Contract (Exhibit 2) just
because his name did not appear in the letter (Exhibit 4) in spite of sufficient
testimonial and documentary evidence to the contrary.

II.

The Respondent Court erred in holding that the dismissal of respondent Epifanio
Blanco for violation of company rules was an unfair labor practice just because the
violation was at the same time a union activity, and in justifying this holding to
consider a just warning for inefficiency and post violations for misconduct for which
he was warned the first time, and for subsequent misconducts for which he was
twice suspended, as a result of which he was given a definite last warning, as
"stale" grounds although the last violation for which he was dismissed occurred
within nine (9) months from the time the definite last warning was issued to him.

The petition is meritorious.


Respondent Court ruled that the five other complainants (Lalucis, Canlas, Roldan, Florentino and Fontaina)
were legally separated from the service pursuant to the closed- shop agreement and the constitution and
by-laws of LEA, which have binding effect on the parties, but ruled as unfair labor practice the dismissal of
BLANCO, his name not having been included in the list of member-employees who were expelled from the
union and recommended to the company for dismissal from the service.

There is no justifiable reason to single out BLANCO. He was in an Identical position as the five other
complainants. If his name was not included in the list of 18 employees recommended for dismissal it was
because he had been dismissed three days before by the company. And if he had not been dismissed by
the company, his dismissal would have been demanded by LEA considering that he was one of those
investigated by LEA's grievance committee which had approved the recommendation to dismiss them on
the charge of being members of another union. In fact, in paragraph 4 of the Complaint ( supra) BLANCO
made common cause with the other complainants for having been dismissed "for no other reason than their
willingness to join the CIALO union and/or affiliation therein and union activities so as to discourage
membership thereto ... ." BLANCO admitted his affiliation with CIALO. There is evidence, too, that he,
together with his co-employees organized a rival union, CIALO, in contravention of the collective bargaining
agreement and the constitution and by-laws of LEA, of which they were then members. These acts of
BLANCO and his co-workers of organizing a rival union and distributing leaflets and propaganda papers,
clearly constituted a ground for expulsion under Section 5 of LEA's constitution and by-laws, quoted
hereinabove.
This Court has held that closed-shop is a valid form of union security and such provision in a collective
bargaining agreement is not a restriction of the right of freedom of association guaranteed by the
Constitution. 10 Respondent Court upheld the validity of the closed-shop agreement of LEA and LITEX,
when it ruled as legal the dismissal of complainants except respondent, pursuant thereto. Respondent
Court should have also upheld as legal the separation from the service of BLANCO on the same ground in
the face of evidence that he committed the same violation.
The case of Manalang vs. Artex Development Company, Inc., supra, is authority for the view that:
Even if we assume, in gratia argumentis, that the petitioners were unaware of the
stipulations set forth in the collective bargaining agreement, since their membership in the
BBLU prior to their expulsion therefrom is undenied, there can be no question that as long
as the agreement with closed-shop provision was in force, they are bound by it. Neither
their ignorance of, nor their dissatisfaction with, its terms and conditions would justify
breach thereof or the formation by them of a union of their own.
In his Answer to the present Petition, BLANCO claimed that the closed-shop provision applies only to newly
hired employees and not to old employees like himself. He abandoned this argument in his Brief, however.
Suffice it to say that he was already a member of LEA when the collective bargaining agreement containing
the closed- shop provision was executed, and therefore, he was bound by the same.
As a general rule, the findings of facts of the Industrial Court are final and conclusive when supported by
substantial evidence. 11 However, where, as in this case, respondent Court ignored the evidence adduced
by the parties, it is guilty of grave abuse of discretion as to warrant a review by this Court of its findings of
fact. 12

We come now to the second assigned error. Respondent Court ruled that the prevailing reason for
BLANCO's separation from the service was his union activities, and it considered as "stale" the other
grounds for which he was dismissed, namely, previous misconduct and violations of company rules and
regulations. Again, this is reversible error.
BLANCO himself admitted that he was suspended for mischief on June 21, 1961; warned for misconduct
and inefficiency on September 27, 1961 and June 1, 1963; suspended on June 25, 1963 13 ; nearly
dismissed on July 13, 1963 pursuant to a letter of dismissal, dated July 10, 1963, but through LEA's
intercession was given a last warning instead on July 11, 1963, as follows:
We are giving a reconsideration to the case of Mr. Epifanio Blanco, on the representation
of the Litex Employees Association although the facts of the case warrant immediate
termination.
Mr. Blanco, is however, to be given a maximum suspension of six (6) working days with a
last warning that any other offense will be subject to outright dismissal for cause.
KHRISNAMURTI A. AFRICANO
Personnel Officer
ACCEPTED:
EPIFANIO D. BLANCO 14
Accordingly, a suspension order for six days, from July 29 to August 3, 1963, was duly approved by
LITEX. 15
It is noteworthy that one of the grounds of dismissal cited by LITEX in its letter of April 23, 1964 was
BLANCO's refusal to be searched upon entrance at the company gate in violation of company rules and
regulations. This was the same offense for which he was almost dismissed on July 13, 1963.
Prior violations, misconduct or misdemeanors form part of an employee's record. BLANCO's present
infraction coupled with his blemished employment record, with a last warning given some nine months
before, inevitably led to his dismissal on April 24, 1964. An employee may be dismissed on the ground of
willful disobedience to rules, orders and instructions of the employer, which must be reasonable and lawful,
known to the employee and pertain to duties which the employee discharges. 16
It is true that BLANCO denied that he refused to be searched. 17 Even granting, however, that he could not
be dismissed on the ground of refusal to be searched for lack of sufficient proof, he can still be legally
dismissed for his affiliation with CIALO which is specifically prohibited by the CBA and the Constitution and
by-laws of LEA, in respect of which, evidence had been satisfactorily adduced.

WHEREFORE, the appealed Decision in so far as it held that petitioner violated the Industrial Peace Act in
dismissing respondent Epifanio D. Blanco and ordering his reinstatement by petitioner, is hereby set aside.
No costs.

FLOUR MILLS EMPLOYEES VS. LIBERTY FLOUR MILLS, INC., PHIL.


LABOR ALLIANCE COUNCIL (PLAC)
GR NOS. 58768-70, DECEMBER 29, 1989
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 abovequoted, 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.

REYES VS. TRAJANO


GR NO. 8443, JUNE 2, 1992
NARVASA, C.J.:
The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano Trajano) sustained the denial by
the Med Arbiter of the right to vote of one hundred forty-one (141) members of the "Iglesia ni Kristo" (INK),
all employed in the same company, at a certification election at which two (2) labor organizations were
contesting the right to be the exclusive representative of the employees in the bargaining unit. That denial
is assailed as having been done with grave abuse of discretion in the special civil action of certiorari at bar,
commenced by the INK members adversely affected thereby.
The certification election was authorized to be conducted by the Bureau of Labor Relations among the
employees of Tri-Union Industries Corporation on October 20, 1987. The competing unions were Tri-Union
Employees Union-Organized Labor Association in Line Industries and Agriculture (TUEU-OLALIA), and
Trade Union of the Philippines and Allied Services (TUPAS). Of the 348 workers initially deemed to be
qualified voters, only 240 actually took part in the election, conducted under the provision of the Bureau of
Labor Relations. Among the 240 employees who cast their votes were 141 members of the INK.
The ballots provided for three (3) choices. They provided for votes to be cast, of course, for either of the
two (2) contending labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and, conformably with
established rule and practice, 1 for (c) a third choice: "NO UNION."
The final tally of the votes showed the following results:
TUPAS 1
TUEU-OLALIA 95
NO UNION 1

SPOILED 1
CHALLENGED 141
The challenged votes were those cast by the 141 INK members. They were segregated and
excluded from the final count in virtue of an agreement between the competing unions, reached at
the pre-election conference, that the INK members should not be allowed to vote "because they
are not members of any union and refused to participate in the previous certification elections."
The INK employees promptly made known their protest to the exclusion of their votes. They filed f a petition
to cancel the election alleging that it "was not fair" and the result thereof did "not reflect the true sentiments
of the majority of the employees." TUEU-OLALIA opposed the petition. It contended that the petitioners "do
not have legal personality to protest the results of the election," because "they are not members of either
contending unit, but . . . of the INK" which prohibits its followers, on religious grounds, from joining or
forming any labor organization . . . ."
The Med-Arbiter saw no merit in the INK employees 1 petition. By Order dated December 21, 1987, he
certified the TUEU-OLALIA as the sole and exclusive bargaining agent of the rank-and-file employees. In
that Order he decided the fact that "religious belief was (being) utilized to render meaningless the rights of
the non-members of the Iglesia ni Kristo to exercise the rights to be represented by a labor organization as
the bargaining agent," and declared the petitioners as "not possessed of any legal personality to institute
this present cause of action" since they were not parties to the petition for certification election.
The petitioners brought the matter up on appeal to the Bureau of Labor Relations. There they argued that
the Med-Arbiter had "practically disenfranchised petitioners who had an overwhelming majority," and "the
TUEU-OLALIA certified union cannot be legally said to have been the result of a valid election where at
least fifty-one percent of all eligible voters in the appropriate bargaining unit shall have cast their votes."
Assistant Labor Secretary Cresenciano B. Trajano, then Officer-in-Charge of the Bureau of Labor
Relations, denied the appeal in his Decision of July 22, 1988. He opined that the petitioners are "bereft of
legal personality to protest their alleged disenfrachisement" since they "are not constituted into a duly
organized labor union, hence, not one of the unions which vied for certification as sole and exclusive
bargaining representative." He also pointed out that the petitioners "did not participate in previous
certification elections in the company for the reason that their religious beliefs do not allow them to form,
join or assist labor organizations."
It is this Decision of July 22, 1988 that the petitioners would have this Court annul and set aside in the
present special civil action of certiorari.
The Solicitor General having expressed concurrence with the position taken by the petitioners, public
respondent NLRC was consequently required to file, and did thereafter file, its own comment on the
petition. In that comment it insists that "if the workers who are members of the Iglesia ni Kristo in the

exercise of their religious belief opted not to join any labor organization as a consequence of which they
themselves can not have a bargaining representative, then the right to be representative by a bargaining
agent should not be denied to other members of the bargaining unit."
Guaranteed to all employees or workers is the "right to self-organization and to form, join, or assist labor
organizations of their own choosing for purposes of collective bargaining." This is made plain by no less
than three provisions of the Labor Code of the Philippines. 2 Article 243 of the Code provides as follows: 3
ART. 243. Coverage and employees right to self-organization. All persons employed in
commercial, industrial and agricultural enterprises and in religious, charitable, medical, or
educational institutions whether operating for profit or not, shall have the right to selforganization and to form, join, or assist labor organizations of their own choosing for
purposes or collective bargaining.Ambulant, intermittent and itinerant workers, selfemployed people, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection.
Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to "interfere with,
restrain or coerce employees in the exercise of their right to self-organization." Similarly, Article 249 (a)
makes it an unfair labor practice for a labor organization to "restrain or coerce employees in the exercise of
their rights to self-organization . . . "
The same legal proposition is set out in the Omnibus Rules Implementing the Labor Code, as amended, as
might be expected Section 1, Rule II (Registration of Unions), Book V (Labor Relations) of the Omnibus
Rules provides as follows; 4
Sec. 1. Who may join unions; exception. All persons employed in commercial, industrial
and agricultural enterprises, including employees of government corporations established
under the Corporation Code as well as employees of religious, medical or educational
institutions, whether operating for profit or not, except managerial employees, shall have
the right to self-organization and to form, join or assist labor organizations for purposes of
collective bargaining. Ambulant, intermittent and without any definite employers people,
rural workers and those without any definite employers may form labor organizations for
their mutual aid and protection.
The right of self-organization includes the right to organize or affiliate with a labor union or determine which
of two or more unions in an establishment to join, and to engage in concerted activities with co-workers for
purposes of collective bargaining through representatives of their own choosing, or for their mutual aid and
protection, i.e., the protection, promotion, or enhancement of their rights and interests. 5
Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a labor
organization, is subsumed in the right to join, affiliate with, or assist any union, and to maintain membership

therein. The right to form or join a labor organization necessarily includes the right to refuse or refrain from
exercising said right. It is self-evident that just as no one should be denied the exercise of a right granted by
law, so also, no one should be compelled to exercise such a conferred right. The fact that a person has
opted to acquire membership in a labor union does not preclude his subsequently opting to renounce such
membership. 6
As early as 1974 this Court had occasion to expatiate on these self-evident propositions in Victoriano v.
Elizalde Rope Workers' Union, et al., 7 viz.:
. . .What the Constitution and Industrial Peace Act recognize and guarantee is the "right" to
form or join associations. Notwithstanding the different theories propounded by the
different schools of jurisprudence regarding the nature and contents of a "right," it can be
safely said that whatever theory one subscribes to, a right comprehends at least two broad
notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an
employee may act for himself being prevented by law; second, power, whereby an
employee may, as he pleases, join or refrain from joining an association. It is therefore the
employee who should decide for himself whether he should join or not an association; and
should he choose to join; and even after he has joined, he still retains the liberty and the
power to leave and cancel his membership with said organization at any time (Pagkakaisa
Samahang Manggagawa ng San Miguel Brewery vs. Enriquez, et al., 108 Phil. 1010,
1019). It is clear, therefore, that the right to join a union includes the right to abstain from
joining any union (Abo, et al. vs. PHILAME [KG] Employees Union, et al., L-19912,
January 20, 1965, 13 SCRA 120, 123, quoting Rothenberg, Labor Relations). Inasmuch as
what both the Constitution and the Industrial Peace Act have recognized, the guaranteed
to the employee, is the "right" to join associations of his choice, it would be absurd to say
that the law also imposes, in the same breath, upon the employee the duty to join
associations. The law does not enjoin an employee to sign up with any association.
The right to refuse to join or be represented by any labor organization is recognized not only by law but also
in the rules drawn up for implementation thereof. The original Rules on Certification promulgated by the
defunct Court of Industrial Relations required that the ballots to be used at a certification election to
determine which of two or more competing labor unions would represent the employees in the appropriate
bargaining unit should contain, aside from the names of each union, an alternative choice of the employee
voting, to the effect that he desires not to which of two or more competing labor unions would represent the
employees in the appropriate bargaining unit should contain, aside from the names of each union, an
alternative choice of the employee voting, to the effect that he desires not to be represented by any
union. 8 And where only one union was involved, the ballots were required to state the question "Do you
desire to be represented by said union?" as regards which the employees voting would mark an
appropriate square, one indicating the answer, "Yes" the other, "No."

To be sure, the present implementing rules no longer explicitly impose the requirement that the ballots at a
certification election include a choice for "NO UNION" Section 8 (rule VI, Book V of the Omnibus Rules)
entitled"Marketing and canvassing of votes," pertinently provides that:
. . . (a) The voter must write a cross (X) or a check (/) in the square opposite the union of
his choice. If only one union is involved, the voter shall make his cross or check in the
square indicating "YES" or "NO."
Withal, neither the quoted provision nor any other in the Omnibus Implementing Rules expressly bars the
inclusion of the choice of "NO UNION" in the ballots. Indeed it is doubtful if the employee's alternative
right NOT to form, join or assist any labor organization or withdraw or resign from one may be validly
eliminated and he be consequently coerced to vote for one or another of the competing unions and be
represented by one of them. Besides, the statement in the quoted provision that "(i)f only one union is
involved, the voter shall make his cross or check in the square indicating "YES" or "NO," is quite clear
acknowledgment of the alternative possibility that the "NO" votes may outnumber the "YES" votes
indicating that the majority of the employees in the company do not wish to be represented by any union
in which case, no union can represent the employees in collective bargaining. And whether the prevailing
"NO" votes are inspired by considerations of religious belief or discipline or not is beside the point, and may
not be inquired into at all.
The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the
employees in the appropriate bargaining unit: to be or not to be represented by a labor organization, and in
the affirmative case, by which particular labor organization. If the results of the election should disclose that
the majority of the workers do not wish to be represented by any union, then their wishes must be
respected, and no union may properly be certified as the exclusive representative of the workers in the
bargaining unit in dealing with the employer regarding wages, hours and other terms and conditions of
employment. The minority employees who wish to have a union represent them in collective bargaining
can do nothing but wait for another suitable occasion to petition for a certification election and hope that
the results will be different. They may not and should not be permitted, however, to impose their will on the
majority who do not desire to have a union certified as the exclusive workers' benefit in the bargaining
unit upon the plea that they, the minority workers, are being denied the right of self-organization and
collective bargaining. As repeatedly stated, the right of self-organization embraces not only the right to
form, join or assist labor organizations, but the concomitant, converse right NOT to form, join or assist any
labor union.
That the INK employees, as employees in the same bargaining unit in the true sense of the term, do have
the right of self-organization, is also in truth beyond question, as well as the fact that when they voted that
the employees in their bargaining unit should be represented by "NO UNION," they were simply exercising
that right of self-organization, albeit in its negative aspect.

The respondents' argument that the petitioners are disqualified to vote because they "are not constituted
into a duly organized labor union" "but members of the INK which prohibits its followers, on religious
grounds, from joining or forming any labor organization" and "hence, not one of the unions which vied for
certification as sole and exclusive bargaining representative," is specious. Neither law, administrative rule
nor jurisprudence requires that only employees affiliated with any labor organization may take part in a
certification election. On the contrary, the plainly discernible intendment of the law is to grant the right to
vote to all bona fide employees in the bargaining unit, whether they are members of a labor organization or
not. As held in Airtime Specialists, Inc. v. Ferrer-Calleja: 9
In a certification election all rank-and-file employees in the appropriate bargaining unit are
entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states
that the "labor organization designated or selected by the majority of the employees in an
appropriate bargaining unit shall be the exclusive representative of the employees in such
unit for the purpose of collective bargaining." Collective bargaining covers all aspects of
the employment relation and the resultant CBA negotiated by the certified union binds all
employees in the bargaining unit. Hence, all rank-and-file employees, probationary or
permanent, have a substantial interest in the selection of the bargaining representative.
The Code makes no distinction as to their employment for certification election. The law
refers to "all" the employees in the bargaining unit. All they need to be eligible to support
the petition is to belong to the "bargaining unit".
Neither does the contention that petitioners should be denied the right to vote because they "did not
participate in previous certification elections in the company for the reason that their religious beliefs do not
allow them to form, join or assist labor organizations," persuade acceptance. No law, administrative rule or
precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past
certification elections. In denying the petitioners' right to vote upon these egregiously fallacious grounds,
the public respondents exercised their discretion whimsically, capriciously and oppressively and gravely
abused the same.
WHEREFORE, the petition for certiorari is GRANTED; the Decision of the then Officer-in-Charge of the
Bureau of Labor Relations dated December 21, 1987 (affirming the Order of the Med-Arbiter dated July 22,
1988) is ANNULLED and SET ASIDE; and the petitioners are DECLARED to have legally exercised their
right to vote, and their ballots should be canvassed and, if validly and properly made out, counted and
tallied for the choices written therein. Costs against private respondents.
SO ORDERED.