1

G.R. No. 106518 March 11, 1999

ABS-CBN SUPERVISORS EMPLOYEES UNION MEMBERS, petitioner,

vs.
ABS-CBN BROADCASTING CORP., HERBERT RIVERA, ALBERTO BERBON, CINDY MUNOZ, CELSO JAMBALOS,
SALVADOR DE VERA, ARNULFO ALCAZAR, JAKE MADERAZO, GON CARPIO, OSCAR LANDRITO, FRED
GARCIA, CESAR LOPEZ and RUBEN BARRAMEDA, respondents.

PURISIMA, J.:

At bar is a special civil action for Certiorari 1 seeking the reversal of the Order 2 dated July 31, 1992 of public respondent
Department of Labor and Employment Undersecretary Bienvenido E. Laguesma 3 in Case No. NCR -
OD-M -90 -07-037.

From the records on hand, it can be gathered, that:

On December 7, 1989, the ABS-CBN Supervisors Employees Union ("the Union"), represented by respondent Union
Officers, and ABS-CBN Broadcasting Corporation ("the Company") signed and concluded a Collective Bargaining
Agreement with the following check-off provision, to wit:

Art. XII The [C]ompany agrees to advance to the Union a sum equivalent to 10% of the sum total of all
the salary increases and signing bonuses granted to the Supervisors under this collective Bargaining
Agreement and upon signing hereof to cover the Union's incidental expenses, including attorney's fees
and representation expenses for its organization and (sic) preparation and conduct hereof, and such
advance shall be deducted from the benefits granted herein as they accrue.

On September 19, 1990, Petitioners 4 filed with the Bureau of Labor Relations, DOLE-NCR, Quezon City, a Complaint
against the Union Officers 5 and ABS-CBN Broadcasting corporation, praying that (1) the special assessment of ten
percent (10%) of the sum total of all salary increases and signing bonuses granted by respondent Company to the
members of the Union be declared illegal for failure to comply with the Labor Code, as amended, particularly Article 241,
paragraphs (g), (n), and (o); and in utter violation of the Constitution and By-Laws of the ABS-CBN Supervisors
Employees Union; (2) respondent Company be ordered to suspend further deductions from petitioners' salaries for their
shares thereof.

In their Answers, respondent Union Officers and Company prayed for the dismissal of the Complaint for lack of merit.
They argued that the check-off provision is in accordance with law as majority of the Union members individually executed
a written authorization giving the Union officers and the Company a blanket authority to deduct subject amount.

On January 21, 1991, Med-Arbiter Rasidali C. Abdullah issued the following Order: 6

WHEREFORE, premises considered judgment is hereby rendered:

a) declaring the special assessment of 10% of the sum total of CBA benefits as illegal;

b) ordering respondents union officers to refund to the complainants and other union members the amount of Five
Hundred Thousand Pesos (P500,000.00) advanced by the respondent Company as part of the 10% sum total of
CBA benefits without unnecessary delay;

c) ordering the respondent company to stop and desist from further making advances and deductions from the
union members' salaries their share in the advances already made to the union;

d) ordering the respondent Company to remit directly to the complainants and other union members the amount
already deducted from the union members' salaries as part of their share advances already made to the union
and which it had kept in trust during the pendency of this case; and

e) directing the respondents union officers and respondent Company to submit report on the compliance thereof.

SO ORDERED.

On appeal, respondent DOLE Undersecretary Bienvenido E. Laguesma handed down a Decision 7 on July 1, 1991,
disposing as follows:
 2

WHEREFORE, the appeals are hereby denied, the Order of the Med-Arbiter is affirmed en toto.

On July 5, 1991, the aforesaid Decision was received by the respondent Union Officers and respondent Company. On
July 13, 1991, they filed their Motion for Reconsideration stating, inter alia that the questioned ten percent (10%) special
assessment is valid pursuant to the ruling in Bank of the Philippine Islands Employee Union - ALU vs. NLRC. 8

On July 31, 1992, Undersecretary B. E. Laguesma issued an Order 9; resolving, thus:

WHEREFORE, the Decision dated 01 July 1991 is hereby SET ASIDE, In lieu thereof, a new one is
hereby entered DISMISSING the Complaint/Petition for lack of merit.

Hence, the present petition seeking to annul and set aside the above-cited Order of public respondent Undersecretary B.
E. Laguesma, for being allegedly tainted with grave abuse of discretion amounting to lack of jurisdiction.

Did the public respondent act with grave abuse of discretion in issuing the challenged Order reversing his own Decision of
July 1,1991? Such is the sole issue posited, which we resolve in the negative. The petition is unmeritorious.

Petitioners claim 10 that the Decision of the Secretary of Labor and Employment dated July 1, 1991, affirming in toto the
Order of Med-Arbiter Rasidali Abdullah dated January 31, 1991, cannot be a subject of a motion for reconsideration
because it is final and unappealable pursuant to Section 8, Rule VIII, Book V of the Omnibus Rule Implementing the Labor
Code. It is further argued that the only remedy of the respondent Union Officers' is to file a petition for certiorari with this
Court.

Sec. 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code, provides:

The Secretary shall have fifteen (15) calendar days within which to decide the appeal from receipt of the
records of the case. The decision of the Secretary shall be final and inappealable. [Underscoring
supplied]. (Comment, p. 101)

The aforecited provision cannot be construed to mean that the Decision of the public respondent cannot be reconsidered
since the same is reviewable by writ of certiorari under Rule 65 of the Rules of Court. As a rule, the law requires a motion
for reconsideration to enable the public respondent to correct his mistakes, if any. In Pearl S. Buck Foundation, Inc., vs.
NLRC, 11 this Court held:

Hence, the only way by which a labor case may reach the Supreme Court is through a petition
for certiorari under Rule 65 of the Rules of Court alleging lack or excess of jurisdiction or grave abuse of
discretion. Such petition may be filed within a reasonable time from receipt of the resolution denying
the motion for reconsideration of the NLRC decision. [Emphasis supplied].

Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion
for reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake
complained of.

So also, considering that a decision of the Secretary of Labor is subject to judicial review only through a special civil action
of certiorari and, as a rule, cannot be resorted to without the aggrieved party having exhausted administrative remedies
through a motion for reconsideration, the aggrieved party, must be allowed to move for a reconsideration of the same so
that he can bring a special civil action for certiorari before the Supreme Court. 12

Furthermore, it appears that the petitioners filed with the public respondent a Motion for Early Resolution 13 dated June 24,
1992, averring that private respondents' Motion for Reconsideration did not contain substantial factual or legal grounds for
the reversal of subject decision. Consequently, petitioners are now estopped from raising the issue sought for resolution.
In Alfredo Marquez vs. Secretary of Labor 14 the Court said:

. . . The active participation of the party against whom the action was brought, coupled with his failure to
object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to
an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said
party from later on impugning the court or body's jurisdiction.

What is more, it was only when the public respondent issued the Order adverse to them that the petitioners raised the
question for the first time before this Court. Obviously, it is a patent afterthought which must be abhorred.
 3

Petitioners also argued that the check-off provision in question is illegal because it was never submitted for consideration
and approval to "all the members at a general membership meeting called for the purpose"; and further alleged that the
formalities mandated by Art. 241, paragraphs (n) and (o) of the Labor Code, as amended, were not complied with.

"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." 15 Its desirability in a labor organization is quite evident. It is assured
thereby of continuous funding. As this Court has acknowledged, the system of check-off is primarily for the benefit of the
Union and only indirectly, for the individual employees.

The legal basis of check-off is found in statutes or in contracts. 16 The statutory limitations on check-offs are found in Article
241, Chapter II, Title IV, Book Five of the Labor Code, which reads:

Rights and conditions of membership in a labor organization The following are the rights and
conditions of membership in a labor organization:

xxx xxx xxx

(g) No officer, agent, or member of a labor organization shall collect any fees, dues, or other contributions
in its behalf to make any disbursement of its money or funds unless he is duly authorized pursuant to its
constitution and by-laws.

xxx xxx xxx

(n) No special assessement or other extraordinary fees may be leavied upon the members of a labor
organization unless authorized by a written resolution of a majority of all the members of a general
membership meeting duly called for the purpose. The secretary of the organization shall record the
minutes of the meeting including the list of all members present, the votes cast, the purpose of the special
assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the
president.

(o) Other than for mandatory activities under the Code, no special assessments, attorney's fees
negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee
without an individual written authorization duly signed by the employee. The authorization should
specifically state the amount, purpose and beneficiary of the deductions. [Emphasis; supplied]

Art. 241 of the Labor Code, as amended, must be read in relation to Article 222, paragraph (b) of the same law, which
states:

No attorney's fees, negotiation fees or similar charges of any kind arising from collective bargaining
negotiations or conclusion of the collective agreement shall be imposed on any individual member of the
contracting union: Provided, however, that attorney's fees may be charged against union funds in an
amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the
contrary shall be null and void. [Emphasis; supplied]

And this court elucidated the object and import of the said provision of law in Bank of Philippine Islands Employees Union
- Association Labor Union (BPIEU-ALU) vs. National Labor Relations Commission: 17

The Court reads the afore-cited provision (Article 222 [b] of the Labor Code) as prohibiting the payment of
attorney's fees only when it is effected through forced contributions from the workers from their own
funds as distinguished from the union funds. . . .

Noticeably, Article 241 speaks of three (3) requisites that must be complied with in order that the special assessment for
Union's incidental expenses, attorney's fees and representation expenses, as stipulated in Article XII of the CBA, be valid
and upheld namely: 1) authorization by a written resolution of the majority of all the members at the general membership
meeting duly called for the purpose; (2) secretary's record of the minutes of the meeting; and (3) individual written
authorization for check-off duly signed by the employee concerned.

After a thorough review of the records on hand, we find that the three (3) requisites for the validity of the ten percent
(10%) special assessment for Union's incidental expenses, attorney's fees and representation expenses were met.
 4

It can be gleaned that on July 14, 1989, the ABS-CBN Supervisors Employee Union held its general meeting, whereat it
was agreed that a ten percent (10%) special assessment from the total economic package due to every member would be
checked-off to cover expenses for negotiation, other miscellaneous expenses and attorney's fees. The minutes of the said
meeting were recorded by the Union's Secretary, Ma. Carminda M. Munoz, and noted by its President, Herbert Rivera. 18

On May 24, 1991, said Union held its General Membership Meeting, wherein majority of the members agreed that "in as
much as the Union had already paid Atty. P. Pascual the amount of P500,000.00, the same must be shared by all the
members until this is fully liquidated. 19

Eighty-five (85) members of the same Union executed individual written authorizations for check-off, thus:

Towards that end, I hereby authorize the Management and/or Cashier of ABS-CBN BROADCASTING
CORPORATION to deduct from my salary the sum of P30.00 per month as my regular union dues and
said Management and/or Cashier are further authorize (sic) to deduct a sum equivalent to10% of all and
whatever benefits that will become due to me under the COLLECTIVE BARGAINING AGREEMENT
(CBA) that may be agreed upon by the UNION and MANAGEMENT and to apply the said sum to the
advance that Management will make to our Union for incidental expenses such as attorney's fees,
representations and other miscellaneous expenses pursuant to Article XII of the proposed CBA. 20

Records do not indicate that the aforesaid check-off authorizations were executed by the eighty-five (85) Union members
under the influence of force or compulsion. There is, then, the presumption that such check-off authorizations were
executed voluntarily by the signatories thereto. Petitioner's contention that the amount to be deducted is uncertain 21 is not
persuasive because the check-off authorization clearly stated that the sum to be deducted is equivalent to ten percent
(10%) of all and whatever benefits may accrue under the CBA. In other words, although the amount is not fixed, it is
determinable.

Petitioners further contend that Article 241 (n) of the Labor Code, as amended, on special assessments, contemplates a
general meeting after the conclusion of the collective bargaining agreement.

Subject Article does not state that the general membership meeting should be called after the conclusion of a collective
bargaining agreement. Even granting ex gratia argumenti that the general meeting should be held after the conclusion of
the CBA, such requirement was complied with since the May 24, 1991 General Membership Meeting was held after the
conclusion of the Collective Bargaining Agreement, which was signed and concluded on December 7, 1989.

Considering that the three requisites afforesaid for the validity of a special assessment were observed or met, we uphold
the validity of the ten percent (10%) special assessment authorized in Article XII of the CBA.

We also concur in the finding by public respondent that the Bank of the Philippine Islands Employees Union - ALU vs.
NLRC 22 is apposite in this case. In BPIEU-ALU, the petitioners, impugned the Order of the NLRC, holding that the validity
of the five percent (5%) special assessment for attorney's fees is contrary to Article 222, paragraph (b) of the Labor Code,
as amended. The court ratiocinated, thus:

The Court reads the aforecited provision as prohibiting the payment of attorney's fees only when it is
effected through forced contributions from the workers from their own funds as distinguished from the
union funds. The purpose of the provision is to prevent imposition on the workers of the duty to
individually contribute their respective shares in the fee to be paid the attorney for his services on behalf
of the union in its negotiations with the management. . . . [Emphasis supplied]

However, the public respondent overlooked the fact that in the said case, the deduction of the stipulated five percent (5%)
of the total economic benefits under the new collective bargaining agreement was applied only to workers who gave their
individual signed authorizations. The Court explained:

. . . And significantly, the authorized deductions affected only the workers who adopted and signed the
resolution and who were the only ones from whose benefits the deductions were made by BPI. No similar
deductions were taken from the other workers who did not sign the resolution and so were not bound by
it. [Underscoring; supplied]

While the court also finds merit in the finding by the public respondent that Palacol vs. Ferrer-Calleja 23 is inapropos in the
case under scrutiny, it does not subscribe to public respondent's reasoning that Palacol should not be retroactively
applied to the present case in the interest of justice, equity and fairplay. 24 The inapplicability of Palacol lies in the fact that
it has a different factual milieu from the present case. In Palacol, the check-off authorization was declared invalid because
majority of the Union members had withdrawn their individual authorizations, to wit:
 5

Paragraph (o) on the other hand requires an individual written authorization duly signed by every
employee in order that special assessment may be validly checked-off. Even assuming that the special
assessment was validly levied pursuant to paragraph (n), and granting that individual written
authorizations were obtained by the Union, nevertheless there can be no valid check-off considering that
the majority of the Union members had already withdrawn their individual authorizations. A withdrawal of
individual authorization is equivalent to no authorization at all. . . . [Emphasis; supplied]

In this case, majority of the Union members gave their individual written check-off authorizations for the ten
percent (10%) special assessment. And they have never withdrawn their individual written authorizations for
check-off.

There is thus cogent reason to uphold the assailed Order, it appearing from the records of the case that twenty (20) 25 of
the forty-two (42) petitioners executed a Compromise Agreement 26 ratifying the controversial check-off provision in the
CBA.

Premises studiedly considered, we are of the irresistible conclusion and, so find, that the ruling in BPIEU-ALU vs.
NLRC that (1) the prohibition against attorney's fees in Article 222, paragraph (b) of the Labor Code applies only when the
payment of attorney's fees is effected through forced contributions from the workers; and (2) that no deductions must be
taken from the workers who did not sign the check-off authorization, applies to the case under consideration.

WHEREFORE, the assailed Order, dated July 31, 1992, of DOLE Undersecretary B. E. Laguesma is AFFIRMED except
that no deductions shall be taken from the workers who did not give their individual written check-off authorization. No
pronouncement as to costs. SO ORDERED.

STA. LUCIA EAST COMMERCIAL G.R. No. 162355

CORPORATION,
Petitioner,
Present:

- versus - PUNO, C.J., Chairperson,

CARPIO,
CORONA,
HON. SECRETARY OF LABOR AND CHICO-NAZARIO,* and
EMPLOYMENT and LEONARDO-DE CASTRO, JJ.
STA. LUCIA EAST COMMERCIAL
CORPORATION WORKERS ASSOCIATION
(CLUP LOCAL CHAPTER), Promulgated:
Respondents.
August 14, 2009
x-------------------------------------------------- x
DECISION
CARPIO, J.:
The Case

This is a petition for review [1] assailing the Decision[2] promulgated on 14 August 2003 as well as the
Resolution[3] promulgated on 24 February 2004 of the Court of Appeals (appellate court) in CA-G.R. SP No. 77015. The
appellate court denied Sta. Lucia East Commercial Corporations (SLECC) petition for certiorari with prayer for writ of
preliminary injunction and temporary restraining order. The appellate court further ruled that the Secretary of Labor and
Employment (Secretary) was correct when she held that the subsequent negotiations and registration of a collective
bargaining agreement (CBA) executed by SLECC with Samahang Manggagawa sa Sta. Lucia East Commercial
(SMSLEC) could not bar Sta. Lucia East Commercial Corporation Workers Associations (SLECCWA) petition for direct
certification.

The Facts

The Secretary narrated the facts as follows:

On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of its
chartered local, instituted a petition for certification election among the regular rank-and-file employees of
Sta. Lucia East Commercial Corporation and its Affiliates, docketed as Case No. RO400-0202-RU-
007. The affiliate companies included in the petition were SLE Commercial, SLE Department Store, SLE
Cinema, Robsan East Trading, Bowling Center, Planet Toys, Home Gallery and Essentials.

On 21 August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to
inappropriateness of the bargaining unit. CLUP-Sta. Lucia East Commercial Corporation and its Affiliates
 6

Workers Union appealed the order of dismissal to this Office on 14 September 2001. On 20 November
2001, CLUP-Sta. Lucia East Commercial Corporation and its Affiliates Workers Union [CLUP-SLECC and
its Affiliates Workers Union] moved for the withdrawal of the appeal. On 31 January 2002, this Office
granted the motion and affirmed the dismissal of the petition.

In the meantime, on 10 October 2001, [CLUP-SLECC and its Affiliates Workers Union]
reorganized itself and re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers
Association (herein appellant CLUP-SLECCWA), limiting its membership to the rank-and-file employees
of Sta. Lucia East Commercial Corporation. It was issued Certificate of Creation of a Local Chapter No.
RO400-0110-CC-004.

On the same date, [CLUP-SLECCWA] filed the instant petition. It alleged that [SLECC] employs
about 115 employees and that more than 20% of employees belonging to the rank-and-file category are
its members. [CLUP-SLECCWA] claimed that no certification election has been held among them within
the last 12 months prior to the filing of the petition, and while there is another union registered with DOLE-
Regional Office No. IV on 22 June 2001 covering the same employees, namely [SMSLEC], it has not
been recognized as the exclusive bargaining agent of [SLECCs] employees.

On 22 November 2001, SLECC filed a motion to dismiss the petition. It averred that it has
voluntarily recognized [SMSLEC] on 20 July 2001 as the exclusive bargaining agent of its regular rank-
and-file employees, and that collective bargaining negotiations already commenced between them.
SLECC argued that the petition should be dismissed for violating the one year and negotiation bar rules
under pars. (c) and (d), Section 11, Rule XI, Book V of the Omnibus Rules Implementing the Labor Code.

On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was ratified by its rank-and-file
employees and registered with DOLE-Regional Office No. IV on 9 January 2002.

In the meantime, on 19 December 2001, [CLUP-SLECCWA] filed its Opposition and Comment to
[SLECCS] Motion to Dismiss. It assailed the validity of the voluntary recognition of [SMSLEC] by
[SLECC] and their consequent negotiations and execution of a CBA. According to [CLUP-SLECCWA],
the same were tainted with malice, collusion and conspiracy involving some officials of the Regional
Office. Appellant contended that Chief LEO Raymundo Agravante, DOLE Regional Office No. IV, Labor
Relations Division should have not approved and recorded the voluntary recognition of [SMSLEC] by
[SLECC] because it violated one of the major requirements for voluntary recognition, i.e., non-existence of
another labor organization in the same bargaining unit. It pointed out that the time of the voluntary
recognition on 20 July 2001, appellants registration as [CLUP-SLECC and its Affiliates Workers Union],
which covers the same group of employees covered by Samahang Manggagawa sa Sta. Lucia East
Commercial, was existing and has neither been cancelled or abandoned. [CLUP-SLECCWA] also
accused Med-Arbiter Bactin of malice, collusion and conspiracy with appellee company when he
dismissed the petition for certification election filed by [SMSLEC] for being moot and academic because
of its voluntary recognition, when he was fully aware of the pendency of [CLUP-SLECCWAs] earlier
petition for certification election.

Subsequent pleadings filed by [CLUP-SLECCWA] and [SLECC] reiterated their respective

positions on the validity and invalidity of the voluntary recognition. On 29 July 2002, Med-Arbiter Bactin
issued the assailed Order.[4]

The Med-Arbiters Ruling

In his Order dated 29 July 2002, Med-Arbiter Anastacio L. Bactin dismissed CLUP-SLECCWAs petition for direct
certification on the ground of contract bar rule. The prior voluntary recognition of SMSLEC and the CBA between SLECC
and SMSLEC bars the filing of CLUP-SLECCWAs petition for direct certification. SMSLEC is entitled to enjoy the rights,
privileges, and obligations of an exclusive bargaining representative from the time of the recording of the voluntary
recognition. Moreover, the duly registered CBA bars the filing of the petition for direct certification.

CLUP-SLECCWA filed a Memorandum of Appeal of the Med-Arbiters Order before the Secretary.

The Ruling of the Secretary of Labor and Employment

In her Decision promulgated on 27 December 2002, the Secretary found merit in CLUP-SLECCWAs appeal. The
Secretary held that the subsequent negotiations and registration of a CBA executed by SLECC with SMSLEC could not
bar CLUP-SLECCWAs petition. CLUP-SLECC and its Affiliates Workers Union constituted a registered labor organization
at the time of SLECCs voluntary recognition of SMSLEC. The dispositive portion of the Secretarys Decision reads:

WHEREFORE, the appeal is hereby GRANTED and the Order of the Med-Arbiter dated 29 July
2002 is REVERSED and SET ASIDE. Accordingly, let the entire records of the case be remanded to the
Regional Office of origin for the immediate conduct of a certification election, subject to the usual pre-
election conference, among the regular rank-and-file employees of [SLECC], with the following choices:

1. Sta. Lucia East Commercial Corporation Workers Association CLUP Local Chapter;
 7

2. Samahang Manggagawa sa Sta. Lucia East Commercial; and

3. No Union.

Pursuant to Rule XI, Section II.1 of Department Order No. 9, appellee corporation is hereby
directed to submit to the office of origin, within ten (10) days from receipt hereof, the certified list of its
employees in the bargaining unit or when necessary a copy of its payroll covering the same employees
for the last three (3) months preceding the issuance of this Decision.

Let a copy of this Decision be furnished the Bureau of Labor Relations and Labor Relations
Division of Regional Office No. IV for the cancellation of the recording of voluntary recognition in favor of
Samahang Manggagawa sa Sta. Lucia East Commercial and the appropriate annotation of re-registration
of CLUP-Sta. Lucia East Commercial Corporation and its Affiliates Workers Union to Sta. Lucia East
Commercial Corporation Workers Association-CLUP Local Chapter.

SO DECIDED.[5]

SLECC filed a motion for reconsideration which the Secretary denied for lack of merit in a Resolution dated 27
March 2003. SLECC then filed a petition for certiorari before the appellate court.

The Ruling of the Appellate Court

The appellate court affirmed the ruling of the Secretary and quoted extensively from the Secretarys decision. The
appellate court agreed with the Secretarys finding that the workers sought to be represented by CLUP-SLECC and its
Affiliates Workers Union included the same workers in the bargaining unit represented by SMSLEC. SMSLEC was not
the only legitimate labor organization operating in the subject bargaining unit at the time of SMSLECs voluntary
recognition on 20 July 2001. Thus, SMSLECs voluntary recognition was void and could not bar CLUP-SLECCWAs
petition for certification election.

The Issue

SLECC raised only one issue in its petition. SLECC asserted that the appellate court commited a reversible error when it
affirmed the Secretarys finding that SLECCs voluntary recognition of SMSLEC was done while a legitimate labor
organization was in existence in the bargaining unit.

The Ruling of the Court

The petition has no merit. We see no reason to overturn the rulings of the Secretary and of the appellate court.

Legitimate Labor Organization

Article 212(g) of the Labor Code defines a labor organization as any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment. Upon compliance with all the documentary requirements, the Regional Office or Bureau shall
issue in favor of the applicant labor organization a certificate indicating that it is included in the roster of legitimate labor
organizations.[6] Any applicant labor organization shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration.[7]
Bargaining Unit

The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a
bargaining unit. We explained the concept of a bargaining unit in San Miguel Corporation v. Laguesma,[8] where we
stated that:

A bargaining unit is a group of employees of a given employer, comprised of all or less than all of
the entire body of employees, consistent with equity to the employer, indicated to be the best suited to
serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.

The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will
of the employees (Globe Doctrine); (2) affinity and unity of the employees interest, such as
substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial
Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status.

Contrary to petitioners assertion, this Court has categorically ruled that the existence of a prior
collective bargaining history is neither decisive nor conclusive in the determination of what constitutes an
appropriate bargaining unit.

However, employees in two corporations cannot be treated as a single bargaining unit even if the businesses of the two
corporations are related.[9]
 8

A Legitimate Labor Organization Representing

An Inappropriate Bargaining Unit

CLUP-SLECC and its Affiliates Workers Unions initial problem was that they constituted a legitimate labor
organization representing a non-appropriate bargaining unit. However, CLUP-SLECC and its Affiliates Workers Union
subsequently re-registered as CLUP-SLECCWA, limiting its members to the rank-and-file of SLECC. SLECC cannot
ignore that CLUP-SLECC and its Affiliates Workers Union was a legitimate labor organization at the time of SLECCs
voluntary recognition of SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether CLUP-SLECC and its
Affiliates Workers Union represented an appropriate bargaining unit.

The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration,
unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in
Sections (a) to (c) of Article 239 of the Labor Code.[10] THUS, CLUP-SLECC AND ITS AFFILIATES WORKERS UNION,
HAVING BEEN VALIDLY ISSUED A CERTIFICATE OF REGISTRATION, SHOULD BE CONSIDERED AS HAVING
ACQUIRED JURIDICAL PERSONALITY WHICH MAY NOT BE ATTACKED COLLATERALLY. THE PROPER
PROCEDURE FOR SLECC IS TO FILE A PETITION FOR CANCELLATION OF CERTIFICATE OF
REGISTRATION[11] OF CLUP-SLECC AND ITS AFFILIATES WORKERS UNION AND NOT TO IMMEDIATELY
COMMENCE VOLUNTARY RECOGNITION PROCEEDINGS WITH SMSLEC.

SLECCs Voluntary Recognition of SMSLEC

The employer may voluntarily recognize the representation status of a union in unorganized establishments.
[12] SLECC WAS NOT AN UNORGANIZED ESTABLISHMENT WHEN IT VOLUNTARILY RECOGNIZED SMSLEC AS
ITS EXCLUSIVE BARGAINING REPRESENTATIVE ON 20 JULY 2001. CLUP-SLECC AND ITS AFFILIATES
WORKERS UNION FILED A PETITION FOR CERTIFICATION ELECTION ON 27 FEBRUARY 2001 AND THIS
PETITION REMAINED PENDING AS OF 20 JULY 2001. THUS, SLECCS VOLUNTARY RECOGNITION OF SMSLEC
ON 20 JULY 2001, THE SUBSEQUENT NEGOTIATIONS AND RESULTING REGISTRATION OF A CBA EXECUTED BY
SLECC AND SMSLEC ARE VOID AND CANNOT BAR CLUP-SLECCWAS PRESENT PETITION FOR CERTIFICATION
ELECTION.

EMPLOYERS PARTICIPATION IN A PETITION FOR CERTIFICATION ELECTION

We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-SLECCWAs petition for
certification election. In petitions for certification election, the employer is a mere bystander and cannot oppose the
petition or appeal the Med-Arbiters decision. The exception to this rule, which happens when the employer is requested
to bargain collectively, is not present in the case before us.[13]

WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14 August 2003 as well as the
Resolution promulgated on 24 February 2004 of the Court of Appeals in CA-G.R. SP No. 77015.

SO ORDERED.
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G.R. No. L-20075 November 27, 1968

DANAO COAL MINING SYNDICATE, LTD., applicant, SOUTHWESTERN UNIVERSITY, petitioner-appellee,

vs.
CENON LAURENTE, oppositor-appellant.

Deen Law Offices for petitioner-appellee.

Ramon Duterte for oppositor-appellant.

REYES, J.B.L., J.:

Forwarded to us for review by the Court of Appeals1 is this appeal from two orders issued by the Court of First Instance of
Cebu in the latter's capacity as land registration court.2 The first was a grant to a buyer's ex partepetition praying, inter
alia, for cancellation of annotation of incumbrances on the transfer certificate of title covering a parcel of land it purchased
from the heirs of registered owner. The second was a denial of a motion for reconsideration of the first order which was
filed by a third person whose interest, purportedly, might have been prejudiced by the cancellation.

The transfer certificate of title (TCT No. 7567) in question covered a parcel of land situated in Camansi, Danao, Cebu. The
same was issued in 1928 by the Register of Deeds of Cebu in favor of H. M. H. Nemazee, the proprietor of the original
applicant, Danao Coal Mining Syndicate, Ltd. On the face thereof were annotated the following incumbrances:

(a) the condition that the applicant shall be required to produce from the mining claims referred to a minimum
amount of coal equal to an average daily production of two hundred tons of twenty hundred and forty English
pounds for every day exclusive of Sundays and holidays, and in the event of the failure of the said Coal Mining
Syndicate to produce such amount of coal, to pay to the Government of the Philippine Islands a royalty at the rate
of twenty centavos per ton upon each and every ton of the deficiency between the amount actually produced, and
the minimum amount herein specified, (b) the use and occupancy of the surface of the said parcel of land in favor
of Filomeno del Mar, as administrator of Roque del Mar, deceased; Lazaro Osmea, as administrator of Tomas
Osmea, deceased; H. B. Walker, as administrator of Candelario Cuizon, deceased; Juan Medio, Eleno Hungug,
Bernardo Cal, Faustino Batucan, Perfecto Lavador, Agustin Tito and Salvador Gonzalez in accordance with the
agreement dated at Cebu, November 22, 1913.

In a quitclaim deed, dated 14 January 1960, the heirs of Nemazee transferred and quitclaimed in favor of Southwestern
University their rights, title, interest and participation in, including their mining and leasehold rights over, said land.

Subsequently, Southwestern University petitioned the lower court to order (1) the cancellation of the aforequoted
annotation of incumbrances on the ground that the condition and agreement constituting the same were cancelled and
rendered inoperative by the outbreak of World War II as well as by the death of all the listed beneficiaries thereof; (2) the
registration of the quitclaim deed; and (3) the cancellation of TCT No. 7567 itself, and issuance of a new certificate of title
in its name. The petition was immediately granted,3 with the lower court dispensing with the usual notice to interested
parties. A new certificate of title (TCT No. RT-2164) was thereafter issued in favor of Southwestern University.

On 12 September 1960, one Cenon Laurente moved the lower court to reconsider its order of cancellation, specifically of
the second portion of the annotation of incumbrances in question. He alleged that Southwestern University had filed an
ejectment suit4 before another branch of the same court against him and several other occupants of the land covered by
TCT No. 7567, over which land, he claimed, he might possibly have an interest as a purchaser of a certain parcel of land
situated also in Camansi, Danao, Cebu, from Filomeno del Mar, one of the persons in whose favor "the use of occupancy
of the surface of the ... land" covered by said TCT No. 7567 was reserved. Laurente thus argued that the cancellation of
the annotation of the incumbrance in favor of Filomeno del Mar and others should not have been ordered without giving
notice, at least through publication, to the parties who, like him, being a successor-in-interest of said Filomeno del Mar,
might thereby be adversely affected. Laurente's alleged interest was, however, never registered.

The motion for reconsideration was denied, as previously intimated. Reasoned the lower court:

The Court is in accord with his contention (that if there should be notice, it should be limited to the parties
annotated in the certificate of title itself, and should not be extended to subsequent parties who, even granting
that they acquired the interests of these persons annotated in the certificate of title, failed to have their rights
accordingly annotated in said certificate of title) of petitioner Southwestern University, and maintains that
inasmuch as the law specifically provides notice to parties in interest, such notice if any, should be limited to the
parties listed or annotated on the certificate of title. Hence, if such parties are already dead, as had been alleged
and substantiated by petitioner Southwestern University, then notice to said parties would be superfluous or
notice would not be necessary. The Court acting within its limited jurisdiction as a Court of Land Registration, can
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only act on what appears on the face of the certificate of title, and cannot go beyond what appears therein as
movant Cenon Laurente would now want this Court to believe. Notice by Publication is not necessary in
connection with the this petition which has been duly filed in accordance with Section 112 of Act 496.

Granting that the use and occupancy which was annotated in the certificate of title is a real right which could be
transferred or disposed of by the person named in the certificate of title to a third person (in this caseCenon
Laurente), the latter should have taken the precaution of having his right annotated on said (certificate of title). His
failure to do so is therefore fatal, in the sense that this Court cannot consider him as a party in interest who is
entitled to notice before the petition for cancellation of incumbrance could be acted upon ... 5

We find no error in the order appealed from.

Cancellation of registered interests that have terminated and ceased may be ordered by the land registration court under,
and in conformity with, section 112 of Act No. 496, otherwise known as the Land Registration Act. The new owner,
Southwestern University, of the land herein involved took the right step by petitioning the court under said section to have
the registered interests the deceased persons' rights of use and occupancy of the surface of said land ordered
cancelled on the ground that the same had terminated and ceased. Notice was no longer necessary for the court to
acquire jurisdiction over the petition insofar as the second portion of the annotation of incumbrances was concerned. With
the death of all the registered adverse claimants thereof, there were no more parties in interest to be notified.

Appelant Laurente was not and can not now be considered a party in interest entitled to notice. He was, as he is now, a
stranger representing no adverse claim as to render the petition for cancellation controversial and, thereby, divest the
lower court of its jurisdiction. For Laurente's claim avers that the cancellation of the right of the persons recorded as
entitled to use and occupancy of the surface of the land could affect him adversely because the interest acquired by him
from Filomeno del Mar "might be included in that which is referred to in the aforementioned annotation." (Record on
Appeal, page 43) This is too vague and unsubstantial to give him standing to claim right to notice or to contest the order of
cancellation. Before a claimant can be considered as possessing a genuine adverse interest that would deprive the
Registration Court of jurisdiction to proceed under section 112 of Act 496 in the absence of notice to him, there must be a
showing of the prima facie truth and validity of such adverse interest. Laurente has failed to make such a showing. His
motion merely speaks of apossibility of being prejudiced. He has not produced and deed of conveyance from Filomeno
del Mar, or secondary evidence thereof. A mere verbal agreement will not do here; there must be a public instrument in
order to affect a stranger (such as the holder of the certificate of title or his successors in interest). For Article 1280, No. 1,
of the Civil Code of 1889 (in force in 1920 when Laurente claims to have acquired title) prescribes:

The following must be reduced to writing in a public instrument:

1. Acts or contracts whose object is the creation, transmission, modification or extinction of rights which affect
immovable property. (Emphasis supplied)

And to affect registered land, such as is covered by the Certificates of Title of appellee Southwestern University and its
predecessor in interest (TCT No. 7567 and RT-2164), the public document above referred to must be recorded and
annotated in the certificate, as pointed out in the appealed order; and admittedly, there is no record of any deed in favor of
Laurente. It is elementary that, under the Torrens system, registration is the operative act that binds the parties thereto,
without affecting the rights of strangers to such contract (Act 496, section 51) unless they have actual knowledge
thereof,6 which is not alleged here.

What is worse is that Laurente allowed more than 20 years to elapse without asserting the alleged conveyance in his
favor, when a period of 10 years sufficed under Act 190 (then in force) to bar any claim to or over real property. Nor has
Laurente adequately explained such laches on his part..

He avers that he could not cause the recording of the conveyance in his favor because the registered owner resided in
Hongkong. This is no excuse, for the claimant could have asked the proper court to have the owner summoned by
publication. Laurente also pleads that the records of the Cebu Register of Deeds were destroyed in the last war. But the
war only broke out in 1941, and the enemy occupied Cebu in 1942, while Laurente's vendor, Filomeno delo Mar, ceased
to be administrator of the Estate of Roque del Mar as far back as 1920, when the proceedings were closed (Record on
Appeal, page 61). Thus, Laurente unaccountably permitted 21 years to elapse without attempting to record or enforce the
alleged conveyance in his favor.

All the foregoing circumstances cast a dense pall of doubt over the genuineness and validity of Laurente's adverse claim,
and fully justify its rejection by the lower court.
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WHEREFORE, the orders appealed from are sustained and affirmed. Costs against appellant Cenon Laurente in all
instances.