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NATIONAL UNION OF BANK EMPLOYEES (NUBE), PETITIONER, Following the expiration of the CBA, the Philnabank Employees Association-FFW

lowing the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-FFW) filed on January 2, 2002 a
vs. petition for certification election among the rank-and-file employees of PNB. The petition sought the conduct of a certification
PHILNABANK EMPLOYEES ASSOCIATION (PEMA) AND PHILIPPINE NATIONAL BANK, RESPONDENTS. election to be participated in by PEMA-FFW and NUBE-PEC.

DECISION While the petition for certification election was still pending, two significant events transpired the independent union
registration of NUBE- PEC and its disaffiliation with NUBE.
PERALTA, J.:
With a legal personality derived only from a charter issued by NUBE, NUBE-PEC, under the leadership of Mariano Soria,
decided to apply for a separate registration with the Department of Labor and Employment (DOLE). On March 25, 2002, it was
Assailed in this petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure are the May 22, 2006
registered as an independent labor organization under Registration Certificate No. NCR-UR-3-3790-2002.
Decision1 and August 17, 2006 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 84606, which reversed the May 27,
2004 Decision3 of the Secretary of Labor and Employment acting as voluntary arbitrator, the dispositive portion of which
states: Thereafter, on June 20, 2003, the Board of Directors of NUBE-PEC adopted a Resolution6 disaffiliating itself from NUBE. Cited as
reasons were as follows:
WHEREFORE, in light of the foregoing findings, the Bank is hereby ORDERED to release all union dues withheld and to continue
remitting to NUBE-PNB chapter the members' obligations under the CBA, LESS the amount corresponding to the number of xxxx
non-union members including those who participated in the unsuccessful withdrawal of membership from their mother union.
WHEREAS, in the long period of time that the Union has been affiliated with NUBE, the latter has miserably failed to extend
The parties are enjoined to faithfully comply with the above- mentioned resolution. and provide satisfactory services and support to the former in the form of legal services, training assistance, educational
seminars, and the like;
With respect to the URGENT MOTION FOR INTERVENTION filed by PEMA, the same is hereby denied without prejudice to the
rights of its members to bring an action to protect such rights if deemed necessary at the opportune time. WHEREAS, this failure by NUBE to provide adequate essential services and support to union members have caused the latter to
be resentful to NUBE and to demand for the Unions disaffiliation from the former[;]
SO ORDERED.4
WHEREAS, just recently, NUBE displayed its lack of regard for the interests and aspirations of the union members by blocking
the latters desire for the early commencement of CBA negotiations with the PNB management[;]
We state the facts.

WHEREAS, this strained relationship between NUBE and the Union is no longer conducive to a fruitful partnership between
Respondent Philippine National Bank (PNB) used to be a government-owned and controlled banking institution established
them and could even threaten industrial peace between the Union and the management of PNB.
under Public Act 2612, as amended by Executive Order No. 80 dated December 3, 1986 (otherwise known as The 1986 Revised
Charter of the Philippine National Bank). Its rank-and-file employees, being government personnel, were represented for
collective negotiation by the Philnabank Employees Association (PEMA), a public sector union. WHEREAS, under the circumstances, the current officers of the Union have no choice but to listen to the clamor of the
overwhelming majority of union members for the Union to disaffiliate from NUBE.7
In 1996, the Securities and Exchange Commission approved PNBs new Articles of Incorporation and By-laws and its changed
status as a private corporation. PEMA affiliated with petitioner National Union of Bank Employees (NUBE), which is a labor The duly notarized Resolution was signed by Edgardo B. Serrana (President), Rico B. Roma (Vice-President), Rachel C. Latorre
federation composed of unions in the banking industry, adopting the name NUBE-PNB Employees Chapter (NUBE-PEC). (Secretary), Valeriana S. Garcia (Director/Acting Treasurer), Ruben C. Medrano (Director), and Verlo C. Magtibay (Director). It is
claimed that said Resolution was overwhelmingly ratified by about eighty-one percent (81%) of the total union membership.
Later, NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB rank-and-file employees. A collective
bargaining agreement (CBA) was subsequently signed between NUBE-PEC and PNB covering the period of January 1, 1997 to On June 25, 2003, NUBE-PEC filed a Manifestation and Motion8 before the Med-Arbitration Unit of DOLE, praying that, in view
December 31, 2001. of its independent registration as a labor union and disaffiliation from NUBE, its name as appearing in the official ballots of the
certification election be changed to "Philnabank Employees Association (PEMA)" or, in the alternative, both parties be allowed
to use the name "PEMA" but with PEMA-FFW and NUBE-PEC be denominated as "PEMA-Bustria Group" and "PEMA-Serrana
Pursuant to Article V on Check-off and Agency Fees of the CBA, PNB shall deduct the monthly membership fee and other
Group," respectively.
assessments imposed by the union from the salary of each union member, and agency fee (equivalent to the monthly
membership dues) from the salary of the rank- and-file employees within the bargaining unit who are not union members.
Moreover, during the effectivity of the CBA, NUBE, being the Federation union, agreed that PNB shall remit 15.00 of the On the same date, PEMA sent a letter to the PNB management informing its disaffiliation from NUBE and requesting to stop,
65.00 union dues per month collected by PNB from every employee, and that PNB shall directly credit the amount to NUBEs effective immediately, the check-off of the 15.00 due for NUBE.9
current account with PNB.5
Acting thereon, on July 4, 2003, PNB informed NUBE of PEMAs letter and its decision to continue the deduction of the 15.00
fees, but stop its remittance to NUBE effective July 2003. PNB also notified NUBE that the amounts collected would be held in a
trust account pending the resolution of the issue on PEMAs disaffiliation.10
On July 11, 2003, NUBE replied that: it remains as the exclusive bargaining representative of the PNB rank-and-file employees; A cursory reading of the motion reveals a denial thereof is not prejudicial to the individual rights of its members. They are
by signing the Resolution (on disaffiliation), the chapter officers have abandoned NUBE-PEC and joined another union; in protected by law.
abandoning NUBE-PEC, the chapter officers have abdicated their respective positions and resigned as such; in joining another
union, the chapter officers committed an act of disloyalty to NUBE-PEC and the general membership; the circumstances clearly
Coming now to the main issues of the case, suffice it to say that after an evaluative review of the record of the case, taking into
show that there is an emergency in NUBE-PEC necessitating its placement under temporary trusteeship; and that PNB should
consideration the arguments and evidence adduced by both parties, We find that indeed no effective disaffiliation took place.
cease and desist from dealing with Serrana, Roma, Latorre, Garcia, Medrano, and Magtibay, who are expelled from NUBE-
PEC.11 With regard to the issue of non-remittance of the union dues, NUBE enjoined PNB to comply with the union check-off
provision of the CBA; otherwise, it would elevate the matter to the grievance machinery in accordance with the CBA. It is well settled that [l]abor unions may disaffiliate from their mother federations to form a local or independent union only
during the 60-day freedom period immediately preceding the expiration of the CBA. [Tanduay Distillery Labor Union v. National
Labor Relations Commission, et al.] However, such disaffiliation must be effected by a majority of the members in the
Despite NUBEs response, PNB stood firm on its decision. Alleging unfair labor practice (ULP) for non-implementation of the
bargaining unit. (Volkschel Labor Union v. Bureau of Labor Relations).
grievance machinery and procedure, NUBE brought the matter to the National Conciliation and Mediation Board (NCMB) for
preventive mediation.12 In time, PNB and NUBE agreed to refer the case to the Office of the DOLE Secretary for voluntary
arbitration. They executed a Submission Agreement on October 28, 2003.13 Applying the foregoing jurisprudence to the case at bar, it is difficult to believe that a justified disaffiliation took place. While
the record apparently shows that attempts at disaffiliation occurred sometime in June of 2003 x x x the latest result of a
certification election dated 17 October 2003 mooted such disaffiliation.
Meantime, the DOLE denied PEMAs motion to change its name in the official ballots. The certification election was finally held
on October 17, 2003. The election yielded the following results:
Further, even if for the sake of argument an attempt at disaffiliation occurred, the record is bereft of substantial evidence to
support a finding of effective disaffiliation. There might have been a mass withdrawal of the union members from the NUBE-
3,74 PNB Chapter. The record shows, however, that only 289 out of 3,742 members shifted their allegiance from the mother union.
Number of eligible voters Hence, they constituted a small minority for which reason they could not have successfully severed the local unions affiliation
2
with NUBE.
2,99
Number of valid votes cast
3 Thus, since only a minority of the members wanted disaffiliation as shown by the certification election, it can be inferred that
the majority of the members wanted the union to remain an affiliate of the NUBE. [Villar, et al. v. Inciong, et al.]. There being
Number of spoiled ballots 72
no justified disaffiliation that took place, the bargaining agents right under the provision of the CBA on Check-Off is unaffected
and still remained with the old NUBE-PNB Chapter. x x x
3,06
Total
5
While it is true that the obligation of an employee to pay union dues is co-terminus with his affiliation [Philippine Federation of
Philnabank Employees Association-FFW 289 Petroleum Workers v. CIR], it is equally tenable that when it is shown, as in this case, that the withdrawal from the mother
union is not supported by majority of the members, the disaffiliation is unjustified and the disaffiliated minority group has no
National Union of Bank Employees (NUBE)- 2,68 authority to represent the employees of the bargaining unit. This is the import of the principle laid down in [Volkschel Labor
Philippine National Bank (PNB) Chapter 3 Union v. Bureau of Labor Relations supra] and the inverse application of the Supreme Court decision in [Philippine Federation
of Petroleum Workers v. CIR] regarding entitlement to the check-off provision of the CBA.
No Union 21

Total 2,993 14 As a necessary consequence to our finding that no valid disaffiliation took place, the right of NUBE to represent its local
chapter at the PNB, less those employees who are no longer members of the latter, is beyond reproach.

On April 28, 2004, PEMA filed before the voluntary arbitrator an Urgent Motion for Intervention,15 alleging that it stands to be However, the Bank cannot be faulted for not releasing union dues to NUBE at the time when representation status issue was
substantially affected by whatever judgment that may be issued, because one of the issues for resolution is the validity of its still being threshed out by proper governmental authority. Prudence dictates the discontinuance of remittance of union dues
disaffiliation from NUBE. It further claimed that its presence is necessary so that a complete relief may be accorded to the to NUBE under such circumstances was a legitimate exercise of management discretion apparently in order to protect the
parties. Only NUBE opposed the motion, arguing that PEMA has no legal personality to intervene, as it is not a party to the Banks business interest. The suspension of the check-off provision of the CBA, at the instance of the latter made in good faith,
existing CBA; and that NUBE is the exclusive bargaining representative of the PNB rank-and-file employees and, in dealing with under the present circumstances cannot give rise to a right of action. For having been exercised without malice much less evil
a union other than NUBE, PNB is violating the duty to bargain collectively, which is another form of ULP.16 motive and for not causing actual loss to the National Union of Bank Employees (NUBE), the same act of management [cannot]
be penalized.17
Barely a month after, DOLE Acting Secretary Manuel G. Imson denied PEMAs motion for intervention and ordered PNB to
release all union dues withheld and to continue remitting the same to NUBE. The May 27, 2004 Decision opined: Aggrieved, PEMA filed before the CA a petition under Rule 43 of the Rules on Civil Procedure with prayer for the issuance of a
temporary restraining order (TRO) or writ of preliminary injunction (WPI). On November 2, 2004, the CA denied the application
Before we delve into the merits of the present dispute, it behooves [Us] to discuss in passing the propriety of the MOTION FOR for WPI.18 PEMAs motion for reconsideration was also denied on February 24, 2005, noting PNBs manifestation that it would
INTERVENTION filed by the Philnabank Employees Association (PEMA) on April 28, 2004, the alleged [break-away] group of submit to the judgment of the CA as to which party it should remit the funds collected from the employees.19
NUBE- PNB Chapter.
On June 21, 2005, however, petitioner again filed an Urgent Motion for the Issuance of a TRO against the June 10, 2005 NUBE filed a motion for reconsideration, but it was denied;25 hence, this petition raising the following issues for resolution:
Resolution of DOLE Acting Secretary Imson, which ordered PNB to properly issue a check directly payable to the order of NUBE
covering the withheld funds from the trust account.20 Considering the different factual milieu, the CA resolved to grant the
I.
motion.21

The Secretary of Labor acted without error and without grave abuse of discretion in not giving due course to the urgent motion
Subsequent to the parties submission of memoranda, the CA promulgated its May 22, 2006 Decision, declaring the validity of
for intervention filed by PEMA.
PEMAs disaffiliation from NUBE and directing PNB to return to the employees concerned the amounts deducted and held in
trust for NUBE starting July 2003 and to stop further deductions in favor of NUBE.22
II.
As to the impropriety of denying PEMAs motion for intervention, the CA noted:
The Secretary of Labor acted without grave abuse of discretion and without serious error in ruling that PEMAs alleged
disaffiliation was invalid.
x x x Among the rights of the [PEMA] as an affiliate of a federation is to disaffiliate from it. Any case in which this is an issue is
then one in which the union has a significant legal interest and as to which it must be heard, irrespective of any residual rights
of the members after a decision that might deny a disaffiliation. It is a non-sequitur to make the intervention of the union in III.
this case dependent on the question of whether its members can pursue their own agenda under the same constraints.23
The Secretary of Labor did not commit serious error in ordering the release of the disputed union fees/dues to NUBE-PNB
On the validity of PEMAs disaffiliation, the CA ratiocinated: Chapter.

The power and freedom of a local union to disaffiliate from its mother union or federation is axiomatic. As Volkschel vs. Bureau IV.
of Labor Relations [137 SCRA 42] recognizes, a local union is, after all, a separate and voluntary association that under the
constitutional guarantee of freedom of expression is free to serve the interests of its members. Such right and freedom There is no substantial basis for the issuance of a preli minary injunction or temporary restraining order.
invariably include the right to disaffiliate or declare its autonomy from the federation or mother union to which it belongs,
subject to reasonable restrictions in the law or the federations constitution. [Malayang Samahan ng mga Manggagawa sa M.
Greenfield vs. Ramos, 326 SCRA 428] V.

Without any restrictive covenant between the parties, [Volkschel Labor Union vs. Bureau of Labor Relations, supra, at 48,] it is Under the Rules of Court, the appeal/petition of PEMA should have been dismissed.
instructive to look into the state of the law on a unions right to disaffiliate. The voluntary arbitrator alludes to a provision in PD
1391 allowing disaffiliation only within a 60-day period preceding the expiration of the CBA. In Alliance of Nationalist and VI.
Genuine Labor Organization vs. Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay Spinning Mills, etc. [258 SCRA 371],
however, the rule was not held to be iron-clad. Volkschel was cited to support a more flexible view that the right may be
allowed as the circumstances warrant. In Associated Workers Union-PTGWO vs. National Labor Relations Commission [188 PEMA and NUBE are not one and the same, and the denial by the Secretary of Labor of the motion for intervention was proper.
SCRA 123], the right to disaffiliate was upheld before the onset of the freedom period when it became apparent that there was
a shift of allegiance on the part of the majority of the union members. VII.

xxxx NUBE-PNB Chapter, not PEMA, has been fighting for PNB rank-and-file interests and rights since PNBs privatization, which is
further pro of that NUBE-PNB Chapter and PEMA are not one and the same.
As the records show, a majority, indeed a vast majority, of the members of the local union ratified the action of the board to
disaffiliate. Our count of the members who approved the board action is, 2,638. If we divide this by the number of eligible VIII.
voters as per the certification election which is 3,742, the quotient is 70.5%, representing the proportion of the members in
favor of disaffiliation. The [PEMA] says that the action was ratified by 81%. Either way, the groundswell of support for the
The alleged disaffiliation was not valid as proper procedure was not followed.
measure was overwhelming.

IX.
The respondent NUBE has developed the ingenious theory that if the disaffiliation was approved by a majority of the members,
it was neutered by the subsequent certification election in which NUBE-PNB Chapter was voted the sole and exclusive
bargaining agent. It is argued that the effects of this change must be upheld as the latest expression of the will of the NUBE is entitled to check-off.26
employees in the bargaining unit. The truth of the matter is that the names of PEMA and NUBE-PNB Chapter are names of only
one entity, the two sides of the same coin. We have seen how NUBE-PNB Employees Chapter evolved into PEMA and Stripped of the non-essential, the issue ultimately boils down on whether PEMA validly disaffiliated itself from NUBE, the
competed with Philnabank Employees Association-FFW for supremacy in the certification election. To realize that it was PEMA resolution of which, in turn, inevitably affects the latters right to collect the union dues held in trust by PNB.
which entered into the contest, we need only to remind ourselves that PEMA was the one which filed a motion in the
certification election case to have its name PEMA put in the official ballot. DOLE insisted, however, in putting the name NUBE-
PNB Chapter in the ballots unaware of the implications of this seemingly innocuous act.24 We deny the petition.
Whether there was a valid disaffiliation is a factual issue.27 It is elementary that a question of fact is not appropriate for a And again, in Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment Office of the Secretary,33this Court
petition for review on certiorari under Rule 45 of the Rules of Court. The parties may raise only questions of law because the opined:
Supreme Court is not a trier of facts. As a general rule, We are not duty-bound to analyze again and weigh the evidence
introduced in and considered by the tribunals below. When supported by substantial evidence, the findings of fact of the CA
Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the charter certificate
are conclusive and binding on the parties and are not reviewable by this Court, except: (1) When the conclusion is a finding
issued by a duly registered federation or national union, and reported to the Regional Office in accordance with the rules
grounded entirely on speculation, surmises and conjectures; (2) When the inference made is manifestly mistaken, absurd or
implementing the Labor Code. A local union does not owe its existence to the federation with which it is affiliated. It is a
impossible; (3) Where there is a grave abuse of discretion; (4) When the judgment is based on a misapprehension of facts; (5)
separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the
When the findings of fact are conflicting; (6) When the CA, in making its findings, went beyond the issues of the case and the
local union of its own personality, neither does it give the mother federation the license to act independently of the local
same is contrary to the admissions of both parties; (7) When the findings are contrary to those of the trial court; (8) When the
union. It only gives rise to a contract of agency, where the former acts in representation of the latter. Hence, local unions are
findings of fact are conclusions without citation of specific evidence on which they are based; (9) When the facts set forth in
considered principals while the federation is deemed to be merely their agent. As such principals, the unions are entitled to
the petition as well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) When the
exercise the rights and privileges of a legitimate labor organization, including the right to seek certification as the sole and
findings of fact of the CA are premised on the supposed absence of evidence and contradicted by the evidence on record.28The
exclusive bargaining agent in the appropriate employer unit.34
Court finds no cogent reason to apply these recognized exceptions.

Finally, the recent case of Cirtek Employees Labor Union-Federation of Free Workers v. Cirtek Electronics, Inc35ruled:
Even a second look at the records reveals that the arguments raised in the petition are bereft of merit.

x x x [A] local union may disaffiliate at any time from its mother federation, absent any showing that the same is prohibited
The right of the local union to exercise the right to disaffiliate from its mother union is well settled in this jurisdiction. In
under its constitution or rule. Such, however, does not result in it losing its legal personality altogether. Verily, Anglo-KMU v.
MSMG-UWP v. Hon. Ramos,29 We held:
Samahan Ng Mga Manggagawang Nagkakaisa Sa Manila Bar Spinning Mills At J.P. Coats enlightens:

A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a separate and
A local labor union is a separate and distinct unit primarily designed to secure and maintain an equality of bargaining power
voluntary association, is free to serve the interests of all its members including the freedom to disaffiliate or declare its
between the employer and their employee-members. A local union does not owe its existence to the federation with which it
autonomy from the federation which it belongs when circumstances warrant, in accordance with the constitutional guarantee
is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. The mere act of
of freedom of association.
affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency where the former acts in representation of the
The purpose of affiliation by a local union with a mother union [or] a federation latter.36

"x x x is to increase by collective action the bargaining power in respect of the terms and conditions of labor. Yet the locals These and many more have consistently reiterated the earlier view that the right of the local members to withdraw from the
remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints federation and to form a new local union depends upon the provisions of the union's constitution, by-laws and charter and, in
imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local union, a local may
the terms laid down in the agreement which brought it into existence." sever its relationship with its parent.37 In the case at bar, there is nothing shown in the records nor is it claimed by NUBE that
PEMA was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway.
This being so, PEMA is not precluded to disaffiliate from NUBE after acquiring the status of an independent labor organization
Thus, a local union which has affiliated itself with a federation is free to sever such affiliation anytime and such disaffiliation
duly registered before the DOLE.
cannot be considered disloyalty. In the absence of specific provisions in the federation's constitution prohibiting disaffiliation
or the declaration of autonomy of a local union, a local may dissociate with its parent union.30
Also, there is no merit on NUBEs contention that PEMAs disaffiliation is invalid for non-observance of the procedure that
union members should make such determination through secret ballot and after due deliberation, conformably with Article
Likewise, Philippine Skylanders, Inc. v. National Labor Relations Commission31 restated:
241 (d) of the Labor Code, as amended.38 Conspicuously, other than citing the opinion of a "recognized labor law authority,"
NUBE failed to quote a specific provision of the law or rule mandating that a local unions disaffiliation from a federation must
The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law.1wphi1 In the comply with Article 241 (d) in order to be valid and effective.
landmark case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc., we upheld the right of local unions to
separate from their mother federation on the ground that as separate and voluntary associations, local unions do not owe
Granting, for arguments sake, that Article 241 (d) is applicable, still, We uphold PEMAs disaffiliation from NUBE. First, non-
their creation and existence to the national federation to which they are affiliated but, instead, to the will of their members.
compliance with the procedure on disaffiliation, being premised on purely technical grounds cannot rise above the employees
The sole essence of affiliation is to increase, by collective action, the common bargaining power of local unions for the effective
fundamental right to self-organization and to form and join labor organizations of their own choosing for the purpose of
enhancement and protection of their interests. Admittedly, there are times when without succor and support local unions may
collective bargaining.39 Second, the Article nonetheless provides that when the nature of the organization renders such secret
find it hard, unaided by other support groups, to secure justice for themselves.
ballot impractical, the union officers may make the decision in behalf of the general membership. In this case, NUBE did not
even dare to contest PEMAs representation that "PNB employees, from where [PEMA] [derives] its membership, are scattered
Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by from Aparri to Jolo, manning more than 300 branches in various towns and cities of the country," hence, "[to] gather the
the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid down in general membership of the union in a general membership to vote through secret balloting is virtually impossible." 40 It is
the agreement which brought such affiliation into existence. understandable, therefore, why PEMAs board of directors merely opted to submit for ratification of the majority their
resolution to disaffiliate from NUBE. Third, and most importantly, NUBE did not dispute the existence of the persons or their
Such dictum has been punctiliously followed since then.32 due execution of the document showing their unequivocal support for the disaffiliation of PEMA from NUBE. Note must be
taken of the fact that the list of PEMA members (identifying themselves as "PEMA-Serrana Group"41) who agreed with the
board resolution was attached as Annex "H" of PEMAs petition before the CA and covered pages 115 to 440 of the CA rollo.
While fully displaying the employees printed name, identification number, branch, position, and signature, the list was left
unchallenged by NUBE. No evidence was presented that the union members ratification was obtained by mistake or through
fraud, force or intimidation. Surely, this is not a case where one or two members of the local union decided to disaffiliate from
the mother federation, but one where more than a majority of the local union members decided to disaffiliate.

Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously bound the two entities was completely
severed. As NUBE was divested of any and all power to act in representation of PEMA, any act performed by the former that
affects the interests and affairs of the latter, including the supposed expulsion of Serrana et al., is rendered without force and
effect.

Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. The moment that PEMA separated from and
left NUBE and exists as an independent labor organization with a certificate of registration, the former is no longer obliged to
pay dues and assessments to the latter; naturally, there would be no longer any reason or occasion for PNB to continue making
deductions.42 As we said in Volkschel Labor Union v. Bureau of Labor Relations:43

x x x In other words, ALUMETAL [NUBE in this case] is entitled to receive the dues from respondent companies as long as
petitioner union is affiliated with it and respondent companies are authorized by their employees (members of petitioner
union) to deduct union dues. Without said affiliation, the employer has no link to the mother union. The obligation of an
employee to pay union dues is coterminous with his affiliation or membership. "The employees' check-off authorization, even
if declared irrevocable, is good only as long as they remain members of the union concerned." A contract between an employer
and the parent organization as bargaining agent for the employees is terminated bv the disaffiliation ofthe local of which the
employees are members. x x x44

On the other hand, it was entirely reasonable for PNB to enter into a CBA with PEMA as represented by Serrana et al. Since
PEMA had validly separated itself from NUBE, there would be no restrictions which could validly hinder it from collectively
bargaining with PNB.

WHEREFORE, the foregoing considered, the instant Petition is DENIED. The May 22, 2006 Decision and August 17, 2006
Resolution of the Court of Appeals in CA-G.R. SP No. 84606, which reversed the May 27, 2004 Decision ofthe Secretary of Labor
and Employment, are AFFIRMED.

SO ORDERED.
PAMBANSANG KAPATIRAN NG MGA ANAK PAWIS SA FORMEY PLASTIC NATIONAL WORKERS BROTHERHOOD, petitioner, The resolution of this issue hinges on the determination of factual matters which certainly is not within the ambit of the
vs. SECRETARY OF LABOR, SECRETARY BIENVENIDO LAGUESMA, FORMEY PLASTIC, INC., KALIPUNAN NG present petition for certiorari. Besides, the contention is without any legal basis at all; it is purely speculative and bereft of any
MANGGAGAWANG PILIPINO (KAMAPI) and MED-ARBITER RASIDALI C. ABDULLAH, respondents. documentary support. Petitioner itself even admitted the existence of an agreement but argued that its provisions were not
being implemented nor adhered to at all. Suffice it to mention that the filing of the petition for certification election is not the
panacea to this allegedly anomalous situation. Violations of collective bargaining agreements constitute unfair labor practice as
DECISION
provided for under Art. 248, par. (i), of the Labor Code. In consonance thereto, Art. 261 equips petitioner with the proper and
BELLOSILLO, J.: appropriate recourse

The rank and file workers of Formey Plastic, Inc. (FORMEY), formed a local union known as Pambansang Kapatiran ng -Art. 261. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and
mga Anak Pawis sa Formey Plastic (KAPATIRAN) under the auspices of the National Workers Brotherhood (NWB). They ratified decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement x x
their Constitution and By-Laws on 4 April 1993. x Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be
treated as unfair labor practice and shall be resolved under the Collective Bargaining Agreement. For purposes of this article,
On 22 April 1993 KAPATIRAN filed a Petition for Certification Election[1] with the Department of Labor and Employment gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic
Med-Arbiter Division alleging that there was no existing and effective Collective Bargaining Agreement (CBA) between FORMEY provision of such agreement.
and any union; neither was there any recognized union within the company.

FORMEY moved to dismiss the petition[2] while Kalipunan ng Manggagawang Pilipino (KAMAPI) intervened and likewise The CBA entered into between FORMEY and KAMAPI stipulates among others
moved to dismiss[3] on the ground that there was already a duly registered CBA covering the period 1 January 1992 to 31
Article IX - GRIEVANCE PROCEDURE
December 1996 hence the contract bar rule[4] would apply. KAPATIRAN opposed both motions to dismiss[5] with
an Addendum[6]thereto claiming that the CBA executed between FORMEY and KAMAPI was fraudulently registered with the
Department of Labor and Employment and that it was defective since what was certified as bargaining agent was KAMAPI Sec. 1. Any complaint, grievance, difficulty, disagreement or dispute arising out of any section taken (sic) by the Company
which, as a federation, only served as mere agent of the local union hence without any legal personality to sign in behalf of the and/or by the Union concerning the interpretation of the terms and conditions of the agreement and/or which may arise
latter. regarding (sic) the terms and conditions of employment shall be settled in the manner provided for under this Article.

Med-Arbiter Rasidali C. Abdullah found that a valid and existing CBA between FORMEY and KAMAPI effectively barred
Sec. 2. The Company and the Union agree to create and establish a Grievance Committee composed of two (2) representatives
the filing of the petition for certification election.[7]
from the Company and two (2) from the Union to receive complaint, grievance or dispute from the workers and/or from the
KAPATIRAN appealed[8] imputing grave abuse of discretion to the Med-Arbiter in applying the contract bar rule and in Company with the view to settle it amicably.
not adopting the case of Progressive Development Corporation v. Secretary, Department of Labor and Employment,[9] as
authority to disregard the CBA between FORMEY and KAMAPI. The Secretary of Labor acting through Undersecretary Sec. 3. In case a complaint or grievance has been filed by either the Union or the Company, the grievance committee shall
Bienvenido E. Laguesma upheld the decision of the Med-Arbiter.[10] The Motion for Reconsideration having been discuss the same and have (sic) to settle it. If after the meeting of the grievance committee no satisfactory settlement is
denied[11] KAPATIRAN now files this Petition for Certiorari[12] charging the Secretary of Labor with grave abuse of discretion in reached the matter shall be referred to the top officers of the Union and the Company for the settlement of the said grievance
applying the contract bar rule literally and in ruling that the Progressive Development Corporation[13] case could not be invoked. or dispute.
Pending resolution of the petition KAMAPI filed an Urgent Motion to Dismiss[14] the instant petition contending that it
had become moot and academic due to the cancellation of NWBs[15]certificate of registration and its delisting from the roll of Sec. 4. Within five (5) days from the time the top officers of the Union and the Company has (sic) failed to reach an amicable
labor federations.[16] KAPATIRAN opposed the motion[17] claiming that the cancellation and delisting were not yet final and settlement of the grievance or dispute, the same shall be submitted for voluntary arbitration. The arbitrator or arbitrators shall
executory considering that it had filed a motion for reconsideration[18] with the Bureau of Labor Relations. be chosen by lottery and the union and the Company shall avail (sic) the list of arbitrators of the Honorable Bureau of Labor
Relations.
The rule is that findings of facts of quasi-judicial agencies will not be disturbed unless there is a showing of grave abuse
of discretion. We find none in the case at bench. We therefore affirm that there is a validly executed collective bargaining
agreement between FORMEY and KAMAPI. Sec. 5. The mutually agreed or chosen arbitrator shall proceed to try and hear the case and for (sic) the reception of evidence
and to call witnesses to testify and after the submission of the case by both parties an award or order shall be issued in
Art. 253-A of the Labor Code provides that (n)o petition questioning the majority status of the incumbent bargaining accordance with the rules and guidelines promulgated by the Honorable Department of Labor and Employment based on the
agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment pertinent laws and established jurisprudence.The expenses of the arbitration proceedings shall be borned (sic) equally by the
outside of the sixty (60) day period immediately before the date of expiry of such five-year term of the collective bargaining Company and the Union.[19]
agreement. Sec. 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code provides that x x x (i)f a collective
bargaining agreement has been duly registered in accordance with Article .231 of the Code, a petition for certification election By filing the petition for certification election it is clear that KAPATIRAN did not avail of the abovementioned grievance
or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement. procedure.
The subject agreement was made effective 1 January 1992 and is yet to expire on 31 December 1996. The petition for It is further argued that the CBA has no binding force since it was entered into by KAMAPI as a federation and not by the
certification election having been filed on 22 April 1993 it is therefore clear that said petition must fail since it was filed before local union. Perusal of the agreement proves the contention flawed. The signatories for KAMAPI consisted of its national
the so-called 60-day freedom period. KAPATIRAN insists that the CBA was a fake it having been surreptitiously registered with president and of the duly elected officers of the local union. Thus the fact that KAMAPI was particularly mentioned as the
the Department of Labor and Employment. bargaining party without specifying the local union cannot strip it of its authority to participate in the bargaining process. The
local union maintains its separate personality despite affiliation with a larger national federation.[20]
The doctrine laid down in Progressive Development Corporation[21] is a mere clarification of the principle enunciated
in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.[22]Both cases have provided that the mother union acting for
and in behalf of its affiliate ha(s) the status of an agent while the local union remained the basic unit of the association free to
serve the common interest of all its members subject only to the restraints imposed by the Constitution and By-Laws of the
association. Nonetheless, the facts and principles laid down in both cases do not jibe squarely with the case at bench. The
controversy in Progressive Development Corporation[23] centered on the requirements before a local or chapter of a federation
may file a petition for certification election and be certified as the sole and exclusive bargaining agent, while in Liberty Cotton
Mills Workers[24] the issue involved was the disaffiliation of the local union from the federation The question of whether there
was a valid and existing CBA, which is the question being resolved in the case at bench, was never raised in the two cited cases
since it was already an accepted fact that the CBA was validly executed and existing.

Anent the Urgent Motion to Dismiss[25] filed by KAMAPI on the ground that the instant petition had become moot and
academic due to the cancellation by the Bureau of Labor Relations of NWBs certificate of registration and its consequent
delisting from the roll of labor federations, suffice it to state that at this juncture we cannot properly rule on the issue
considering that KAMAPI has not proven that the decision of the Bureau of Labor Relations has become final and executory
taking into account KAPATIRANs filing of a motion for reconsideration with the Bureau. This notwithstanding, Sec. 9, Rule II,
Book V of the Omnibus Rules Implementing the Labor Cose requires that an appeal be filed with the Bureau, or in case of
cancellation by the Bureau, with the Secretary of Labor and Employment whose decision shall become final and no longer
subject of appeal.

WHEREFORE, the petition is DENIED. The decision of the Secretary of Labor and Employment dated 15 August
1993 sustaining the order of the Med-Arbiter dated 31 May 1993 is AFFIRMED.

SO ORDERED.
179 Phil. 317 While respondent company, under the Maintenance of Membership provision of the Collective Bargaining Agreement, is
bound to dismiss any employee expelled by PAFLU for disloyalty, upon its written request, this undertaking should not be done
hastily and summarily. The company acted in bad faith in dismissing petitioner workers without giving them the benefit of a
MAKASIAR, J.: hearing. It did not even bother to inquire from the workers concerned and from PAFLU itself about the cause of the expulsion
of the petitioner workers. Instead, the company immediately dismissed the workers on May 30, 1964 after its receipt of the
A motion was filed on September 24, 1975 by herein petitioners Liberty Cotton Mills Workers Union, Rafael Nepomuceno, request of PAFLU on May 29, 1964 - in a span of only one day - stating that it had no alternative but to comply with its
Mariano Castillo, Nelly Acevedo, Rizalino Castillo, and Rafael Combalicer, for the reconsideration and/or modification of the obligation under the Security Agreement in the Collective Bargaining Agreement, thereby disregarding the right of the workers
decision dated September 4, 1975. to due process, self-organization and security of tenure.
The Court, in its resolution dated September 29, 1975, required the respondents to comment on said motion. Respondent Morever, even after the workers were dismissed on May 30, 1964, and had sought for a reconsideration of their dismissal the
Liberty Cotton Mills, Inc. filed its comment on October 27, 1975. However, respondent Philippine Association of Free Labor next day, respondent company stood pat on its decision and immediately denied the request for reconsideration on June 2,
Union (PAFLU) filed on October 30, 1975 a manifestation of compliance submitting petitioner's motion for reconsideration 1964 without any valid reason. This actuation further emphasizes respondent company's bad faith in the dismissal of the
without comment. Respondent National Labor Relations Commission, successor of the defunct Court of Industrial Relations, petitioner workers.
filed its comment on November 5, 1975.
The power to dismiss is a normal prerogative of the employer. However, this is not without limitations. The employer is bound
In their motion, petitioners pray that: to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union
pursuant to the Collective Bargaining Agreement, as in the instant case. Dismissals must not be arbitrary and capricious. Due
1. the respondent company be made jointly and severally, or at least jointly, liable for the payment of backwages of the process must be observed in dismissing an employee because it affects not only his position but also his means of
workers involved; livelihood. Employers should therefore respect and protect the rights of their employees, which include the right to labor. For
as WE have already stated:
2. the workers involved be reinstated immediately, without loss of seniority and/or fringe benefits and, upon their
reinstatement, their wages should be at the same rates as those of their contemporaries in 1964; and "The right to labor is a constitutional as well as a statutory right. Every man has a natural right to the fruits of his own
industry. A man who has been employed to undertake certain labor and has put into it his time and effort is entitled to be
3. the backwages of the workers involved be made for more than three (3) years without any deduction or qualification or at
protected. The right of a person to his labor is deemed to be properly within the meaning of constitutional guarantees. That is
least 50% backwages or 5 years, also without deduction or qualification, if not from the date of dismissal up to the date of
his means of livelihood. He cannot be deprived of his labor or work without due process of law" (Batangas Laguna Tayabas Bus
actual reinstatement (pp. 4-5, Motion for Reconsideration, pp. 230-231, rec.).
Company vs. Court of Appeals, 71 SCRA 470, 480 [1976]; Phil. Education Co., Inc. vs. CIR, et al., L-7156, May 31, 1955; Philippine
The Court's decision, among others, limited the liability of the respondent company to the immediate reinstatement of the Movie Pictures Workers' Association vs. Premier Productions, Inc., 92 Phil. 843, 848 [1953]; 11 Am Jur., 333, pp. 1151-1153;.11
workers (petitioners herein) and directed respondent PAFLU to pay the petitioner workers the equivalent of three (3) Am Jur., section 344, pp. 1168-1171; underscoring supplied).
years backwages without deduction or qualification.
The "scandalous haste" with which the company dismissed the workers, acceding with unusual alacrity to the request
It is OUR considered view that respondent company is equally liable for the payment of backwages for having acted in bad faith of PAFLU, and without giving them the benefit of a hearing prior to their dismissal, also supports the conclusion that there was
in effecting the dismissal of the individual petitioners. Bad faith on the part of the respondent company may be gleaned from conspiracy or connivance between the respondent company and respondent PAFLU in the dismissal of the petitioner workers.
the fact that the petitioner workers were dismissed hastily and summarily. At best, it was guilty of a tortious act, for which it
must assume solidaryliability, since it apparently chose to summarily dismiss the workers at the union's instance secure in the Likewise, the records show that the disaffiliation of the local union members from the PAFLU was caused by the alleged
union's contractual undertaking that the union would hold it "free from any liability" arising from such dismissal. negligence of PAFLU and its lack of concern over the problems of the local union and its members, particularly its neglect in not
providing the local union with a good lawyer who would attend to their ULP case against the company. This apparent laxity or
It appears that on May 17, 1964, thirty-two (32) out of the thirty-six (36) members of the local union, Liberty Cotton Mills negligence of PAFLU invites suspicion.
Union, disaffiliated themselves from respondent PAFLU in accordance with Article X, on Union Affiliation, of the local union's
Constitution and By-Laws, which provides that: The records also show that the local union members were dissatisfied with the way PAFLU negotiated the Collective Bargaining
Agreement with the company because it did not fight for their demands and instead accepted the proposals of the company.
"Section 1. The Liberty Cotton Mills Workers Union-Paflu x x x shall remain an affiliate as long as ten or more of its members
evidence their desire to continue the said local union's affiliation x x x." And furthermore, PAFLU expelled only six (6) union members, because PAFLU erroneously contends that their disaffiliation and
their refusal to retract amounted to disloyalty. It was not disloyalty; it was their dissatisfaction with PAFLU that compelled
Respondent PAFLU received the resolution of disaffiliation on May 25, 1964 and immediately informed the respondent them to disaffiliate. The constitutional guarantee of security of tenure of the worker and his freedom of association - to join or
company on May 27, 1964 that the disaffiliation was null and void and that it is taking over the administration of the local not to join a union - are paramount and should prevail over a contractual condition for continued union membership and over
union in dealing with the management. Two days later, on May 29, 1964, PAFLU advised the company that the petitioner whimsical or arbitrary termination of his employment.
workers, who were among those who signed the disaffiliation resolution, were expelled from their union membership in the
Respondent PAFLU also overlooked the fact that only sixteen (16) out of the original thirty-two (32) signatories retracted their
mother federation because they were found guilty of acts unbecoming of officers and members of the union and disloyalty to
disaffiliation. PAFLU should have also expelled the remaining sixteen members who did not retract, instead of only the six
the mother federation for instigating union disaffiliation, and at the same time requested for their dismissal. On May 30, 1964,
members, if indeed their unretracted disaffiliation were an act of disloyalty instead of dissatisfaction with the PAFLU's failure
the company terminated the employment of the petitioner workers pursuant to the Maintenance of Membership provision of
to promote and defend their interests.
the Collective Bargaining Agreement, the pertinent portion of which reads, as follows:
It is also worth considering here the fact that of the six members expelled by PAFLU and subsequently dismissed by the
"x x x for disloyalty to the union shall be dismissed from employment by the Company upon request in writing by the Union,
company, four (4) were officers of the local union and two were ordinary members.
which shall hold the COMPANY free from any liability arising from or caused by such dismissal."
The company also failed to notice this fact and proceeded immediately to grant the request of PAFLU by dismissing the
petitioner workers without giving them the opportunity to be heard.
These facts and circumstances on record further underscore the existence of conspiracy or connivance between the company
and PAFLUin the dismissal of the petitioner workers. Respondent company is therefore a party to the illegal dismissal of the
petitioner workers. Under such a situation, the respondent company should be jointly and severally liable with the
respondent PAFLU for the payment of backwages to the petitioner workers.

The other reliefs prayed for by the petitioner workers do not merit any consideration for the reason that the amount
of backwages fixed by the Court in the main decision, consisting of three (3) years backwages without deduction or
qualification, following the formula of computing backwages enunciated in the case of Mercury Drug Co., Inc., et al. vs. CIR, et
al. (56 SCRA 694 [1974], is just and reasonable under the facts and circumstances obtaining in the case. This new formula of
fixing the amount of backwages to a just and reasonable level without deduction or qualification has been reiterated in a
number of cases, the more recent of which is the case of L. R. AguinaldoCo., Inc., et al. vs. CIR, et al. (82 SCRA 309 [1978])
where the Court ordered the reinstatement of the illegally dismissed employees and awarded three (3)
years backwages without deduction or qualification considering the lapse of time from the date of their dismissal (see
also Danao Development Corporation vs. NLRC, et al. (81 SCRA 489 [1978]; Monteverde, et al. vs. CIR, et al. (79 SCRA 259
[1977]; Insular Life Insurance Co., Ltd. Employees Association-NATU vs. Insular Life Assurance Co., Ltd. (76 SCRA 50 [1977];
People's Bank and Trust Company, et al. vs. People's Bank and Trust Company Employees Union, et al. (69 SCRA 10 [1976]; and
cases cited therein).

And the rationale for the formula was explained by this Court in the case of Feati University Faculty Club vs. Feati University
(58 SCRA395 [1974]) as follows:

"x x x this formula of awarding reasonable net backwages without deduction or qualification relieves the employees from
proving or disproving their earnings during their lay-off and the employers from submitting counterproofs; and obviates the
twin evils of idleness on the part of the employee who would 'with folded arms, remain inactive in the expectation that a
windfall would come to him' and attrition and protracted delay in satisfying such award on the part of unscrupulous employers
who have seized upon the further proceedings to determine the actual earnings of the wrongfully dismissed or laid-off
employees to hold unduly extended hearings for each and every employee awarded backwages and thereby render practically
nugatory such award and compel the employees to agree to unconscionable settlements of their backwages award in order to
satisfy their dire need."

WHEREFORE, the decision dated September 4, 1975 is hereby amended to read as follows:

"WHEREFORE, the decision appealed from is reversed and set aside and the RESPONDENT company is hereby ordered to
immediately reinstate complainant workers, AT CURRENT RATES PAID BY IT TO WORKERS OCCUPYING THE SAME OR SIMILAR
POSITIONS, WITHOUT LOSS OF SENIORITY AND OTHER PRIVILEGES AS IF SAID COMPLAINANT WORKERS HAD NOT BEEN
WRONGFULLY DISMISSED, within thirty (30) days from notice of this decision and failure to so reinstate the workers without
valid and just cause shall make respondent company liable to the workers for the payment of their wages AT CURRENT RATES
from and after the expiration of such thirty-day period. The mother federation PAFLU AND RESPONDENT LIBERTY COTTON
MILLS, INC. ARE hereby sentenced to pay JOINTLY AND SEVERALLY complainants-workers the equivalent of three (3)
years backwages (AT THE RATES ACTUALLY RECEIVED BY THEM BEFORE THEIR DISMISSAL) without deduction or qualification,
AND RESPONDENT PAFLU IS IN TURN SENTENCED TO REIMBURSE AND PAY RESPONDENT LIBERTY COTTON MILLS, INC. ANY
AND ALL SUCH AMOUNTS THAT SAID RESPONDENT COMPANY MAY PAY HEREUNDER BY WAY OF BACKWAGES TO THE
COMPLAINANTS-WORKERS.

"In view of the length of time that this dispute has been pending, this decision shall be immediately executory upon
promulgation and notice to the parties. Without pronouncement as to costs."
G.R. No. 99395 was filed by the Association of Democratic Labor Organization of petitioner. However, private respondent emerged victorious
after the elections and was thus certified as the exclusive bargaining entity of petitioner's rank and file employees.

MELO, J.: Following the decision dated September 14, 1990 in NCR-00-M-90-05-077 (pp. 444-445, Rollo) which upheld the legitimacy of
Del Prado's status including the other officers, Bayani Diwa of the Ramirez Wing appealed; the two cases -- NCR-00-M-90-05-
In response to the mandate under Article 263(g) of the Labor Code and amidst the labor controversy between petitioner St. 070 for interpleader and NCR-00-M-90-05-077 -- were consolidated.
Luke's Medical Center and private respondent St. Luke's Medical Center Employees Association-Alliance of Filipino Workers
(SLMCEA-AFW), then Secretary of Labor Ruben D. Torres, issued the Order of January 28, 1991 requiring the parties to execute On September 17, 1990, private respondent wrote petitioner for the resumption of their negotiations concerning the union's
and finalize their 1990-1993 collective bargaining agreement (CBA) to retroact to the expiration of the anterior CBA. The proposed CBA. Petitioner reacted by writing a letter on September 20, 1990 expressing willingness to negotiate a new CBA for
parties were also instructed to incorporate in the new CBA the disposition on economic and non-economic issues spelled out in the rank and file employees who are not occupying confidential positions. Negotiations thus resumed. However, a deadlock on
said Order (p. 48, Rollo). Separate motions for re-evaluation from the parties were to no avail; hence, the petition at bar issues, especially that bearing on across-the-board monthly and meal allowances followed and to pre-empt the impending
premised on the following ascriptions of error, to wit: strike as voted upon by a majority of private respondent's membership, petitioner lodged the petition below. The Secretary of
Labor immediately assumed jurisdiction and the parties submitted their respective pleadings.
I
On January 22, 1991, a resolution was issued in the consolidated cases which eventually declared Gregorio del Prado and his
PUBLIC RESPONDENT HON. SECRETARY OF LABOR ACTED IN EXCESS OF JURISDICTION AND/OR COMMITTED GRAVE ABUSE OF group as the legitimate officials of the AFW and the acknowledged group to represent AFW (pp. 320-321, Rollo).
DISCRETION WHEN HE VIOLATED PETITIONER'S RIGHT TO DUE PROCESS, PUBLIC RESPONDENT COMPLETELY IGNORED THE
LATTER'S EVIDENCE AND ISSUED THE QUESTIONED AWARDS ON THE BASIS OF ARBITRARY GUESSWORKS, CONJECTURES AND On January 28, 1991, public respondent Secretary of Labor issued the Order now under challenge. Said Order contained a
INFERENCES. disposition on both the economic and non-economic issues raised in the petition. On the economic issues, he thus ruled:

II First year - P1,140.00 broken down as follows: P510.00 in compliance with the government mandated daily salary increase of
P17.00; and P630.00 CBA across the board monthly salary increase.
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN HE CURTAILED THE PARTIES' RIGHT TO FREE
COLLECTIVE BARGAINING, AND WHEN HE GRANTED MONETARY AWARDS AND ADDITIONAL BENEFITS TO THE EMPLOYEES Second year - P700.00 across the board monthly salary increase.
GROSSLY DISPROPORTIONATE TO THE OPERATING INCOME OF PETITIONER.
Third year - P700.00 across the board monthly salary increase.
III
It is understood that the second and third year salary increases shall not be chargeable to future government mandated wage
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN HE ADOPTED/CONSIDERED THE ALLEGATIONS OF THE increases. (p. 47, Rollo.)
UNION THAT THE HOSPITAL OFFERED SALARY AND MEAL ALLOWANCE INCREASES IN THE AMOUNT OF P1,140.00 FOR THE
FIRST YEAR AND P700.00 ACROSS THE BOARD MONTHLY SALARY INCREASES FOR THE SECOND AND THIRD YEARS OF THE NEW As earlier stated, both parties moved for reconsideration of the above order, but both motions were denied. Consequently,
CBA. petitioner St. Luke's filed the instant petition, a special civil action on certiorari.

IV In assailing the Order of January 28, 1991, petitioner St. Luke's focuses on public respondent's disposition of the economic
issues.
FINALLY, PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN HE GAVE HIS AWARD RETROACTIVE EFFECT.
First, petitioner finds highly questionable the very basis of public respondent's decision to award P1,140.00 as salary and meal
When the collective bargaining agreement for the period August 1, 1987 to July 30, 1990 was forged between petitioner and allowance increases for the first year and P700.00 across-the-board monthly salary increases for the succeeding second and
private respondent, the incumbent national president of AFW, the federation to which the local union SLMCEA is affiliated, was third years of the new CBA. According to petitioner, private respondent SLMCEA-AFW misled public respondent into believing
Gregorio del Prado. that said amounts were the last offer of petitioner St. Luke's immediately prior to the deadlock. Petitioner vehemently denies
having made such offer, claiming that its only offer consists of the following:
Before the expiration of the 1987-90 CBA, the AFW was plagued by internal squabble splitting its leadership between Del Prado
and Purita Ramirez, resulting in the filing by AFW and Del Prado of a petition later docketed before the Department of Labor as Non-Economic Issues:
NCR-00-M-90-05-077, where a declaration was sought on the legitimacy of Del Prado's faction as bona fide officers of the
federation. Pending resolution of said case, herein private respondent SLMCEA-AFW brought to the attention of St. Luke's submits that it is adopting the non-economic issues proposed and agreed upon in its Collective Bargaining Agreement
petitioner via a letter dated July 4, 1990 that the 1987-1990 was about to expire, and manifested in the process that private with SLMCEA-AFW for the period covering 1987, 1990. Copy of the CBA is attached as Annex "F" hereof.
respondent wanted to renew the CBA. This development triggered round-table talks on which occasions petitioner proposed,
among other items, a maximum across-the-board monthly salary increase of P375.00 per employee, to which proposal private Economic Issue
respondent demanded a P1,500.00 hike or 50% increase based on the latest salary rate of each employee, whichever is higher.
St. Luke's respectfully offers to give an increase to all its rank and file employees computed as follows:
In the meantime, relative to the interpleader case (NCR-00-M-90-05-070) initiated by petitioner to settle the question as to First Year - P900 (P700.00 basic + P200.00 food allowance) for an overall total food allowance of P320.00.
who between Del Prado and Diwa was authorized to collect federation dues assessed from hospital employees, the Med- Second Year - P400
Arbiter recognized Del Prado's right (p. 423, Rollo). This resolution of July 31, 1990 was elevated to the Labor Secretary. Third Year - P400
plus the union will be allowed to operate and manage one (1) canteen for free to augment their funds. Although the profit shall
The talks that then ensued between petitioner and private respondent were disturbed anew when the other wing in the AFW be divided equally between union and SLMC, the operation of the canteen will generate for them a monthly income of no less
headed by Purita Ramirez, expressed its objections to the on-going negotiations, and when a petition for certification election than P15,000.00, and likewise provide cheap and subsidized food to Union members.
The wage increase as proposed shall be credited to whatever increases in the minimum wage or to any across the board On the basis of the foregoing, petitioner St. Luke's concludes that it would be in a very poor position to even produce the
increases that may be mandated by the government or the DOLE. (pp. 20-21-, Rollo.) resources necessary to pay the wage increases of its rank and file employees.

Petitioner charges that public respondent, in making such award, erroneously relied on the extrapolated figures provided by Petitioner also impugns public respondent's awards on grounds of prematurity, emphasizing that the awards in question even
private respondent SLMCEA-AFW, which grossly inflated petitioner St. Luke's net income. Petitioner contends that if the preceded collective bargaining negotiations which have to take place first between both litigants. It denies entering into a
disputed awards are sustained, the wage increases and benefits shall total approximately P194,403,000.00 which it claims is round of negotiations withprivate respondent SLMCEA-AFW on the theory that the meetings referred to by the latter were
excessive and unreasonable, considering that said aggregate amount is more than its projected income for the next three merely informal ones, without any binding effect on the parties because AFW is torn between two factions vying for the right
years. To illustrate its point, petitioner submits the following computation: to represent it. Thus, petitioner maintains that nothing conclusive on the terms and conditions of the proposed CBA could be
arrived at when the other party, private respondent SLMCEA-AFW is confronted with an unresolved representation issue.
YR I
Petitioner argues further that since no formal negotiations were conducted, it could not have possibly made an offer of
A. P1,140 added to basic pay P1,140.00 as salary and meal allowance increases for the first year and an increase of P700.00 across-the-board monthly salary
a) P1,140 x 1,500 (no. of employees) x 12 (months) -
P20,520,000 for the second and third years of the new CBA. It raises doubts on the veracity of the minutes presented by private respondent
b) 13th month pay: P1,140 x 1,500 -
1,710,000 SLMCEA-AFW to prove that negotiations were held, particularly on October 26, 1990, when petitioner allegedly made said
c) Overtime pay, 20% of payroll - 4,104,000 offer as its last ditch effort for a compromise prior to the deadlock. According to petitioner, these minutes, unsigned by
d) Holiday pay, PM/Night pay - 1,026,000 petitioner, were merely concocted by private respondent SLMCEA-AFW.
e) Sick leave - 855,000
f) Funeral, Paternity, Maternity leaves, retirement pay - 820,000 Finally, petitioner attacks the Order of January 28, 1991 for being violative of Article 253-A of the Labor Code, particularly its
B. P230 added to meal allowance provisions on retroactivity. Said Article pertinently provides:
a) P230 x 1,500 x 12 - 4,140,000
C One day added to sick leave x x x
a) (Ave. pay P3,000 + P1,140) divided by 30 x 1,500 - 222,000
D. Sick leave cash conversion base reduced from 60 to 45 days Any agreement on such other provisions of the collective bargaining agreement entered into within six (6) months from the
a) (P3,300 + P1,140)/30 x 1,200 - 2,664,000 date of expiry of the term of such other provisions as fixed in the collective bargaining agreement, shall retroact to the day
E. Retirement benefits adjustment - 500,000 immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the
-------------------------- duration of retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining agreement, the parties
FIRST YEAR ADDITIONAL COST - P36,561,000 may exercise their rights under this Code.
YR II
Petitioner argues that in granting retroactive effect to the enforceability of the CBA, public respondent committed an act
A. Yr I increase except sick leave cash conversion from 60 to 45 - P33,897,000
contrary to the above provision of law, pointing out that the old CBA expired on July 30, 1990 and the questioned order was
B. P700 added to monthly basic pay
issued on January 28, 1991. Petitioner theorizes that following Article 13 of the Civil Code which provides that there are 30
a) P700 x 1,500 x 12 - 12,600,000
days in one month, the questioned Order of January 28, 1991 was issued beyond the six-month period, graphically shown thus:
b) 13th month pay: P700 x 1,500 - 1,050,000
c) Overtime pay, 20% of P12.6M - 2,520,000 July 30, 1990 Expiration
d) Holiday pay, PM/Night pay - 630,000 July 31 = 1 day
e) Sick leave: 15 days x 700/30 x 1,500 - 525,000 August 1-31, 1990 = 31 days
f) Funeral, paternity, maternity leaves, retirement pay - 504,000 September 1-30, 1990 = 30 days
------------------------------ October 1-31, 1990 = 31 days
SECOND YEAR ADDITIONAL COST - P51,726,000 November 1-30, 1990 = 30 days
YR III December 1-31, 1990 = 31 days
A. Yr I and Yr II increases - P88,287,000 January 1-28, 1991 = 28 days
B. P700 added to basic pay _____________________
a) P700 x 1,500 x 12 - 12,600,000
b) 13th month pay: P700 x 1,500 - 1,050,000 TOTAL ------------------------ = 182 days (6 months and 2 days)
c) Overtime pay, 20% of P12.6M - 2,520,000
d) Holiday pay, PM/Night pay - 630,000 (p. 34, Rollo.)
e) Sick leave - 525,000
f) Funeral, paternity, maternity leaves, retirement pay - 504,000 Traversing petitioner's arguments, private respondent SLMCEA-AFW contends that the formulation of the terms and conditions
of the CBA awards is well supported by the factual findings of public respondent which established that petitioner failed to
-------------------------------- refute private respondent's allegation that during their last meeting on October 26, 1990, petitioner stood pat on its offer of
P1,140.00 as salary and meal allowance increases for the first year of the new CBA and P700.00 across-the-board salary
THIRD YEAR ADDITIONAL COST - P106,116,000 increases for the second and third years thereof.Said awards, it said, are well within the means of petitioner because its
reported net income of P15 million, P11 million, and P13 million for 1987, 1988, and 1989, respectively, have been actually
TOTAL THREE-YEAR ADDITIONAL BENEFITS/WAGES - P194,403,000 understated. Moreover, private respondent claims that petitioner, in actual terms, does not have to pay the alleged amount of
P194,403,000.00 for wages and benefits in favor of its employees. Such amount, according to private respondent, is bloated
(pp. 14-16, Rollo). and excessive. Private respondent in substantiating such claim made the following analysis:
First, P1,140.00 total salary increase for the first year (1990-1991) of the new CBA is divided into: P510.00 in compliance with the aforestated issue: that public respondent, in the exercise of his power to assume jurisdiction over subject labor dispute,
the government mandated daily salary increase of P17.00 and P630.00 CBA across the board monthly salary increase, thus, the acted whimsically, capriciously, or in an arbitrary, despotic manner by reason of passion or personal hostility which was so
whole P1,140.00 salary increase is payable only beginning August 1, 1990 (reckoned from the CBA July 30, 1990 expiry date) up patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined or to act at all in
to October 31, 1990 only following the November 1, 1990 effectivity of WAGE ORDER NO. NCR-01 which granted the said contemplation of law (San Sebastian College vs. Court of Appeals, 197 SCRA 138 [1991]).
P17.00 daily wage increase or P510.00 monthly of which herein petitioner promptly complied with and paid to its employees
and therefore deductible from P1,140.00 total monthly salary increase (Annex "A" - Petition and Annex "13" hereof); Subjected to and measured by this test, the challenged Order, we believe, can withstand even the most rigorous scrutiny.

Second, the remaining P630.00 CBA across the board monthly salary increase takes effect on November 1, 1990 up to January Petitioner assails the Order of January 28, 1991 on three grounds: (a) unreasonableness and baselessness; (b) prematurity; and
7, 1991 only following the January 8, 1991 effectivity of WAGE ORDER NO. NCR-02 which mandated P12.00 daily wage increase (c) violation of Article 253-A of the Labor Code.
or P360.00 monthly, hence, reducing the P630.00 CBA monthly salary increase to P270.00 CBA monthly salary increase
effective January 8, 1991 and onwards till July 31, 1991 (Annexes "22" and "23" hereof); We rule that the Order, particularly in its disposition on the economic issues, was not arbitrarily imposed by public respondent.
A perusal of the Order shows that public respondent took into consideration the parties' respective contentions, a clear
Third, that out of an estimated workforce of 1,264 regular employees inclusive of about 209 supervisors, unit, junior area, indication that he was keenly aware of their contrary positions. Both sides having been heard, they were allowed to present
division department managers and top level executives, all occupying permanent positions, and approximately 55 regular but their respective evidence. The due process requirement was thus clearly observed. Considering public respondent's expertise
highly confidential employees, only 1,000 rank-and-file regular/permanent employees (casuals, contractuals, probies and on the subject and his observance of the cardinal principles of due process, the assailed Order deserves to be accorded great
security guards excluded) are entitled to the CBA benefits for three (3) years (1990-1993) (as private respondent SLMCEA-AFW respect by this Court.
gathered and analyzed from the petitioner's Personnel Strength Report hereto attached as Annex "28" hereof) vis-a-vis the
generalized and inflated 1,500 employees as total workforce purportedly entitled to CBA benefits per its self-serving and Equally worth mentioning is the fact that in resolving the economic issues, public respondent merely
incredible computation; adopted in toto petitioner's proposals. Consequently, petitioner cannot now claim that the awards are unreasonable and
baseless. Neither can it deny having made such proposals, as it attempted to do in its Motion for Reconsideration of the
Fourth, the petitioner's computed 20% overtime pay of the basic salary is unrealistic and overstated in view of its extreme cost- challenged Order before public respondent and which it continues to pursue in the instant petition. It is too late in the day for
cutting/savings measures on all expenditures, most specially, on overtime work adopted since last year and a continuing such pretense, especially so because petitioner failed to controvert private respondent's allegation contained in its Comment
management priority project up to the present; and to the petition before the Labor Secretary that petitioner had offered as its last proposal said salary and meal allowance
increases. As correctly pointed out by public respondent, petitioner failed, when it had the chance, to rebut the same in its
Fifth, due to the above considerations, the total real award of wages and fringe benefits is far less than the true annual hefty Reply to said Comment, considering that the resolution of the labor dispute at that time was still pending. Any objection on
operating net income of the petitioner. this point is thus deemed waived.

The net result is that the first year award of P1,140.00 monthly salary increase of which P510.00 monthly salary increase is We do not see merit in petitioner's theory that the awards were granted prematurely. In its effort to persuade this Court along
made in compliance with the P510.00 monthly wage increase at P17.00 daily wage increase effective November 1, 1990 under this point, petitioner denies having negotiated with private respondent SLMCEA-AFW. Petitioner collectively refers to all the
Wage Order No. NCR-01 (Annex "13" hereof) or with the intended P630.00 CBA monthly salary increase is further reduced by talks conducted with private respondent as mere informal negotiations due to the representation issue involving AFW.
P360.00 monthly wage increase at P12.00 daily wage increase effective January 8, 1991 under Wage Order No. NCR-02 (Annex Petitioner thus argues that in the absence of any formal negotiations, no collective bargaining could have taken place. Public
"22" hereof), thereby leaving a downgraded or watered down CBA monthly increase of P270.00 only. respondent, petitioner avers, should have required the parties instead to negotiate rather than prematurely issuing his order.

Comparatively speaking, the 13% monthly salary increase of each employee average basic monthly salary of P2,500.00 in 1987 We cannot agree with this line of reasoning. It is immaterial whether the representation issue within AFW has been resolved
or P325.00 monthly salary increase granted by the petitioner under the first old CBA (1987-1990) is better than the much with finality or not. Said squabble could not possibly serve as a bar to any collective bargaining since AFW is not the real party-
diluted P270.00 CBA monthly salary increase (in lieu of the awarded P630.00 CBA monthly salary increase for the first year of in-interest to the talks; rather, the negotiations were confined to petitioner and the local union SLMCEA which is affiliated to
the new CBA under Order, dated January 28, 1991, of public respondent). (Annexes "A" and "G" Petition). (pp. 390-391, Rollo.) AFW. Only the collective bargaining agent, the local union SLMCEA in this case, possesses legal standing to negotiate with
petitioner. A duly registered local union affiliated with a national union or federation does not lose its legal personality or
Private respondent concludes that petitioner's version that it will have to pay P194,403,000.00 is not true because this will be independence (Adamson and Adamson, Inc. vs. The Court of Industrial Relations and Adamson and Adamson Supervising Union
drastically reduced by 40% to 60% in real terms due to a smaller number of employees covered. It is further explained that the (FFW), 127 SCRA 268 [1984]). In Elisco-Elirol Labor Union (NAFLU) vs. Noriel (180 SCRA 681 [1977]), then Justice Teehankee re-
government-decreed wage increases abovementioned already form part of the P1,140.00 wage and meal allowance increases, echoed the words of Justice Esguerra in Liberty Cotton Mills Workers Unionvs. Liberty Cotton Mills, Inc. (66 SCRA 512 [1975]),
not to mention the strict cost-cutting measures and practices on overtime and expense items adopted by petitioner since thus:
1990.
(T)he locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between
With respect to public respondent's ruling that the CBA awards should be given retroactive effect, private respondent agrees the employer and their employee-members in the economic struggle for the fruits of the joint productive effort of labor and
with the Labor Secretary's view that Article 253-A of the Labor Code does not apply to arbitral awards such as those involved in capital; and the association of the locals into the national union (as PAFLU) was in furtherance of the same end. These
the instant case. According to private respondent, Article 253-A of the Labor Code is clear and plain on its face as referring only associations are consensual entities capable of entering into such legal relations with their members. The essential purpose
to collective bargaining agreements entered into by management and the certified exclusive bargaining agent of all rank-and- was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power
file employees therein within six (6) months from the expiry of the old CBA. 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, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free
These foregoing contentions and arguments of private respondent have been similarly put forward by the Office of the also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence.
Solicitor General in its Consolidated Comment filed on November 23, 1991. The Solicitor General shares the views of private (at p. 688; italics in the original.)
respondent SLMCEA-AFW.
Appending "AFW" to the local union's name does not mean that the federation absorbed the latter. No such merger can be
We are now tasked to rule on the petition. Do petitioner's evidence and arguments provide adequate basis for the charge of construed. Rather, what is conveyed is the idea of affiliation with the local union and the larger national federation retaining
alleged grave abuse of discretion committed by public respondent in his Order of January 28, 1991 as to warrant its annulment their separate personalities.
by this Court? This is the sole issue in the case at bar. Consequently, this Court would apply the following yardstick in resolving
Petitioner cannot pretend to be unaware of these legal principles since they enjoy the benefit of legal advice from their
distinguished counsel. Thus, we are constrained to agree with the position of the Solicitor General that petitioner conveniently
used the representation issue within AFW to skirt entering into bargaining negotiations with the private respondent.

Too, petitioner is in error in contending that the order was prematurely issued. It must be recalled that immediately after the
deadlock in the talks, it was petitioner which filed a petition with the Secretary of Labor for the latter to assume jurisdiction
over the labor dispute. In effect, petitioner submitted itself to the public respondent's authority and recognized the latter's
power to settle the labor dispute pursuant to Article 263(g) of the Labor Code granting him the power and authority
to decide the dispute. It cannot, therefore, be said that public respondent's decision to grant the awards is premature and pre-
emptive of the parties' right to collectively bargain, simply because the Order of January 28, 1991 was unfavorable to one or
the other party, for as we held in Saulog Transit, Inc. vs. Lazaro, (128 SCRA 591[1984]):

It is a settled rule that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and
after failing to obtain such relief, repudiate or question that same jurisdiction. A party cannot invoke jurisdiction at one time
and reject it at another time in the same controversy to suit its interests and convenience. The Court frowns upon and does not
tolerate the undesirable practice of some litigants who submit voluntarily a cause and then accepting the judgment when
favorable to them and attacking it for lack of jurisdiction when adverse. (Tajonera v. Lamaroxa, 110 SCRA 447, citing Tijam v.
Sibonghanoy, 23 SCRA 35). (at p. 601.)

Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the previous CBA,
contrary to the position of petitioner. Under the circumstances of the case, Article 253-A cannot be properly applied to herein
case. As correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing petitioner's Motion for
Reconsideration --

Anent the alleged lack of basis for the retroactivity provisions awarded, we would stress that the provision of law invoked by
the Hospital, Article 253-A of the Labor Code, speaks of agreements by and between the parties, and not arbitral awards ... (p.
818, Rollo.)

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by
the Secretary of Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public respondent is deemed
vested with plenary and discretionary powers to determine the effectivity thereof.

WHEREFORE, the instant petition is hereby DISMISSED for lack of merit.

SO ORDERED.
INSULAR HOTEL EMPLOYEES V. WATERFRONT INSULAR HOTEL DAVAO
1) Suspension of [the] CBA for ten years, No strike no lock-out shall be enforced.
DECISION 2) Pay all the employees their benefits due, and put the length of service to zero with a
minimum hiring rate. Payment of benefits may be on a staggered basis or as available.
3) Night premium and holiday pays shall be according to law. Overtime hours rendered shall be
PERALTA, J.: offsetted as practiced.
4) Reduce the sick leaves and vacation leaves to 15 days/15days.
5) Emergency leave and birthday off are hereby waived.
Before this Court is a petition for review on certiorari,[1] under Rule 45 of the Rules of Court, seeking to set aside the 6) Duty meal allowance is fixed at P30.00 only. No more midnight snacks and double meal
Decision[2] dated October 11, 2005, and the Resolution[3]dated July 13, 2006 of the Court of Appeals (CA) in consolidated labor allowance. The cook drinks be stopped as practiced.
cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657. Said Decision reversed the Decision[4] dated the April 5, 7) We will shoulder 50% of the group health insurance and family medical allowance be reduced
2004 of the Accredited Voluntary Arbitrator Rosalina L. Montejo (AVA Montejo). to 1,500.00 instead of 3,000.00.
The facts of the case, as culled from the records, are as follows: 8) The practice of bringing home our uniforms for laundry be continued.
9) Fixed manning shall be implemented, the rest of manpower requirements maybe sourced
thru WAP and casual hiring. Manpower for fixed manning shall be 145 rank-and-file union members.
On November 6, 2000, respondent Waterfront Insular Hotel Davao (respondent) sent the Department of Labor and 10) Union will cooperate fully on strict implementation of house rules in order to attain desired
Employment (DOLE), Region XI, Davao City, a Notice of Suspension of Operations[5] notifying the same that it will suspend its productivity and discipline. The union will not tolerate problem members.
operations for a period of six months due to severe and serious business losses. In said notice, respondent assured the DOLE 11) The union in its desire to be of utmost service would adopt multi-tasking for the hotel to be
that if the company could not resume its operations within the six-month period, the company would pay the affected more competitive.
employees all the benefits legally due to them.

During the period of the suspension, Domy R. Rojas (Rojas), the President of Davao Insular Hotel Free Employees Union
(DIHFEU-NFL), the recognized labor organization in Waterfront Davao, sent respondent a number of letters asking
management to reconsider its decision. It is understood that with the suspension of the CBA renegotiations, the same existing CBA shall be
adopted and that all provisions therein shall remain enforced except for those mentioned in this
In a letter[6] dated November 8, 2000, Rojas intimated that the members of the Union were determined to keep their jobs and proposal.
that they believed they too had to help respondent, thus:
These proposals shall automatically supersede the affected provisions of the CBA.[11]
xxxx
In a handwritten letter[12] dated November 25, 2000, Rojas once again appealed to respondent for it to consider their proposals
Sir, we are determined to keep our jobs and push the Hotel up from sinking. We believe that we have to and to re-open the hotel. In said letter, Rojasstated that manpower for fixed manning shall be one hundred (100) rank-and-file
help in this (sic) critical times. Initially, we intend to suspend the re-negotiations of our CBA. We could Union members instead of the one hundred forty-five (145) originally proposed.
talk further on possible adjustments on economic benefits, the details of which we are hoping to discuss
with you or any of your emissaries. x x x[7] Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted to respondent a Manifesto[13] concretizing their
earlier proposals.
In another letter[8] dated November 10, 2000, Rojas reiterated the Union's desire to help respondent, to wit: After series of negotiations, respondent and DIHFEU-NFL, represented by its President, Rojas, and Vice-Presidents, Exequiel J.
Varela Jr. and Avelino C. Bation, Jr., signed a Memorandum of Agreement[14] (MOA) wherein respondent agreed to re-open the
We would like to thank you for giving us the opportunity to meet [with] your representatives in order for hotel subject to certain concessions offered by DIHFEU-NFL in its Manifesto.
us to air our sentiments and extend our helping hands for a possible reconsideration of the company's
decision. Accordingly, respondent downsized its manpower structure to 100 rank-and-file employees as set forth in the terms of the
The talks have enabled us to initially come up with a suggestion of solving the high cost on payroll. MOA. Moreover, as agreed upon in the MOA, a new pay scale was also prepared by respondent.

We propose that 25 years and above be paid their due retirement benefits and put their length of The retained employees individually signed a Reconfirmation of Employment[15] which embodied the new terms and conditions
service to zero without loss of status of employment with a minimum hiring rate. of their continued employment. Each employee was assisted by Rojas who also signed the document.
Thru this scheme, the company would be able to save a substantial amount and reduce greatly the
payroll costs without affecting the finance of the families of the employees because they will still have a On June 15, 2001, respondent resumed its business operations.
job from where they could get their income. On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be local officers of the National Federation
of Labor (NFL), filed a Notice of Mediation[16]before the National Conciliation and Mediation Board (NCMB), Region XI, Davao
Moreover, we are also open to a possible reduction of some economic benefits as our gesture of sincere City. In said Notice, it was stated that the Union involved was DARIUS JOVES/DEBBIE PLANAS ET. AL, National Federation of
desire to help. Labor. The issue raised in said Notice was the Diminution of wages and other benefits through unlawful Memorandum of
Agreement.
We are looking forward to a more fruitful round of talks in order to save the hotel.[9]
On August 29, 2002, the NCMB called Joves and respondent to a conference to explore the possibility of settling the conflict. In
In another letter[10] dated November 20, 2000, Rojas sent respondent more proposals as a form of the Union's gesture of their the said conference, respondent and petitioner Insular Hotel Employees Union-NFL (IHEU-NFL), represented by Joves, signed a
intention to help the company, thus: Submission Agreement[17] wherein they chose AVA Alfredo C. Olvida (AVA Olvida) to act as voluntary arbitrator. Submitted for
the resolution of AVA Olvida was the determination of whether or not there was a diminution of wages and other benefits of filling up the blanks particularly on the question there of Union; which was filled up with Insular Hotel
through an unlawful MOA. In support of his authority to file the complaint, Joves, assisted by Atty. Danilo Cullo (Cullo), Employees Union-NFL. There is nothing there that indicates that it is a complainant as the case is
presented several Special Powers of Attorney (SPA) which were, however, undated and unnotarized. initiated by the individual workers and National Federation of Labor, not by the local union. The local
union was not included as party-complainant considering that it was a party to the assailed MOA.[27]
On September 2, 2002, respondent filed with the NCMB a Manifestation with Motion for a Second Preliminary
Conference,[18] raising the following grounds:
On March 18, 2003, AVA Olvida issued a Resolution[28] denying respondent's Motion for Reconsideration. He, however, ruled
1) The persons who filed the instant complaint in the name of the Insular Hotel Employees Union- that respondent was correct when it raised its objection to NFL as proper party-complainant, thus:
NFL have no authority to represent the Union;
2) The individuals who executed the special powers of attorney in favor of the person who filed the Anent to the real complainant in this instant voluntary arbitration case, the respondent is correct when it
instant complaint have no standing to cause the filing of the instant complaint; and raised objection to the National Federation of Labor (NFL) and as proper party-complainants.
3) The existence of an intra-union dispute renders the filing of the instant case premature.[19]
The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the recognized and incumbent
bargaining agent of the rank-and-file employees of the respondent hotel. In the submission agreement
On September 16, 2002, a second preliminary conference was conducted in the NCMB, where Cullo denied any existence of an of the parties dated August 29, 2002, the party complainant written is INSULAR HOTEL EMPLOYEES
intra-union dispute among the members of the union. Cullo, however, confirmed that the case was filed not by the IHEU-NFL UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79 other members.
but by the NFL. When asked to present his authority from NFL, Cullo admitted that the case was, in fact, filed by individual
employees named in the SPAs. The hearing officer directed both parties to elevate the aforementioned issues to AVA Olvida.[20] However, since the NFL is the mother federation of the local union, and signatory to the existing CBA, it
can represent the union, the officers, the members or union and officers or members, as the case may
The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred to AVA Olvida. Respondent again raised its be, in all stages of proceedings in courts or administrative bodies provided that the issue of the case will
objections, specifically arguing that the persons who signed the complaint were not the authorized representatives of the involve labor-management relationship like in the case at bar.
Union indicated in the Submission Agreement nor were they parties to the MOA. AVA Olvida directed respondent to file a
formal motion to withdraw its submission to voluntary arbitration.
The dispositive portion of the March 18, 2003 Resolution of AVA Olvida reads:
On October 16, 2002, respondent filed its Motion to Withdraw.[21] Cullo then filed an Opposition[22] where the same was
captioned: WHEREFORE, premises considered, the motion for reconsideration filed by respondent is DENIED. The
resolution dated November 11, 2002 is modified in so far as the party-complainant is concerned; thus,
NATIONAL FEDERATION OF LABOR instead of National Federation of Labor and 79 individual employees, union members, shall be Insular
And 79 Individual Employees, Union Members, Hotel Employees Union-NFL et. al., as stated in the joint submission agreement dated August 29, 2002.
Complainants, Respondent is directed to comply with the decision of this Arbitrator dated November 11, 2002,
-versus-
Waterfront Insular Hotel Davao, No further motion of the same nature shall be entertained.[29]
Respondent.

On May 9, 2003, respondent filed its Position Paper Ad Cautelam,[30] where it declared, among others, that the same was
In said Opposition, Cullo reiterated that the complainants were not representing IHEU-NFL, to wit: without prejudice to its earlier objections against the jurisdiction of the NCMB and AVA Olvida and the standing of the persons
xxxx who filed the notice of mediation.

2. Respondent must have been lost when it said that the individuals who executed the SPA have no standing Cullo, now using the caption Insular Hotel Employees Union-NFL, Complainant, filed a Comment[31] dated June 5, 2003. On June
to represent the union nor to assail the validity of Memorandum of Agreement (MOA). What is correct is 23, 2003, respondent filed its Reply.[32]
that the individual complainants are not representing the union but filing the complaint through their Later, respondent filed a Motion for Inhibition[33] alleging AVA Olvida's bias and prejudice towards the cause of the employees.
appointed attorneys-in-fact to assert their individual rights as workers who are entitled to the benefits In an Order[34] dated July 25, 2003, AVA Olvida voluntarily inhibited himself out of delicadeza and ordered the remand of the
granted by law and stipulated in the collective bargaining agreement.[23] case to the NCMB.
On November 11, 2002, AVA Olvida issued a Resolution[24] denying respondent's Motion to Withdraw. On December 16, 2002,
respondent filed a Motion for Reconsideration[25] where it stressed that the Submission Agreement was void because the On August 12, 2003, the NCMB issued a Notice requiring the parties to appear before the conciliator for the selection of a new
Union did not consent thereto. Respondent pointed out that the Union had not issued any resolution duly authorizing the voluntary arbitrator.
individual employees or NFL to file the notice of mediation with the NCMB. In a letter[35] dated August 19, 2003 addressed to the NCMB, respondent reiterated its position that the individual union
members have no standing to file the notice of mediation before the NCMB. Respondent stressed that the complaint should
Cullo filed a Comment/Opposition[26] to respondent's Motion for Reconsideration. Again, Cullo admitted that the case was not have been filed by the Union.
initiated by the IHEU-NFL, to wit:
On September 12, 2003, the NCMB sent both parties a Notice[36] asking them to appear before it for the selection of the new
The case was initiated by complainants by filling up Revised Form No. 1 of the NCMB duly furnishing voluntary arbitrator. Respondent, however, maintained its stand that the NCMB had no jurisdiction over the case.
respondent, copy of which is hereto attached as Annex A for reference and consideration of the Consequently, at the instance of Cullo, the NCMB approved ex parte the selection of AVA Montejo as the new voluntary
Honorable Voluntary Arbitrator. There is no mention there of Insular Hotel Employees Union, but only arbitrator.
National Federation of Labor (NFL). The one appearing at the Submission Agreement was only a matter
On April 5, 2004, AVA Montejo rendered a Decision[37] ruling in favor of Cullo, the dispositive portion of which reads: III.
WHEREOF, in view of the all the foregoing, judgment is hereby rendered: THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY ERRED IN CONCLUDING THAT ARTICLE 100
OF THE LABOR CODE APPLIES ONLY TO BENEFITS ENJOYED PRIOR TO THE ADOPTION OF THE LABOR
1. Declaring the Memorandum of Agreement in question as invalid as it is contrary to law and CODE WHICH, IN EFFECT, ALLOWS THE DIMINUTION OF THE BENEFITS ENJOYED BY EMPLOYEES FROM
public policy; ITS ADOPTION HENCEFORTH.[42]
2. Declaring that there is a diminution of the wages and other benefits of the Union members and
officers under the said invalid MOA.
3. Ordering respondent management to immediately reinstate the workers wage rates and other The petition is not meritorious.
benefits that they were receiving and enjoying before the signing of the invalid MOA;
4. Ordering the management respondent to pay attorneys fees in an amount equivalent to ten
percent (10%) of whatever total amount that the workers union may receive representing individual Anent the first error raised, Cullo argues that the CA erred when it overlooked the fact that before the case was submitted to
wage differentials. voluntary arbitration, the parties signed a Submission Agreement which mentioned the name of the local union and not only
NFL. Cullo, thus, contends that the CA committed error when it ruled that the voluntary arbitrator had no jurisdiction over the
case simply because the Notice of Mediation did not state the name of the local union thereby disregarding the Submission
As to the other claims of the Union regarding diminution of other benefits, this accredited voluntary Agreement which states the names of local union as Insular Hotel Employees Union-NFL.[43]
arbitrator is of the opinion that she has no authority to entertain, particularly as to the computation
thereof. In its Memorandum,[44] respondent maintains its position that the NCMB and Voluntary Arbitrators had no jurisdiction over the
complaint. Respondent, however, now also contends that IHEU-NFL is a non-entity since it is DIHFEU-NFL which is considered
SO ORDERED.[38] by the DOLE as the only registered union in Waterfront Davao.[45] Respondent argues that the Submission Agreement does not
name the local union DIHFEU-NFL and that it had timely withdrawn its consent to arbitrate by filing a motion to withdraw.
Both parties appealed the Decision of AVA Montejo to the CA. Cullo only assailed the Decision in so far as it did not
categorically order respondent to pay the covered workers their differentials in wages reckoned from the effectivity of the A review of the development of the case shows that there has been much confusion as to the identity of the party which filed
MOA up to the actual reinstatement of the reduced wages and benefits. Cullos' petition was docketed as CA-G.R. SP No. 83831. the case against respondent. In the Notice of Mediation[46] filed before the NCMB, it stated that the union involved was DARIUS
Respondent, for its part, questioned among others the jurisdiction of the NCMB. Respondent maintained that the MOA it had JOVES/DEBBIE PLANAS ET. AL., National Federation of Labor. In the Submission Agreement,[47] however, it stated that the union
entered into with the officers of the Union was valid. Respondent's petition was docketed as CA-G.R. SP No. 83657. Both cases involved was INSULAR HOTEL EMPLOYEES UNION-NFL.
were consolidated by the CA.
Furthermore, a perusal of the records would reveal that after signing the Submission Agreement, respondent persistently
On October 11, 2005, the CA rendered a Decision[39] ruling in favor of respondent, the dispositive portion of which reads: questioned the authority and standing of the individual employees to file the complaint. Cullo then clarified in subsequent
documents captioned as National Federation of Labor and 79 Individual Employees, Union Members, Complainants that the
WHEREFORE, premises considered, the petition for review in CA-G.R. SP No. 83657 is hereby GRANTED, individual complainants are not representing the union, but filing the complaint through their appointed attorneys-in-
while the petition in CA-G.R. SP No. 83831 is DENIED. Consequently, the assailed Decision dated April 5, fact.[48] AVA Olvida, however, in a Resolution dated March 18, 2003, agreed with respondent that the proper party-
2004 rendered by AVA Rosalina L. Montejo is hereby REVERSED and a new one entered declaring the complainant should be INSULAR HOTEL EMPLOYEES UNION-NFL, to wit:
Memorandum of Agreement dated May 8, 2001 VALID and ENFORCEABLE. Parties are DIRECTED to
comply with the terms and conditions thereof. x x x In the submission agreement of the parties dated August 29, 2002, the party complainant written is
INSULAR HOTEL EMPLOYEES UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79 other
SO ORDERED.[40] members.[49]

The dispositive portion of the Resolution dated March 18, 2003 of AVA Olvida reads:
Aggrieved, Cullo filed a Motion for Reconsideration, which was, however, denied by the CA in a Resolution [41] dated July 13,
2006. WHEREFORE, premises considered, the motion for reconsideration filed by respondent is DENIED. The
resolution dated November 11, 2002, is modified in so far as the party complainant is concerned, thus,
Hence, herein petition, with Cullo raising the following issues for this Court's resolution, to wit: instead of National Federation of Labor and 79 individual employees, union members, shall be Insular
Hotel Employees Union-NFL et. al., as stated in the joint submission agreement dated August 29, 2002.
I. Respondent is directed to comply with the decision of this Arbitrator dated November 11, 2002.[50]
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN FINDING
THAT THE ACCREDITED VOLUNTARY ARBITRATOR HAS NO JURISDICTION OVER THE CASE SIMPLY
BECAUSE THE NOTICE OF MEDIATION DOES NOT MENTION THE NAME OF THE LOCAL UNION BUT ONLY After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted Insular Hotel Employees Union-NFL et. al., Complainant as
THE AFFILIATE FEDERATION THEREBY DISREGARDING THE SUBMISSION AGREEMENT DULY SIGNED BY the caption in all his subsequent pleadings. Respondent, however, was still adamant that neither Cullo nor the individual
THE PARTIES AND THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF THE LOCAL UNION. employees had authority to file the case in behalf of the Union.

II. While it is undisputed that a submission agreement was signed by respondent and IHEU-NFL, then represented by Joves and
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR BY Cullo, this Court finds that there are two circumstances which affect its validity: first, the Notice of Mediation was filed by a
DISREGARDING THE PROVISIONS OF THE CBA SIMPLY BECAUSE IT BELIEVED THE UNPROVEN party who had no authority to do so; second, that respondent had persistently voiced out its objection questioning the
ALLEGATIONS OF RESPONDENT HOTEL THAT IT WAS SUFFERING FROM FINANCIAL CRISIS. authority of Joves, Cullo and the individual members of the Union to file the complaint before the NCMB.
Procedurally, the first step to submit a case for mediation is to file a notice of preventive mediation with the NCMB. It is only submitted to it within fifteen (15) days after the problems ha[ve] been discussed
after this step that a submission agreement may be entered into by the parties concerned. by the members. If the dispute or grievance cannot be settled by the Committee,
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive mediation, to wit: or if the committee failed to act on the matter within the period of fifteen (15)
days herein stipulated, the UNION and the COMPANY agree to submit the issue to
Who may file a notice or declare a strike or lockout or request preventive mediation. - Voluntary Arbitration. Selection of the arbitrator shall be made within seven (7)
Any certified or duly recognized bargaining representative may file a notice or declare a strike or request days from the date of notification by the aggrieved party. The Arbitrator shall be
for preventive mediation in cases of bargaining deadlocks and unfair labor practices. The employer may selected by lottery from four (4) qualified individuals nominated by in equal
file a notice or declare a lockout or request for preventive mediation in the same cases. In the absence of a numbers by both parties taken from the list of Arbitrators prepared by the
certified or duly recognized bargaining representative, any legitimate labor organization in the National Conciliation and Mediation Board (NCMB). If the Company and the Union
establishment may file a notice, request preventive mediation or declare a strike, but only on grounds of representatives within ten (10) days fail to agree on the Arbitrator, the NCMB shall
unfair labor practice. name the Arbitrator. The decision of the Arbitrator shall be final and binding upon
the parties. However, the Arbitrator shall not have the authority to change any
provisions of the Agreement.The cost of arbitration shall be borne equally by the
From the foregoing, it is clear that only a certified or duly recognized bargaining agent may file a notice or request for parties.
preventive mediation. It is curious that even Cullo himself admitted, in a number of pleadings, that the case was filed not by
the Union but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the notice filed Petitioners have not, however, been duly authorized to represent the union. Apropos is this Courts
before it. pronouncement in Atlas Farms, Inc. v. National Labor Relations Commission, viz:

Even though respondent signed a Submission Agreement, it had, however, immediately manifested its desire to withdraw from x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or
the proceedings after it became apparent that the Union had no part in the complaint. As a matter of fact, only four days had designate their respective representatives to the grievance machinery and if the
lapsed after the signing of the Submission Agreement when respondent called the attention of AVA Olvida in a Manifestation grievance is unsettled in that level, it shall automatically be referred to the
with Motion for a Second Preliminary Conference[51] that the persons who filed the instant complaint in the name of Insular voluntary arbitrators designated in advance by parties to a CBA.
Hotel Employees Union-NFL had no authority to represent the Union. Respondent cannot be estopped in raising the Consequently, only disputes involving the union and the company shall be
jurisdictional issue, because it is basic that the issue of jurisdiction may be raised at any stage of the proceedings, even on referred to the grievance machinery or voluntary arbitrators. (Emphasis and
appeal, and is not lost by waiver or by estoppel. underscoring supplied.)[55]

In Figueroa v. People,[52] this Court explained that estoppel is the exception rather than the rule, to wit: If the individual members of the Union have no authority to file the case, does the federation to which the local union is
affiliated have the standing to do so? On this note, Coastal Subic Bay Terminal, Inc. v. Department of Labor and
Applying the said doctrine to the instant case, the petitioner is in no way estopped by laches in assailing Employment[56] is enlightening, thus:
the jurisdiction of the RTC, considering that he raised the lack thereof in his appeal before the appellate
court. At that time, no considerable period had yet elapsed for laches to attach. True, delay alone, though
unreasonable, will not sustain the defense of estoppel by laches unless it further appears that the party, x x x A local union does not owe its existence to the federation with which it is affiliated. It is a separate
knowing his rights, has not sought to enforce them until the condition of the party pleading laches has in and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not
good faith become so changed that he cannot be restored to his former state, if the rights be then divest the local union of its own personality, neither does it give the mother federation the license to
enforced, due to loss of evidence, change of title, intervention of equities, and other causes. In applying the act independently of the local union. It only gives rise to a contract of agency, where the former acts in
principle of estoppel by laches in the exceptional case of Sibonghanoy, the Court therein considered the representation of the latter. Hence, local unions are considered principals while the federation is
patent and revolting inequity and unfairness of having the judgment creditors go up their Calvary once deemed to be merely their agent. x x x[57]
more after more or less 15 years.The same, however, does not obtain in the instant case.

We note at this point that estoppel, being in the nature of a forfeiture, is not favored by law. It is to be Based on the foregoing, this Court agrees with approval with the disquisition of the CA when it ruled that NFL had no authority
applied rarelyonly from necessity, and only in extraordinary circumstances. The doctrine must be applied to file the complaint in behalf of the individual employees, to wit:
with great care and the equity must be strong in its favor.When misapplied, the doctrine of estoppel may
be a most effective weapon for the accomplishment of injustice. x x x (Italics supplied.)[53] Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction over the case. Waterfront
contents that the Notice of Mediation does not mention the name of the Union but merely referred to the
National Federation of Labor (NFL) with which the Union is affiliated. In the subsequent pleadings, NFL's
The question to be resolved then is, do the individual members of the Union have the requisite standing to question the MOA legal counsel even confirmed that the case was not filed by the union but by NFL and the individual
before the NCMB? On this note, Tabigue v. International Copra Export Corporation (INTERCO)[54] is instructive: employees named in the SPAs which were not even dated nor notarized.
Respecting petitioners thesis that unsettled grievances should be referred to voluntary arbitration as Even granting that petitioner Union was affiliated with NFL, still the relationship between that of the local
called for in the CBA, the same does not lie.The pertinent portion of the CBA reads: union and the labor federation or national union with which the former was affiliated is generally
understood to be that of agency, where the local is the principal and the federation the agency. Being
In case of any dispute arising from the interpretation or implementation of this merely an agent of the local union, NFL should have presented its authority to file the Notice of Mediation.
Agreement or any matter affecting the relations of Labor and Management, While We commend NFL's zealousness in protecting the rights of lowly workers, We cannot, however,
the UNION and the COMPANY agree to exhaust all possibilities of conciliation allow it to go beyond what it is empowered to do.
through the grievance machinery. The committee shall resolve all problems
As provided under the NCMB Manual of Procedures, only a certified or duly recognized bargaining
representative and an employer may file a notice of mediation, declare a strike or lockout or request Article 100 of the Labor Code provides:
preventive mediation. The Collective Bargaining Agreement (CBA), on the other, recognizes that DIHFEU-
NFL is the exclusive bargaining representative of all permanent employees. The inclusion of the word NFL
after the name of the local union merely stresses that the local union is NFL's affiliate. It does not, PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS- Nothing in this Book shall be
however, mean that the local union cannot stand on its own. The local union owes its creation and construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at
continued existence to the will of its members and not to the federation to which it belongs. The spring the time of the promulgation of this Code.
cannot rise higher than its source, so to speak.[58]

In its Memorandum, respondent contends that IHEU-NFL is a non-entity and that DIHFEU-NFL is the only recognized bargaining On this note, Apex Mining Company, Inc. v. NLRC[65] is instructive, to wit:
unit in their establishment. While the resolution of the said argument is already moot and academic given the discussion
above, this Court shall address the same nevertheless. Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the Labor
Code is specifically concerned with benefits already enjoyed at the time of the promulgation of the Labor
While the November 16, 2006 Certification[59] of the DOLE clearly states that IHEU-NFL is not a registered labor organization, Code. Article 100 does not, in other words, purport to apply to situations arising after the promulgation
this Court finds that respondent is estopped from questioning the same as it did not raise the said issue in the proceedings date of the Labor Code x x x.[66]
before the NCMB and the Voluntary Arbitrators. A perusal of the records reveals that the main theory posed by respondent Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees with respondent that the same does not
was whether or not the individual employees had the authority to file the complaint notwithstanding the apparent non- prohibit a union from offering and agreeing to reduce wages and benefits of the employees. In Rivera v. Espiritu,[67] this Court
participation of the union. Respondent never put in issue the fact that DIHFEU-NFL was not the same as IHEU-NFL. ruled that the right to free collective bargaining, after all, includes the right to suspend it, thus:
Consequently, it is already too late in the day to assert the same.
Anent the second issue raised by Cullo, the same is again without merit.
A CBA is a contract executed upon request of either the employer or the exclusive bargaining
Cullo contends that respondent was not really suffering from serious losses as found by the CA. Cullo anchors his position on representative incorporating the agreement reached after negotiations with respect to wages, hours of
the denial by the Wage Board of respondent's petition for exemption from Wage Order No. RTWPB-X1-08 on the ground that it work and all other terms and conditions of employment, including proposals for adjusting any grievances
is a distressed establishment.[60] In said denial, the Board ruled: or questions arising under such agreement. The primary purpose of a CBA is the stabilization of labor-
A careful analysis of applicant's audited financial statements showed that during the period ending management relations in order to create a climate of a sound and stable industrial peace. In construing a
December 31, 1999, it registered retained earnings amounting to P8,661,260.00. Applicant's interim CBA, the courts must be practical and realistic and give due consideration to the context in which it is
financial statements for the quarter ending June 30, 2000 cannot be considered, as the same was not negotiated and the purpose which it is intended to serve.
audited. Accordingly, this Board finds that applicant is not qualified for exemption as a distressed
establishment pursuant to the aforecited criteria.[61] The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations
undertaken in the light of the severe financial situation faced by the employer, with the peculiar and
In its Decision, the CA held that upholding the validity of the MOA would mean the continuance of the hotel's operation and unique intention of not merely promoting industrial peace at PAL, but preventing the latters
financial viability, to wit: closure. We find no conflict between said agreement and Article 253-A of the Labor Code. Article 253-A
has a two-fold purpose. One is to promote industrial stability and predictability. Inasmuch as the
x x x We cannot close Our eyes to the impending financial distress that an employer may suffer should the agreement sought to promote industrial peace at PAL during its rehabilitation, said agreement satisfies
terms of employment under the said CBA continue. the first purpose of Article 253-A. The other is to assign specific timetables wherein negotiations become
a matter of right and requirement. Nothing in Article 253-A, prohibits the parties from waiving or
If indeed We are to tilt the balance of justice to labor, then We would be inclined to favor for the nonce suspending the mandatory timetables and agreeing on the remedies to enforce the same.
petitioner Waterfront. To uphold the validity of the MOA would mean the continuance of the hotel's
operation and financial viability. Otherwise, the eventual permanent closure of the hotel would only result In the instant case, it was PALEA, as the exclusive bargaining agent of PALs ground employees, that
to prejudice of the employees, as a consequence thereof, will necessarily lose their jobs.[62] voluntarily entered into the CBA with PAL. It was also PALEA that voluntarily opted for the 10-year
suspension of the CBA. Either case was the unions exercise of its right to collective bargaining. The right
to free collective bargaining, after all, includes the right to suspend it.[68]
In its petition before the CA, respondent submitted its audited financial statements[63] which show that for the years 1998,
1999, until September 30, 2000, its total operating losses amounted to P48,409,385.00. Based on the foregoing, the CA was
not without basis when it declared that respondent was suffering from impending financial distress. While the Wage Board Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's Constitution and By-Laws specifically provides that the results
denied respondent's petition for exemption, this Court notes that the denial was partly due to the fact that the June 2000 of the collective bargaining negotiations shall be subject to ratification and approval by majority vote of the Union members at
financial statements then submitted by respondent were not audited. Cullo did not question nor discredit the accuracy and a meeting convened, or by plebiscite held for such special purpose.[69] Accordingly, it is undisputed that the MOA was not
authenticity of respondent's audited financial statements. This Court, therefore, has no reason to question the veracity of the subject to ratification by the general membership of the Union. The question to be resolved then is, does the non-ratification
contents thereof. Moreover, it bears to point out that respondent's audited financial statements covering the years 2001 to of the MOA in accordance with the Union's constitution prove fatal to the validity thereof?
2005 show that it still continues to suffer losses.[64]
It must be remembered that after the MOA was signed, the members of the Union individually signed contracts denominated
Finally, anent the last issue raised by Cullo, the same is without merit. as Reconfirmation of Employment.[70] Cullo did not dispute the fact that of the 87 members of the Union, who signed and
accepted the Reconfirmation of Employment, 71 are the respondent employees in the case at bar. Moreover, it bears to stress
Cullo argues that the CA must have erred in concluding that Article 100 of the Labor Code applies only to benefits already that all the employees were assisted by Rojas, DIHFEU-NFL's president, who even co-signed each contract.
enjoyed at the time of the promulgation of the Labor Code.
Stipulated in each Reconfirmation of Employment were the new salary and benefits scheme. In addition, it bears to WHEREFORE, premises considered, the petition is DENIED. The Decision dated October 11, 2005, and the Resolution dated July
stress that specific provisions of the new contract also made reference to the MOA. Thus, the individual members of the union 13, 2006 of the Court of Appeals in consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657,
cannot feign knowledge of the execution of the MOA. Each contract was freely entered into and there is no indication that the are AFFIRMED.
same was attended by fraud, misrepresentation or duress. To this Court's mind, the signing of the individual Reconfirmation of
Employment should, therefore, be deemed an implied ratification by the Union members of the MOA. SO ORDERED.

In Planters Products, Inc. v. NLRC,[71] this Court refrained from declaring a CBA invalid notwithstanding that the same was not
ratified in view of the fact that the employees had enjoyed benefits under it, thus:

Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing Rules, the parties to a
collective [bargaining] agreement are required to furnish copies of the appropriate Regional Office with
accompanying proof of ratification by the majority of all the workers in a bargaining unit. This was not
done in the case at bar. But we do not declare the 1984-1987 CBA invalid or void considering that the
employees have enjoyed benefits from it. They cannot receive benefits under provisions favorable to them
and later insist that the CBA is void simply because other provisions turn out not to the liking of certain
employees. x x x. Moreover, the two CBAs prior to the 1984-1987 CBA were not also formally ratified, yet
the employees are basing their present claims on these CBAs. It is iniquitous to receive benefits from a
CBA and later on disclaim its validity.[72]

Applied to the case at bar, while the terms of the MOA undoubtedly reduced the salaries and certain benefits previously
enjoyed by the members of the Union, it cannot escape this Court's attention that it was the execution of the MOA which
paved the way for the re-opening of the hotel, notwithstanding its financial distress. More importantly, the execution of the
MOA allowed respondents to keep their jobs. It would certainly be iniquitous for the members of the Union to sign new
contracts prompting the re-opening of the hotel only to later on renege on their agreement on the fact of the non-ratification
of the MOA.

In addition, it bears to point out that Rojas did not act unilaterally when he negotiated with respondent's management. The
Constitution and By-Laws of DIHFEU-NFL clearly provide that the president is authorized to represent the union on all
occasions and in all matters in which representation of the union may be agreed or required. [73] Furthermore, Rojas was
properly authorized under a Board of Directors Resolution[74] to negotiate with respondent, the pertinent portions of which
read:

SECRETARY's CERTIFICATE
I, MA. SOCORRO LISETTE B. IBARRA, x x x, do hereby certify that, at a meeting of the Board of Directors of
the DIHFEU-NFL, on 28 Feb. 2001 with a quorum duly constituted, the following resolutions were
unanimously approved:

RESOLVED, as it is hereby resolved that the Manifesto dated 25 Feb. 2001 be


approved ratified and adopted;

RESOLVED, FURTHER, that Mr. Domy R. Rojas, the president of the DIHFEU-NFL,
be hereby authorized to negotiate with Waterfront Insular Hotel Davao and to
work for the latter's acceptance of the proposals contained in DIHFEU-NFL
Manifesto; and

RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized to sign any and
all documents to implement, and carry into effect, his foregoing authority.[75]
Withal, while the scales of justice usually tilt in favor of labor, the peculiar circumstances herein prevent this Court from
applying the same in the instant petition. Even if our laws endeavor to give life to the constitutional policy on social justice and
on the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play.[76]
[G.R. No. 115180. November 16, 1999] b) Damages to the good business standing and commercial credit of the company in the amount of THREE HUNDRED FIFTY
THOUSAND PESOS (P350,000.00); and

c) Exemplary damages to deter others similarly inclined from committing similar acts and to serve as an example for the public
FILIPINO PIPE AND FOUNDRY CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL LABOR good, in the amount of TWO HUNDRED FIFTY THOUSAND PESOS (P250,000.00).
UNION TUCP, and EULOGIO LERUM, respondents.
Further, respondent NLU is hereby directed to pay the attorneys fees equivalent to 10% of the actual damages, or the amount
DECISION of ONE HUNDRED THOUSAND PESOS (P100, 000.00).

PURISIMA, J.: For lack of showing that respondent Lerum acted in his personal capacity, he is hereby ABSOLVED from any liability.

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court seeking to annul and set aside the Pursuant to the Agreement, the complaint against all the other individual respondents are hereby DISMISSED.
Decision[1] of the National Labor Relations Commission,[2] dated September 29, 1993, in NLRC NCR CA No. 003806-92, which
reversed the Decision[3] of the Labor Arbiter,[4] dated August 31, 1992, in NLRC Case No. 4-1309-86, disposing thus:
SO ORDERED.[9]
WHEREFORE, premises considered, the appeal of complainant corporation is hereby dismissed for lack of merit; the appeal of
Atty. Lerum and NLU is hereby granted, and the Decision dated August 31, 1992 is hereby annulled and set side, and a new Therefrom, both parties appealed to the NLRC which on September 29, 1993, rendered the assailed
judgment is hereby entered declaring the complaint below dismissed for lack of merit insofar as respondent NLU and Atty. decision. Dissatisfied therewith, the petitioner company found its way to this Court via the present petition; theorizing that:
Lerum are concerned.
I

SO ORDERED.[5]
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION ERRED IN LAW, CAPRICIOUSLY AND WHIMSICALLY
DISREGARDED THE EVIDENCE SUBMITTED IN THE CASE AND GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK AND/OR
The antecedent facts can be culled as follows: EXCESS OF JURISDICTION WHEN IT HELD THAT PRIVATE RESPONDENTS NATIONAL LABOR UNION (NLU)-TUCP AND ATTY.
EULOGIO LERUM ARE NOT PRIMARILY RESPONSIBLE AND, THEREFORE, NOT LIABLE FOR DAMAGES SUFFERED BY PETITIONER
On February 10, 1986, respondent National Labor Union-Trade Union Congress of the Philippines (NLU-TUCP), a national ON ACCOUNT OF THE ILLEGAL STRIKE THEY HAD DIRECTLY AIDED, ASSISTED, ABETTED AND PARTICIPATED IN.
federation of labor unions, filed with the then Ministry of Labor and Employment, in behalf of its local chapter, the Filipino Pipe
Workers Union-National Labor Union (FPWU-NLU, hereinafter referred to as Union), a notice of strike signed by its national
president, Atty. Eulogio R. Lerum, against the petitioner, Filipino Pipe and Foundry Corporation, alleging as grounds therefor II
union busting and non-implementation of the Collective Bargaining Agreement.[6]
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK
The initial conciliation conference was set on February 24, 1986 but due to lack of notice thereof to petitioner company,
AND/OR EXCESS OF JURISDICTION AND ACTED CAPRICIOUSLY AND WHIMSICALLY IN TOTAL DISREGARD OF THE EVIDENCE
as well as the failure of FPWU-NLU to furnish the latter a copy of the notice of strike, the initial conciliation conference was re-
PRESENTED IN THE CASE WHEN IT HELD THAT PRIVATE RESPONDENTS MERELY ASSISTED THE LOCAL CHAPTER AND ITS
set to March 3, 1986.
MEMBERS IN STAGING A STRIKE AGAINST PETITIONER AND THAT SUCH ASSISTANCE WAS NOT THE CAUSE NOR WAS IT AN
In the early morning of March 3, 1986, however, without waiting for the outcome of the conciliation conference INDESPENSABLE ELEMENT OF THE STRIKE.
scheduled on said date, the FPWU-NLU staged the strike in question which lasted until June 13, 1986, when a return to work
agreement was reached by the union and petitioner company.[7] III
On April 8, 1986, petitioner company interposed before the Arbitration Branch of the then Ministry of Labor and
Employment, a petition to declare the strike illegal with prayer for damages against FPWU-NLU, NLU-TUCP and its national PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ERRED IN LAW AND GRAVELY ABUSED ITS
president, Atty. Eulogio Lerum. DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT CONCLUDED THAT PETITIONER LOST ITS CAUSE
OF ACTION AGAINST PRIVATE RESPONDENTS AFTER THE LOCAL UNION HIRED A NEW COUNSEL AND PETITIONER MOVED FOR
On December 23, 1988, petitioner company moved for the partial dismissal of the Complaint against forty-three (43) PARTIAL DISMISSAL OF ITS COMPLAINT AGAINST THE STRIKING WORKERS INASMUCH AS PRIVATE RESPONDENTS ARE MERE
officers and members of FPWU-NLU, but maintained the action against the NLU-TUCP and Atty. Eulogio Lerum.[8] THIRD PARTIES.[10]
On August 31, 1992, the Labor Arbiter came out with a decision for petitioner company, ruling as follows:
Rule XXII, Book V, of the Rules Implementing the Labor Code, provides:
WHEREFORE, judgment is hereby rendered declaring that the strike staged by respondents from March 3, 1986 to June 13, 1986
was ILLEGAL. Accordingly and in conformity with the Return-to-Work Agreement, respondent National Labor Union-TUCP is Section 1. Grounds for strike and lockout. A strike or lockout may be declared in cases of bargaining deadlocks and unfair labor
hereby directed to pay the complainant company the following: practices. Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic
provisions, shall not be considered unfair labor practice and shall not be strikeable. No strike or lockout may be declared on
grounds involving inter-union and intra-union disputes or on issues brought to voluntary or compulsory arbitration.
a) Actual damages in the form of loss of revenue during the duration of the strike which lasted for 100 days or in the amount of
ONE MILLION PESOS (P1,000,000.00);
xxx xxx xxx legitimate labor organization.[13] In support of this stance, petitioner cited the following letter of Atty. Lerum to the company,
to wit:
Section 3. Notice of strike or lockout.- In cases of bargaining deadlocks, a notice of strike or lockout shall be filed with the
regional branch of the Board at least thirty (30) days before the intended date thereof, a copy of said notice having been NATIONAL LABOR UNION
served on the other party concerned. x x x"
An Affiliate of the Trade Union of the Philippines
xxx xxx xxx 3199 Ramon Magsaysay Blvd., Manila, Philippines
Tel. 61-42-65
March 29, 1983
"Section 6. Conciliation. - Upon receipt of the notice, the regional branch of the Board shall exert all efforts at mediation and
Dear Sirs:
conciliation to enable the parties to settle the dispute amicably. The regional branch of the Board may, upon consultation,
Please be informed that we have formed a local union in your company and the officers thereof are the following:
recommend to the parties to submit the dispute to voluntary arbitration.
President - Virgilio Bernal
Vice-Pres. - Ramon Alborte
During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of the dispute. They Secretary - Ernesto Ballesteros
are obliged as part of the duty to bargain collectively in good faith, to participate fully and promptly in the conciliation meetings Treasurer - Arsenio Agustin
called by the regional branch of the board. The regional branch of the Board shall have the power to issue subpoenas requiring Auditor - Genaro Gabule
the attendance of the parties to the meetings. xxx" Board Members:
1. Eduardo Cenina 4. Felimon Simborio
Applying the aforecited provision of law in point to the case under consideration, the Court is of the finding and 2. Dante Canete 5. Joseph Olazo
conclusion that the strike staged by FPWU-NLU was illegal for want of any legal basis.Contrary to the grounds advanced by the 3. Reynaldo Adelante 6. Virgilio Elnar
union in the notice of strike, it turned out during the March 3, 1986 conciliation conference that the purpose of the strike was Shop Stewards:
to pressure the petitioner company to: 1. Pablito Fajardo
2. Ruperto Manlangit
1) include in the salary of the strikers the P3.00 wage increase[11] effective March 1, 1986. 3. Ruben Bongaos

2) compute their backwages covering the period from December 1, 1980 to February 28, 1986, including vacation We have given them full authority to deal with you on all matters covered by our authority as sole collective bargaining
leave and sick leave. representative of your rank and file workers.
A thorough sifting of the pertinent records discloses that the alleged union busting was not substantiated and the supposed
non-implementation of the collective bargaining agreement was groundless because the demands of FPWU-NLU, at the time Very truly yours,
the notice of strike was filed and at the time the union actually struck, were the subject of a pending application for a writ of
execution filed by the union in Case No. AB-7933-80 (NCR-CA-8-674-80), which application was granted on April 4, 1986 by the (Sgd) EULOGIO R. LERUM - National President[14]
Labor Arbiter.[12] Verily, the strike staged by FPWU-NLU was baseless since it was still pre-mature then for the union to insist on
the implementation of the adverted provision of the collective bargaining agreement, which was the subject of a pending writ
of execution. In Progressive Development Corporation vs. Secretary, Department of Labor and Employment, [15] the Court explained the
nature of the relationship between a mother union/federation and a local union, thus:
Then too, the failure of the union to serve petitioner company a copy of the notice of strike is a clear violation of Section
3 of the aforestated Rules. The constitutional precepts of due process mandate that the other party be notified of the adverse
At this juncture, it is important to clarify the relationship between the mother union and the local union. In the case of Liberty
action of the opposing party. So also, the same Section provides for a mandatory thirty (30) day cooling-off period which the
Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975], the Court held that the mother union, acting for
union ignored when it struck on March 3, 1986, before the 30th day from the time the notice of strike was filed on February
and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association, free to
10, 1986.
serve the common interest of all its members subject only to the restraints imposed by the constitution and by-laws of the
What is more, the same strike blatantly disregarded the prohibition on the doing of any act which may impede or association. x x x[16]
disrupt the conciliation proceedings, when the union staged the strike in the early morning of March 3, 1986, the very same
day the conciliation conference was scheduled by the former Ministry of Labor. The same is true even if the local union is not a legitimate labor organization. Conformably, in the abovecited case the Court
ruled that the mother federation was a mere agent and the local chapter/union was the principal, notwithstanding the failure
In light of the foregoing, it is beyond cavil that subject strike staged by the union was illegal.
of the local union to comply with the procedural requirements that would make it a legitimate labor organization.
Anent the responsibility for the damages allegedly sustained by petitioner company on account of the illegal strike, the
Evidently, in the case under scrutiny, whether or not FPWU, the local chapter, complied with the procedural
latter theorized that the liability therefor should be borne by NLU-TUCP and its national president, Atty. Eulogio Lerum, for
requirements that would make it a legitimate labor organization is immaterial. It would not affect its status as the principal and
having directly participated in aiding and abetting the illegal strike. It is argued that FPWU-NLU is a mere agent of respondent
basic unit of the association. The requirement laid down in the Progressive Development case, that the local union must be a
NLU-TUCP, because FPWU-NLU, which was formed by respondent NLU-TUCP is not registered as a local unit or chapter but
legitimate labor organization, pertains to the conditions before a union may file a petition for certification election and to be
directly affiliated with the latter and therefore, could not have acted on its own. Otherwise stated, petitioner is of the view
certified as sole and exclusive bargaining agent. In the present case, there is no dispute that FPWU-NLU is the sole and
that FPWU-NLU, a local union, cannot act as the principal of respondent NLU-TUCP, a mother federation, because it is not a
exclusive bargaining representative of the rank and file employees of petitioner company. The union's status as a legitimate
labor organization is therefore of no moment in the resolution of the controversy here. As the local union, it is considered as
the principal; the entity which staged the illegal strike and the one responsible for the resulting damages allegedly sustained by
petitioner company.

Furthermore, the petitioner company is now estopped from reneging on the recognition it extended to the FPUW-NLU
as the bargaining representative of its rank and file workers, by belatedly attacking its status which petitioner company had
voluntarily recognized. It should be noted that even as early as 1981, when the collective bargaining agreement sought to be
implemented by the union was entered into, the latter was already the bargaining representative of the employees
concerned. It is not, therefore, true that it was respondent NLU-TUCP which formed FPWU. At most, the entry into the picture
of the private respondent on March 23, 1983, merely affirmed the status of FPWU as the recognized bargaining representative
of the rank and file employees of petitioner company.

Evidently, direct and primary responsibility for the damages allegedly caused by the illegal strike sued upon fall on the
local union FPWU, being the principal, and not on respondent NLU-TUCP, a mere agent of FPWU-NLU which assisted the latter
in filing the notice of strike. Being just an agent, the notice of strike filed by Atty. Eulogio Lerum, the national president of NLU-
TUCP, is deemed to have been filed by its principal, the FPWU-NLU. Having thus dismissed the claim for damages against the
principal, FPWU-NLU, the action for damages against its agent, respondent NLU-TUCP, and Atty. Lerum, has no more leg to
stand on and should also be dismissed.

Premises studiedly considered, the Court is of the ineluctable conclusion, and so holds, that the National Labor Relations
Commission did not act with grave abuse of discretion in reversing the Decision of the Labor Arbiter in NLRC CASE No. 4-1309-
86.

WHEREFORE, for lack of merit, the Petition is DISMISSED, and the Decision of the National Labor Relations Commission
in NLRC NCR CA No. 003806-92 AFFIRMED. No pronouncement as to costs.

SO ORDERED.
G.R. No. 96425 February 4, 1992 In his September 5, 1990 resolution, Med Arbiter dela Cruz held that there was substantial compliance with the requirements
for the formation of the chapter. He further stated that mere issuance of the charter certificate by the federation was
sufficient compliance with the rules. Considering that the establishment was unorganized, he maintained that a certification
PROGRESSIVE DEVELOPMENT CORPORATION, petitioner,
election should be conducted to resolve the question of representation.
vs.
THE HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER EDGARDO DELA CRUZ and
PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)-TUCP, respondents. Treating the motion for reconsideration filed by the PDC as an appeal to the Office of the Secretary, Undersecretary Laguesma
held that the same was merely a "reiteration of the issues already ventilated in the proceedings before the Med-Arbiter,
specifically, the matter involving the formal organization of the chapter." (Rollo, p. 20) PDC's motion for reconsideration from
Beltran, Bacungan & Candoy for petitioner.
the aforementioned ruling was likewise denied. Hence, this petition.

Jimenez & Associates co-counsel for petitioner.


In an order dated February 25, 1991, the Court resolved to issue a temporary restraining order enjoining the public
respondents from carrying out the assailed resolution and orders or from proceeding with the certification election. (Rollo, pp.
37-39)

GUTIERREZ, JR., J.: It is the petitioner's contention that a labor organization (such as the Kilusan) may not validly invest the status of legitimacy
upon a local or chapter through the mere expedient of issuing a charter certificate and submitting such certificate to the BLR
The controversy in this case centers on the requirements before a local or chapter of a federation may file a petition for (Rollo, p. 85) Petitioner PDC posits that such local or chapter must at the same time comply with the requirement of
certification election and be certified as the sole and exclusive bargaining agent of the petitioner's employees. submission of duly subscribed constitution and by-laws, list of officers and books of accounts. (Rollo, p. 35) PDC points out that
the constitution and by-laws and list of officers submitted were not duly subscribed. Likewise, the petitioner claims that the
mere filing of the aforementioned documents is insufficient; that there must be due recognition or acknowledgment accorded
Petitioner Progressive Development Corporation (PDC) filed this petition for certiorari to set aside the following: to the local or chapter by BLR through a certificate of registration or any communication emanating from it. (Rollo, p. 86)

1) Resolution dated September 5, 1990, issued by respondent Med-Arbiter Edgardo dela Cruz, directing the holding of the The Solicitor General, in behalf of the public respondent, avers that there was a substantial compliance with the requirements
certification election among the regular rank-and-file employees of PDC: for the formation of a chapter. Moreover, he invokes Article 257 of the Labor Code which mandates the automatic conduct by
the Med-Arbiter of a certification election in any establishment where there is no certified bargaining agreement.
2) Order dated October 12, 1990, issued by the respondent Secretary of Labor and Employment, denying PDC's appeal; and
The Court has repeatedly stressed that the holding of a certification election is based on a statutory policy that cannot be
3) Order dated November 12, 1990, also issued by the respondent Secretary, denying the petitioner's Motion for circumvented. (Airtime Specialists, Inc. v. Ferrer-Calleja, 180 SCRA 749 [1989]; Belyca Corporation v. Ferrer-Calleja, 168 SCRA
Reconsideration. 184 [1988]; George and Peter Lines, Inc. v. Associated Labor Unions, 134 SCRA 82 [1986]). The workers must be allowed to
freely express their choice in a determination where everything is open to their sound judgment and the possibility of fraud
and misrepresentation is eliminated.
On June 19, 1990, respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP (hereinafter referred to as Kilusan) filed with
the Department of Labor and Employment (DOLE) a petition for certification election among the rank-and-file employees of
the petitioner alleging that it is a legitimate labor federation and its local chapter, Progressive Development Employees Union, But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification election in an unorganized
was issued charter certificate No. 90-6-1-153. Kilusan claimed that there was no existing collective bargaining agreement and establishment, it also requires that the petition for certification election must be filed by a legitimate labor organization. Article
that no other legitimate labor organization existed in the bargaining unit. 242 enumerates the exclusive rights of a legitimate labor organization among which is the right to be certified as the exclusive
representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining.
Petitioner PDC filed its motion to dismiss dated July 11, 1990 contending that the local union failed to comply with Rule II
Section 3, Book V of the Rules Implementing the Labor Code, as amended, which requires the submission of: (a) the Meanwhile, Article 212(h) defines a legitimate labor organization as "any labor organization duly registered with the DOLE
constitution and by-laws; (b) names, addresses and list of officers and/or members; and (c) books of accounts. and includes any branch or local thereof." (Emphasis supplied) Rule I, Section 1 (j), Book V of the Implementing Rules likewise
defines a legitimate labor organization as "any labor organization duly registered with the DOLE and includes any branch, local
or affiliate thereof. (Emphasis supplied)
On July 16 , 1990, respondent Kilusan submitted a rejoinder to PDC's motion to dismiss claiming that it had submitted the
necessary documentary requirements for registration, such as the constitution and by-laws of the local union, and the list of
officers/members with their addresses. Kilusan further averred that no books of accounts could be submitted as the local The question that now arises is: when does a branch, local or affiliate of a federation become a legitimate labor organization?
union was only recently organized.
Ordinarily, a labor organization acquires legitimacy only upon registration with the BLR. Under Article 234 (Requirements of
In its "Supplemental Position Paper" dated September 3, 1990, the petitioner insisted that upon verification with the Bureau of Registration):
Labor Relations (BLR), it found that the alleged minutes of the organizational meeting was unauthenticated, the list of
members did not bear the corresponding signatures of the purported members, and the constitution and by-laws did not bear Any applicant labor organization, association or group of unions or workers shall acquire legal
the signature of the members and was not duly subscribed. It argued that the private respondent therefore failed to personality and shall be entitled to the rights and privileges granted by law to legitimate labor
substantially comply with the registration requirements provided by the rules. Additionally, it prayed that Med-Arbiter Edgardo organizations upon issuance of the certificate of registration based on the following requirements:
dela Cruz inhibit himself from handling the case for the reason that he allegedly had prejudged the same.
(a) Fifty-pesos (P50.00) registration fee; Sec. 3. Union affiliation; direct membership with national union. An affiliate of a labor federation or
national union may be a local or chapter thereof or an independently registered union.
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes
of the organizational meeting and the list of the workers who participated in such meetings; a) The labor federation or national union concerned shall issue a charter certificate indicating the
creation or establishment of a local or chapter, copy of which shall be submitted to the Bureau of Labor
Relations within thirty (30) days from issuance of such charter certificate.
(c) The names of all its members comprising at least twenty 20% percent of all the employees in the
bargaining unit where it seek to operate;
b) An independently registered union shall be considered an affiliate of a labor federation or national
union after submission to the Bureau of the contract or agreement of affiliation within thirty (30) days
(d) If the applicant has been in existence for one or more years, copies , of its annual financial reports;
after its execution.
and

xxx xxx xxx


(e) Four copies of the constitution and by-laws of the applicant union, the minutes of its adoption or
ratification and the list of the members who participated in it.
e) The local or chapter of a labor federation or national union shall have and maintain a constitution and
by laws, set of officers and books and accounts. For reporting purposes, the procedure governing the
And under Article 235 (Action on Application)
reporting of independently registered unions, federations or national unions shall be observed.

The Bureau shall act on all applications for registration within thirty (30) days from filing.
Paragraph (a) refers to the local or chapter of a federation which did not undergo the rudiments of registration while
paragraph (b) refers to an independently registered union which affiliated with a federation. Implicit in the foregoing
All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the differentiation is the fact that a local or chapter need not be independently registered. By force of law (in this case, Article
organization, as the case may be, and attested to by its president. 212[h]); such local or chapter becomes a legitimate labor organization upon compliance with the aforementioned provisions of
Section 3.
Moreover, section 4 of Rule II, Book V of the Implementing Rules requires that the application should be signed by at least
twenty percent (20%) of the employees in the appropriate bargaining unit and be accompanied by a sworn statement of the Thus, several requirements that are otherwise required for union registration are omitted, to wit:
applicant union that there is no certified bargaining agent or, where there is an existing collective bargaining agreement duly
submitted to the DOLE, that the application is filed during the last sixty (60) days of the agreement.
(1) The requirement that the application for registration must be signed by at least 20% of the employees in the appropriate
bargaining unit;
The respondent Kilusan questions the requirements as too stringent in their application but the purpose of the law in
prescribing these requisites must be underscored. Thus, in Philippine Association of Free Labor Unions v. Secretary of Labor, 27
2) The submission of officers' addresses, principal address of the labor organization, the minutes of organizational meetings
SCRA 40 (1969), the Court declared:
and the list of the workers who participated in such meetings;

The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of assembly
3) The submission of the minutes of the adoption or ratification of the constitution and by the laws and the list of the members
and association guaranteed in the Bill of Rights is devoid of factual basis. The registration prescribed in
who participated in it.
Paragraph (b) of said section is not a limitation to the right of assembly or association, which may be
exercised with or without said registration. The latter is merely a condition sine qua nonfor the
acquisition of legal personality by the labor organizations, associations or unions and the possession of Undoubtedly, the intent of the law in imposing lesser requirements in the case of the branch or local of a registered federation
the "rights and privileges granted by law to legitimate labor organizations." The Constitution does not or national union is to encourage the affiliation of a local union with the federation or national union in order to increase the
guarantee these rights and the privileges, much less said personality, which are mere statutory creations, local union's bargaining powers respecting terms and conditions of labor.
for the possession and exercise of which registration is required to protect both labor and the public
against abuses, fraud or impostors who pose as organizers, although not truly accredited agents of the
The petitioner maintains that the documentary requirements prescribed in Section 3(c), namely: the constitution and by-laws,
union they purport to represent. Such requirement is a valid exercise of the police power, because the
set of officers and books of accounts, must follow the requirements of law. Petitioner PDC calls for the similar application of
activities in which labor organizations, associations and unions of workers are engaged affect public
the requirement for registration in Article 235 that all requisite documents and papers be certified under oath by the secretary
interest, which should be protected. Furthermore, the obligation to submit financial statements, as a
or the treasurer of the organization and attested to by the president.
condition for the non-cancellation of a certificate of registration, is a reasonable regulation for the
benefit of the members of the organization, considering that the same generally solicits funds or
membership, as well as oftentimes collects, on behalf of its members, huge amounts of money due to In the case at bar, the constitution and by-laws and list of officers submitted in the BLR, while attested to by the chapter's
them or to the organization. (Emphasis supplied) president, were not certified under oath by the secretary. Does such defect warrant the withholding of the status of legitimacy
to the local or chapter?
But when an unregistered union becomes a branch, local or chapter of a federation, some of the aforementioned
requirements for registration are no longer required. The provisions governing union affiliation are found in Rule II, Section 3, In the case of union registration, the rationale for requiring that the submitted documents and papers be certified under oath
Book V of the Implementing Rules, the relevant portions of which are cited below: by the secretary or treasurer, as the case may be, and attested to by president is apparent. The submission of the required
documents (and payment of P50.00 registration fee) becomes the Bureau's basis for approval of the application for membership why they should join a union, and briefly explained the ideology of the Pambansang Kilusan
registration. Upon approval, the labor union acquires legal personality and is entitled to all the rights and privileges granted by ng Paggawa-TUCP as a democratically based organization and then read the proposed Constitution and
law to a legitimate labor organization. The employer naturally needs assurance that the union it is dealing with is a bona By-Laws, after which said Constitution and By-Laws was duly and unanimously ratified after some
fide organization, one which has not submitted false statements or misrepresentations to the Bureau. The inclusion of the clarification.
certification and attestation requirements will in a marked degree allay these apprehensions of management. Not only is the
issuance of any false statement and misrepresentation a ground for cancellation of registration (see Article 239 (a), (c) and (d));
Bro. Jose Parungao was also unanimously voted by the group to act as the chairman of the COMELEC in
it is also a ground for a criminal charge of perjury.
holding the organizational election of officers of the union.

The certification and attestation requirements are preventive measures against the commission of fraud. They likewise afford a
Bro. Jose Parungao, officially opened the table for nomination of candidates after which the election of
measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose
officers followed by secret balloting and the following were the duly elected officers. (Original Record, p.
sole purpose is to control union funds or to use the union for dubious ends.
25)

In the case of the union affiliation with a federation, the documentary requirements are found in Rule II, Section 3(e), Book V
The foregoing shows that Kilusan took the initiative and encouraged the formation of a union which automatically became its
of the Implementing Rules, which we again quote as follows:
chapter. On June 18, 1990, Kilusan issued a charter certificate in favor of PDEU-KILUSAN (Records, page 1). It can be seen that
Kilusan was moving very fast.
(c) The local chapter of a labor federation or national union shall have and maintain a constitution and
by-laws, set of officers and books of accounts. For reporting purposes, the procedure governing the
On June 19, 1990, or just three days after the organizational meeting, Kilusan filed a petition for certification election (Records,
reporting of independently registered unions, federations or national unions shall be observed.(Emphasis
pages 2 and 3) accompanied by a copy each of the charter certificate, constitution and by-laws and minutes of the
supplied)
organizational meeting. Had the local union filed an application for registration, the petition for certification election could not
have been immediately filed. The applicant union must firstly comply with the "20% signature" requirement and all the other
Since the "procedure governing the reporting of independently registered unions" refers to the certification and attestation requisites enumerated in Article 234. Moreover, since under Article 235 the BLR shall act on any application for registration
requirements contained in Article 235, paragraph 2, it follows that the constitution and by-laws, set of officers and books of within thirty (30) days from its filing, the likelihood is remote that, assuming the union complied with all the requirements, the
accounts submitted by the local and chapter must likewise comply with these requirements. The same rationale for requiring application would be approved on the same day it was filed.
the submission of duly subscribed documents upon union registration exists in the case of union affiliation. Moreover, there is
greater reason to exact compliance with the certification and attestation requirements because, as previously mentioned,
We are not saying that the scheme used by the respondents is per se illegal for precisely, the law allows such strategy. It is not
several requirements applicable to independent union registration are no longer required in the case of formation of a local or
this Court's function to augment the requirements prescribed by law in order to make them wiser or to allow greater
chapter. The policy of the law in conferring greater bargaining power upon labor unions must be balanced with the policy of
protection to the workers and even their employer. Our only recourse is, as earlier discussed, to exact strict compliance with
providing preventive measures against the commission of fraud.
what the law provides as requisites for local or chapter formation.

A local or chapter therefore becomes a legitimate labor organization only upon submission of the following to the BLR:
It may likewise be argued that it was Kilusan (the mother union) and not the local union which filed the petition for
certification election and, being a legitimate labor organization, Kilusan has the personality to file such petition.
1) A charter certificate, within 30 days from its issuance by the labor federation or national union, and
At this juncture, it is important to clarify the relationship between the mother union and the local union. In the case of Liberty
2) The constitution and by-laws, a statement on the set of officers, and the books of accounts all of which are certified under Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975]), the Court held that the mother union, acting for
oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by its president. and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association, free to
serve the common interest of all its members subject only to the restraints imposed by the constitution and by-laws of the
association. Thus, where as in this case the petition for certification election was filed by the federation which is merely an
Absent compliance with these mandatory requirements, the local or chapter does not become a legitimate labor organization.
agent, the petition is deemed to be filed by the chapter, the principal, which must be a legitimate labor organization. The
chapter cannot merely rely on the legitimate status of the mother union.
In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the required documents under oath is fatal to its
acquisition of a legitimate status.
The Court's conclusion should not be misconstrued as impairing the local union's right to be certified as the employees'
bargaining agent in the petitioner's establishment. We are merely saying that the local union must first comply with the
We observe that, as borne out by the facts in this case, the formation of a local or chapter becomes a handy tool for the statutory requirements in order to exercise this right. Big federations and national unions of workers should take the lead in
circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient device for a requiring their locals and chapters to faithfully comply with the law and the rules instead of merely snapping union after union
small group of employees to foist a not-so-desirable federation or union on unsuspecting co-workers and pare the need for into their folds in a furious bid with rival federations to get the most number of members.
wholehearted voluntariness which is basic to free unionism. The records show that on June 16, 1990, Kilusan met with several
employees of the petitioner. Excerpts of the "Minutes of the Organizational/General Membership Meeting of Progressive
WHEREFORE, the petition is GRANTED. The assailed resolution and orders of respondent Med-Arbiter and Secretary of Labor
Development Employees Union (PDEU) Kilusan," are quoted below:
and Employment, respectively, are hereby SET ASIDE. The temporary restraining order dated February 25, 1991 is made
permanent. SO ORDERED.
The meeting was formally called to order by Bro. Jose V. Parungao, KILUSAN secretary for organization
by explaining to the general membership the importance of joining the union. He explained to the
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA GREENFIELD V RAMOS On September 12, 1986, a local union election was held under the auspices of the ULGWP wherein the herein petitioner, Beda
Magdalena Villanueva, and the other union officers were proclaimed as winners. Minutes of the said election were duly filed
with the Bureau of Labor Relations on September 29, 1986.
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to annul the decision of the National Labor
Relations Commission in an unfair labor practice case instituted by a local union against its employer company and the officers
of its national federation. On March 21, 1987, a Petition for Impeachment was filed with the national federation ULGWP by the defeated candidates in
the aforementioned election.
The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B) (MSMG), hereinafter referred to as the
"local union", is an affiliate of the private respondent, United Lumber and General Workers of the Philippines (ULGWP), On June 16, 1987, the federation conducted an audit of the local union funds. The investigation did not yield any unfavorable
referred to as the "federation". The collective bargaining agreement between MSMG and M. Greenfield, Inc., names the result and the local union officers were cleared of the charges of anomaly in the custody, handling and disposition of the union
parties as follows: funds.1wphi1.nt

This agreement made and entered into by and between: The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local union officers with the DOLE NCR on
November 5, 1987, docketed as NCR-OD-M-11-780-87. However, the same was dismissed on March 2, 1988, by Med-Arbiter
Renato Parungo for failure to substantiate the charges and to present evidence in support of the allegations.
M. GREENFIELD, INC. (B) a corporation duly organized in accordance with the laws of the Republic of the Philippines
with office address at Km. 14, Merville Road, Paraaque, Metro Manila, represented in this act by its General
manager, Mr. Carlos T. Javelosa, hereinafter referred to as the Company; On April 17, 1988, the local union held a general membership meeting at the Caruncho Complex in Pasig. Several union
members failed to attend the meeting, prompting the Executive Board to create a committee tasked to investigate the non-
attendance of several union members in the said assembly, pursuant to Sections 4 and 5, Article V of the Constitution and By-
-and-
Laws of the union, which read:

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (B) (MSMG)/UNITED LUMBER AND GENERAL
Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng hakbangin ng unyon ng sinumang kasapi
WORKERS OF THE PHILIPPINES (ULGWP), a legitimate labor organization with address at Suite 404, Trinity Building,
o pinuno ay maaaring maging sanhi ng pagtitiwalag o pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat araw
T. M. Kalaw Street, Manila, represented in this act by a Negotiating Committee headed by its National President,
na nagkulang.
Mr. Godofredo Paceno, Sr., referred to in this Agreement as the UNION.1

Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong ay ituturing na pagliban at maparusahan
The CBA includes, among others, the following pertinent provisions:
itong alinsunod sa Article V, Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o pisyales na mahuli and dating
sa takdang oras ng di lalampas sa isang oras ay magmumulta ng P25.00 at babawasin sa sahod sa pamamagitan ng
Art. II-Union Security salary deduction at higit sa isang oras ng pagdating ng huli ay ituturing na pagliban.3

Sec. 1. Coverage and Scope. All employees who are covered by this Agreement and presently members of the On June 27, 1988, the local union wrote respondent company a letter requesting it to deduct the union fines from the
UNION shall remain members of the UNION for the duration of this Agreement as a condition precedent to wages/salaries of those union members who failed to attend the general membership meeting. A portion of the said letter
continued employment with the COMPANY. stated:

xxx xxx xxx xxx xxx xxx

Sec. 4. Dismissal. Any such employee mentioned in Section 2 hereof, who fails to maintain his membership in the In connection with Section 4 Article II of our existing Collective Bargaining Agreement, please deduct the amount of
UNION for non-payment of UNION dues, for resignation and for violation of UNION's Constitution and By-Laws and P50.00 from each of the union members named in said annexes on the payroll of July 2-8, 1988 as fine for their
any new employee as defined in Section 2 of this Article shall upon written notice of such failure to join or to failure to attend said general membership meeting.4
maintain membership in the UNION and upon written recommendation to the COMPANY by the UNION, be
dismissed from the employment by the COMPANY; provided, however, that the UNION shall hold the COMPANY
In a Memorandum dated July 3, 1988, the Secretary General of the national federation, Godofredo Paceo, Jr. disapproved the
free and blameless from any and all liabilities that may arise should the dismissed employee question, in any
resolution of the local union imposing the P50.00 fine. The union officers protested such action by the Federation in a Reply
manner, his dismissal; provided, further that the matter of the employee's dismissal under this Article may be
dated July 4, 1988.
submitted as a grievance under Article XIII and, provided, finally, that no such written recommendation shall be
made upon the COMPANY nor shall COMPANY be compelled to act upon any such recommendation within the
period of sixty (60) days prior to the expiry date of this Agreement conformably to law. On July 11, 1988, the Federation wrote respondent company a letter advising the latter not to deduct the fifty-peso fine from
the salaries of the union members requesting that:
Art. IX
. . . any and all future representations by MSMG affecting a number of members be first cleared from the federation
before corresponding action by the Company.5
Sec. 4. Program Fund The Company shall provide the amount of P10,000.00 a month for a continuing labor
education program which shall be remitted to the Federation . . .2
The following day, respondent company sent a reply to petitioner union's request in a letter, stating that it cannot deduct fines employees. This action by the national federation was protested by the petitioners in a letter to respondent company dated
from the employees' salary without going against certain laws. The company suggested that the union refer the matter to the November 11, 1988.
proper government office for resolution in order to avoid placing the company in the middle of the issue.
On November 13, 1988, the petitioner union officers received identical letters from the administrator requiring them to explain
The imposition of P50.00 fine became the subject of bitter disagreement between the Federation and the local union within 72 hours why they should not be removed from their office and expelled from union membership.
culminating in the latter's declaration of general autonomy from the former through Resolution No. 10 passed by the local
executive board and ratified by the general membership on July 16, 1988.
On November 26, 1988, petitioners replied:

In retaliation, the national federation asked respondent company to stop the remittance of the local union's share in the
(a) Questioning the validity of the alleged National Executive Board Resolution placing their union under
education funds effective August 1988. This was objected to by the local union which demanded that the education fund be
trusteeship;
remitted to it in full.

(b) Justifying the action of their union in declaring a general autonomy from ULGWP due to the latter's inability to
The company was thus constrained to file a Complaint for Interpleader with a Petition for Declaratory Relief with the Med-
give proper educational, organizational and legal services to its affiliates and the pendency of the audit of the
Arbitration Branch of the Department of Labor and Employment, docketed as Case No. OD-M-8-435-88. This was resolved on
federation funds;
October 28, 1988, by Med-Arbiter Anastacio Bactin in an Order, disposing thus:

(c) Advising that their union did not commit any act of disloyalty as it has remained an affiliate of ULGWP;
WHEREFORE, premises considered, it is hereby ordered:

(d) Giving ULGWP a period of five (5) days to cease and desist from further committing acts of coercion, intimidation
1. That the United Lumber and General Workers of the Philippines (ULGWP) through its local union officers shall
and harassment.8
administer the collective bargaining agreement (CBA).

However, as early as November 21, 1988, the officers were expelled from the ULGWP. The termination letter read:
2. That petitioner company shall remit the P10,000.00 monthly labor education program fund to the ULGWP subject
to the condition that it shall use the said amount for its intended purpose.
Effective today, November 21, 1988, you are hereby expelled from UNITED LUMBER AND GENERAL WORKERS OF
THE PHILIPPINES (ULGWP) for committing acts of disloyalty and/or acts inimical to the interest and violative to the
3. That the Treasurer of the MSMG shall be authorized to collect from the 356 union members the amount of
Constitution and by-laws of your federation.
P50.00 as penalty for their failure to attend the general membership assembly on April 17, 1988.

You failed and/or refused to offer an explanation inspite of the time granted to you.
However, if the MSMG Officers could present the individual written authorizations of the 356 union members, then
the company is obliged to deduct from the salaries of the 356 union members the P50.00 fine.6
Since you are no longer a member of good standing, ULGWP is constrained to recommend for your termination
from your employment, and provided in Article II Section 4, known as UNION SECURITY, in the Collective Bargaining
On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February 7, 1989, which modified in part the earlier
agreement.9
disposition, to wit:

On the same day, the federation advised respondent company of the expulsion of the 30 union officers and demanded their
WHEREFORE, premises considered, the appealed portion is hereby modified to the extent that the company should
separation from employment pursuant to the Union Security Clause in their collective bargaining agreement. This demand was
remit the amount of five thousand pesos (P5,000.00) of the P10,000.00 monthly labor education program fund to
reiterated twice, through letters dated February 21 and March 4, 1989, respectively, to respondent company.
ULGWP and the other P5,000.00 to MSMG, both unions to use the same for its intended purpose.7

Thereafter, the Federation filed a Notice of Strike with the National Conciliation and Mediation Board to compel the company
Meanwhile, on September 2, 1988, several local unions (Top Form, M. Greenfield, Grosby, Triumph International, General
to effect the immediate termination of the expelled union officers.
Milling, and Vander Hons chapters) filed a Petition for Audit and Examination of the federation and education funds of ULGWP
which was granted by Med-Arbiter Rasidali Abdullah on December 25, 1988 in an Order which directed the audit and
examination of the books of account of ULGWP. On March 7, 1989, under the pressure of a threatened strike, respondent company terminated the 30 union officers from
employment, serving them identical copies of the termination letter reproduced below:
On September 30, 1988, the officials of ULGWP called a Special National Executive Board Meeting at Nasipit, Agusan del Norte
where a Resolution was passed placing the MSMG under trusteeship and appointing respondent Cesar Clarete as We received a demand letter dated 21 November 1988 from the United Lumber and General Workers of the
administrator. Philippines (ULGWP) demanding for your dismissal from employment pursuant to the provisions of Article II, Section
4 of the existing Collective Bargaining Agreement (CBA). In the said demand letter, ULGWP informed us that as of
November 21, 1988, you were expelled from the said federation "for committing acts of disloyalty and/or acts
On October 27, 1988, the said administrator wrote the respondent company informing the latter of its designation of a certain
inimical to the interest of ULGWP and violative to its Constitution and By-laws particularly Article V, Section 6, 9,
Alfredo Kalingking as local union president and "disauthorizing" the incumbent union officers from representing the
and 12, Article XIII, Section 8.
In subsequent letters dated 21 February and 4 March 1989, the ULGWP reiterated its demand for your dismissal, On March 13 and 14, 1989, a total of 78 union shop stewards were placed under preventive suspension by respondent
pointing out that notwithstanding your expulsion from the federation, you have continued in your employment company. This prompted the union members to again stage a walk-out and resulted in the official declaration of strike at
with the company in violation of Sec. 1 and 4 of Article II of our CBA, and of existing provisions of law. around 3:30 in the afternoon of March 14, 1989. The strike was attended with violence, force and intimidation on both sides
resulting to physical injuries to several employees, both striking and non-striking, and damage to company properties.
In view thereof, we are left with no alternative but to comply with the provisions of the Union Security Clause of our
CBA. Accordingly, we hereby serve notice upon you that we are dismissing you from your employment with M. The employees who participated in the strike and allegedly figured in the violent incident were placed under preventive
Greenfield, Inc., pursuant to Sections 1 and 4, Article II of the CBA effective immediately.10 suspension by respondent company. The company also sent return-to-work notices to the home addresses of the striking
employees thrice successively, on March 27, April 8 and April 31, 1989, respectively. However, respondent company admitted
that only 261 employees were eventually accepted back to work. Those who did not respond to the return-to-work notice
On that same day, the expelled union officers assigned in the first shift were physically or bodily brought out of the company
were sent termination letters dated May 17, 1989, reproduced below:
premises by the company's security guards. Likewise, those assigned to the second shift were not allowed to report for work.
This provoked some of the members of the local union to demonstrate their protest for the dismissal of the said union officers.
Some union members left their work posts and walked out of the company premises. M. Greenfield Inc., (B)
Km. 14, Merville Rd., Paraaque, M.M.
May 17, 1989
On the other hand, the Federation, having achieved its objective, withdrew the Notice of Strike filed with the NCMB.
xxx xxx xxx
On March 14, 1989, without justifiable cause and without due notice, you left your work assignment at
On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE, Manila, docketed as Case No. NCMB-NCR-NS- the prejudice of the Company's operations. On March 27, April 11, and April 21, 1989, we sent you
03-216-89, alleging the following grounds for the strike: notices to report to the Company. Inspite of your receipt of said notices, we have not heard from you up
to this date.
(a) Discrimination Accordingly, for your failure to report, it is construed that you have effectively abandoned your
employment and the Company is, therefore, constrained to dismiss you for said cause.
Very truly yours,
(b) Interference in union activities M. GREENFIELD, INC., (B)
By:
(c) Mass dismissal of union officers and shop stewards WENZEL STEPHEN LIGOT
Asst. HRD Manager12
(d) Threats, coercion and intimidation On August 7, 1989, the petitioners filed a verified complaint with the Arbitration Branch, National Capital Region, DOLE,
Manila, docketed as Case No. NCR-00-09-04199-89, charging private respondents of unfair labor practice which consists of
(e) Union busting union busting, illegal dismissal, illegal suspension, interference in union activities, discrimination, threats, intimidation,
coercion, violence, and oppression.
The following day, March 9, 1989, a strike vote referendum was conducted and out of 2, 103 union members who cast their
votes, 2,086 members voted to declare a strike. After the filing of the complaint, the lease contracts on the respondent company's office and factory at Merville Subdivision,
Paraaque expired and were not renewed. Upon demand of the owners of the premises, the company was compelled to
vacate its office and factory.
On March 10, 1989, the thirty (30) dismissed union officers filed an urgent petition, docketed as Case No. NCMB-NCR-NS-03-
216-89, with the Office of the Secretary of the Department of Labor and Employment praying for the suspension of the effects
of their termination from employment. However, the petition was dismissed by then Secretary Franklin Drilon on April 11, Thereafter, the company transferred its administration and account/client servicing department at AFP-RSBS Industrial Park in
1989, the pertinent portion of which stated as follows: Taguig, Metro Manila. For failure to find a suitable place in Metro Manila for relocation of its factory and manufacturing
operations, the company was constrained to move the said departments to Tacloban, Leyte. Hence, on April 16, 1990,
respondent company accordingly notified its employees of a temporary shutdown in operations. Employees who were
At this point in time, it is clear that the dispute at M. Greenfield is purely an intra-union matter. No mass lay-off is
interested in relocating to Tacloban were advised to enlist on or before April 23, 1990.
evident as the terminations have been limited to those allegedly leading the secessionist group leaving MSMG-
ULGWP to form a union under the KMU. . . .
The complaint for unfair labor practice was assigned to Labor Arbiter Manuel Asuncion but was thereafter reassigned to Labor
Arbiter Cresencio Ramos when respondents moved to inhibit him from acting on the case.
xxx xxx xxx

On December 15, 1992, finding the termination to be valid in compliance with the union security clause of the collective
WHEREFORE, finding no sufficient jurisdiction to warrant the exercise of our extraordinary authority under Article
bargaining agreement, Labor Arbiter Cresencio Ramos dismissed the complaint.
277 (b) of the Labor Code, as amended, the instant Petition is hereby DISMISSED for lack of merit.

Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo Putong retired from the service, leaving
SO ORDERED.11
only two commissioners, Commissioner Vicente Veloso III and Hon. Chairman Bartolome Carale in the First Division. When
Commissioner Veloso inhibited himself from the case, Commissioner Joaquin Tanodra of the Third Division was temporarily
designated to sit in the First Division for the proper disposition of the case.
The First Division affirmed the Labor Arbiter's disposition. With the denial of their motion for reconsideration on January 28, Petitioners contend that their dismissal from work was effected in an arbitrary, hasty, capricious and illegal manner because it
1994, petitioners elevated the case to this Court, attributing grave abuse of discretion to public respondent NLRC in: was undertaken by the respondent company without any prior administrative investigation; that, had respondent company
conducted prior independent investigation it would have found that their expulsion from the union was unlawful similarly for
lack of prior administrative investigation; that the federation cannot recommend the dismissal of the union officers because it
I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS BY RESPONDENT COMPANY AS VALID;
was not a principal party to the collective bargaining agreement between the company and the union; that public respondents
acted with grave abuse of discretion when they declared petitioners' dismissals as valid and the union strike as illegal and in
II. HOLDING THAT THE STRIKE STAGED BY THE PETITIONERS AS ILLEGAL; not declaring that respondents were guilty of unfair labor practice.

III. HOLDING THAT THE PETITIONER EMPLOYEES WERE DEEMED TO HAVE ABANDONED THEIR WORK AND HENCE, Private respondents, on the other hand, maintain that the thirty dismissed employees who were former officers of the
VALIDLY DISMISSED BY RESPONDENT COMPANY; AND federation have no cause of action against the company, the termination of their employment having been made upon the
demand of the federation pursuant to the union security clause of the CBA; the expelled officers of the local union were
IV. NOT FINDING RESPONDENT COMPANY AND RESPONDENT FEDERATION OFFICERS GUILTY OF ACTS OF UNFAIR accorded due process of law prior to their expulsion from their federation; that the strike conducted by the petitioners was
LABOR PRACTICE. illegal for noncompliance with the requirements; that the employees who participated in the illegal strike and in the
commission of violence thereof were validly terminated from work; that petitioners were deemed to have abandoned their
employment when they did not respond to the three return to work notices sent to them; that petitioner labor union has no
Notwithstanding the several issues raised by the petitioners and respondents in the voluminous pleadings presented before legal personality to file and prosecute the case for and on behalf of the individual employees as the right to do so is personal to
the NLRC and this Court, they revolve around and proceed from the issue of whether or not respondent company was justified the latter; and that, the officers of respondent company cannot be liable because as mere corporate officers, they acted within
in dismissing petitioner employees merely upon the labor federation's demand for the enforcement of the union security the scope of their authority.
clause embodied in their collective bargaining agreement.

Public respondent, through the Labor Arbiter, ruled that the dismissed union officers were validly and legally terminated
Before delving into the main issue, the procedural flaw pointed out by the petitioners should first be resolved. because the dismissal was effected in compliance with the union security clause of the CBA which is the law between the
parties. And this was affirmed by the Commission on appeal. Moreover, the Labor Arbiter declared that notwithstanding the
Petitioners contend that the decision rendered by the First Division of the NLRC is not valid because Commissioner Tanodra, lack of a prior administrative investigation by respondent company, under the union security clause provision in the CBA, the
who is from the Third Division, did not have any lawful authority to sit, much less write the ponencia, on a case pending before company cannot look into the legality or illegality of the recommendation to dismiss by the union nd the obligation to dismiss
the First Division. It is claimed that a commissioner from one division of the NLRC cannot be assigned or temporarily is ministerial on the part of the company.13
designated to another division because each division is assigned a particular territorial jurisdiction. Thus, the decision rendered
did not have any legal effect at all for being irregularly issued. This ruling of the NLRC is erroneous. Although this Court has ruled that union security clauses embodied in the collective
bargaining agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not erode
Petitioners' argument is misplaced. Article 213 of the Labor Code in enumerating the powers of the Chairman of the National the fundamental requirement of due process. The reason behind the enforcement of union security clauses which is the
Labor Relations Commission provides that: sanctity and inviolability of contracts14 cannot override one's right to due process.

The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of a judgment or In the case of Cario vs. National Labor Relations Commission,15 this Court pronounced that while the company, under a
resolution. Whenever the required membership in a division is not complete and the concurrence of two (2) maintenance of membership provision of the collective bargaining agreement, is bound to dismiss any employee expelled by
commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate such number the union for disloyalty upon its written request, this undertaking should not be done hastily and summarily. The company acts
of additional Commissioners from the other divisions as may be necessary. in bad faith in dismissing a worker without giving him the benefit of a hearing.

It must be remembered that during the pendency of the case in the First Division of the NLRC, one of the three commissioners, The power to dismiss is a normal prerogative of the employer. However, this is not without limitation. The employer
Commissioner Romeo Putong, retired, leaving Chairman Bartolome Carale and Commissioner Vicente Veloso III. Subsequently, is bound to exercise caution in terminating the services of his employees especially so when it is made upon the
Commissioner Veloso inhibited himself from the case because the counsel for the petitioners was his former classmate in law request of a labor union pursuant to the Collective Bargaining Agreement, . . . Dismissals must not be arbitrary and
school. The First Division was thus left with only one commissioner. Since the law requires the concurrence of two capricious. Due process must be observed in dismissing an employee because it affects not only his position but also
commissioners to arrive at a judgment or resolution, the Commission was constrained to temporarily designate a his means of livelihood. Employers should respect and protect the rights of their employees, which include the right
commissioner from another division to complete the First Division. There is nothing irregular at all in such a temporary to labor.
designation for the law empowers the Chairman to make temporary assignments whenever the required concurrence is not
met. The law does not say that a commissioner from the first division cannot be temporarily assigned to the second or third In the case under scrutiny, petitioner union officers were expelled by the federation for allegedly committing acts of disloyalty
division to fill the gap or vice versa. The territorial divisions do not confer exclusive jurisdiction to each division and are merely and/or inimical to the interest of ULGWP and in violation of its Constitution and By-laws. Upon demand of the federation, the
designed for administrative efficiency. company terminated the petitioners without conducting a separate and independent investigation. Respondent company did
not inquire into the cause of the expulsion and whether or not the federation had sufficient grounds to effect the same.
Going into the merits of the case, the court finds that the Complaint for unfair labor practice filed by the petitioners against Relying merely upon the federation's allegations, respondent company terminated petitioners from employment when a
respondent company which charges union busting, illegal dismissal, illegal suspension, interference in union activities, separate inquiry could have revealed if the federation had acted arbitrarily and capriciously in expelling the union officers.
discrimination, threats, intimidation, coercion, violence, and oppression actually proceeds from one main issue which is the Respondent company's allegation that petitioners were accorded due process is belied by the termination letters received by
termination of several employees by respondent company upon the demand of the labor federation pursuant to the union the petitioners which state that the dismissal shall be immediately effective.
security clause embodied in their collective bargaining agreement.
As held in the aforecited case of Cario, "the right of an employee to be informed of the charges against him and to reasonable It is undisputed that ULGWP is the certified sole and exclusive collective bargaining agent of all the regular rank-
opportunity to present his side in a controversy with either the company or his own union is not wiped away by a union and-file workers of the company, M. Greenfield, Inc. (pages 31-32 of the records).
security clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be protected not only
from a company which disregards his rights but also from his own union the leadership of which could yield to the temptation
It has been established also that the company and ULGWP signed a 3-year collective bargaining agreement effective
of swift and arbitrary expulsion from membership and mere dismissal from his job.
July 1, 1986 up to June 30, 1989.19

While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security
Although the issue of whether or not the federation had reasonable grounds to expel the petitioner union officers is properly
clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done
within the original and exclusive jurisdiction of the Bureau of Labor Relations, being an intra-union conflict, this Court deems it
hastily and summarily thereby eroding the employees' right to due process, self-organization and security of tenure. The
justifiable that such issue be nonetheless ruled upon, as the Labor Arbiter did, for to remand the same to the Bureau of Labor
enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness,
Relations would be to intolerably delay the case.
and always with due process.16 Even on the assumption that the federation had valid grounds to expel the union officers, due
process requires that these union officers be accorded a separate hearing by respondent company.
The Labor Arbiter found that petitioner union officers were justifiably expelled from the federation for committing acts of
disloyalty when it "undertook to disaffiliate from the federation by charging ULGWP with failure to provide any legal,
In its decision, public respondent also declared that if complainants (herein petitioners) have any recourse in law, their right of
educational or organizational support to the local. . . . and declared autonomy, wherein they prohibit the federation from
action is against the federation and not against the company or its officers, relying on the findings of the Labor Secretary that
interfering in any internal and external affairs of the local union."20
the issue of expulsion of petitioner union officers by the federation is a purely intra-union matter.

It is well-settled that findings of facts of the NLRC are entitled to great respect and are generally binding on this Court, but it is
Again, such a contention is untenable. While it is true that the issue of expulsion of the local union officers is originally between
equally well-settled that the Court will not uphold erroneous conclusions of the NLRC as when the Court finds insufficient or
the local union and the federation, hence, intra-union in character, the issue was later on converted into a termination dispute
insubstantial evidence on record to support those factual findings. The same holds true when it is perceived that far too much
when the company dismissed the petitioners from work without the benefit of a separate notice and hearing. As a matter of
is concluded, inferred or deduced from the bare or incomplete facts appearing of record.21
fact, the records reveal that the termination was effective on the same day that the termination notice was served on the
petitioners.
In its decision, the Labor Arbiter declared that the act of disaffiliation and declaration of autonomy by the local union was part
of its "plan to take over the respondent federation." This is purely conjecture and speculation on the part of public respondent,
In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.17,
the Court held the company liable for the
totally unsupported by the evidence.
payment of backwages for having acted in bad faith in effecting the dismissal of the employees.

A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a separate and
. . . Bad faith on the part of the respondent company may be gleaned from the fact that the petitioner workers were
voluntary association, is free to serve the interests of all its members including the freedom to disaffiliate or declare its
dismissed hastily and summarily. At best, it was guilty of a tortious act, for which it must assume solidary liability,
autonomy from the federation to which it belongs when circumstances warrant, in accordance with the constitutional
since it apparently chose to summarily dismiss the workers at the union's instance secure in the union's contractual
guarantee of freedom of association.22
undertaking that the union would hold it "free from any liability" arising from such dismissal.

The purpose of affiliation by a local union with a mother union or a federation.


Thus, notwithstanding the fact that the dismissal was at the instance of the federation and that it undertook to hold the
company free from any liability resulting from such a dismissal, the company may still be held liable if it was remiss in its duty
to accord the would-be dismissed employees their right to be heard on the matter. . . . is to increase by collective action the 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, subject to the
restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for
Anent petitioners contention that the federation was not a principal party to the collective bargaining agreement between the
mutual welfare upon the terms laid down in the agreement which brought it into existence.23
company and the union, suffice it to say that the matter was already ruled upon in the Interpleader case filed by respondent
company. Med-Arbiter Anastacio Bactin thus ruled:
Thus, a local union which has affiliated itself with a federation is free to sever such affiliation anytime and such disaffiliation
cannot be considered disloyalty. In the absence of specific provisions in the federation's constitution prohibiting disaffiliation
After a careful examination of the facts and evidences presented by the parties, this Officer hereby renders its
or the declaration of autonomy of a local union, a local may dissociate with its parent union.24
decision as follows:

The evidence on hand does not show that there is such a provision in ULGWP's constitution. Respondents' reliance upon Article
1.) It appears on record that in Collective Bargaining Agreement (CBA) which took effect on July 1, 1986, the
V, Section 6, of the federation's constitution is not right because said section, in fact, bolsters the petitioner union's claim of its
contracting parties are M. Greenfield, Inc. (B) and Malayang Samahan ng Mga Manggagawa sa M. Greenfield, Inc.
right to declare autonomy:
(B) (MSMG)/United Lumber and General Workers of the Philippines (ULGWP). However, MSMG was not yet
registered labor organization at the time of the signing of the CBA. Hence, the union referred to in the CBA is the
ULGWP.18 Sec. 6. The autonomy of a local union affiliated with ULGWP shall be respected insofar as it pertains to its internal
affairs, except as provided elsewhere in this Constitution.
Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as follows:
There is no disloyalty to speak of, neither is there any violation of the federation's constitution because there is nothing in the
said constitution which specifically prohibits disaffiliation or declaration of autonomy. Hence, there cannot be any valid
dismissal because Article II, Section 4 of the union security clause in the CBA limits the dismissal to only three (3) grounds, to In the present case, respondents failed to prove that there was a clear intention on the part of the striking employees to sever
wit: failure to maintain membership in the union (1) for non-payment of union dues, (2) for resignation; and (3) for violation of their employer-employee relationship. Although admittedly the company sent three return to work notices to them, it has not
the union's Constitution and By-Laws. been substantially proven that these notices were actually sent and received by the employees. As a matter of fact, some
employees deny that they ever received such notices. Others alleged that they were refused entry to the company premises by
the security guards and were advised to secure a clearance from ULGWP and to sign a waiver. Some employees who
To support the finding of disloyalty, the Labor Arbiter gave weight to the fact that on February 26, 1989, the petitioners
responded to the notice were allegedly told to wait for further notice from respondent company as there was lack of work.
declared as vacant all the responsible positions of ULGWP, filled these vacancies through an election and filed a petition for the
registration of UWP as a national federation. It should be pointed out, however, that these occurred after the federation had
already expelled the union officers. The expulsion was effective November 21, 1988. Therefore, the act of establishing a Furthermore, this Court has ruled that an employee who took steps to protest his lay-off cannot be said to have abandoned his
different federation, entirely separate from the federation which expelled them, is but a normal retaliatory reaction to their work.30 The filing of a complaint for illegal dismissal is inconsistent with the allegation of abandonment. In the case under
expulsion. consideration, the petitioners did, in fact, file a complaint when they were refused reinstatement by respondent company.

With regard to the issue of the legality or illegality of the strike, the Labor Arbiter held that the strike was illegal for the Anent public respondent's finding that there was no unfair labor practice on the part of respondent company and federation
following reasons: (1) it was based on an intra-union dispute which cannot properly be the subject of a strike, the right to strike officers, the Court sustains the same. As earlier discussed, union security clauses in collective bargaining agreements, if freely
being limited to cases of bargaining deadlocks and unfair labor practice (2) it was made in violation of the "no strike, no lock- and voluntarily entered into, are valid and binding. Corollary, dismissals pursuant to union security clauses are valid and legal
out" clause in the CBA, and (3) it was attended with violence, force and intimidation upon the persons of the company officials, subject only to the requirement of due process, that is, notice and hearing prior to dismissal. Thus, the dismissal of an
other employees reporting for work and third persons having legitimate business with the company, resulting to serious employee by the company pursuant to a labor union's demand in accordance with a union security agreement does not
physical injuries to several employees and damage to company property. constitute unfair labor practice.31

On the submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the intra-union conflict However, the dismissal was invalidated in this case because of respondent company's failure to accord petitioners with due
between the federation and the local union, it bears reiterating that when respondent company dismissed the union officers, process, that is, notice and hearing prior to their termination. Also, said dismissal was invalidated because the reason relied
the issue was transformed into a termination dispute and brought respondent company into the picture. Petitioners believed upon by respondent Federation was not valid. Nonetheless, the dismissal still does not constitute unfair labor practice.
in good faith that in dismissing them upon request by the federation, respondent company was guilty of unfair labor practice in
that it violated the petitioner's right to self-organization. The strike was staged to protest respondent company's act of
Lastly, the Court is of the opinion, and so holds, that respondent company officials cannot be held personally liable for
dismissing the union officers. Even if the allegations of unfair labor practice are subsequently found out to be untrue, the
damages on account of the employees' dismissal because the employer corporation has a personality separate and distinct
presumption of legality of the strike prevails.25
from its officers who merely acted as its agents.

Another reason why the Labor Arbiter declared the strike illegal is due to the existence of a no strike no lockout provision in
It has come to the attention of this Court that the 30-day prior notice requirement for the dismissal of employees has been
the CBA. Again, such a ruling is erroneous. A no strike, no lock out provision can only be invoked when the strike is economic in
repeatedly violated and the sanction imposed for such violation enunciated in Wenphil Corporation vs. NLRC32 has become an
nature, i.e. to force wage or other concessions from the employer which he is not required by law to grant. 26 Such a provision
ineffective deterrent. Thus, the Court recently promulgated a decision to reinforce and make more effective the requirement
cannot be used to assail the legality of a strike which is grounded on unfair labor practice, as was the honest belief of herein
of notice and hearing, a procedure that must be observed before termination of employment can be legally effected.
petitioners. Again, whether or not there was indeed unfair labor practice does not affect the strike.

In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No. 117040, January 27, 2000), the Court ruled that an
On the allegation of violence committed in the course of the strike, it must be remembered that the Labor Arbiter and the
employee who is dismissed, whether or not for just or authorized cause but without prior notice of his termination, is entitled
Commission found that "the parties are agreed that there were violent incidents . . . resulting to injuries to both sides, the
to full backwages from the time he was terminated until the decision in his case becomes final, when the dismissal was for
union and management."27 The evidence on record show that the violence cannot be attributed to the striking employees
cause; and in case the dismissal was without just or valid cause, the backwages shall be computed from the time of his
alone for the company itself employed hired men to pacify the strikers. With violence committed on both sides, the
dismissal until his actual reinstatement. In the case at bar, where the requirement of notice and hearing was not complied
management and the employees, such violence cannot be a ground for declaring the strike as illegal.
with, the aforecited doctrine laid down in the Serrano case applies.

With respect to the dismissal of individual petitioners, the Labor Arbiter declared that their refusal to heed respondent's recall
WHEREFORE, the Petition is GRANTED; the decision of the National Labor Relations Commission in Case No. NCR-00-09-04199-
to work notice is a clear indication that they were no longer interested in continuing their employment and is deemed
89 is REVERSED and SET ASIDE; and the respondent company is hereby ordered to immediately reinstate the petitioners to
abandonment. It is admitted that three return to work notices were sent by respondent company to the striking employees on
their respective positions. Should reinstatement be not feasible, respondent company shall pay separation pay of one month
March 27, April 11, and April 21, 1989 and that 261 employees who responded to the notice were admitted back to work.
salary for every year of service. Since petitioners were terminated without the requisite written notice at least 30 days prior to
their termination, following the recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and Isetann
However, jurisprudence holds that for abandonment of work to exist, it is essential (1) that the employee must have failed to Department Store, the respondent company is hereby ordered to pay full backwages to petitioner-employees while the
report for work or must have been absent without valid or justifiable reason; and (2) that there must have been a clear Federation is also ordered to pay full backwages to petitioner-union officers who were dismissed upon its instigation. Since the
intention to sever the employer-employee relationship manifested by some overt acts.28 Deliberate and unjustified refusal on dismissal of petitioners was without cause, backwages shall be computed from the time the herein petitioner employees and
the part of the employee to go back to his work post amd resume his employment must be established. Absence must be union officers were dismissed until their actual reinstatement. Should reinstatement be not feasible, their backwages shall be
accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. 29 And the computed from the time petitioners were terminated until the finality of this decision. Costs against the respondent
burden of proof to show that there was unjustified refusal to go back to work rests on the employer. company.1wphi1.nt

SO ORDERED.
TROPICAL HUT FOOD EMPLOYEES UNION V TROPICAL HUT FOOD MARKET Article III

MEDIALDEA, J.: Union Membership and Union Check-off

This is a petition for certiorari under Rule 65 seeking to set aside the decisions of the public respondents Secretary of Labor and Sec. 1 . . . Employees who are already members of the UNION at the time of the signing of this Agreement or who
National Labor Relations Commission which reversed the Arbitrators rulings in favor of petitioners herein. become so thereafter shall be required to maintain their membership therein as a condition of continued
employment.
The following factual background of this case appears from the record:
xxx xxx xxx
On January 2, 1968, the rank and file workers of the Tropical Hut Food Market Incorporated, referred to herein as respondent
company, organized a local union called the Tropical Hut Employees Union, known for short as the THEU, elected their officers, Sec. 3Any employee who is expelled from the UNION for joining another federation or forming another union, or
adopted their constitution and by-laws and immediately sought affiliation with the National Association of Trade Unions who fails or refuses to maintain his membership therein as required, . . . shall, upon written request of the UNION
(NATU). On January 3, 1968, the NATU accepted the THEU application for affiliation. Following such affiliation with NATU, be discharged by the COMPANY. (Rollo, pp. 667-670)
Registration Certificate No. 5544-IP was issued by the Department of Labor in the name of the Tropical Hut Employees Union
NATU. It appears, however, that NATU itself as a labor federation, was not registered with the Department of Labor.
And attached to the Agreement as Appendix "A" is a check-off Authorization Form, the terms of which are as follows:

After several negotiations were conducted between THEU-NATU, represented by its local president and the national officers of
We, the undersigned, hereby designate the NATIONAL Association of Trade Unions, of which the TROPICAL HUT
the NATU, particularly Ignacio Lacsina, President, Pacifico Rosal, Executive Vice-President and Marcelino Lontok, Jr., Vice
EMPLOYEES UNION is an affiliate as sole collective bargaining agent in all matters relating to salary rates, hours of
President, and respondent Tropical Hut Food Market, Incorporated, thru its President and General Manager, Cesar Azcona, Sr.,
work and other terms and conditions of employment in the Tropical Hut Food Market, Inc. and we hereby authorize
a Collective Bargaining Agreement was concluded between the parties on April 1, 1968, the term of which expired on March
the said company to deduct the amount of Four (P 4.00) Pesos each every month as our monthly dues and to deliver
31, 1971. Said agreement' contained these clear and unequivocal terms:
the amount to the Treasurer of the Union or his duly authorized representatives. (Rollo, pp. 680-684)

This Agreement made and entered into this __________ day of ___________, 1968, by and between:
On May 21, 1971, respondent company and THEU-NATU entered into a new Collective Bargaining Agreement which ended on
March 31, 1974. This new CBA incorporated the previous union-shop security clause and the attached check-off authorization
The Tropical Hut Food Market, Inc., a corporation duly organized and existing under and by virtue of the laws of the form.
Republic of the Philippines, with principal office at Quezon City, represented in this Act by its President, Cesar B.
Azcona (hereinafter referred to as the Company)
Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, was appointed by the respondent company as
Assistant Unit Manager. On July 24, 1973, he wrote the general membership of his union that for reason of his present
and position, he was resigning as President of the THEU-NATU effective that date. As a consequence thereof, his Vice-President,
Jose Encinas, assumed and discharged the duties of the presidency of the THEU-NATU.
The Tropical Hut Employees Union NATU, a legitimate labor organization duly organized and existing in
accordance with the laws of the Republic of the Philippines, and affiliated with the National Association of Trade On December 19,1973, NATU received a letter dated December 15, 1973, jointly signed by the incumbent officers of the local
Unions, with offices at San Luis Terraces, Ermita, Manila, and represented in this Act by its undersigned officers union informing the NATU that THEU was disaffiliating from the NATU federation. On December 20, 1973, the Secretary of the
(hereinafter referred to as the UNION) THEU, Nemesio Barro, made an announcement in an open letter to the general membership of the THEU, concerning the
latter's disaffiliation from the NATU and its affiliation with the Confederation of General Workers (CGW). The letter was passed
around among the members of the THEU-NATU, to which around one hundred and thirty-seven (137) signatures appeared as
Witnesseth:
having given their consent to and acknowledgment of the decision to disaffiliate the THEU from the NATU.

xxx xxx xxx


On January 1, 1974, the general membership of the so-called THEU-CGW held its annual election of officers, with Jose Encinas
elected as President. On January 3, 1974, Encinas, in his capacity as THEU-CGW President, informed the respondent company
Article I of the result of the elections. On January 9, 1974, Pacifico Rosal, President of the Confederation of General Workers (CGW),
wrote a letter in behalf of complainant THEU-CGW to the respondent company demanding the remittance of the union dues
Coverage and Effectivity collected by the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this was refused by the respondent company.

Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective bargaining agent for all its workers On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, Jr., wrote Vidal Mantos, requiring the latter to
and employees in all matters concerning wages, hours of work, and other terms and conditions of employment. assume immediately the position of President of the THEU-NATU in place of Jose Encinas, but the position was declined by
Mantos. On the same day, Lontok, Jr., informed Encinas in a letter, concerning the request made by the NATU federation to the
respondent company to dismiss him (Encinas) in view of his violation of Section 3 of Article III of the Collective Bargaining
xxx xxx xxx Agreement. Encinas was also advised in the letter that NATU was returning the letter of disaffiliation on the ground that:
1. Under the restructuring program NOT of the Bureau of Labor but of the Philippine National Trade Union Center in under Registration Certificate No. 5544 IP. Another letter signed by one hundred forty-six (146) members of THEU-CGW was
conjunction with the NATU and other established national labor centers, retail clerks and employees such as our sent to the President of the Philippines informing him of the unfair labor practices committed by private respondents against
members in the Tropical Hut pertain to Industry II which by consensus, has been assigned already to the jurisdiction THEU-CGW members.
of the NATU;
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed with the Labor Arbiter, Arbitrator Daniel Lucas issued
2. The right to disaffiliate belongs to the union membership who on the basis of verified reports received by an order dated March 21, 1974, holding that the issues raised by the parties became moot and academic with the issuance of
have not even been consulted by you regarding the matter; NLRC Order dated February 25, 1974 in NLRC Case No. LR-2670, which directed the holding of a certification election among
the rank and file workers of the respondent company between the THEU-NATU and THEU-CGW. He also ordered: a) the
reinstatement of all complainants; b) for the respondent company to cease and desist from committing further acts of
3. Assuming that the disaffiliation decision was properly reached; your letter nevertheless is unacceptable in view of
dismissals without previous order from the NLRC and for the complainant Tropical Hut Employees UNION-CGW to file
Article V, Section 1, of the NATU Constitution which provides that "withdrawal from the organization shall he valid
representation cases on a case to case basis during the freedom period provided for by the existing CBA between the parties
provided three (3) months notice of intention to withdraw is served upon the National Executive Council." (p.
(pp. 91-93, Rollo).
281, Rollo)

With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered case, Arbitrator Cleto T. Villatuya rendered a decision
In view of NATU's request, the respondent company, on the same day, which was January 11, 1974, suspended Encinas
dated October 14, 1974, the dispositive portion of which states:
pending the application for clearance with the Department of Labor to dismiss him. On January 12, 1974, members of the
THEU-CGW passed a resolution protesting the suspension of Encinas and reiterated their ratification and approval of their
union's disaffiliation from NATU and their affiliation with the Confederation of General Workers (CGW). It was Encinas' Premises considered, a DECISION is hereby rendered ordering respondent company to reinstate immediately the
suspension that caused the filing of NLRC Case No. LR-2511 on January 11, 1974 against private respondents herein, charging sixty three (63) complainants to their former positions with back wages from the time they were illegally suspended
them of unfair labor practice. up to their actual reinstatement without loss of seniority and other employment rights and privileges, and ordering
the respondents to desist from further committing acts of unfair labor practice. The respondent company's
application for clearance filed with the Secretary of Labor to terminate the subject complainants' services effective
On January 15,1974, upon the request of NATU, respondent company applied for clearance with the Secretary of Labor to
March 20 and 23, 1974, should be denied.
dismiss the other officers and members of THEU-CGW. The company also suspended them effective that day. NLRC Case No.
LR-2521 was filed by THEU-CGW and individual complainants against private respondents for unfair labor practices.
SO ORDERED. (pp. 147-148, Rollo)
On January 19, 1974, Lontok, acting as temporary chairman, presided over the election of officers of the remaining THEU-NATU
in an emergency meeting pending the holding of a special election to be called at a later date. In the alleged election, Arturo From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases No. LR-2511 and LR-2521 and by Arbitrator Cleto
Dilag was elected acting THEU-NATU President together with the other union officers. On February 14, 1974, these temporary Villatuya in NLRC Cases Nos. LR-2971, LR-3015, and the unnumbered case, all parties thereto, namely, petitioners herein,
officers were considered as having been elected as regular officers for the year 1974. respondent company, NATU and Dilag appealed to the National Labor Relations Commission.

On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce Enrile, Secretary of National Defense, complaining of In a decision rendered on August 1, 1975, the National Labor Relations Commission found the private respondents' appeals
the unfair labor practices committed by respondent company against its members and requesting assistance on the matter. meritorious, and stated, inter alia:
The aforementioned letter contained the signatures of one hundred forty-three (143) members.
WHEREFORE, in view of the foregoing premises, the Order of Arbitrator Lucas in NLRC CASE NOS. LR-2511, 2521 and
On February 24,1974, the secretary of THEU-NATU, notified the entire rank and file employees of the company that they will the decision of Arbitrator Villatuya in NLRC CASE NOS. LR-2971, 3015 and the unnumbered Case are hereby
be given forty-eight (48) hours upon receipt of the notice within which to answer and affirm their membership with THEU- REVERSED. Accordingly, the individual complainants are deemed to have lost their status as employees of the
NATU. When the petitioner employees failed to reply, Arturo Dilag advised them thru letters dated February 26, March 2 and respondent company. However, considering that the individual complainants are not presumed to be familiar with
5, 1974, that the THEU-NATU shall enforce the union security clause set forth in the CBA, and that he had requested nor to have anticipated the legal mesh they would find themselves in, after their "disaffiliation" from National
respondent company to dismiss them. Association of Trade Unions and the THEU-NATU, much less the legal consequences of the said action which we
presume they have taken in all good faith; considering, further, that the thrust of the new orientation in labor
relations is not towards the punishment of acts violative of contractual relations but rather towards fair
Respondent company, thereafter, wrote the petitioner employees demanding the latter's comment on Dilag's charges before
adjustments of the resulting complications; and considering, finally, the consequent economic hardships that would
action was taken thereon. However, no comment or reply was received from petitioners. In view of this, Estelita Que,
be visited on the individual complainants, if the law were to be strictly enforced against them, this Commission is
President/General Manager of respondent company, upon Dilag's request, suspended twenty four (24) workers on March 5,
constrained to be magnanimous in this instant, notwithstanding its obligation to give full force and effect to the
1974, another thirty seven (37) on March 8, 1974 and two (2) more on March 11, 1974, pending approval by the Secretary of
majesty of the law, and hereby orders the respondent company, under pain of being cited for contempt for failure
Labor of the application for their dismissal.
to do so, to give the individual complainants a second chance by reemploying them upon their voluntary
reaffirmation of membership and loyalty to the Tropical Hut Employees Union-NATU and the National Association
As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an unnumbered case were filed by petitioners against of Trade Unions in the event it hires additional personnel.
Tropical Hut Food Market, Incorporated, Estelita Que, Hernando Sarmiento and Arturo Dilag.
SO ORDERED. (pp. 312-313, Rollo)
It is significant to note that the joint letter petition signed by sixty-seven (67) employees was filed with the Secretary of Labor,
the NLRC Chairman and Director of Labor Relations to cancel the words NATU after the name of Tropical Hut Employee Union
The petitioner employees appealed the decision of the respondent National Labor Relations Commission to the Secretary of of Labor amounting to lack of or in excess of jurisdiction in deciding the controversy, this Court can properly take cognizance of
Labor. On February 23, 1976, the Secretary of Labor rendered a decision affirming the findings of the Commission, which and resolve the issues raised herein.
provided inter alia:
This brings Us to the question of the legality of the dismissal meted to petitioner employees. In the celebrated case of Liberty
We find, after a careful review of the record, no sufficient justification to alter the decision appealed from except Cotton Mills Workers Union v. Liberty Cotton Mills, L-33187, September 4, 1975, 66 SCRA 512, We held that the validity of the
that portion of the dispositive part which states: dismissals pursuant to the union security clause in the collective bargaining agreement hinges on the validity of the
disaffiliation of the local union from the federation.
. . . this Commission . . . hereby orders respondent company under pain of being cited for contempt for
failure to do so, to give the individual complainants a second chance by reemploying them upon their The right of a local union to disaffiliate from its mother federation is well-settled. A local union, being a separate and voluntary
voluntary reaffirmation of membership and loyalty to the Tropical Hut Employees UNION-NATU and the association, is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant.
National Association of Trade Union in the event it hires additional personnel. This right is consistent with the constitutional guarantee of freedom of association (Volkschel Labor Union v. Bureau of Labor
Relations, No. L-45824, June 19, 1985, 137 SCRA 42).
Compliance by respondent of the above undertaking is not immediately feasible considering that the same is based
on an uncertain event, i.e., reemployment of individual complainants "in the event that management hires All employees enjoy the right to self organization and to form and join labor organizations of their own choosing for the
additional personnel," after they shall have reaffirmed their loyalty to THEU-NATU, which is unlikely. 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
In lieu of the foregoing, and to give complainants positive relief pursuant to Section 9, Implementing Instruction No.
favors the exercise of labor rights.
1. dated November 9, 1972, respondent is hereby ordered to grant to all the individual complainants financial
assistance equivalent to one (1) month salary for every year of service.
Relevant on this point is the basic principle We have repeatedly in affirmed in many rulings:
WHEREFORE, with the modification as above indicated, the Decision of the National Labor Relations Commission is
hereby affirmed. . . . 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 the locals into the national union (PAFLU) was in
SO ORDERED.(pp. 317-318, Rollo)
furtherance of the same end. These associations are consensual entities capable of entering into such legal relations
with their member. The essential purpose was the affiliation of the local unions into a common enterprise to
From the various pleadings filed and arguments adduced by petitioners and respondents, the following issues appear to be increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the
those presented for resolution in this petition to wit: 1) whether or not the petitioners failed to exhaust administrative locals remained the basic units of association, free to serve their own and the common interest of all, subject to the
remedies when they immediately elevated the case to this Court without an appeal having been made to the Office of the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for
President; 2) whether or not the disaffiliation of the local union from the national federation was valid; and 3) whether or not mutual welfare upon the terms laid down in the agreement which brought it into existence. (Adamson & Adamson,
the dismissal of petitioner employees resulting from their unions disaffiliation for the mother federation was illegal and Inc. v. CIR, No. L-35120, January 31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union (NAFLU) v. Noriel, No. L-41955,
constituted unfair labor practice on the part of respondent company and federation. December 29, 1977, 80 SCRA 681; Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., supra).

We find the petition highly meritorious. The inclusion of the word NATU after the name of the local union THEU in the registration with the Department of Labor is
merely to stress that the THEU is NATU's affiliate at the time of the registration. It does not mean that the said local union
The applicable law then is the Labor Code, PD 442, as amended by PD 643 on January 21, 1975, which states: cannot stand on its own. Neither can it be interpreted to mean that it cannot pursue its own interests independently of the
federation. A local union owes its creation and continued existence to the will of its members and not to the federation to
which it belongs.
Art. 222. Appeal . . .

When the local union withdrew from the old federation to join a new federation, it was merely exercising its primary right to
xxx xxx xxx labor organization for the effective enhancement and protection of common interests. In the absence of enforceable
provisions in the federation's constitution preventing disaffiliation of a local union a local may sever its relationship with its
Decisions of the Secretary of Labor may be appealed to the President of the Philippines subject to such conditions parent (People's Industrial and Commercial Employees and Workers Organization (FFW) v. People's Industrial and Commercial
or limitations as the President may direct. (Emphasis ours) Corporation, No. 37687, March 15, 1982, 112 SCRA 440).

The remedy of appeal from the Secretary of Labor to the Office of the President is not a mandatory requirement before resort There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was expressly
to courts can be had, but an optional relief provided by law to parties seeking expeditious disposition of their labor disputes. forbidden to disaffiliate from the federation (pp. 62, 281, Rollo), The alleged non-compliance of the local union with the
Failure to avail of such relief shall not in any way served as an impediment to judicial intervention. And where the issue is lack provision in the NATU Constitution requiring the service of three months notice of intention to withdraw did not produce the
of power or arbitrary or improvident exercise thereof, decisions of the Secretary of Labor may be questioned in effect of nullifying the disaffiliation for the following grounds: firstly, NATU was not even a legitimate labor organization, it
a certiorari proceeding without prior appeal to the President (Arrastre Security Association TUPAS v. Ople, No. L-45344, appearing that it was not registered at that time with the Department of Labor, and therefore did not possess and acquire, in
February 20, 1984, 127 SCRA 580). Since the instant petition raises the same issue of grave abuse of discretion of the Secretary the first place, the legal personality to enforce its constitution and laws, much less the right and privilege under the Labor Code
to organize and affiliate chapters or locals within its group, and secondly, the act of non-compliance with the procedure on he belonged to the managerial personnel who could not be expected to work for the betterment of the rank and file
withdrawal is premised on purely technical grounds which cannot rise above the fundamental right of self-organization. employees. Besides, managers and supervisors are prohibited from joining a rank and file union (Binalbagan Isabela Sugar Co.,
Inc. (BISCOM) v. Philippine Association of Free Labor Unions (PAFLU), et al., L-18782, August 29, 1963, 8 SCRA 700).
Correspondingly, if a manager or supervisor organizes or joins a rank and file union, he will be required to resign therefrom
Respondent Secretary of Labor, in affirming the decision of the respondent Commission, concluded that the supposed decision
(Magalit, et al. v. Court of Industrial Relations, et al., L-20448, May 25, 1965,14 SCRA 72).
to disaffiliate was not the subject of a free and open discussion and decision on the part of the THEU-NATU general
membership (p. 305, Rollo). This, however, is contradicted by the evidence on record. Moreover, We are inclined to believe
Arbitrator Villatuya's findings to the contrary, as follows: Public respondents further submit that several employees who disaffiliate their union from the NATU subsequently retracted
and reaffirmed their membership with the THEU-NATU. In the decision which was affirmed by respondent Secretary of Labor,
the respondent Commission stated that:
. . . . However, the complainants refute this allegation by submitting the following: a) Letter dated December 20,
1.973 signed by 142 members (Exhs. "B to B-5") resolution dated January 12, 1974, signed by 140 members (Exhs.
"H to H-6") letter dated February 26, 1974 to the Department of Labor signed by 165 members (Exhs. "I to I-10"); d) . . . out of the alleged one hundred and seventy-one (171) members of the THEU-CGW whose signatures appeared
letter dated January 30, 1974 to the Secretary of the National Defense signed by 144 members (Exhs. "0 to 0-5") in the "Analysis of Various Documents Signed by Majority Members of the THEU-CGW, (Annex "T", Complainants),
and; e) letter dated March 6, 1974 signed by 146 members addressed to the President of the Philippines (Exhs. "HH which incidentally was relied upon by Arbitrator Villatuya in holding that complainant THEU-CGW commanded the
to HH-5"), to show that in several instances, the members of the THEU-NATU have acknowledged their disaffiliation majority of employees in respondent company, ninety-three (93) of the alleged signatories reaffirmed their
from NATU. The letters of the complainants also indicate that an overwhelming majority have freely and voluntarily membership with the THEU-NATU and renounced whatever connection they may have had with other labor unions,
signed their union's disaffiliation from NATU, otherwise, if there was really deception employed in securing their (meaning the complainant THEU-CGW) either through resolution or membership application forms they have
signatures as claimed by NATU/ Dilag, it could not be possible to get their signatures in five different documents. (p. unwittingly signed." (p. 306, Rollo)
144, Rollo)
Granting arguendo, that the fact of retraction is true, the evidence on record shows that the letters of retraction were
We are aware of the time-honored doctrine that the findings of the NLRC and the Secretary of Labor are binding on this Court executed on various dates beginning January 11, 1974 to March 8, 1974 (pp. 278-280, Rollo). This shows that the retractions
if supported by substantial evidence. However, in the same way that the findings of facts unsupported by substantial and were made more or less after the suspension pending dismissal on January 11, 1974 of Jose Encinas, formerly THEU-NATU
credible evidence do not bind this Court, neither will We uphold erroneous conclusions of the NLRC and the Secretary of Labor President, who became THEU-CGW President, and the suspension pending their dismissal of the other elected officers and
when We find that the latter committed grave abuse of discretion in reversing the decision of the labor arbiter (San Miguel members of the THEU-CGW on January 15, 1974. It is also clear that some of the retractions occurred after the suspension of
Corporation v. NLRC, L-50321, March 13, 1984, 128 SCRA 180). In the instant case, the factual findings of the arbitrator were the first set of workers numbering about twenty-four (24) on March 5, 1974. There is no use in saying that the retractions
correct against that of public respondents. obliterated the act of disaffiliation as there are doubts that they were freely and voluntarily done especially during such time
when their own union officers and co-workers were already suspended pending their dismissal.
Further, there is no merit in the contention of the respondents that the act of disaffiliation violated the union security clause of
the CBA and that their dismissal as a consequence thereof is valid. A perusal of the collective bargaining agreements shows Finally, with regard to the process by which the workers were suspended or dismissed, this Court finds that it was hastily and
that the THEU-NATU, and not the NATU federation, was recognized as the sole and exclusive collective bargaining agent for all summarily done without the necessary due process. The respondent company sent a letter to petitioners herein, advising them
its workers and employees in all matters concerning wages, hours of work and other terms and conditions of employment (pp. of NATU/Dilag's recommendation of their dismissal and at the same time giving them forty-eight (48) hours within which to
667-706, Rollo). Although NATU was designated as the sole bargaining agent in the check-off authorization form attached to comment (p. 637, Rollo). When petitioners failed to do so, respondent company immediately suspended them and thereafter
the CBA, this simply means it was acting only for and in behalf of its affiliate. The NATU possessed the status of an agent while effected their dismissal. This is certainly not in fulfillment of the mandate of due process, which is to afford the employee to be
the local union remained the basic principal union which entered into contract with the respondent company. When the THEU dismissed an opportunity to be heard.
disaffiliated from its mother federation, the former did not lose its legal personality as the bargaining union under the CBA.
Moreover, the union security clause embodied in the agreements cannot be used to justify the dismissals meted to petitioners
The prerogative of the employer to dismiss or lay-off an employee should be done without abuse of discretion or arbitrainess,
since it is not applicable to the circumstances obtaining in this case. The CBA imposes dismissal only in case an employee is
for what is at stake is not only the employee's name or position but also his means of livelihood. Thus, the discharge of an
expelled from the union for joining another federation or for forming another union or who fails or refuses to maintain
employee from his employment is null and void where the employee was not formally investigated and given the opportunity
membership therein. The case at bar does not involve the withdrawal of merely some employees from the union but of the
to refute the alleged findings made by the company (De Leon v. NLRC, L-52056, October 30, 1980, 100 SCRA 691). Likewise, an
whole THEU itself from its federation. Clearly, since there is no violation of the union security provision in the CBA, there was
employer can be adjudged guilty of unfair labor practice for having dismissed its employees in line with a closed shop provision
no sufficient ground to terminate the employment of petitioners.
if they were not given a proper hearing (Binalbagan-Isabela Sugar Co., Inc.,(BISCOM) v. Philippine Association of Free Labor
Unions (PAFLU) et al., L-18782, August 29, 1963, 8 SCRA 700).
Public respondents considered the existence of Arturo Dilag's group as the remaining true and valid union. We, however, are
inclined to agree instead with the Arbitrator's findings when he declared:
In view of the fact that the dispute revolved around the mother federation and its local, with the company suspending and
dismissing the workers at the instance of the mother federation then, the company's liability should be limited to the
. . . . Much more, the so-called THEU-NATU under Dilag's group which assumes to be the original THEU-NATU has a immediate reinstatement of the workers. And since their dismissals were effected without previous hearing and at the
very doubtful and questionable existence not to mention that the alleged president is performing supervisory instance of NATU, this federation should be held liable to the petitioners for the payment of their backwages, as what We have
functions and not qualified to be a bona fide member of the rank and file union. (p. 146, Rollo) ruled in the Liberty Cotton Mills Case (supra).

Records show that Arturo Dilag had resigned in the past as President of THEU-NATU because of his promotion to a managerial ACCORDINGLY, the petition is hereby GRANTED and the assailed decision of respondent Secretary of Labor is REVERSED and
or supervisory position as Assistant Unit Manager of respondent Company. Petitioner Jose Encinas replaced Dilag as President SET ASIDE, and the respondent company is hereby ordered to immediately reinstate all the petitioner employees within thirty
and continued to hold such position at the time of the disaffiliation of the union from the federation. It is therefore improper (30) days from notice of this decision. If reinstatement is no longer feasible, the respondent company is ordered to pay
and contrary to law for Dilag to reassume the leadership of the remaining group which was alleged to be the true union since petitioners separation pay equivalent to one (1) month pay for every year of service. The respondent NATU federation is
directed to pay petitioners the amount of three (3) years backwages without deduction or qualification. This decision shall be
immediately executory upon promulgation and notice to the parties.

SO ORDERED.
ABARIA V NLRC dated February 21, 1996 addressed to Rev. Gregorio Iyoy, the Administrator of the hospital, you
categorically stated as follows: We do not need any endorsement from NFL, more particularly from Atty.
Armando Alforque to negotiate our CBA with MCCH. You did not only ignore the authority of the
VILLARAMA, JR., J.:
undersigned as Regional Director but you maliciously prevented and bluntly refused my request to join
the union negotiating panel in the CBA negotiations.

The consolidated petitions before us involve the legality of mass termination of hospital employees who participated in strike Your above flagrant actuations, made in the presence of the union membership, constitute
and picketing activities. the following offenses:

1. Willful violation of the Constitution and By-Laws of the Federation and the orders and
The factual antecedents: decisions of duly constituted authorities of the same (Section 4 (b), Article III), namely:

Metro Cebu Community Hospital, Inc. (MCCHI), presently known as the Visayas Community Medical Center (VCMC), is a non- a) Defying the decision of the organization disaffiliating from the KMU; and
stock, non-profit corporation organized under the laws of the Republic of the Philippines. It operates the Metro Cebu
Community Hospital (MCCH), a tertiary medical institution located at Osmea Boulevard, Cebu City.MCCH is owned by the b) Section 9 (b), Article IX which pertains to the powers and responsibilities of the Regional
United Church of Christ in the Philippines (UCCP) and Rev. Gregorio P. Iyoy is the Hospital Administrator. Director, particularly, to negotiate and sign collective bargaining agreement together with the local
negotiating panel subject to prior ratification by the general membership;

The National Federation of Labor (NFL) is the exclusive bargaining representative of the rank-and-file employees of 2. Joining or assisting another labor organization or helping in the formation of a new labor
MCCHI. Under the 1987 and 1991 Collective Bargaining Agreements (CBAs), the signatories were Ciriaco B. Pongasi, Sr. for organization that seeks or tends to defeat the purpose of the Federation (Section 4 (d), Article III) in
MCCHI, and Atty. Armando M. Alforque (NFL Legal Counsel) and Paterno A. Lumapguid as President of NFL-MCCH Chapter. In relation to the National Executive Boards Resolution No. 8, September 26-27, 1994, to wit:
the CBA effective from January 1994 until December 31, 1995, the signatories were Sheila E. Buot as Board of Trustees
Chairman, Rev. Iyoy as MCCH Administrator and Atty. Fernando Yu as Legal Counsel of NFL, while Perla Nava, President of
Pursuant to the NEB Resolution disaffiliating from the KMU
Nagkahiusang Mamumuo sa MCCH (NAMA-MCCH-NFL) signed the Proof of Posting.[1]
dated September 11, 1993, the NEB in session hereby declare that KMU is deemed
an organization that seeks to defeat the objective of establishing independent and
On December 6, 1995, Nava wrote Rev. Iyoy expressing the unions desire to renew the CBA, attaching to her letter a statement democratic unions and seeks to replace the Federation as exclusive representative
of proposals signed/endorsed by 153 union members. Nava subsequently requested that the following employees be allowed of its members.
to avail of one-day union leave with pay on December 19, 1995: Celia Sabas, Jesusa Gerona, Albina Baez, Eddie Villa, Roy
Malazarte, Ernesto Canen, Jr., Guillerma Remocaldo, Catalina Alsado, Evelyn Ong, Melodia Paulin, Sofia Bautista, Hannah Committing acts that tend to alienate the loyalty of the members to the
Bongcaras, Ester Villarin, Iluminada Wenceslao and Perla Nava. However, MCCHI returned the CBA proposal for Nava to secure Federation, subvert its duly constituted authorities, and divide the organization in
first the endorsement of the legal counsel of NFL as the official bargaining representative of MCCHI employees.[2] any level with the objective of establishing a pro-KMU faction or independent
union loyal to the KMU shall be subject to disciplinary action, suspension or
expulsion from union membership, office or position in accordance with
Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA submitted by Nava was never referred to NFL and that NFL paragraph[s] d and f of Section 4, Article III, and paragraph h, Section 6, Article VI,
has not authorized any other legal counsel or any person for collective bargaining negotiations. By January 1996, the collection paragraph d, Section 9, Article IX.
of union fees (check-off) was temporarily suspended by MCCHI in view of the existing conflict between the federation and its
local affiliate. Thereafter, MCCHI attempted to take over the room being used as union office but was prevented to do so by You are, therefore, directed to submit written explanation on the above charges within five
Nava and her group who protested these actions and insisted that management directly negotiate with them for a new (5) days from receipt hereof. Failure on your part shall be considered a waiver of your right to be heard
CBA. MCCHI referred the matter to Atty. Alforque, NFLs Regional Director, and advised Nava that their group is not recognized and the Federation will act accordingly.
by NFL.[3]
Considering the gravity of the charges against you, the critical nature of the undertaking to
In his letter dated February 24, 1996 addressed to Nava, Ernesto Canen, Jr., Jesusa Gerona, Hannah Bongcaras, Emma renew the collective bargaining agreement, and the serious threat you posed to the organization, you
Remocaldo, Catalina Alsado and Albina Baez, Atty. Alforque suspended their union membership for serious violation of the are hereby placed under temporary suspension from your office and membership in the union
Constitution and By-Laws. Said letter states: immediately upon receipt hereof pending investigation and final disposition of your case in accordance
with the unions constitution and by-laws.
During the last General Membership Meeting of the union on February 20, 1996, you openly
declared that you recognized the officers of the KMU not those of the NFL, that you submit to the For your guidance and compliance.[4]
stuctures [sic] and authority of the KMU not of the NFL, and that you are loyal only to the KMU not to
the NFL.
On February 26, 1996, upon the request of Atty. Alforque, MCCHI granted one-day union leave with pay for 12 union
Also, in the same meeting, you admitted having sent a proposal for a renewed collective members.[5] The next day, several union members led by Nava and her group launched a series of mass actions such as wearing
bargaining agreement to the management without any consultation with the NFL. In fact, in your letter black and red armbands/headbands, marching around the hospital premises and putting up placards, posters and
streamers. Atty. Alforque immediately disowned the concerted activities being carried out by union members which are not On August 27, 1996, the City Government of Cebu ordered the demolition of the structures and obstructions put up by the
sanctioned by NFL. MCCHI directed the union officers led by Nava to submit within 48 hours a written explanation why they picketing employees of MCCHI along the sidewalk, having determined the same as a public nuisance or nuisance per se.[11]
should not be terminated for having engaged in illegal concerted activities amounting to strike, and placed them under
immediate preventive suspension. Responding to this directive, Nava and her group denied there was a temporary stoppage of
work, explaining that employees wore their armbands only as a sign of protest and reiterating their demand for MCCHI to Thereafter, several complaints for illegal dismissal and unfair labor practice were filed by the terminated employees against
comply with its duty to bargain collectively. Rev. Iyoy, having been informed that Nava and her group have also been MCCHI, Rev. Iyoy, UCCP and members of the Board of Trustees of MCCHI.
suspended by NFL, directed said officers to appear before his office for investigation in connection with the illegal strike
wherein they reportedly uttered slanderous and scurrilous words against the officers of the hospital, threatening other
workers and forcing them to join the strike. Said union officers, however, invoked the grievance procedure provided in the CBA On August 4, 1999, Executive Labor Arbiter Reynoso A. Belarmino rendered his decision[12] dismissing the
to settle the dispute between management and the union.[6] complaints for unfair labor practice in NLRC Case Nos. RAB-VII-02-0309-98, RAB-VII-02-0394-98 and RAB-VII-03-0596-98 filed
by Nava and 90 other complainants. Executive Labor Arbiter Belarmino found no basis for the charge of unfair labor practice
and declared the strike and picketing activities illegal having been conducted by NAMA-MCCH-NFL which is not a legitimate
On March 13 and 19, 1996, the Department of Labor and Employment (DOLE) Regional Office No. 7 issued certifications stating labor organization. The termination of union leaders Nava, Alsado, Baez, Bongcaras, Canen, Gerona and Remocaldo were
that there is nothing in their records which shows that NAMA-MCCH-NFL is a registered labor organization, and that said union upheld as valid but MCCHI was directed to grant separation pay equivalent to one-half month for every year of service, in the
submitted only a copy of its Charter Certificate on January 31, 1995.[7] MCCHI then sent individual notices to all union members total amount of P3,085,897.40 for the 84 complainants.[13]
asking them to submit within 72 hours a written explanation why they should not be terminated for having supported the
illegal concerted activities of NAMA-MCCH-NFL which has no legal personality as per DOLE records. In their collective
response/statement dated March 18, 1996, it was explained that the picketing employees wore armbands to protest MCCHIs Complainants appealed to the Commission. On March 14, 2001, the NLRCs Fourth Division rendered its
refusal to bargain; it was also contended that MCCHI cannot question the legal personality of the union which had actively Decision,[14] the dispositive portion of which reads:
assisted in CBA negotiations and implementation.[8]
WHEREFORE, premises considered, the decision of the Executive Labor Arbiter dismissing the
complaint for unfair labor practice and illegal dismissal is AFFIRMED with MODIFICATIONS declaring the
On March 13, 1996, NAMA-MCCH-NFL filed a Notice of Strike but the same was deemed not filed for want of legal personality dismissal of all the complainants in RAB Case No. 07-02-0394-98 and RAB Case No. 07-03-0596-98 valid
on the part of the filer. The National Conciliation and Mediation Board (NCMB) Region 7 office likewise denied their motion for and legal. Necessarily, the award of separation pay and attorneys fees are hereby Deleted.
reconsideration on March 25, 1996. Despite such rebuff, Nava and her group still conducted a strike vote on April 2,
1996 during which an overwhelming majority of union members approved the strike.[9] Resolution on RAB Case No. 07-02-0309-98 is hereby Deferred upon Joint Motion of the
parties.
Meanwhile, the scheduled investigations did not push through because the striking union members insisted on attending the
same only as a group. MCCHI again sent notices informing them that their refusal to submit to investigation is deemed a waiver SO ORDERED.[15]
of their right to explain their side and management shall proceed to impose proper disciplinary action under the
circumstances. On March 30, 1996, MCCHI sent termination letters to union leaders and other members who participated in
the strike and picketing activities.On April 8, 1996, it also issued a cease-and-desist order to the rest of the striking employees In its Resolution dated July 2, 2001, the NLRC denied complainants motion for reconsideration.[16]
stressing that the wildcat concerted activities spearheaded by the Nava group is illegal without a valid Notice of Strike
and warning them that non-compliance will compel management to impose disciplinary actions against them. For their
continued picketing activities despite the said warning, more than 100 striking employees were dismissed effective April 12 Complainants elevated the case to the Court of Appeals (CA) (Cebu Station) via a petition for certiorari, docketed as CA-G.R. SP
and 19, 1996. No. 66540.[17]

Unfazed, the striking union members held more mass actions. The means of ingress to and egress from the hospital were In its Resolution dated November 14, 2001, the CAs Eighth Division dismissed the petition on the ground that out of 88
blocked so that vehicles carrying patients and employees were barred from entering the premises. Placards were placed at the petitioners only 47 have signed the certification against forum shopping.[18] Petitioners moved to reconsider the said dismissal
hospitals entrance gate stating: Please proceed to another hospital and we are on protest. Employees and patients reported arguing that the 47 signatories more than constitute the principal parties as the petition involves a matter of common concern
acts of intimidation and harassment perpetrated by union leaders and members. With the intensified atmosphere of violence to all the petitioning employees.[19] By Resolution[20] dated May 28, 2002, the CA reinstated the case only insofar as the 47
and animosity within the hospital premises as a result of continued protest activities by union members, MCCHI suffered heavy petitioners who signed the petition are concerned.
losses due to low patient admission rates. The hospitals suppliers also refused to make further deliveries on credit.

Petitioners challenged the validity of the November 14, 2001 and May 28, 2002 resolutions before this Court in a petition for
With the volatile situation adversely affecting hospital operations and the condition of confined patients, MCCHI filed a review on certiorari, docketed as G.R. No. 154113.
petition for injunction in the NLRC (Cebu City) on July 9, 1996 (Injunction Case No. V-0006-96). A temporary restraining order
(TRO) was issued on July 16, 1996. MCCHI presented 12 witnesses (hospital employees and patients), including a security guard
who was stabbed by an identified sympathizer while in the company of Navas group. MCCHIs petition was granted and a Meanwhile, the NLRCs Fourth Division (Cebu City) rendered its Decision[21] dated March 12, 2003 in RAB Case Nos. 07-02-0309-
permanent injunction was issued on September 18, 1996 enjoining the Nava group from committing illegal acts mentioned in 98 (NLRC Case No. V-001042-99) pertaining to complainants Erma Yballe, Evelyn Ong, Nelia Angel and Eleuteria Cortez as
Art. 264 of the Labor Code.[10] follows:

WHEREFORE, premises considered, the decision of the Executive Labor Arbiter dismissing the complaint
for unfair labor practice and illegal dismissal is AFFIRMED with MODIFICATIONS declaring all
complainants to have been validly dismissed. Necessarily, the award of separation pay and attorneys SO ORDERED.[31]
fees are hereby Deleted.

SO ORDERED.[22] Private respondents (MCCHI, et al.) moved to reconsider the above decision but the CA denied their motion on February 22,
2011.[32]

The NLRC likewise denied the motion for reconsideration filed by complainants Yballe, et al. in its Resolution dated April 13,
2004.[23] Both petitioners and private respondents in CA-G.R. SP No. 66540 appealed to this Court. Private respondent MCCHI in CA-G.R.
SP No. 84998, under its new name Visayas Community Medical Center (VCMC), filed a petition for certiorari in this Court.

On October 17, 2008, the CA rendered its Decision[24] in CA-G.R. SP No. 66540, the dispositive portion of which states:
In G.R. No. 187778, petitioners Nava, et al. prayed that the CA decision be set aside and a new judgment be entered by this
Court (1) declaring private respondents guilty of unfair labor practice and union busting; (2) directing private respondents to
WHEREFORE, premises considered, judgment is hereby rendered AFFIRMING the Decision of cease and desist from further committing unfair labor practices against the petitioners; (3) imposing upon MCCH the proposed
the National Labor Relations Commission (NLRC) Fourth Division dated March 14, 2001 in NLRC Case No. CBA or, in the alternative, directing the hospital and its officers to bargain with the local union; (4) declaring private
V-001042-99, WITH MODIFICATIONS to the effect that (1) the petitioners, except the union officers, shall respondents guilty of unlawfully suspending and illegally dismissing the individual petitioners-employees; (5) directing private
be awarded separation pay equivalent to one-half (1/2) month pay for every year of service, and (2) respondents to reinstate petitioners-employees to their former positions, or their equivalent, without loss of seniority rights
petitioner Cecilia Sabas shall be awarded overtime pay amounting to sixty-three (63) hours. with full backwages and benefits until reinstatement; and (6) ordering private respondents to pay the petitioners moral
damages, exemplary damages, legal interests, and attorneys fees.[33]
SO ORDERED.[25]

On the other hand, petitioner MCCHI in G.R. No. 187861 prayed for the modification of the CA decision by deleting the award
of separation pay and reinstating the March 14, 2001 decision of the NLRC.[34]
Petitioners filed a motion for reconsideration while private respondents filed a motion for partial reconsideration questioning
the award of separation pay. The former also invoked the decision of this Court in Bascon v. Court of Appeals,[26] while the
latter argued for the application of the ruling in decision rendered by the CA (Cebu City) in Miculob v. NLRC, et al. (CA-G.R. SP In G.R. No. 196156, MCCHI/VCMC prayed for the annulment of the November 7, 2008 Decision and February 22, 2011
No. 84538),[27] both involving similar complaints filed by dismissed employees of MCCHI. Resolution of the CA, for this Court to declare the dismissal of respondents Yballe, et al. as valid and legal and to reinstate the
March 12, 2003 Decision and April 13, 2004 Resolution of the NLRC.
By Resolution[28] dated April 17, 2009, the CA denied both motions:
G.R. No. 187861 was consolidated with G.R. Nos. 154113 and 187778 as they involve similar factual circumstances and
WHEREFORE, the petitioners Motion for Reconsideration and the private respondent[s] identical or related issues. G.R. No. 196156 was later also consolidated with the aforesaid cases.
Motion for Partial Reconsideration of the October 17, 2008 Decision are both DENIED for lack of merit.

The Motions for Substitution of Counsel and Compromise Agreements submitted by The issues are: (1) whether the CA erred in dismissing the petition for certiorari (CA-G.R. SP No. 66540) with respect to the
petitioners Bernardito Lawas, Avelina Bangalao, Dailenda Hinampas and Daylinda Tigo are hereby petitioners in G.R. No. 154113 for their failure to sign the certification against forum shopping; (2) whether MCCHI is guilty of
approved. Consequently, said petitioners are ordered dropped from the list of petitioners and the case is unfair labor practice; (3) whether petitioning employees were illegally dismissed; and (4) if their termination was illegal,
deemed dismissed as to them. whether petitioning employees are entitled to separation pay, backwages, damages and attorneys fees.

Dropping of petitioners who did not sign the certification


SO ORDERED.[29]
against forum shopping improper

Complainants Yballe, et al. also challenged before the CA the March 12, 2003 Decision and April 13, 2004 Resolution of the
NLRC in a petition for certiorari, docketed as CA-G.R. SP No. 84998 (Cebu City). By Decision[30] dated November 7, 2008, the CA The Court has laid down the rule in Altres v. Empleo[35] as culled from jurisprudential pronouncements, that the certification
granted their petition, as follows: against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be
dropped as parties to the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners
WHEREFORE, the challenged Decision of public respondent dated March 12, 2003 and its Resolution share a common interest and invoke a common cause of action or defense, the signature of only one of them in the
dated April 13, 2004 are hereby REVERSED AND SET ASIDE. Private certification against forum shopping substantially complies with the Rule.
respondent Metro Cebu Community Hospital is ordered to reinstate petitioners Erma Yballe, Eleuteria
Cortes, Nelia Angel and Evelyn Ong without loss of seniority rights and other privileges; to pay them their
In the case at bar, the signatures of 47 out of 88 petitioning employees in the certification against forum shopping constitute
full backwages inclusive of their allowances and other benefits computed from the time of their dismissal
substantial compliance with the rule. There is no question that they shared a common interest and invoked a common cause of
up to the time of their actual reinstatement.
action when they filed suit before the Labor Arbiter and NLRC questioning the validity of their termination and charging MCCHI
with unfair labor practice. Thus, when they appealed their case to the CA, they pursued the same as a collective body, raising
No pronouncement as to costs. only one argument in support of their cause of action, i.e., the illegal dismissal allegedly committed by MCCHI when union
members resorted to strike and mass actions due to MCCHIs refusal to bargain with officers of the local chapter. There is majority vote in a secret balloting in accordance with Art. 241 (d).[40] Nava and her group simply demanded that MCCHI directly
sufficient basis, therefore, for the 47 signatories to the petition, to speak for and in behalf of their co-petitioners and to file the negotiate with the local union which has not even registered as one.
Petition for Certiorari in the appellate court.[36] Clearly, the CA erred in dropping as parties-petitioners those who did not sign
the certification against forum shopping.
To prove majority support of the employees, NAMA-MCCH-NFL presented the CBA proposal allegedly signed by 153 union
members. However, the petition signed by said members showed that the signatories endorsed the proposed terms and
However, instead of remanding the case to the CA for it to resolve the petition with respect to the herein petitioners in G.R. conditions without stating that they were likewise voting for or designating the NAMA-MCCH-NFL as their exclusive bargaining
No. 154113, and as prayed for, the Court shall consider them parties-petitioners in CA-G.R. SP No. 66540,which case has representative. In any case, NAMA-MCCH-NFL at the time of submission of said proposals was not a duly registered labor
already been decided and now subject of appeal in G.R. No. 187778. organization, hence it cannot legally represent MCCHIs rank-and-file employees for purposes of collective bargaining. Hence,
even assuming that NAMA-MCCH-NFL had validly disaffiliated from its mother union, NFL, it still did not possess the legal
MCCHI not guilty of unfair labor practice personality to enter into CBA negotiations. A local union which is not independently registered cannot, upon disaffiliation from
the federation, exercise the rights and privileges granted by law to legitimate labor organizations; thus, it cannot file a petition
for certification election.[41] Besides, the NFL as the mother union has the right to investigate members of its local chapter
Art. 248 (g) of the Labor Code, as amended, makes it an unfair labor practice for an employer [t]o violate the duty to bargain under the federations Constitution and By-Laws, and if found guilty to expel such members.[42]MCCHI therefore cannot be
collectively as prescribed by the Code. The applicable provision in this case is Art. 253 which provides: faulted for deferring action on the CBA proposal submitted by NAMA-MCCH-NFL in view of the union leaderships conflict with
the national federation. We have held that the issue of disaffiliation is an intra-union dispute[43] which must be resolved in a
ART. 253. Duty to bargain collectively when there exists a collective bargaining different forum in an action at the instance of either or both the federation and the local union or a rival labor organization,
agreement. When there is a collective bargaining agreement, the duty to bargain collectively shall also not the employer.[44]
mean that neither party shall terminate nor modify such agreement during its lifetime. However, either
party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force Not being a legitimate labor organization nor the certified exclusive bargaining representative of MCCHIs rank-and-file
and effect the terms and conditions of the existing agreement during the 60-day period and/or until a employees, NAMA-MCCH-NFL cannot demand from MCCHI the right to bargain collectively in their behalf. [45] Hence, MCCHIs
new agreement is reached by the parties. refusal to bargain then with NAMA-MCCH-NFL cannot be considered an unfair labor practice to justify the staging of the
strike.[46]

Strike and picketing activities conducted by union officers


NAMA-MCCH-NFL charged MCCHI with refusal to bargain collectively when the latter refused to meet and convene for
and members were illegal
purposes of collective bargaining, or at least give a counter-proposal to the proposed CBA the union had submitted and which
was ratified by a majority of the union membership. MCCHI, on its part, deferred any negotiations until the local unions dispute
with the national union federation (NFL) is resolved considering that the latter is the exclusive bargaining agent which
represented the rank-and-file hospital employees in CBA negotiations since 1987. Art. 263 (b) of the Labor Code, as amended, provides:

We rule for MCCHI. ART. 263. Strikes, picketing and lockouts. x x x

(b) Workers shall have the right to engage in concerted activities for purposes of collective
Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL had not registered as a labor organization, having bargaining or for their mutual benefit and protection. The right of legitimate labor organizations to
submitted only its charter certificate as an affiliate or local chapter of NFL. [37] Not being a legitimate labor organization, NAMA- strike and picket and of employers to lockout, consistent with the national interest, shall continue to be
MCCH-NFL is not entitled to those rights granted to a legitimate labor organization under Art. 242, specifically: recognized and respected. However, no labor union may strike and no employer may declare a lockout
on grounds involving inter-union and intra-union disputes.
(a) To act as the representative of its members for the purpose of collective bargaining;
x x x x (Emphasis supplied.)
(b) To be certified as the exclusive representative of all the employees in an appropriate
collective bargaining unit for purposes of collective bargaining;
As borne by the records, NAMA-MCCH-NFL was not a duly registered or an independently registered union at the
xxxx time it filed the notice of strike on March 13, 1996 and when it conducted the strike vote on April 2, 1996. It could not then
legally represent the union members. Consequently, the mandatory notice of strike and the conduct of the strike vote report
were ineffective for having been filed and conducted by NAMA-MCCH-NFL which has no legal personality as a legitimate labor
Aside from the registration requirement, it is only the labor organization designated or selected by the majority of the organization, in violation of Art. 263 (c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing
employees in an appropriate collective bargaining unit which is the exclusive representative of the employees in such unit for the Labor Code.[47]
the purpose of collective bargaining, as provided in Art. 255.[38] NAMA-MCCH-NFL is not the labor organization certified or
designated by the majority of the rank-and-file hospital employees to represent them in the CBA negotiations but the NFL, as
Art. 263 of the Labor Code provides:
evidenced by CBAs concluded in 1987, 1991 and 1994. While it is true that a local union has the right to disaffiliate from the
national federation, NAMA-MCCH-NFL has not done so as there was no any effort on its part to comply with the legal
requisites for a valid disaffiliation during the freedom period[39] or the last 60 days of the last year of the CBA, through a ART. 263. Strikes, picketing and lockouts. (a) x x x
xxxx megaphones.[50] On the other hand, the affidavits[51] executed by several hospital employees and patients narrated in detail the
incidents of harassment, intimidation, violence and coercion, some of these witnesses have positively identified the
(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may perpetrators. The prolonged work stoppage and picketing activities of the striking employees severely disrupted hospital
file a notice of strike or the employer may file a notice of lockout with the Department at least 30 days operations that MCCHI suffered heavy financial losses.
before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days
and in the absence of a duly certified or recognized bargaining agent, the notice of strike may be filed
by any legitimate labor organization in behalf of its members. However, in case of dismissal from The findings of the Executive Labor Arbiter and NLRC, as sustained by the appellate court, clearly established that
employment of union officers duly elected in accordance with the union constitution and by-laws, which the striking union members created so much noise, disturbance and obstruction that the local government authorities
may constitute union busting, where the existence of the union is threatened, the 15-day cooling-off eventually ordered their removal for being a public nuisance. This was followed by an injunction from the NCMB enjoining the
period shall not apply and the union may take action immediately. (As amended by Executive Order No. union leaders from further blocking the free ingress to and egress from the hospital, and from committing threats, coercion
111, December 24, 1986.) and intimidation against non-striking employees and patients/vehicles desiring to enter for the purpose of seeking medical
treatment/confinement. By then, the illegal strike had lasted for almost five months.
(d) The notice must be in accordance with such implementing rules and regulations as the Consequences of illegal strike to union officers
Department of Labor and Employment may promulgate. and members

xxxx Art. 264 (a) of the Labor Code, as amended, provides for the consequences of an illegal strike to the participating workers:

(f) A decision to declare a strike must be approved by a majority of the total union x x x Any union officer who knowingly participates in illegal strike and any worker or union officer who
membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
for that purpose. A decision to declare a lockout must be approved by a majority of the board of employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute
directors of the corporation or association or of the partners in a partnership, obtained by secret ballot sufficient ground for termination of his employment, even if a replacement had been hired by the
in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on employer during such lawful strike.
substantially the same grounds considered when the strike or lockout vote was taken. The Department
may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret
balloting. In every case, the union or the employer shall furnish the Ministry the voting at least seven
days before the intended strike or lockout, subject to the cooling-off period herein provided. (As The above provision makes a distinction between workers and union officers who participate in an illegal strike: an ordinary
amended by Batas Pambansa Bilang 130, August 21, 1981 and further amended by Executive Order No. striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed
111, December 24, 1986.) (Emphasis supplied.) illegal acts during a strike. A union officer, on the other hand, may be terminated from work when he knowingly participates in
an illegal strike, and like other workers, when he commits an illegal act during a strike.[52]

Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code reads: Considering their persistence in holding picketing activities despite the declaration by the NCMB that their union
was not duly registered as a legitimate labor organization and the letter from NFLs legal counsel informing that their acts
RULE XXII constitute disloyalty to the national federation, and their filing of the notice of strike and conducting a strike vote
notwithstanding that their union has no legal personality to negotiate with MCCHI for collective bargaining purposes, there is
no question that NAMA-MCCH-NFL officers knowingly participated in the illegal strike. The CA therefore did not err in ruling
CONCILIATION, STRIKES AND LOCKOUTS
that the termination of union officers Perla Nava, Catalina Alsado, Albina Baez, Hannah Bongcaras, Ernesto Canen, Jesusa
Gerona and Guillerma Remocaldo was valid and justified.
xxxx

SEC. 6. Who may declare a strike or lockout. Any certified or duly recognized bargaining With respect to the dismissed union members, although MCCHI submitted photographs taken at the picket line, it did not
representative may declare a strike in cases of bargaining deadlocks and unfair labor practices.The individually name those striking employees and specify the illegal act committed by each of them. As to the affidavits executed
employer may declare a lockout in the same cases. In the absence of a certified or duly recognized by non-striking employees, they identified mostly union officers as the persons who blocked the hospital entrance, harassed
bargaining representative, any legitimate labor organization in the establishment may declare a strike hospital employees and patients whose vehicles were prevented from entering the premises. Only some of these witnesses
but only on grounds of unfair labor practice. (Emphasis supplied.) actually named a few union members who committed similar acts of harassment and coercion. Consequently, we find no error
committed by the CA in CA-G.R. SP No. 66540 when it modified the decision of the NLRC and ruled that the dismissal of union
members who merely participated in the illegal strike was illegal. On the other hand, in CA-G.R. SP No. 84998, the CA did not
err in ruling that the dismissal of Yballe, et al. was illegal; however, it also ordered their reinstatement with full back wages.
Furthermore, the strike was illegal due to the commission of the following prohibited activities [48]: (1) violence, coercion,
intimidation and harassment against non-participating employees; and (2) blocking of free ingress to and egress from the
Dismissed union members not entitled to
hospital, including preventing patients and their vehicles from entering the hospital and other employees from reporting to
backwages but should be awarded separation
work, the putting up of placards with a statement advising incoming patients to proceed to another hospital because MCCHI
pay in lieu of reinstatement
employees are on strike/protest. As shown by photographs[49] submitted by MCCHI, as well as the findings of the NCMB and
Cebu City Government, the hospital premises and sidewalk within its vicinity were full of placards, streamers and makeshift
structures that obstructed its use by the public who were likewise barraged by the noise coming from strikers using
Since there is no clear proof that union members actually participated in the commission of illegal acts during the strike, they The CA decision in CA-G.R. SP No. 66540 ordering the payment of separation pay in lieu of reinstatement without
are not deemed to have lost their employment status as a consequence of a declaration of illegality of the strike. back wages is thus in order, to conform to the policy of a fair days wage for a fair days labor. The amount of separation pay is
increased to one month pay for every year of service, consistent with jurisprudence. Accordingly, the decision in CA-G.R. SP No.
84998 is modified by deleting the award of back wages and granting separation pay in lieu of reinstatement.
Petitioners in G.R. Nos. 154113 and 187778 assail the CA in not ordering their reinstatement with back wages. Invoking stare
decisis, they cited the case of Bascon v. Court of Appeals[53] decided by this Court in 2004 and which involved two former
hospital employees who likewise sued MCCHI after the latter terminated their employment due to their participation in the
same illegal strike led by NAMA-MCCH-NFL. In said case we ruled that petitioners Cole and Bascon were illegally dismissed It is to be noted that as early as April 8, 1996, union members who took part in the concerted activities have been
because MCCHI failed to prove that they committed illegal acts during the strike. We thus ordered the reinstatement of warned by management that NAMA-MCCH-NFL is not a legitimate labor organization and its notice of strike was denied by the
petitioners Bascon and Cole without loss of seniority rights and other privileges and payment of their back wages inclusive of NCMB, and directed to desist from further participating in such illegal activities. Despite such warning, they continued with
allowances, and other benefits computed from the time they were dismissed up to the time of their actual their picketing activities and held more mass actions after management sent them termination notices. The prolonged work
reinstatement. Bascon was also the basis of the award of back wages in CA-G.R. SP No. 84998. stoppage seriously disrupted hospital operations, which could have eventually brought MCCHI into bankruptcy had the City
Government of Cebu not issued a demolition order and the NLRC Region 7 not formally enjoined the prohibited picketing
activities. Also, the illegal dismissal complaints subsequently filed by the terminated employees did not obliterate the fact that
Stare decisis et non quieta movere. Stand by the decision and disturb not what is settled. Under the doctrine of stare decisis, they did not suffer loss of earnings by reason of the employers unjustified acts, there being no unfair labor practice committed
once a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it by MCCHI. Hence, fairness and justice dictate that back wages be denied the said employees who participated in the illegal
to all future cases where the facts are substantially the same,[54] even though the parties may be different. It proceeds from the concerted activities to the great detriment of the employer.
first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus,
where the same questions relating to the same event have been put forward by parties similarly situated as in a previous case
litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue.[55] Separation pay is made an alternative relief in lieu of reinstatement in certain circumstances, like: (a) when
reinstatement can no longer be effected in view of the passage of a long period of time or because of the realities of the
situation; (b) reinstatement is inimical to the employers interest; (c) reinstatement is no longer feasible; (d) reinstatement does
The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular case override the not serve the best interests of the parties involved; (e) the employer is prejudiced by the workers continued employment; (f)
great benefits derived by our judicial system from the doctrine of stare decisis, the Court is justified in setting it aside.[56] For facts that make execution unjust or inequitable have supervened; or (g) strained relations between the employer and
the Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially with a employee.[61]
new membership, is not obliged to follow blindly a particular decision that it determines, after re-examination, to call for a
rectification.[57]
Considering that 15 years had lapsed from the onset of this labor dispute, and in view of strained relations that
ensued, in addition to the reality of replacements already hired by the hospital which had apparently recovered from its huge
Although the Bascon case involved the very same illegal strike in MCCHI which led to the termination of herein losses, and with many of the petitioners either employed elsewhere, already old and sickly, or otherwise incapacitated,
petitioners, its clearly erroneous application of the law insofar only as the award of back wages warrants setting aside the separation pay without back wages is the appropriate relief. We note that during the pendency of the cases in this Court, some
doctrine. Indeed, the doctrine of stare decisis notwithstanding, the Court has abandoned or overruled precedents whenever it of the petitioners have entered into compromise agreements with MCCHI, all of which were duly approved by this Court. Thus,
realized that the Court erred in the prior decisions. Afterall, more important than anything else is that this Court should be excluded from the herein monetary awards are the following petitioners whose compromise agreements have been approved
right.[58] by this Court and judgment having been entered therein: Gloria Arguilles, Romulo Alforque, Gerna Patigdas-Barte, Daylinda
Tigo Merlyn Nodado, Ramon Tagnipis, Bernabe Lumapguid, Romeo Empuerto, Marylen Labra, Milagros Castillo Bernadette
Pontillas-Tibay, Constancio Pagador, Nolan Alvin Panal, Edilberto Villa, Roy Malazarte, Felecianita Malazarte and Noel
In G & S Transport Corporation v. Infante,[59] the Court explained the rationale for its recent rulings deleting back Hortelano.
wages awarded to the dismissed workers if the strike was found to be illegal. Considering that they did not render work for the
employer during the strike, they are entitled only to reinstatement. Attorneys fees

With respect to backwages, the principle of a fair days wage for a fair days labor remains as
The dismissed employees having been compelled to litigate in order to seek redress and protect their rights, they are entitled
the basic factor in determining the award thereof. If there is no work performed by the employee there
to reasonable attorneys fees pursuant to Art. 2208 (2) of the Civil Code. In view of the attendant circumstances of this case, we
can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally
hold that attorneys fees in the amount of P50,000.00 is reasonable and justified. However, the respondents in G.R. No. 196156
locked out, suspended or dismissed or otherwise illegally prevented from working. While it was found
are not entitled to the same relief since they did not appeal from the CA decision which did not include the award of attorneys
that respondents expressed their intention to report back to work, the latter exception cannot apply in
fees.
this case. In Philippine Marine Officers Guild v. Compaia Maritima, as affirmed in Philippine Diamond
Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court stressed that for this exception to
apply, it is required that the strike be legal, a situation that does not obtain in the case at bar. WHEREFORE, the petition for review on certiorari in G.R. No. 187861 is DENIED while the petitions in G.R. Nos.
154113, 187778 and 196156 are PARTLY GRANTED. The Decision dated October 17, 2008 of the Court of Appeals in CA-G.R. SP
Under the circumstances, respondents reinstatement without backwages suffices for the No. 66540 is hereby AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay the petitioners in G.R. Nos. 154113 and
appropriate relief. If reinstatement is no longer possible, given the lapse of considerable time from the 187778, except the petitioners who are union officers, separation pay equivalent to one month pay for every year of service,
occurrence of the strike, the award of separation pay of one (1) month salary for each year of service, in and reasonable attorneys fees in the amount of P50,000.00. The Decision dated November 7, 2008 is
lieu of reinstatement, is in order.[60] (Emphasis supplied.) likewise AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay the private respondents in G.R. No. 196156
separation pay equivalent to one month pay for every year of service, and that the award of back wages is DELETED.
The case is hereby remanded to the Executive Labor Arbiter for the recomputation of separation pay due to each of
the petitioners union members in G.R. Nos. 154113, 187778 and 196156 except those who have executed compromise
agreements approved by this Court.

No pronouncement as to costs.

SO ORDERED.
G.R. No. L-41955 December 29, 1977 7. That steps were taken by petitioner-appellant to enforce the collective bargaining agreement as the
principal party to the same representing the workers covered by such agreement immediately after the
issuance of the certificate of registration.
ELISCO-ELIROL LABOR UNION (NAFLU) and its OFFICERS AND MEMBERS OF THE BOARD OF DIRECTORS, petitioners
vs.
CARMELO NORIEL, in his capacity as Director of the Bureau of Labor Relations, ELIZALDE STEEL CONSOLIDATED, INC. and 8. That on June 10, 1975, at a special meeting called for the purpose, the general membership of
NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), respondents. petitioner union decided that their mother union, the National Federation of Labor Unions, can no
longer safeguard the rights of its members insofar as working conditions and other terms of employment
are concerned and that the interest and welfare of petitioner can be served best if it will stay
Villaluz, Villaluz & Villaluz, Padilla Law Offices and Rizalindo V. Diaz for petitioners.
independent and disaffiliated from said mother union, hence, the general membership adopted a
resolution to disaffiliate from the National Federation of Labor Unions.
Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor Reynato S. Puno and Solicitor Ramon A. Barcelona respondent
Director.
9. That on June 11, 1975, petitioner, acting through its President Hilario Riza informed respondents of
said disaffiliation by means of a letter, and subsequently requested respondents to recognize petitioner
Rolando M. Olalia for respondent Union (NAFLU). as the sole and exclusive bargaining representative of the employees thereof.

10. That respondent without any justifiable reason refused and continues to refuse to recognize
petitioner as the sole and exclusive bargaining representative of its employees, and, now actually
TEEHANKEE, J.: dismissed the petitioner union's officers and board members.2 In this connection, a complaint for unfair
labor practice was filed by petitioners against respondents for the latter's refusal to bargain collectively
with petitioner, which complaint is presently docketed as Case No. LR-RO4-6-1662.
The Court sets aside respondent director's appealed resolution and rules in accordance with the prevailing law and settled
jurisprudence that the petitioner union consisting of the members-employees of respondent corporation is the principal party
to the collective bargaining agreement (rather than the respondent mother union which is merely its agent) and is therefore 11. That by virtue of said refusal of respondent company to recognize petitioner as the sole and exclusive
entitled to be recognized as the sole and exclusive bargaining representative entitled to administer and enforce the collective bargaining representative of the employees, petitioners filed a petition before the Bureau of Labor
bargaining agreement with the employer corporation. Relations, Department of Labor on July 2, 1975, with Case No. LR-861 against respondents Elizalde Steel
Consolidated, Inc. and the National Federation of Labor Unions be ordered to stop from presenting itself
as the collective bargaining agent and pursuant thereto, a writ of preliminary mandatory and prohibitory
The undisputed antecedent facts which gave rise to the present petition are stated in the petition as follows: injunction be issued.

2. That sometime on February 1974, petitioner-Elisco Elirol Labor Union (NAFLU), negotiated and 12. That on August 19, 1975. the Bureau of Labor Relations, through Med-Arbiter Reynaldo B. Carta,
executed a collective bargaining agreement with respondent-Elizalde Steel Consolidated, Inc.1 before whom the case was beard, issued an Order dismissing the petition for lack of merit.

3. That upon verification by individual petitioners at the Registration division, Bureau of Labor Relations, On appeal to respondent Director of the Bureau of Labor Relations, said respondent issued his
Department of Labor, the Elisco-Elirol Labor Union (NAFLU), the contracting party in said collective Resolution of October 30, 1975 affirming the dismissal of petitioner-union's petition as follows:
bargaining agreement, was not then registered and therefore not entitled to the benefits and privileges
embodied in said collective bargaining agreement; thus on March 3, 1975, the member of petitioner-
appellant union in a general membership meeting decided in a resolution to register their union to On February, 1974 the members of the petitioner union who were then yet affiliated with the National
protect and preserve the integrity and inviolability of the collective bargaining agreement between the Association of Free Labor Union negotiated and executed with the respondent company a collective
Elisco-Elirol Labor Union (NAFLU) and the Elizalde Steel Consolidated, Inc. bargaining agreement with expiry date in November, 1976.

4. That said resolution of the members of petitioner-appellant union was passed upon by the officers and On May 28, 1975, after the same members, by valid resolution of the Board of directors and approved by
members of the Board of Directors on May 20, 1975, at a special meeting called for the purpose, the general membership, have formed themselves into an i t organization and applied for registration as
resolution No. 6, s. 1975 was approved requesting the Acting Directors, Registration Division, Bureau of a union, a certificate of registration was issued by the Department of Labor. And on June 10, 1975 again
Labor Relations, to register the union Elisco-Elirol Labor Union (NAFLU). by a valid resolution the same members disaffiliated with the NAFLU.

5. That by virtue of resolution No. 6, Petitioner-appellant union applied for registration with the Bureau The issue for resolution is
of Labor Relations, hence on May 28, 1975, Certificate of Registration No. 8511-IP was issued by said
Office. Which of the two unions should be recognized as the sole and exclusive bargaining representative of the
employees and ultimately recognized to administer and supervise the enforcement of the collective
6. That with the issuance of the certificate of registration petitioner-appellant acquired a personality bargaining agreement.
separate and distinct from any other labor union.
Petitioner-union contends that it having the necessary interest and being the real party must be the sole allegiance in the majority of the employees at respondent company." As was stressed by the Court in Benguet Consolidated Inc.
union to be recognized and given authority to bargain with the company. vs. BCI Employees & W Union-PAFLU5

Setting aside jurisprudence and the collective bargaining agreement of the parties, the appellant is ... This principle, formulated by the NLRB as its initial compromise solution to the problem facing it when
correct. For to grant to the former mother union (NAFLU) the authority to administer and enforce their there occurs a shift in employees' union allegiance after the execution of a bargaining contract with their
collective bargaining agreement without presumably any members in the bargaining unit is quite absurd. employer, merely states that even during the effectivity of a collective bargaining agreement executed
But to transfer also the authority to the newly formed union although the members of the same were between employer and employees thru their agent, the employees can change said agent but the
the same members who composed then the local chapter of the mother union is also in violation of the contract continues to bind then up to its expiration date. They may bargain however for the shortening of
CBA particularly article IV which is the union security clause, wherein it is a condition for a continued said expiration date.
employment in the company to maintain membership in the Union. Theoretically therefore, when the
employees disaffiliated from the mother union and formed themselves into a new union, their status as
In formulating the "substitutionary" doctrine, the only consideration involved as the employees'
employees was also terminated. As such they could not therefore absolutely and legally claim that they
interestin the existing bargaining agreement. The agent's interest never entered the picture. In fact, the
still comprise the majority of the bargaining unit.
justification for said doctrine was:

Secondly, to vest, upon the new union the authority to bargain is in violation of the whole CBA, under
... that the majority of the employees, as an entity under the statute, is the true party in interest to the
the theory that when the mother union (NAFLU) entered and executed the same in its separate and
contract, holding rights through the agency of the union representative. Thus, any exclusive interest
distinct personality aside from the people composing the same. In fine, the CBA then was executed by
claimed by the agent is defeasible at the will of the principal.
and between the company and the (NAFLU) with the latter as an entity having its own capacity and
personality different from the members composing the same.
3. It need only be mentioned finally that the Secretary of Labor in his decision of April 23, 1976 and order of January 10, 1977
denying reconsideration in the sister unfair labor practice case and ordering respondent corporation to immediately lift the
Lastly, to preserve and avoid unstability and disorder in the labor movement as correctly ruled by the
suspension and reinstate the complainant officers and board members of petitioner union6 has likewise adhered to the
med-arbiter, the status quo should be preserved, there being no compelling reason to alter the same.3
foregoing basic principles and settled jurisprudence in contrast to respondent director (as well as therein respondent NLRC
which similarly adhered to the archaic and illogical view that the officers and board members of petitioner local union
Hence, the petition at bar. We find the petition to be clearly meritorious and reverse the appealed resolution. committed an "act of disloyalty" in disaffiliating from the mother union when practically all its members had so voted to
disaffiliate and the mother union [as mere agent] no longer had any local union or members to represent), ruling that
"(G)ranting arguendo that the disaffiliation from the NAFLU is a legal cause for expulsion and dismissal, it could not detract
1. Respondent director correctly perceived in his Resolution that "to grant to the former mother union (NAFLU) the authority
from the fact that only 13 individual complainants out of almost 700 members who disaffiliated, were singled out for expulsion
to administer and enforce their collective bargaining agreement without presumably any members in the bargaining unit is
and recommended for dismissal. The actuation of NAFLU conclusively constitute discrimination. Since the suspension of the
quite absurd" but fell unto the grave error of holding that "When the employees disaffiliated from the mother union and
complainants was effected at the instance of NAFLU, it should be held liable to the payment of back wages."
formed themselves into a new union, their status as employees was also terminated."

The Presidential Assistant for Legal Affairs Ronaldo B. Zamora has likewise dismissed as untenable in a similar case
His error was in not perceiving that the employees and members of the local union did not form a new union but merely
respondents' views that "such maintenance of membership" clause be distorted as "intended for the security of the union
registered the local union as was their right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of employees and members
rather than the security of tenure for the workers", ruling that "(W)hat is paramount, as it is expressly and explicitly emphasize
of the local union was the principal party to the agreement. NAFLU as the "mother union" in participation in the execution of
in an exacting language under the New Constitution, is the security of tenure of the workers, not the security of the union. To
the bargaining agreement with respondent company acted merely as agent of the local union, which remained the basic unit
impress, therefore, such "maintenance of membership" which is intended for the security of the union rather than the
of the association existing principally and freely to serve the common interest of all its members, including the freedom to
security of tenure of the workers as a bar to employees' changing their affiliation is not only to infringe on the constitutional
disaffiliated when the circumstances so warranted as in the present case.
right of freedom of association, but also to trample upon the constitutional right of workers to security of tenure and to render
meaningless whatever "adequate social services" the State may establish or maintain in the field of employment "to guarantee
2. Contrary to respondent director's misimpression, our jurisprudence fully supports 'petitioner's stand. In Liberty Cotton Mills the enjoyment by the people of a decent standard of living."7
Workers Union vs. Liberty Cotton Mills, Inc.4 , the Court expressly cited and affirmed the basic principle that "(T)he locals are
separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer
It is expected that with this decision, any suspension or lay-off of the complainants officers and board members or employees
and their employee-members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the
of petitioner union arising from the respondents' misconception of the clearly applicable principles and jurisprudence
association of the locals into the national union (as PAFLU) was in furtherance of the same end.These associations are
upholding the primacy of the employees and their freely chosen local union as the true party in interest to the collective
consensual entities capable of entering into such legal relations with their members. The essential purpose was the affirmation
bargaining agreement will be forthwith rectified and set aside.
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, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce ACCORDINGLY, the petition is granted and the appealed resolution is set aside and petitioner local union is declared to be the
the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence." sole and exclusive bargaining representative of the employees of respondent corporation entitled to administer and enforce
any subsisting collective bargaining agreement with said employer corporation. This decision shall be immediately executory
upon its promulgation.
Corollarily, the "substitutionary" doctrine likewise fully supports petitioner's stand. Petitioner union to whom the employees
owe their allegiance has from the beginning expressly avowed that it "does not intend to change and/or amend the provisions
of the present collective bargaining agreement but only to be given the chance to enforce the same since there is a shift of Makasiar, Muoz Palma, Fernandez and Guerrero, JJ., concur.
Martin, J., took no part.