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G.R. No. 80882 April 24, 1989 2.

Mindanao Miners Employees Union-Sandigan ng

Manggagawang Pilipino (MMEU-Sandigan) and
(SPFL), petitioner, 3. No union.
HONORABLE PURA FERRER CALLEJA, Director, Bureau of Labor On February 9, 1987, a pre-election conference was
Relations, Department of Labor and Employment, public conducted among the petitioner Union; private respondent
respondent. MINDANAO MINERS EMPLOYEE UNION SANDIGAN Union, MMEU-Sandigan; and APEX to settle details in the
NG MANGGAGAWANG PILIPINO (SANDIGAN), forced intervenor- conduct of the election such as the venue of the election and
private respondent. APEX MINING COMPANY, INC., employer-private the list of employees qualified to vote in the election.
During the pre-election conference, the parties agreed to
GUTIERREZ, JR., J.: delete from the list of workers prepared and submitted by
APEX numbering One Thousand Seven Hundred Sixteen
This petition for certiorari seeks to annul and set aside the Order issued by (1,716), the names of nineteen (1 9) managerial employees
public respondent Director Pura Ferrer Calleja of the Bureau of Labor and seventy-three probationary employees who were
Relations dated June 23, 1987 which certified the respondent union, statutorily disqualified from voting. Petitioner Union
Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino objected to the inclusion in said list of the following: (1)
(MMEU-Sandigan), as the sole and exclusive bargaining representative of employees occupying the positions of Supervisor I, II, and
the rank-and-file employees of respondent Apex Mining Company (Apex) III; (2) employees under confidential/special payrolls; and
after the said public respondent denied the motion of herein petitioner to (3) employees who were not paying Union dues. The
exclude one hundred ninety-seven (197) employees from voting in the petitioner Union contends that the aforementioned
certification election. The denial is based on the ground that they are rank- employees were disqualified from participating in the
and-file employees. certification election since the Supervisors were managerial
employees while the last two were disqualified by virtue of
As summarized by the Solicitor General in his Comment, the facts are as their non-membership in the Union and their exclusion from
follows: the benefits of the collective bargaining agreement.

On December 29, 1986, petitioner Southern Philippines In view of the lack of agreement among the parties on the list
Federation of Labor filed a petition for certification election of qualified voters, Med-Arbiter Macasa issued an Order on
among the rank-and-file employees of private respondent February 20, 1987, the dispositive portion of which reads:
Apex Mining Company, Incorporated with the Department
of Labor in Region XI, Davao City. "Wherefore, premises considered it is hereby
declared that the following groups of
On February 6, 1987, Med-Arbiter Conrado 0. Macasa, Sr. workers be not included in the list of
issued an Order calling for the holding of the certification employees qualified to vote in the consent
election on February 23, 1987 among the rank-and-file election on February 23, 1987, as follows:
employees of APEX with the following choices:
1 Nineteen (19) managerial employees;
l. Southern Philippines Federation of Labor (SPFL)

2 Seventy-three (73) probationary determine, once and for all, the winner in the
employees; and certification and/or consent election and
thereafter certify the sole and exclusive
3 Nineteen (19) Supervisors 1; collective bargaining representative of all
rank-and-file employees and workers of
All other workers except the foregoing will Apex Mining Company, Incorporated."
be allowed to vote."
xxx xxx xxx
On February 23, 1987, the day of the certification election,
petitioner Union filed a Motion for Reconsideration of On March 11, 1987, APEX filed a Manifestation and Motion
Macasa's Order dated February 20, 1987. The certification manifesting its interest in the speedy resolution of the case
election was nonetheless conducted, with the result as and primary concern for "the restoration of normalcy and the
follows: preservation of industrial peace in the already explosive
situation in the mining area."
l. Southern Philippines Federation of Labor............. 614
xxx xxx xxx
2. Mindanao Miners
Employees union On March 19, 1987, Med-Arbiter Macasa issued an Order,
(MMEU- the dispositive portion of which reads:
...................... 528 "Wherefore, the interest of industrial peace
considered, it is hereby directed that the
3. No Union......................................................................... 9 challenged ballots be opened and
inventoried on 26 March 1987 at 3:00 p.m.,
4. Challenged Ballots......................................................197 before the entire records of the case be
indorsed to the BLR for review."
5. Spoiled............................................................................25
xxx xxx xxx
CAST............................................................1,373 Petitioner Union appealed Macasa's Order dated March 19,
1987 to the Bureau of Labor Relations. On April 14, 1987,
On the basis of the foregoing results, respondent Union filed BLR Director Pura Ferrer-Calleja issued an Order, the
an Urgent Motion to Open the Challenged Ballots, with the dispositive portion of which reads:
prayer, to wit:
"WHEREFORE, the Appeal of petitioner
"Wherefore, premises considered, it is most Southern Philippines Federation of Labor
respectfully prayed of this Honorable office (SPFL) is hereby dismissed for lack of merit
that this instant motion be given due course and the Med- Arbiter's Order dated 19
and that an order be issued to open and March 1987 is affirmed with modification
count the challenged ballots in order to that the 197 ballots should be opened and

canvassed by Labor Regional Office XI, "WHEREFORE, the Motion for
Davao City. Let, therefore, the records of reconsideration of Petitioner SPFL is hereby
this case be immediately remanded to the denied for lack of merit. Meanwhile,
said office, for the immediate intervenor Mindanao Employees Union-
implementation of this Resolution." Sandigan Ng Manggagawang Pilipino
(MMEU- SANDIGAN) is hereby certified
Petitioner Union moved for a reconsideration of the as the sole and exclusive bargaining
resolution dated April 14, 1987. Meanwhile, on May 21, representative of the rank-and-file
1987, Med-Arbiter Macasa opened and canvassed the 197 employees of respondent Apex Mining
challenged ballots with the result as follows: Company, Inc. Accordingly, the
management of Apex Mining Company,
SPFL 12 votes Inc., is directed to negotiate with (MMEU-
SANDIGAN 178 votes SANDIGAN) for the conclusion of a
No Union 2 votes collective bargaining agreement (CBA)."
Spoiled 4 votes
Envelop with Hence, this petition.
no ballots 1 vote
The issue raised in this petition is whether or not the public respondent
__________ committed grave abuse of discretion in allowing the 197 employees to vote in
TOTAL 197 votes the certification election when, as alleged by the petitioner, they are
disqualified by express provision of law or under the existing collective
As a consequence of the opening and canvass of the bargaining agreement.
challenged ballots, the outcome of the certification election
became: It is maintained by the petitioner that under the Labor Code, managerial
employees are excluded from forming or joining a collective bargaining unit;
SPFL 626 votes and under the collective bargaining agreement executed between Apex and
SANDIGAN 706 votes respondent union, among those who are excluded from the bargaining unit
No Union 11 votes are: a) managerial employees as defined in paragraph K, Article 212 of the
Labor Code; b) those performing supervisory functions; and c) those holding
___________ confidential positions as determined by the company. Therefore, the
TOTAL 1,343 votes employees holding the positions of Supervisors II and III and those in the
confidential payrolls should be excluded from joining the bargaining unit and
Based on the aforementioned results, respondent Union filed from voting in the certification election. Likewise, those employees who are
a Manifestation with the BLR with prayer for the issuance of not paying union dues should be excluded from the same since the existing
Certification Order certifying it as the sole and exclusive CBA contains a Union shop provision.
bargaining representative of the rank-and-file employees of
APEX. On June 23, 1987, Director Calleja issued an Order, The contentions have no merit.
the dispositive portion of which reads:
Although we have upheld the validity of the CBA as the law among the
parties, (see Planters Products, Inc. v. NLRC, et al., G.R. No. 78524, January
20, 1989), its provisions cannot override what is expressly provided by law
that only managerial employees are ineligible to join, assist or form any labor are given ready policies to execute and standard practices to
organization (See Art. 247, Labor Code). Therefore, regardless of the observe, thus having little freedom of action (National
challenged employees' designations, whether they are employed as Waterworks and Sewerage Authority v. NWSA
Supervisors or in the confidential payrolls, if the nature of their job does not Consolidated, L-18938, 11 SCRA 766 [1964]).
fall under the definition of "managerial" as defined in the Labor Code, they
are eligible to be members of the bargaining unit and to vote in the The petitioner's motion for reconsideration before the public respondent
certification election. Their right to self-organization must be upheld in the outlined the job description of Supervisors. In the category of Supervisory II,
absence of an express provision of law to the contrary. It cannot be curtailed the "General Summary" provides:
by a collective bargaining agreement.
Hence, it is important to determine whether the positions of Supervisors II
and III are considered "managerial" under the law. Assists the Foreman in the effective dispatching/distribution
of manpower and equipment to carry out approved work. (p.
As defined in the Labor Code and as we have held in the case of Franklin 30, Rollo)
Baker Company of the Phils. v. Trajano, (1 57 SCRA 416, 421-423, [1988]):
while the first duty enumerated in the position of Supervisor III states:
A managerial employee is defined as one who is vested with
powers or prerogatives to lay down and execute management 1. Executes and coordinates work plans emanating from his
policies and/or to hire, transfer, suspend, lay-off, recall, supervisors. (p. 32, Rollo)
discharge, assign or discipline employees, or to effectively
recommend such managerial actions. (Reynolds Phil. Corp. Thus, it is clear from the above provisions that the functions of the
v. Eslava, 137 SCRA [1985], citing Section 212 (K), Labor questioned positions are not managerial in nature because they only execute
Code.) approved and established policies leaving little or no discretion at all whether
to implement the said policies or not. The respondent Director, therefore, did
The test of "supervisory" or "managerial status" depends on not commit grave abuse of discretion in dismissing the petitioner's appeal
whether a person possesses authority to act in the interest of from the Med-Arbiter's Order to open and count the challenged ballots in
his employer in the matter specified in Article 212 (k) of the denying the petitioner's motion for reconsideration and in certifying the
Labor Code and Section 1 (m) of its Implementing Rules and respondent Union as the sole and exclusive bargaining representative of the
whether such authority is not merely routinary or clerical in rank-and-file employees of respondent Apex .
nature, but requires the use of independent judgment. Thus,
where such recommendatory powers as in the case at bar, are As regards the employees in the confidential payroll, the petitioner has not
subject to evaluation, review and final action by the shown that the nature of their jobs is classified as managerial except for its
department heads and other higher executives of the allegation that they are considered by management as occupying managerial
company, the same, although present, are not effective and positions and highly confidential. Neither can payment or non-payment of
not an exercise of independent judgment as required by law union dues be the determining factor of whether the challenged employees
(National Warehousing Corp. v. CIR, 7 SCRA 602-603 should be excluded from the bargaining unit since the union shop provision
[1963]). in the CBA applies only to newly hired employees but not to members of the
bargaining unit who were not members of the union at the time of the signing
Furthermore, in line with the ruling of this Court, subject of the CBA. It is, therefore, not impossible for employees to be members of
employees are not managerial employees because as borne
by the records, they do not participate in policy making but
the bargaining unit even though they are non-union members or not paying G.R. No. 77231 May 31, 1989
union dues.
WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. (SAJELCO), petitioner,
Costs against the petitioner. vs.
SO ORDERED. ADLO, respondents.


This is a petition for certiorari under Rule 65 of the Rules of Court.

Petitioner San Jose City Electric Service Cooperative, Inc. (SAJELCO, for
brevity) seeks the reversal of the Order (pp. 38-40, Rollo) of Pura Ferrer-
Calleja, Director of Bureau of Labor Relations in BLR Case No. A-10-259-
86 which affirmed the Order of Med-Arbiter Antonio R. Cortez to conduct a
certification election among the rank-and-file employees of SAJELCO.

The antecedent facts of the instant case are as follows:

On July 29, 1986, private respondent Manggagawang Nagkakaisa ng

SAJELCO-Association of Democratic Labor Organization (MAGKAISA-
ADLO) filed a petition (pp. 16-18, Rollo) for direct certification election with
the Regional Office No. 111 of the Department of Labor and Employment in
San Fernando, Pampanga. The petition alleged that MAGKAISA-ADLO is a
legitimate labor organization duly registered with the Ministry of Labor and
Employment; that there are more or less fifty-four (54) rank and file
employees in SAJELCO; that almost 62% of the employees sought to be
represented have supported the filing of the petition; that there has been no
valid certification election held in SAJELCO during the twelve (12) month
period prior to the filing of the petition and that there is no other union in the
bargaining unit.

In its answer (pp. 19-21, Rollo), SAJELCO opposed the petition for direct
certification election contending, inter alia, that the employees who sought to
be represented by private respondent are members-consumers of the
Cooperative itself and at the same time composed the General Assembly
which, pursuant to the By-laws is also the final arbiter of any dispute arising
in the Cooperative. Thus:


5. That some, if not most, of the employees who sought to be including the right to self-organization (pp. 25, Rollo). This Order was
represented by the petitioner, are member-consumers, and as appealed by SAJELCO to the Bureau of Labor Relations.
such are members of the General or Special Assembly which
is the final arbiter on any dispute which a member and/or the In its appeal, (pp. 27-36, Rollo) SAJELCO reiterated its position that:
Board, or the Cooperative may have, and that such "some"of
said alleged supporters, in their capacity as member- . . . upon the principle that in electric cooperative — as in the
consumers, enjoy two personalities in that as employees case of respondent, there is a merger of the consumer-
and/or members of the General Assembly, and therefore members that composed of the assembly and that of the
cannot fairly and prudently represent such opposing rank-and-file members of the petitioners-into one person or
personalities that merge into one juridical or natural person, juridical status thus rendering the proposed collective
and these special and unique status or personalities of the bargaining agent ineffective and/or uncalled for —
supposed supporters cannot qualify to be represented by the considering that a grievance machinery for employees and/or
petitioner, without doing injustice, in equity and unfair status member-consumers of the cooperative-has been provided for
or advantage to those member-consumers who have not that by the By-laws as a built-in over-all arbiter involving
destiny or status of becoming employees; disputes affecting said cooperative;

6 No valid and lawful representation can be obtained by Respondent Director of the Bureau of Labor Relations dismissed the appeal
petitioner in behalf of the supposed supporters, who are also and sustained the ruling of the Med-Arbiter in an order dated January 5,
member-consumer, that are bound by the Article of 1987.
Incorporation, By-laws of the respondent Cooperative and
pertinent Decrees and laws, to support and defend the basic On February 19, 1987, SAJELCO filed the instant petition
policies of the Government on Electric Cooperatives; for certiorari praying that the order of respondent Director be set aside and
another one rendered denying the holding or conduct of a certification
7. There is no possible legal way by which to dismantle the election among the rank and file employees of SAJELCO.
personalities of some of the supporters of the petitioner, as
employees, from their status as consumer-members, who are, In a letter dated June 20, 1987, Atty. Ricardo Soto, Jr., counsel for private
under the By-laws, part and parcels of the General or Special respondent union, manifested that a direct certification election was
Assembly that finally decides any dispute, and no reasonable conducted in SAJELCO, there being no restraining order from this Court
or valid scale of justice could be invoked to divide a person enjoining the holding thereof Likewise, Atty. Soto was of the opinion that in
who, in conscience, is also the other fellow against whom a view of the direct certification election conducted, the petition brought before
remedy is sought for in allowing this to happen is tantamount this Court by SAJELCO has become moot and academic (p. 48, Rollo).
to slaughtering a man to his own ends; Attached to his letter is a copy of the minutes of the certification election
held on April 13, 1987 showing that of forty three (43) employees who
xxx voted, thirty (30) voted for respondent union and thirteen (13) voted for "no
On September 5, 1986, the Med-Arbiter who was assigned to the case issued
an Order (pp. 24-26, Rollo) granting the petition for direct certification In the resolution of this court (First Division) dated September 29, 1987,
election on the basis of the pleadings filed. The Order said that while some of respondents were required to comment on the petition. The Solicitor General
the members of petitioner union are members of the cooperative, it cannot be filed its comment dated October 30, 1987 wherein it took a stand contrary to
denied that they are also employees within the contemplation of the Labor that of respondent Director. To support its stand, the Solicitor General argued
Code and are therefore entitled to enjoy all the benefits of employees, firstly, that the union members who seek to be represented by the union are
the very members of the cooperative, thereby resulting in a fusion of two the ones who run and operate the business while the others
personalities. Thus, it will be inconsistent for the union members to bargain are its employees. As above stated, irrespective of the name
with themselves. Secondly, he said that article 243 of the Labor Code; of shares owned by its members they are entitled to cast one
requires that before one can form, join or assist a labor union, he must first be vote each in deciding upon the affair of the cooperative.
employed and to be an employee one must be under hire and must have no Their share capital earn limited interests, They enjoy special
involvement in the ownership of the firm. A labor union is formed for privileges as — exemption from income tax and sales taxes,
purposes of collective bargaining. The duty to bargain exists only between preferential right to supply their products to State agencies
employer and employees and not between an employer and his co-owners. and even exemption from minimum wage laws.
Thirdly, he also said that under the National Electrification Decree (P.D. No.
269, August 6, 1973) members of an electric cooperative such as petitioner, An employee therefore of such a cooperative who is a
besides contributing financially to its establishments and maintenance, member and co-owner thereof cannot invoke the right to
participate in its management. In the latter aspect, they possess the powers collective bargaining for certainly an owner cannot bargain
and prerogatives of managerial employees who are not eligible to join, assist with himself or his co-owners. In the opinion of August 14,
or form any labor organization (pp. 4-6 of Comment; pp 43-45, Rollo). 1981 of the Solicitor General, he corectly opined that
employees of cooperatives who are themselves members of
On November 25, 1987, We required Atty. Soto, Jr. to comment on the the cooperative have no right to form or join labor
comment of the Solicitor General (p. 47, Rollo). However, the notices sent to organizations for purposes of collective bargaining for being
him were returned and stamped "moved to an unknown address." But themselves co-owners of the cooperative.
respondent Director of the Bureau of Labor Relations filed a comment on the
aforesaid comment of the Solicitor General reiterating his stand that members However, in so far as it involves cooperatives with
of private respondent union fall under the general provision of Article 244 of employees who are not members or co-owners thereof,
the Code on who are qualified to form, join or assist in the formation of certainly such employees are entitled to exercise the rights of
unions as they are neither managerial employees nor persons belonging to all workers to organization, collective bargaining,
subversive organizations. Thus, on May 25, 1988, we gave due course to the negotiations and others as are enshrined in the Constitution
petition (p. 79, Rollo). and existing laws of the country.

The only issue presented for resolution in this petition is whether or not the In this petition, San Jose City Electric Service Cooperative, Inc. (SAJELCO)
employees-members of an electric cooperative can organize themselves for claims that its employees are also members of the cooperative. It cited
purposes of collective bargaining. Section 17(18) of its By-laws which declares that:

This Court had the occasion to rule on this issue in the consolidated cases The Board shall also create positions for subordinate
of Batangas I-Electric Cooperative Labor Union vs. Romeo Young, et al., employees and fix their duties and remunerations. Only
G.R. No. 62386, Bulacan II- Electric Cooperative, Inc., vs. Hon. Eliseo A. member-consumers or members of their immediate family
Penaflor, et al., G.R. No. 70880 and Albay Electric Cooperative vs. shall be employed by the cooperative (Emphasis supplied).
Crescencio B. Trajano et. al., G.R. No. 74560 (November 9, 1988), citing the
case of Cooperative Rural Bank of Davao City, Inc. vs. Pura Ferrer-Calleja, The above-cited provision, however, mentions two types of employees,
G.R. No. 77951, September 26,1988, where it was held that: namely: the members-consumers and the members of their immediate
families. As regards employees of SAJELCO who are members-consumers,
A cooperative, therefore, is by its nature different from an the rule is settled that they are not qualified to form, join or assist labor
ordinary business concern being run either, by persons, organizations for purposes of collective bargaining. The reason for
partnerships or corporations. Its owners and/or members are withholding from employees of a cooperative who are members-co-owners
the right to collective bargaining is clear: an owner cannot bargain with G.R. No. 85750 September 28, 1990
himself. However, employees who are not members-consumers may form,
join or assist labor organizations for purposes of collective bargaining INTERNATIONAL CATHOLIC IMMIGRATION
notwithstanding the fact that employees of SAJELCO who are not members- COMMISSION, petitioner
consumers were employed ONLY because they are members of the vs
immediate family of members-consumers. The fact remains that they are not HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE
themselves members-consumers, and as such, they are entitled to exercise the BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE
rights of all workers to organization, collective bargaining, negotiations and PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.
others as are enshrined in Section 8, Article III and Section 3, Article XIII of
the 1987 Constitution, Labor Code of the Philippines and other related laws G.R. No. 89331 September 28, 1990
(Cooperative Rural Bank of Davao City, Inc., supra, p. 10).
respondent Pura Ferrer-Calleja, Director of the Bureau of Labor Relations is AGRICULTURE, petitioner,
hereby MODIFIED to the effect that only the rank-and-file employees of vs
petitioner who are not its members-consumers are entitled to self- SECRETARY OF LABOR AND EMPLOYMENT AND
organization, collective bargaining, and negotiations, while other employees INTERNATIONAL RICE RESEARCH INSTITUTE, INC., respondents.
who are members-consumers thereof cannot enjoy such right. The direct
certification election conducted on April 13, 1987 is hereby set aside. The MELENCIO-HERRERA, J.:
Regional Office III of the Department of Labor and Employment in San
Fernando, Pampanga is hereby directed: (a) to determine the number of rank Consolidated on 11 December 1989, these two cases involve the validity of
and file employees of SAJELCO who are not themselves members- the claim of immunity by the International Catholic Migration Commission
consumers; (b) to resolve whether or not there is compliance with the (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the
requirements set forth in Article 257 of the Labor Code; and (c) in the application of Philippine labor laws.
affirmative, to immediately conduct a direct certification election among the
rank and file employees of SAJELCO who are not members-consumers.
I. Facts and Issues
A. G.R. No. 85750 — the International Catholic Migration
Commission (ICMC) Case.

As an aftermath of the Vietnam War, the plight of Vietnamese refugees

fleeing from South Vietnam's communist rule confronted the international

In response to this crisis, on 23 February 1981, an Agreement was forged

between the Philippine Government and the United Nations High
Commissioner for Refugees whereby an operating center for processing
Indo-Chinese refugees for eventual resettlement to other countries was to be
established in Bataan (Annex "A", Rollo, pp. 22-32).

ICMC was one of those accredited by the Philippine Government to operate Thus, on 24 November 1988, ICMC filed the present Petition for
the refugee processing center in Morong, Bataan. It was incorporated in New Certiorari with Preliminary Injunction assailing the BLR Order.
York, USA, at the request of the Holy See, as a non-profit agency involved in
international humanitarian and voluntary work. It is duly registered with the On 28 November 1988, the Court issued a Temporary Restraining Order
United Nations Economic and Social Council (ECOSOC) and enjoys enjoining the holding of the certification election.
Consultative Status, Category II. As an international organization rendering
voluntary and humanitarian services in the Philippines, its activities are On 10 January 1989, the DEFORAF, through its Legal Adviser, retired
parallel to those of the International Committee for Migration (ICM) and the Justice Jorge C. Coquia of the Court of Appeals, filed a Motion for
International Committee of the Red Cross (ICRC) [DOLE Records of BLR Intervention alleging that, as the highest executive department with the
Case No. A-2-62-87, ICMC v. Calleja, Vol. 1]. competence and authority to act on matters involving diplomatic immunity
and privileges, and tasked with the conduct of Philippine diplomatic and
On 14 July 1986, Trade Unions of the Philippines and Allied Services consular relations with foreign governments and UN organizations, it has a
(TUPAS) filed with the then Ministry of Labor and Employment a Petition legal interest in the outcome of this case.
for Certification Election among the rank and file members employed by
ICMC The latter opposed the petition on the ground that it is an international Over the opposition of the Solicitor General, the Court allowed DEFORAF
organization registered with the United Nations and, hence, enjoys intervention.
diplomatic immunity.
On 12 July 1989, the Second Division gave due course to the ICMC Petition
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and and required the submittal of memoranda by the parties, which has been
dismissed the petition for lack of jurisdiction. complied with.

On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor As initially stated, the issue is whether or not the grant of diplomatic
Relations (BLR), reversed the Med-Arbiter's Decision and ordered the privileges and immunites to ICMC extends to immunity from the application
immediate conduct of a certification election. At that time, ICMC's request of Philippine labor laws.
for recognition as a specialized agency was still pending with the Department
of Foreign Affairs (DEFORAF). ICMC sustains the affirmative of the proposition citing (1) its Memorandum
of Agreement with the Philippine Government giving it the status of a
Subsequently, however, on 15 July 1988, the Philippine Government, specialized agency, (infra); (2) the Convention on the Privileges and
through the DEFORAF, granted ICMC the status of a specialized agency Immunities of Specialized Agencies, adopted by the UN General Assembly
with corresponding diplomatic privileges and immunities, as evidenced by a on 21 November 1947 and concurred in by the Philippine Senate through
Memorandum of Agreement between the Government and ICMC (Annex Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification
"E", Petition, Rollo, pp. 41-43), infra. was signed by the President on 30 August 1949 and deposited with the UN
on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987
ICMC then sought the immediate dismissal of the TUPAS Petition for Constitution, which declares that the Philippines adopts the generally
Certification Election invoking the immunity expressly granted but the same accepted principles of international law as part of the law of the land.
was denied by respondent BLR Director who, again, ordered the immediate
conduct of a pre-election conference. ICMC's two Motions for Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and
Reconsideration were denied despite an opinion rendered by DEFORAF on seeks an affirmance of the DEFORAF determination that the BLR Order for
17 October 1988 that said BLR Order violated ICMC's diplomatic immunity. a certification election among the ICMC employees is violative of the
diplomatic immunity of said organization.

Respondent BLR Director, on the other hand, with whom the Solicitor On 20 April 1987, the Kapisanan filed a Petition for Direct Certification
General agrees, cites State policy and Philippine labor laws to justify its Election with Region IV, Regional Office of the Department of Labor and
assailed Order, particularly, Article II, Section 18 and Article III, Section 8 of Employment (DOLE).
the 1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as
amended, ibid. In addition, she contends that a certification election is not a IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it
litigation but a mere investigation of a non-adversary, fact-finding character. the status of an international organization and granting it immunity from all
It is not a suit against ICMC its property, funds or assets, but is the sole civil, criminal and administrative proceedings under Philippine laws.
concern of the workers themselves.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on
B. G.R. No. 89331 — (The International Rice Research Institute [IRRI] the basis of Pres. Decree No. 1620 and dismissed the Petition for Direct
Case). Certification.

Before a Decision could be rendered in the ICMC Case, the Third Division, On appeal, the BLR Director, who is the public respondent in the ICMC
on 11 December 1989, resolved to consolidate G.R. No. 89331 pending Case, set aside the Med-Arbiter's Order and authorized the calling of a
before it with G.R. No. 85750, the lower-numbered case pending with the certification election among the rank-and-file employees of IRRI. Said
Second Division, upon manifestation by the Solicitor General that both cases Director relied on Article 243 of the Labor Code, as amended, infra and
involve similar issues. Article XIII, Section 3 of the 1987 Constitution, 1 and held that "the
immunities and privileges granted to IRRI do not include exemption from
The facts disclose that on 9 December 1959, the Philippine Government and coverage of our Labor Laws." Reconsideration sought by IRRI was denied.
the Ford and Rockefeller Foundations signed a Memorandum of
Understanding establishing the International Rice Research Institute (IRRI) On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside
at Los Baños, Laguna. It was intended to be an autonomous, philanthropic, the BLR Director's Order, dismissed the Petition for Certification Election,
tax-free, non-profit, non-stock organization designed to carry out the and held that the grant of specialized agency status by the Philippine
principal objective of conducting "basic research on the rice plant, on all Government to the IRRI bars DOLE from assuming and exercising
phases of rice production, management, distribution and utilization with a jurisdiction over IRRI Said Resolution reads in part as follows:
view to attaining nutritive and economic advantage or benefit for the people
of Asia and other major rice-growing areas through improvement in quality Presidential Decree No. 1620 which grants to the IRRI the
and quantity of rice." status, prerogatives, privileges and immunities of an
international organization is clear and explicit. It provides in
Initially, IRRI was organized and registered with the Securities and categorical terms that:
Exchange Commission as a private corporation subject to all laws and
regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19 Art. 3 — The Institute shall enjoy immunity from any penal,
April 1979, IRRI was granted the status, prerogatives, privileges and civil and administrative proceedings, except insofar as
immunities of an international organization. immunity has been expressly waived by the Director-
General of the Institution or his authorized representative.
The Organized Labor Association in Line Industries and Agriculture
(OLALIA), is a legitimate labor organization with an existing local union, Verily, unless and until the Institute expressly waives its
the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in immunity, no summons, subpoena, orders, decisions or
respondent IRRI. proceedings ordered by any court or administrative or quasi-
judicial agency are enforceable as against the Institute. In the

case at bar there was no such waiver made by the Director- the Omnibus Rules Implementing the Labor Code, the Order of the BLR
General of the Institute. Indeed, the Institute, at the very first Director had become final and unappeable and that, therefore, the Secretary
opportunity already vehemently questioned the jurisdiction of Labor had no more jurisdiction over the said appeal.
of this Department by filing an ex-parte motion to dismiss
the case. On the other hand, in entertaining the appeal, the Secretary of Labor relied on
Section 25 of Rep. Act. No. 6715, which took effect on 21 March 1989,
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave providing for the direct filing of appeal from the Med-Arbiter to the Office of
abuse of discretion by respondent Secretary of Labor in upholding IRRI's the Secretary of Labor and Employment instead of to the Director of the
diplomatic immunity. Bureau of Labor Relations in cases involving certification election orders.

The Third Division, to which the case was originally assigned, required the III
respondents to comment on the petition. In a Manifestation filed on 4 August
1990, the Secretary of Labor declared that it was "not adopting as his Findings in Both Cases.
own" the decision of the BLR Director in the ICMC Case as well as the
Comment of the Solicitor General sustaining said Director. The last pleading There can be no question that diplomatic immunity has, in fact, been granted
was filed by IRRI on 14 August 1990. ICMC and IRRI.

Instead of a Comment, the Solicitor General filed a Manifestation and Article II of the Memorandum of Agreement between the Philippine
Motion praying that he be excused from filing a comment "it appearing that Government and ICMC provides that ICMC shall have a status "similar to
in the earlier case of International Catholic Migration Commission v. Hon. that of a specialized agency." Article III, Sections 4 and 5 of the Convention
Pura Calleja, G.R. No. 85750. the Office of the Solicitor General had on the Privileges and Immunities of Specialized Agencies, adopted by the
sustained the stand of Director Calleja on the very same issue now before it, UN General Assembly on 21 November 1947 and concurred in by the
which position has been superseded by respondent Secretary of Labor in Philippine Senate through Resolution No. 19 on 17 May 1949, explicitly
G.R. No. 89331," the present case. The Court acceded to the Solicitor provides:
General's prayer.
Art. III, Section 4. The specialized agencies, their property
The Court is now asked to rule upon whether or not the Secretary of Labor and assets, wherever located and by whomsoever held,
committed grave abuse of discretion in dismissing the Petition for shall enjoy immunity from every form of legal process except
Certification Election filed by Kapisanan. insofar as in any particular case they have expressly waived
their immunity. It is, however, understood that no waiver of
Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI immunity shall extend to any measure of execution.
the status, privileges, prerogatives and immunities of an international
organization, invoked by the Secretary of Labor, is unconstitutional in so far Sec. 5. — The premises of the specialized agencies shall be
as it deprives the Filipino workers of their fundamental and constitutional inviolable. The property and assets of the specialized
right to form trade unions for the purpose of collective bargaining as agencies, wherever located and by whomsoever held shall be
enshrined in the 1987 Constitution. immune from search, requisition, confiscation, expropriation
and any other form of interference, whether by executive,
A procedural issue is also raised. Kapisanan faults respondent Secretary of administrative, judicial or legislative action. (Emphasis
Labor for entertaining IRRI'S appeal from the Order of the Director of the supplied).
Bureau of Labor Relations directing the holding of a certification election.
Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its branch and will not embarrass the latter by assuming an
grant of immunity, thus: antagonistic jurisdiction. 3

Art. 3. Immunity from Legal Process. — The Institute shall A brief look into the nature of international organizations and specialized
enjoy immunity from any penal, civil and administrative agencies is in order. The term "international organization" is generally used
proceedings, except insofar as that immunity has been to describe an organization set up by agreement between two or more
expressly waived by the Director-General of the Institute or states. 4 Under contemporary international law, such organizations are
his authorized representatives. endowed with some degree of international legal personality 5 such that they
are capable of exercising specific rights, duties and powers. 6 They are
Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S organized mainly as a means for conducting general international business in
invocation of immunity when in a Memorandum, dated 17 October 1988, it which the member states have an interest. 7 The United Nations, for instance,
expressed the view that "the Order of the Director of the Bureau of Labor is an international organization dedicated to the propagation of world peace.
Relations dated 21 September 1988 for the conduct of Certification Election
within ICMC violates the diplomatic immunity of the organization." "Specialized agencies" are international organizations having functions in
Similarly, in respect of IRRI, the DEFORAF speaking through The Acting particular fields. The term appears in Articles 57 8 and 63 9 of the Charter of
Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987, the United Nations:
to the Secretary of Labor, maintained that "IRRI enjoys immunity from the
jurisdiction of DOLE in this particular instance." The Charter, while it invests the United Nations with the
general task of promoting progress and international
The foregoing opinions constitute a categorical recognition by the Executive cooperation in economic, social, health, cultural, educational
Branch of the Government that ICMC and IRRI enjoy immunities accorded and related matters, contemplates that these tasks will be
to international organizations, which determination has been held to be a mainly fulfilled not by organs of the United Nations itself
political question conclusive upon the Courts in order not to embarrass a but by autonomous international organizations established by
political department of Government. inter-governmental agreements outside the United Nations.
There are now many such international agencies having
It is a recognized principle of international law and under our functions in many different fields, e.g. in posts,
system of separation of powers that diplomatic immunity is telecommunications, railways, canals, rivers, sea transport,
essentially a political question and courts should refuse to civil aviation, meteorology, atomic energy, finance, trade,
look beyond a determination by the executive branch of the education and culture, health and refugees. Some are
government, and where the plea of diplomatic immunity is virtually world-wide in their membership, some are regional
recognized and affirmed by the executive branch of the or otherwise limited in their membership. The Charter
government as in the case at bar, it is then the duty of the provides that those agencies which have "wide international
courts to accept the claim of immunity upon appropriate responsibilities" are to be brought into relationship with the
suggestion by the principal law officer of the government . . . United Nations by agreements entered into between them
or other officer acting under his direction. Hence, in and the Economic and Social Council, are then to be known
adherence to the settled principle that courts may not so as "specialized agencies." 10
exercise their jurisdiction . . . as to embarrass the executive
arm of the government in conducting foreign relations, it is The rapid growth of international organizations under contemporary
accepted doctrine that in such cases the judicial department international law has paved the way for the development of the concept of
of (this) government follows the action of the political international immunities.

It is now usual for the constitutions of international 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987
organizations to contain provisions conferring certain Constitution; and implemented by Articles 243 and 246 of the Labor
immunities on the organizations themselves, representatives Code, 16 relied on by the BLR Director and by Kapisanan.
of their member states and persons acting on behalf of the
organizations. A series of conventions, agreements and For, ICMC employees are not without recourse whenever there are disputes
protocols defining the immunities of various international to be settled. Section 31 of the Convention on the Privileges and Immunities
organizations in relation to their members generally are now of the Specialized Agencies of the United Nations 17 provides that "each
widely in force; . . . 11 specialized agency shall make provision for appropriate modes of settlement
of: (a) disputes arising out of contracts or other disputes of private character
There are basically three propositions underlying the grant of international to which the specialized agency is a party." Moreover, pursuant to Article IV
immunities to international organizations. These principles, contained in the of the Memorandum of Agreement between ICMC the the Philippine
ILO Memorandum are stated thus: 1) international institutions should have a Government, whenever there is any abuse of privilege by ICMC, the
status which protects them against control or interference by any one Government is free to withdraw the privileges and immunities accorded.
government in the performance of functions for the effective discharge of Thus:
which they are responsible to democratically constituted international bodies
in which all the nations concerned are represented; 2) no country should Art. IV. Cooperation with Government Authorities. — 1.
derive any national financial advantage by levying fiscal charges on common The Commission shall cooperate at all times with the
international funds; and 3) the international organization should, as a appropriate authorities of the Government to ensure the
collectivity of States members, be accorded the facilities for the conduct of observance of Philippine laws, rules and regulations,
its official business customarily extended to each other by its individual facilitate the proper administration of justice and prevent the
member States. 12 The theory behind all three propositions is said to be occurrences of any abuse of the privileges and immunities
essentially institutional in character. "It is not concerned with the status, granted its officials and alien employees in Article III of this
dignity or privileges of individuals, but with the elements of functional Agreement to the Commission.
independence necessary to free international institutions from national
control and to enable them to discharge their responsibilities impartially on 2. In the event that the Government determines that there has
behalf of all their members. 13 The raison d'etre for these immunities is the been an abuse of the privileges and immunities granted
assurance of unimpeded performance of their functions by the agencies under this Agreement, consultations shall be held between
concerned. the Government and the Commission to determine whether
any such abuse has occurred and, if so, the Government shall
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly withdraw the privileges and immunities granted the
necessitated by their international character and respective purposes. The Commission and its officials.
objective is to avoid the danger of partiality and interference by the host
country in their internal workings. The exercise of jurisdiction by the Neither are the employees of IRRI without remedy in case of dispute with
Department of Labor in these instances would defeat the very purpose of management as, in fact, there had been organized a forum for better
immunity, which is to shield the affairs of international organizations, in management-employee relationship as evidenced by the formation of the
accordance with international practice, from political pressure or control by Council of IRRI Employees and Management (CIEM) wherein "both
the host country to the prejudice of member States of the organization, and to management and employees were and still are represented for purposes of
ensure the unhampered performance of their functions. maintaining mutual and beneficial cooperation between IRRI and its
employees." The existence of this Union factually and tellingly belies the
ICMC's and IRRI's immunity from local jurisdiction by no means deprives argument that Pres. Decree No. 1620, which grants to IRRI the status,
labor of its basic rights, which are guaranteed by Article II, Section
privileges and immunities of an international organization, deprives its election itself, was already in effect, specifically since 21 March 1989.
employees of the right to self-organization. Hence, no grave abuse of discretion may be imputed to respondent Secretary
of Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's
The immunity granted being "from every form of legal process except in so allegations. The pertinent portion of that law provides:
far as in any particular case they have expressly waived their immunity," it is
inaccurate to state that a certification election is beyond the scope of that Art. 259. — Any party to an election may appeal the order or
immunity for the reason that it is not a suit against ICMC. A certification results of the election as determined by the Med-
election cannot be viewed as an independent or isolated process. It could Arbiter directly to the Secretary of Labor and Employment
tugger off a series of events in the collective bargaining process together with on the ground that the rules and regulations or parts thereof
related incidents and/or concerted activities, which could inevitably involve established by the Secretary of Labor and Employment for
ICMC in the "legal process," which includes "any penal, civil and the conduct of the election have been violated. Such appeal
administrative proceedings." The eventuality of Court litigation is neither shall be decided within 15 calendar days (Emphasis
remote and from which international organizations are precisely shielded to supplied).
safeguard them from the disruption of their functions. Clauses on
jurisdictional immunity are said to be standard provisions in the constitutions En passant, the Court is gratified to note that the heretofore antagonistic
of international Organizations. "The immunity covers the organization positions assumed by two departments of the executive branch of
concerned, its property and its assets. It is equally applicable to government have been rectified and the resultant embarrassment to the
proceedings in personam and proceedings in rem." 18 Philippine Government in the eyes of the international community now,
hopefully, effaced.
We take note of a Manifestation, dated 28 September 1989, in the ICMC
Case (p. 161, Rollo), wherein TUPAS calls attention to the case WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is
entitled "International Catholic Migration Commission v. NLRC, et als., GRANTED, the Order of the Bureau of Labor Relations for certification
(G.R. No. 72222, 30 January 1989, 169 SCRA 606), and claims that, having election is SET ASIDE, and the Temporary Restraining Order earlier issued
taken cognizance of that dispute (on the issue of payment of salary for the is made PERMANENT.
unexpired portion of a six-month probationary employment), the Court is
now estopped from passing upon the question of DOLE jurisdiction petition In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse
over ICMC. of discretion having been committed by the Secretary of Labor and
Employment in dismissing the Petition for Certification Election.
We find no merit to said submission. Not only did the facts of said
controversy occur between 1983-1985, or before the grant to ICMC on 15 No pronouncement as to costs.
July 1988 of the status of a specialized agency with corresponding
immunities, but also because ICMC in that case did not invoke its immunity
and, therefore, may be deemed to have waived it, assuming that during that
period (1983-1985) it was tacitly recognized as enjoying such immunity.

Anent the procedural issue raised in the IRRI Case, suffice it to state that the
Decision of the BLR Director, dated 15 February 1989, had not become final
because of a Motion for Reconsideration filed by IRRI Said Motion was
acted upon only on 30 March 1989 when Rep. Act No. 6715, which provides
for direct appeals from the Orders of the Med-Arbiter to the Secretary of
Labor in certification election cases either from the order or the results of the
G.R. No. L-25246 September 12, 1974 Being a member of a religious sect that prohibits the affiliation of its
members with any labor organization, Appellee presented his resignation to
BENJAMIN VICTORIANO, plaintiff-appellee, appellant Union in 1962, and when no action was taken thereon, he reiterated
vs. his resignation on September 3, 1974. Thereupon, the Union wrote a formal
ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE letter to the Company asking the latter to separate Appellee from the service
FACTORY, INC., defendants, ELIZALDE ROPE WORKERS' in view of the fact that he was resigning from the Union as a member. The
UNION, defendant-appellant. management of the Company in turn notified Appellee and his counsel that
unless the Appellee could achieve a satisfactory arrangement with the Union,
ZALDIVAR, J.:p the Company would be constrained to dismiss him from the service. This
prompted Appellee to file an action for injunction, docketed as Civil Case
Appeal to this Court on purely questions of law from the decision of the No. 58894 in the Court of First Instance of Manila to enjoin the Company
Court of First Instance of Manila in its Civil Case No. 58894. and the Union from dismissing Appellee.1 In its answer, the Union invoked
the "union security clause" of the collective bargaining agreement; assailed
The undisputed facts that spawned the instant case follow: the constitutionality of Republic Act No. 3350; and contended that the Court
had no jurisdiction over the case, pursuant to Republic Act No. 875, Sections
24 and 9 (d) and (e).2 Upon the facts agreed upon by the parties during the
Benjamin Victoriano (hereinafter referred to as Appellee), a member of the
pre-trial conference, the Court a quo rendered its decision on August 26,
religious sect known as the "Iglesia ni Cristo", had been in the employ of the
1965, the dispositive portion of which reads:
Elizalde Rope Factory, Inc. (hereinafter referred to as Company) since 1958.
As such employee, he was a member of the Elizalde Rope Workers' Union
(hereinafter referred to as Union) which had with the Company a collective IN VIEW OF THE FOREGOING, judgment is rendered
bargaining agreement containing a closed shop provision which reads as enjoining the defendant Elizalde Rope Factory, Inc. from
follows: dismissing the plaintiff from his present employment and
sentencing the defendant Elizalde Rope Workers' Union to
pay the plaintiff P500 for attorney's fees and the costs of this
Membership in the Union shall be required as a condition of
employment for all permanent employees workers covered
by this Agreement.
From this decision, the Union appealed directly to this Court on purely
questions of law, assigning the following errors:
The collective bargaining agreement expired on March 3, 1964 but was
renewed the following day, March 4, 1964.
I. That the lower court erred when it did not rule that
Republic Act No. 3350 is unconstitutional.
Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its
amendment by Republic Act No. 3350, the employer was not precluded
"from making an agreement with a labor organization to require as a II. That the lower court erred when it sentenced appellant
herein to pay plaintiff the sum of P500 as attorney's fees and
condition of employment membership therein, if such labor organization is
the representative of the employees." On June 18, 1961, however, Republic the cost thereof.
Act No. 3350 was enacted, introducing an amendment to — paragraph (4)
subsection (a) of section 4 of Republic Act No. 875, as follows: ... "but such In support of the alleged unconstitutionality of Republic Act No. 3350, the
agreement shall not cover members of any religious sects which prohibit Union contented, firstly, that the Act infringes on the fundamental right to
affiliation of their members in any such labor organization". form lawful associations; that "the very phraseology of said Republic Act
3350, that membership in a labor organization is banned to all those
belonging to such religious sect prohibiting affiliation with any labor
organization"4 , "prohibits all the members of a given religious sect from Sixthly, the Union contended that Republic Act No. 3350 violates the
joining any labor union if such sect prohibits affiliations of their members constitutional provision regarding the promotion of social justice. 11
thereto"5 ; and, consequently, deprives said members of their constitutional
right to form or join lawful associations or organizations guaranteed by the Appellant Union, furthermore, asserted that a "closed shop provision" in a
Bill of Rights, and thus becomes obnoxious to Article III, Section 1 (6) of the collective bargaining agreement cannot be considered violative of religious
1935 Constitution. 6 freedom, as to call for the amendment introduced by Republic Act No.
3350; 12and that unless Republic Act No. 3350 is declared unconstitutional,
Secondly, the Union contended that Republic Act No. 3350 is trade unionism in this country would be wiped out as employers would prefer
unconstitutional for impairing the obligation of contracts in that, while the to hire or employ members of the Iglesia ni Cristo in order to do away with
Union is obliged to comply with its collective bargaining agreement labor organizations. 13
containing a "closed shop provision," the Act relieves the employer from its
reciprocal obligation of cooperating in the maintenance of union membership Appellee, assailing appellant's arguments, contended that Republic Act No.
as a condition of employment; and that said Act, furthermore, impairs the 3350 does not violate the right to form lawful associations, for the right to
Union's rights as it deprives the union of dues from members who, under the join associations includes the right not to join or to resign from a labor
Act, are relieved from the obligation to continue as such members.7 organization, if one's conscience does not allow his membership therein, and
the Act has given substance to such right by prohibiting the compulsion of
Thirdly, the Union contended that Republic Act No. 3350 discriminatorily workers to join labor organizations; 14 that said Act does not impair the
favors those religious sects which ban their members from joining labor obligation of contracts for said law formed part of, and was incorporated into,
unions, in violation of Article Ill, Section 1 (7) of the 1935 Constitution; and the terms of the closed shop agreement; 15 that the Act does not violate the
while said Act unduly protects certain religious sects, it leaves no rights or establishment of religion clause or separation of Church and State, for
protection to labor organizations.8 Congress, in enacting said law, merely accommodated the religious needs of
those workers whose religion prohibits its members from joining labor
Fourthly, Republic Act No. 3350, asserted the Union, violates the unions, and balanced the collective rights of organized labor with the
constitutional provision that "no religious test shall be required for the constitutional right of an individual to freely exercise his chosen religion;
exercise of a civil right," in that the laborer's exercise of his civil right to join that the constitutional right to the free exercise of one's religion has primacy
associations for purposes not contrary to law has to be determined under the and preference over union security measures which are merely contractual 16;
Act by his affiliation with a religious sect; that conversely, if a worker has to that said Act does not violate the constitutional provision of equal protection,
sever his religious connection with a sect that prohibits membership in a for the classification of workers under the Act depending on their religious
labor organization in order to be able to join a labor organization, said Act tenets is based on substantial distinction, is germane to the purpose of the
would violate religious freedom.9 law, and applies to all the members of a given class; 17 that said Act, finally,
does not violate the social justice policy of the Constitution, for said Act was
Fifthly, the Union contended that Republic Act No. 3350, violates the "equal enacted precisely to equalize employment opportunities for all citizens in the
protection of laws" clause of the Constitution, it being a discriminately midst of the diversities of their religious beliefs." 18
legislation, inasmuch as by exempting from the operation of closed shop
agreement the members of the "Iglesia ni Cristo", it has granted said I. Before We proceed to the discussion of the first assigned error, it is
members undue advantages over their fellow workers, for while the Act necessary to premise that there are some thoroughly established principles
exempts them from union obligation and liability, it nevertheless entitles which must be followed in all cases where questions of constitutionality as
them at the same time to the enjoyment of all concessions, benefits and other obtains in the instant case are involved. All presumptions are indulged in
emoluments that the union might secure from the employer. 10 favor of constitutionality; one who attacks a statute, alleging
unconstitutionality must prove its invalidity beyond a reasonable doubt, that
a law may work hardship does not render it unconstitutional; that if any
reasonable basis may be conceived which supports the statute, it will be duty to join associations. The law does not enjoin an employee to sign up
upheld, and the challenger must negate all possible bases; that the courts are with any association.
not concerned with the wisdom, justice, policy, or expediency of a statute;
and that a liberal interpretation of the constitution in favor of the The right to refrain from joining labor organizations recognized by Section 3
constitutionality of legislation should be adopted. 19 of the Industrial Peace Act is, however, limited. The legal protection granted
to such right to refrain from joining is withdrawn by operation of law, where
1. Appellant Union's contention that Republic Act No. 3350 prohibits and a labor union and an employer have agreed on a closed shop, by virtue of
bans the members of such religious sects that forbid affiliation of their which the employer may employ only member of the collective bargaining
members with labor unions from joining labor unions appears nowhere in the union, and the employees must continue to be members of the union for the
wording of Republic Act No. 3350; neither can the same be deduced by duration of the contract in order to keep their jobs. Thus Section 4 (a) (4) of
necessary implication therefrom. It is not surprising, therefore, that appellant, the Industrial Peace Act, before its amendment by Republic Act No. 3350,
having thus misread the Act, committed the error of contending that said Act provides that although it would be an unfair labor practice for an employer
is obnoxious to the constitutional provision on freedom of association. "to discriminate in regard to hire or tenure of employment or any term or
condition of employment to encourage or discourage membership in any
Both the Constitution and Republic Act No. 875 recognize freedom of labor organization" the employer is, however, not precluded "from making an
association. Section 1 (6) of Article III of the Constitution of 1935, as well as agreement with a labor organization to require as a condition of employment
Section 7 of Article IV of the Constitution of 1973, provide that the right to membership therein, if such labor organization is the representative of the
form associations or societies for purposes not contrary to law shall not be employees". By virtue, therefore, of a closed shop agreement, before the
abridged. Section 3 of Republic Act No. 875 provides that employees shall enactment of Republic Act No. 3350, if any person, regardless of his
have the right to self-organization and to form, join of assist labor religious beliefs, wishes to be employed or to keep his employment, he must
organizations of their own choosing for the purpose of collective bargaining become a member of the collective bargaining union. Hence, the right of said
and to engage in concerted activities for the purpose of collective bargaining employee not to join the labor union is curtailed and withdrawn.
and other mutual aid or protection. What the Constitution and the Industrial
Peace Act recognize and guarantee is the "right" to form or join associations. To that all-embracing coverage of the closed shop arrangement, Republic Act
Notwithstanding the different theories propounded by the different schools of No. 3350 introduced an exception, when it added to Section 4 (a) (4) of the
jurisprudence regarding the nature and contents of a "right", it can be safely Industrial Peace Act the following proviso: "but such agreement shall not
said that whatever theory one subscribes to, a right comprehends at least two cover members of any religious sects which prohibit affiliation of their
broad notions, namely: first, liberty or freedom, i.e., the absence of legal members in any such labor organization". Republic Act No. 3350 merely
restraint, whereby an employee may act for himself without being prevented excludes ipso jure from the application and coverage of the closed shop
by law; and second, power, whereby an employee may, as he pleases, join or agreement the employees belonging to any religious sects which prohibit
refrain from Joining an association. It is, therefore, the employee who should affiliation of their members with any labor organization. What the exception
decide for himself whether he should join or not an association; and should provides, therefore, is that members of said religious sects cannot be
he choose to join, he himself makes up his mind as to which association he compelled or coerced to join labor unions even when said unions have closed
would join; and even after he has joined, he still retains the liberty and the shop agreements with the employers; that in spite of any closed shop
power to leave and cancel his membership with said organization at any agreement, members of said religious sects cannot be refused employment or
time. 20 It is clear, therefore, that the right to join a union includes the right to dismissed from their jobs on the sole ground that they are not members of the
abstain from joining any union. 21 Inasmuch as what both the Constitution collective bargaining union. It is clear, therefore, that the assailed Act, far
and the Industrial Peace Act have recognized, and guaranteed to the from infringing the constitutional provision on freedom of association,
employee, is the "right" to join associations of his choice, it would be absurd upholds and reinforces it. It does not prohibit the members of said religious
to say that the law also imposes, in the same breath, upon the employee the sects from affiliating with labor unions. It still leaves to said members the
liberty and the power to affiliate, or not to affiliate, with labor unions. If,
notwithstanding their religious beliefs, the members of said religious sects to safeguard the vital interests of its people. Legislation appropriate to
prefer to sign up with the labor union, they can do so. If in deference and safeguarding said interests may modify or abrogate contracts already in
fealty to their religious faith, they refuse to sign up, they can do so; the law effect. 25 For not only are existing laws read into contracts in order to fix the
does not coerce them to join; neither does the law prohibit them from joining; obligations as between the parties, but the reservation of essential attributes
and neither may the employer or labor union compel them to join. Republic of sovereign power is also read into contracts as a postulate of the legal
Act No. 3350, therefore, does not violate the constitutional provision on order. All contracts made with reference to any matter that is subject to
freedom of association. regulation under the police power must be understood as made in reference to
the possible exercise of that power. 26 Otherwise, important and valuable
2. Appellant Union also contends that the Act is unconstitutional for reforms may be precluded by the simple device of entering into contracts for
impairing the obligation of its contract, specifically, the "union security the purpose of doing that which otherwise may be prohibited. The policy of
clause" embodied in its Collective Bargaining Agreement with the Company, protecting contracts against impairment presupposes the maintenance of a
by virtue of which "membership in the union was required as a condition for government by virtue of which contractual relations are worthwhile a
employment for all permanent employees workers". This agreement was government which retains adequate authority to secure the peace and good
already in existence at the time Republic Act No. 3350 was enacted on June order of society. The contract clause of the Constitution must, therefore, be
18, 1961, and it cannot, therefore, be deemed to have been incorporated into not only in harmony with, but also in subordination to, in appropriate
the agreement. But by reason of this amendment, Appellee, as well as others instances, the reserved power of the state to safeguard the vital interests of
similarly situated, could no longer be dismissed from his job even if he the people. It follows that not all legislations, which have the effect of
should cease to be a member, or disaffiliate from the Union, and the impairing a contract, are obnoxious to the constitutional prohibition as to
Company could continue employing him notwithstanding his disaffiliation impairment, and a statute passed in the legitimate exercise of police power,
from the Union. The Act, therefore, introduced a change into the express although it incidentally destroys existing contract rights, must be upheld by
terms of the union security clause; the Company was partly absolved by law the courts. This has special application to contracts regulating relations
from the contractual obligation it had with the Union of employing only between capital and labor which are not merely contractual, and said labor
Union members in permanent positions, It cannot be denied, therefore, that contracts, for being impressed with public interest, must yield to the common
there was indeed an impairment of said union security clause. good. 27

According to Black, any statute which introduces a change into the express In several occasions this Court declared that the prohibition against impairing
terms of the contract, or its legal construction, or its validity, or its discharge, the obligations of contracts has no application to statutes relating to public
or the remedy for its enforcement, impairs the contract. The extent of the subjects within the domain of the general legislative powers of the state
change is not material. It is not a question of degree or manner or cause, but involving public welfare. 28 Thus, this Court also held that the Blue Sunday
of encroaching in any respect on its obligation or dispensing with any part of Law was not an infringement of the obligation of a contract that required the
its force. There is an impairment of the contract if either party is absolved by employer to furnish work on Sundays to his employees, the law having been
law from its performance. 22 Impairment has also been predicated on laws enacted to secure the well-being and happiness of the laboring class, and
which, without destroying contracts, derogate from substantial contractual being, furthermore, a legitimate exercise of the police power. 29
rights. 23
In order to determine whether legislation unconstitutionally impairs contract
It should not be overlooked, however, that the prohibition to impair the obligations, no unchanging yardstick, applicable at all times and under all
obligation of contracts is not absolute and unqualified. The prohibition is circumstances, by which the validity of each statute may be measured or
general, affording a broad outline and requiring construction to fill in the determined, has been fashioned, but every case must be determined upon its
details. The prohibition is not to be read with literal exactness like a own circumstances. Legislation impairing the obligation of contracts can be
mathematical formula, for it prohibits unreasonable impairment only. 24 In sustained when it is enacted for the promotion of the general good of the
spite of the constitutional prohibition, the State continues to possess authority people, and when the means adopted to secure that end are reasonable. Both
the end sought and the means adopted must be legitimate, i.e., within the It cannot be denied, furthermore, that the means adopted by the Act to
scope of the reserved power of the state construed in harmony with the achieve that purpose — exempting the members of said religious sects from
constitutional limitation of that power. 30 coverage of union security agreements — is reasonable.

What then was the purpose sought to be achieved by Republic Act No. 3350? It may not be amiss to point out here that the free exercise of religious
Its purpose was to insure freedom of belief and religion, and to promote the profession or belief is superior to contract rights. In case of conflict, the latter
general welfare by preventing discrimination against those members of must, therefore, yield to the former. The Supreme Court of the United States
religious sects which prohibit their members from joining labor unions, has also declared on several occasions that the rights in the First Amendment,
confirming thereby their natural, statutory and constitutional right to work, which include freedom of religion, enjoy a preferred position in the
the fruits of which work are usually the only means whereby they can constitutional system. 33 Religious freedom, although not unlimited, is a
maintain their own life and the life of their dependents. It cannot be gainsaid fundamental personal right and liberty, 34 and has a preferred position in the
that said purpose is legitimate. hierarchy of values. Contractual rights, therefore, must yield to freedom of
religion. It is only where unavoidably necessary to prevent an immediate and
The questioned Act also provides protection to members of said religious grave danger to the security and welfare of the community that infringement
sects against two aggregates of group strength from which the individual of religious freedom may be justified, and only to the smallest extent
needs protection. The individual employee, at various times in his working necessary to avoid the danger.
life, is confronted by two aggregates of power — collective labor, directed by
a union, and collective capital, directed by management. The union, an 3. In further support of its contention that Republic Act No. 3350 is
institution developed to organize labor into a collective force and thus protect unconstitutional, appellant Union averred that said Act discriminates in favor
the individual employee from the power of collective capital, is, of members of said religious sects in violation of Section 1 (7) of Article Ill
paradoxically, both the champion of employee rights, and a new source of of the 1935 Constitution, and which is now Section 8 of Article IV of the
their frustration. Moreover, when the Union interacts with management, it 1973 Constitution, which provides:
produces yet a third aggregate of group strength from which the individual
also needs protection — the collective bargaining relationship. 31 No law shall be made respecting an establishment of
religion, or prohibiting the free exercise thereof, and the free
The aforementioned purpose of the amendatory law is clearly seen in the exercise and enjoyment of religious profession and worship,
Explanatory Note to House Bill No. 5859, which later became Republic Act without discrimination and preference, shall forever be
No. 3350, as follows: allowed. No religious test shall be required for the exercise
of civil or political rights.
It would be unthinkable indeed to refuse employing a person
who, on account of his religious beliefs and convictions, The constitutional provision into only prohibits legislation for the support of
cannot accept membership in a labor organization although any religious tenets or the modes of worship of any sect, thus forestalling
he possesses all the qualifications for the job. This is compulsion by law of the acceptance of any creed or the practice of any form
tantamount to punishing such person for believing in a of worship, 35 but also assures the free exercise of one's chosen form of
doctrine he has a right under the law to believe in. The law religion within limits of utmost amplitude. It has been said that the religion
would not allow discrimination to flourish to the detriment clauses of the Constitution are all designed to protect the broadest possible
of those whose religion discards membership in any labor liberty of conscience, to allow each man to believe as his conscience directs,
organization. Likewise, the law would not commend the to profess his beliefs, and to live as he believes he ought to live, consistent
deprivation of their right to work and pursue a modest means with the liberty of others and with the common good. 36 Any legislation
of livelihood, without in any manner violating their religious whose effect or purpose is to impede the observance of one or all religions,
faith and/or belief. 32 or to discriminate invidiously between the religions, is invalid, even though
the burden may be characterized as being only indirect. 37 But if the stage those who are members of religious sects that prohibit their members from
regulates conduct by enacting, within its power, a general law which has for joining labor unions, the benefit upon the religious sects is merely incidental
its purpose and effect to advance the state's secular goals, the statute is valid and indirect. The "establishment clause" (of religion) does not ban regulation
despite its indirect burden on religious observance, unless the state can on conduct whose reason or effect merely happens to coincide or harmonize
accomplish its purpose without imposing such burden. 38 with the tenets of some or all religions. 43 The free exercise clause of the
Constitution has been interpreted to require that religious exercise be
In Aglipay v. Ruiz 39 , this Court had occasion to state that the government preferentially aided. 44
should not be precluded from pursuing valid objectives secular in character
even if the incidental result would be favorable to a religion or sect. It has We believe that in enacting Republic Act No. 3350, Congress acted
likewise been held that the statute, in order to withstand the strictures of consistently with the spirit of the constitutional provision. It acted merely to
constitutional prohibition, must have a secular legislative purpose and a relieve the exercise of religion, by certain persons, of a burden that is
primary effect that neither advances nor inhibits religion. 40 Assessed by imposed by union security agreements. It was Congress itself that imposed
these criteria, Republic Act No. 3350 cannot be said to violate the that burden when it enacted the Industrial Peace Act (Republic Act 875), and,
constitutional inhibition of the "no-establishment" (of religion) clause of the certainly, Congress, if it so deems advisable, could take away the same
Constitution. burden. It is certain that not every conscience can be accommodated by all
the laws of the land; but when general laws conflict with scrupples of
The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not conscience, exemptions ought to be granted unless some "compelling state
spiritual or religious or holy and eternal. It was intended to serve the secular interest" intervenes. 45 In the instant case, We see no such compelling state
purpose of advancing the constitutional right to the free exercise of religion, interest to withhold exemption.
by averting that certain persons be refused work, or be dismissed from work,
or be dispossessed of their right to work and of being impeded to pursue a Appellant bewails that while Republic Act No. 3350 protects members of
modest means of livelihood, by reason of union security agreements. To help certain religious sects, it leaves no right to, and is silent as to the protection
its citizens to find gainful employment whereby they can make a living to of, labor organizations. The purpose of Republic Act No. 3350 was not to
support themselves and their families is a valid objective of the state. In fact, grant rights to labor unions. The rights of labor unions are amply provided
the state is enjoined, in the 1935 Constitution, to afford protection to labor, for in Republic Act No. 875 and the new Labor Code. As to the lamented
and regulate the relations between labor and capital and industry. 41 More so silence of the Act regarding the rights and protection of labor unions, suffice
now in the 1973 Constitution where it is mandated that "the State shall afford it to say, first, that the validity of a statute is determined by its provisions, not
protection to labor, promote full employment and equality in employment, by its silence 46 ; and, second, the fact that the law may work hardship does
ensure equal work opportunities regardless of sex, race or creed and regulate not render it unconstitutional. 47
the relation between workers and employers. 42
It would not be amiss to state, regarding this matter, that to compel persons to
The primary effects of the exemption from closed shop agreements in favor join and remain members of a union to keep their jobs in violation of their
of members of religious sects that prohibit their members from affiliating religious scrupples, would hurt, rather than help, labor unions, Congress has
with a labor organization, is the protection of said employees against the seen it fit to exempt religious objectors lest their resistance spread to other
aggregate force of the collective bargaining agreement, and relieving certain workers, for religious objections have contagious potentialities more than
citizens of a burden on their religious beliefs; and by eliminating to a certain political and philosophic objections.
extent economic insecurity due to unemployment, which is a serious menace
to the health, morals, and welfare of the people of the State, the Act also Furthermore, let it be noted that coerced unity and loyalty even to the
promotes the well-being of society. It is our view that the exemption from the country, and a fortiori to a labor — union assuming that such unity and
effects of closed shop agreement does not directly advance, or diminish, the loyalty can be attained through coercion — is not a goal that is
interests of any particular religion. Although the exemption may benefit
constitutionally obtainable at the expense of religious liberty. 48 A desirable treated in law as though they were the same. The equal protection clause does
end cannot be promoted by prohibited means. not forbid discrimination as to things that are different. 51 It does not prohibit
legislation which is limited either in the object to which it is directed or by
4. Appellants' fourth contention, that Republic Act No. 3350 violates the the territory within which it is to operate.
constitutional prohibition against requiring a religious test for the exercise of
a civil right or a political right, is not well taken. The Act does not require as The equal protection of the laws clause of the Constitution allows
a qualification, or condition, for joining any lawful association membership classification. Classification in law, as in the other departments of knowledge
in any particular religion or in any religious sect; neither does the Act require or practice, is the grouping of things in speculation or practice because they
affiliation with a religious sect that prohibits its members from joining a agree with one another in certain particulars. A law is not invalid because of
labor union as a condition or qualification for withdrawing from a labor simple inequality. 52 The very idea of classification is that of inequality, so
union. Joining or withdrawing from a labor union requires a positive act. that it goes without saying that the mere fact of inequality in no manner
Republic Act No. 3350 only exempts members with such religious affiliation determines the matter of constitutionality. 53 All that is required of a valid
from the coverage of closed shop agreements. So, under this Act, a religious classification is that it be reasonable, which means that the classification
objector is not required to do a positive act — to exercise the right to join or should be based on substantial distinctions which make for real differences;
to resign from the union. He is exempted ipso jure without need of any that it must be germane to the purpose of the law; that it must not be limited
positive act on his part. A conscientious religious objector need not perform a to existing conditions only; and that it must apply equally to each member of
positive act or exercise the right of resigning from the labor union — he is the class. 54 This Court has held that the standard is satisfied if the
exempted from the coverage of any closed shop agreement that a labor union classification or distinction is based on a reasonable foundation or rational
may have entered into. How then can there be a religious test required for the basis and is not palpably arbitrary. 55
exercise of a right when no right need be exercised?
In the exercise of its power to make classifications for the purpose of
We have said that it was within the police power of the State to enact enacting laws over matters within its jurisdiction, the state is recognized as
Republic Act No. 3350, and that its purpose was legal and in consonance enjoying a wide range of discretion. 56 It is not necessary that the
with the Constitution. It is never an illegal evasion of a constitutional classification be based on scientific or marked differences of things or in
provision or prohibition to accomplish a desired result, which is lawful in their relation. 57 Neither is it necessary that the classification be made with
itself, by discovering or following a legal way to do it. 49 mathematical nicety. 58 Hence legislative classification may in many cases
properly rest on narrow distinctions, 59 for the equal protection guaranty does
5. Appellant avers as its fifth ground that Republic Act No. 3350 is a not preclude the legislature from recognizing degrees of evil or harm, and
discriminatory legislation, inasmuch as it grants to the members of certain legislation is addressed to evils as they may appear.
religious sects undue advantages over other workers, thus violating Section 1
of Article III of the 1935 Constitution which forbids the denial to any person We believe that Republic Act No. 3350 satisfies the aforementioned
of the equal protection of the laws. 50 requirements. The Act classifies employees and workers, as to the effect and
coverage of union shop security agreements, into those who by reason of
The guaranty of equal protection of the laws is not a guaranty of equality in their religious beliefs and convictions cannot sign up with a labor union, and
the application of the laws upon all citizens of the state. It is not, therefore, a those whose religion does not prohibit membership in labor unions. Tile
requirement, in order to avoid the constitutional prohibition against classification rests on real or substantial, not merely imaginary or whimsical,
inequality, that every man, woman and child should be affected alike by a distinctions. There is such real distinction in the beliefs, feelings and
statute. Equality of operation of statutes does not mean indiscriminate sentiments of employees. Employees do not believe in the same religious
operation on persons merely as such, but on persons according to the faith and different religions differ in their dogmas and cannons. Religious
circumstances surrounding them. It guarantees equality, not identity of rights. beliefs, manifestations and practices, though they are found in all places, and
The Constitution does not require that things which are different in fact be in all times, take so many varied forms as to be almost beyond imagination.
There are many views that comprise the broad spectrum of religious beliefs affiliating with labor unions, their exemption from the coverage of said
among the people. There are diverse manners in which beliefs, equally agreements continues.
paramount in the lives of their possessors, may be articulated. Today the
country is far more heterogenous in religion than before, differences in Finally, the Act applies equally to all members of said religious sects; this is
religion do exist, and these differences are important and should not be evident from its provision. The fact that the law grants a privilege to
ignored. members of said religious sects cannot by itself render the Act
unconstitutional, for as We have adverted to, the Act only restores to them
Even from the phychological point of view, the classification is based on real their freedom of association which closed shop agreements have taken away,
and important differences. Religious beliefs are not mere beliefs, mere ideas and puts them in the same plane as the other workers who are not prohibited
existing only in the mind, for they carry with them practical consequences by their religion from joining labor unions. The circumstance, that the other
and are the motives of certain rules. of human conduct and the justification of employees, because they are differently situated, are not granted the same
certain acts. 60 Religious sentiment makes a man view things and events in privilege, does not render the law unconstitutional, for every classification
their relation to his God. It gives to human life its distinctive character, its allowed by the Constitution by its nature involves inequality.
tone, its happiness or unhappiness its enjoyment or irksomeness. Usually, a
strong and passionate desire is involved in a religious belief. To certain The mere fact that the legislative classification may result in actual inequality
persons, no single factor of their experience is more important to them than is not violative of the right to equal protection, for every classification of
their religion, or their not having any religion. Because of differences in persons or things for regulation by law produces inequality in some degree,
religious belief and sentiments, a very poor person may consider himself but the law is not thereby rendered invalid. A classification otherwise
better than the rich, and the man who even lacks the necessities of life may reasonable does not offend the constitution simply because in practice it
be more cheerful than the one who has all possible luxuries. Due to their results in some inequality. 61 Anent this matter, it has been said that whenever
religious beliefs people, like the martyrs, became resigned to the inevitable it is apparent from the scope of the law that its object is for the benefit of the
and accepted cheerfully even the most painful and excruciating pains. public and the means by which the benefit is to be obtained are of public
Because of differences in religious beliefs, the world has witnessed turmoil, character, the law will be upheld even though incidental advantage may
civil strife, persecution, hatred, bloodshed and war, generated to a large occur to individuals beyond those enjoyed by the general public. 62
extent by members of sects who were intolerant of other religious beliefs.
The classification, introduced by Republic Act No. 3350, therefore, rests on 6. Appellant's further contention that Republic Act No. 3350 violates the
substantial distinctions. constitutional provision on social justice is also baseless. Social justice is
intended to promote the welfare of all the people. 63 Republic Act No. 3350
The classification introduced by said Act is also germane to its purpose. The promotes that welfare insofar as it looks after the welfare of those who,
purpose of the law is precisely to avoid those who cannot, because of their because of their religious belief, cannot join labor unions; the Act prevents
religious belief, join labor unions, from being deprived of their right to work their being deprived of work and of the means of livelihood. In determining
and from being dismissed from their work because of union shop security whether any particular measure is for public advantage, it is not necessary
agreements. that the entire state be directly benefited — it is sufficient that a portion of
the state be benefited thereby.
Republic Act No. 3350, furthermore, is not limited in its application to
conditions existing at the time of its enactment. The law does not provide that Social justice also means the adoption by the Government of measures
it is to be effective for a certain period of time only. It is intended to apply for calculated to insure economic stability of all component elements of society,
all times as long as the conditions to which the law is applicable exist. As through the maintenance of a proper economic and social equilibrium in the
long as there are closed shop agreements between an employer and a labor inter-relations of the members of the community. 64 Republic Act No. 3350
union, and there are employees who are prohibited by their religion from insures economic stability to the members of a religious sect, like the Iglesia
ni Cristo, who are also component elements of society, for it insures security
in their employment, notwithstanding their failure to join a labor union P500 for attorney's fees directly contravenes Section 24 of Republic Act No.
having a closed shop agreement with the employer. The Act also advances 875, for the instant action involves an industrial dispute wherein the Union
the proper economic and social equilibrium between labor unions and was a party, and said Union merely acted in the exercise of its rights under
employees who cannot join labor unions, for it exempts the latter from the the union shop provision of its existing collective bargaining contract with
compelling necessity of joining labor unions that have closed shop the Company; that said order also contravenes Article 2208 of the Civil
agreements and equalizes, in so far as opportunity to work is concerned, Code; that, furthermore, Appellee was never actually dismissed by the
those whose religion prohibits membership in labor unions with those whose defendant Company and did not therefore suffer any damage at all . 72
religion does not prohibit said membership. Social justice does not imply
social equality, because social inequality will always exist as long as social In refuting appellant Union's arguments, Appellee claimed that in the instant
relations depend on personal or subjective proclivities. Social justice does not case there was really no industrial dispute involved in the attempt to compel
require legal equality because legal equality, being a relative term, is Appellee to maintain its membership in the union under pain of dismissal,
necessarily premised on differentiations based on personal or natural and that the Union, by its act, inflicted intentional harm on Appellee; that
conditions. 65 Social justice guarantees equality of opportunity 66 , and this is since Appellee was compelled to institute an action to protect his right to
precisely what Republic Act No. 3350 proposes to accomplish — it gives work, appellant could legally be ordered to pay attorney's fees under Articles
laborers, irrespective of their religious scrupples, equal opportunity for work. 1704 and 2208 of the Civil Code. 73

7. As its last ground, appellant contends that the amendment introduced by The second paragraph of Section 24 of Republic Act No. 875 which is relied
Republic Act No. 3350 is not called for — in other words, the Act is not upon by appellant provides that:
proper, necessary or desirable. Anent this matter, it has been held that a
statute which is not necessary is not, for that reason, unconstitutional; that in No suit, action or other proceedings shall be maintainable in
determining the constitutional validity of legislation, the courts are any court against a labor organization or any officer or
unconcerned with issues as to the necessity for the enactment of the member thereof for any act done by or on behalf of such
legislation in question. 67 Courts do inquire into the wisdom of organization in furtherance of an industrial dispute to which
laws. 68 Moreover, legislatures, being chosen by the people, are presumed to it is a party, on the ground only that such act induces some
understand and correctly appreciate the needs of the people, and it may other person to break a contract of employment or that it is in
change the laws accordingly. 69 The fear is entertained by appellant that restraint of trade or interferes with the trade, business or
unless the Act is declared unconstitutional, employers will prefer employing employment of some other person or with the right of some
members of religious sects that prohibit their members from joining labor other person to dispose of his capital or labor. (Emphasis
unions, and thus be a fatal blow to unionism. We do not agree. The threat to supplied)
unionism will depend on the number of employees who are members of the
religious sects that control the demands of the labor market. But there is That there was a labor dispute in the instant case cannot be disputed for
really no occasion now to go further and anticipate problems We cannot appellant sought the discharge of respondent by virtue of the closed shop
judge with the material now before Us. At any rate, the validity of a statute is agreement and under Section 2 (j) of Republic Act No. 875 a question
to be determined from its general purpose and its efficacy to accomplish the involving tenure of employment is included in the term "labor
end desired, not from its effects on a particular case. 70 The essential basis for dispute". 74 The discharge or the act of seeking it is the labor dispute itself. It
the exercise of power, and not a mere incidental result arising from its being the labor dispute itself, that very same act of the Union in asking the
exertion, is the criterion by which the validity of a statute is to be employer to dismiss Appellee cannot be "an act done ... in furtherance of an
measured. 71 industrial dispute". The mere fact that appellant is a labor union does not
necessarily mean that all its acts are in furtherance of an industrial
II. We now pass on the second assignment of error, in support of which the dispute. 75 Appellant Union, therefore, cannot invoke in its favor Section 24
Union argued that the decision of the trial court ordering the Union to pay of Republic Act No. 875. This case is not intertwined with any unfair labor
practice case existing at the time when Appellee filed his complaint before G.R. Nos. 43633-34 September 14, 1990
the lower court.
Neither does Article 2208 of the Civil Code, invoked by the Union, serve as FELINO BULANDUS, petitioners,
its shield. The article provides that attorney's fees and expenses of litigation vs.
may be awarded "when the defendant's act or omission has compelled the THE COURT OF APPEALS and THE PEOPLE OF THE
plaintiff ... to incur expenses to protect his interest"; and "in any other case PHILIPPINES, respondents.
where the court deems it just and equitable that attorney's fees and expenses
of litigation should be recovered". In the instant case, it cannot be gainsaid NARVASA, J.:
that appellant Union's act in demanding Appellee's dismissal caused Appellee
to incur expenses to prevent his being dismissed from his job. Costs Under the Industrial Peace Act, 1 government-owned or controlled
according to Section 1, Rule 142, of the Rules of Court, shall be allowed as a corporations had the duty to bargain collectively and were otherwise subject
matter of course to the prevailing party. to the obligations and duties of employers in the private sector.2 The Act also
prohibited supervisors to become, or continue to be, members of labor
WHEREFORE, the instant appeal is dismissed, and the decision, dated organizations composed of rank-and-file employees, 3 and prescribed
August 26, 1965, of the Court of First Instance of Manila, in its Civil Case criminal sanctions for breach of the prohibition. 4
No. 58894, appealed from is affirmed, with costs against appellant Union. It
is so ordered. It was under the regime of said Industrial Peace Act that the Government
Service Insurance System (GSIS, for short) became bound by a collective
bargaining agreement executed between it and the labor organization
representing the majority of its employees, the GSIS Employees Association.
The agreement contained a "maintenance-of-membership" clause, 5 i.e., that
all employees who, at the time of the execution of said agreement, were
members of the union or became members thereafter, were obliged to
maintain their union membership in good standing for the duration of the
agreement as a condition for their continued employment in the GSIS.

There appears to be no dispute that at that time, the petitioners occupied

supervisory positions in the GSIS. Pablo Arizala and Sergio Maribao were,
respectively, the Chief of the Accounting Division, and the Chief of the
Billing Section of said Division, in the Central Visayas Regional Office of
the GSIS. Leonardo Joven and Felino Bulandus were, respectively, the
Assistant Chief of the Accounting Division (sometimes Acting Chief in the
absence of the Chief) and the Assistant Chief of the Field Service and Non-
Life Insurance Division (and Acting Division Chief in the absence of the
Chief), of the same Central Visayas Regional Office of the GSIS. Demands
were made on all four of them to resign from the GSIS Employees
Association, in view of their supervisory positions. They refused to do so.
Consequently, two (2) criminal cases for violation of the Industrial Peace Act
were lodged against them in the City Court of Cebu: one involving Arizala
and Maribao 6 and the other, Joven and Bulandus. 7
Both criminal actions resulted in the conviction of the accused in separate 2. Article 292 of the Labor Code repealed such parts and provisions of the
decisions. 8 They were each sentenced "to pay a fine of P 500.00 or to suffer Industrial Peace Act as were "not adopted as part" of said Code "either
subsidiary imprisonment in case of insolvency." They appealed to the Court directly or by reference." The Code did not adopt the provision of the
of Appeals.9 Arizala's and Maribao's appeal was docketed as CA-G.R. No. Industrial Peace Act conferring on employees of government-owned or
14724-CR; that of Joven and Bulandus, as CA-G.R. No. 14856-CR. controlled corporations the right of self-organization and collective
bargaining; in fact it made known that the "terms and conditions of
The appeals were consolidated on motion of the appellants, and eventuated in employment of all government employees, including employees of
a judgment promulgated on January 29, 1976 affirming the convictions of all government-owned and controlled corporations," would thenceforth no
four appellants. The appellants moved for reconsideration. They argued that longer be fixed by collective bargaining but "be governed by the Civil
when the so called "1973 Constitution" took effect on January 17, 1973 Service Law, rules and regulations." 10
pursuant to Proclamation No. 1104, the case of Arizala and Maribao was still
pending in the Court of Appeals and that of Joven and Bulandus, pending 3. The specific penalty for violation of the prohibition on supervisors being
decision in the City Court of Cebu; that since the provisions of that members in a labor organization of employees under their supervision has
constitution and of the Labor Code subsequently promulgated (eff., disappeared.
November 1, 1974), repealing the Industrial Peace Act-placed employees of
all categories in government-owned or controlled corporations without 4. The Code also modified the concept of unfair labor practice, decreeing that
distinction within the Civil Service, and provided that the terms and thenceforth, "it shall be considered merely as an administrative offense rather
conditions of their employment were to be "governed by the Civil Service than a criminal offense (and that) (u)nfair labor practice complaints shall x x
Law, rules and regulations" and hence, no longer subject of collective be processed like any ordinary labor disputes."11
bargaining, the appellants ceased to fall within the coverage of the Industrial
Peace Act and should thus no longer continue to be prosecuted and exposed On the other hand, in justification of the Appellate Tribunal's affirmance of
to punishment for a violation thereof. They pointed out further that the the petitioners' convictions of violations of the Industrial Peace Act, the
criminal sanction in the Industrial Peace Act no longer appeared in the Labor People-
Code. The Appellate Court denied their plea for reconsideration.
1) advert to the fact that said Labor Code also states that "all actions or
Hence, the present petition for review on certiorari. claims accruing prior to ... (its) effectivity ... shall be determined in
accordance with the laws in force at the time of their accrual;" and
The crucial issue obviously is whether or not the petitioners' criminal liability
for a violation of the Industrial Peace Act may be deemed to have been 2) argue that the legislature cannot generally intervene and vacate the
obliterated in virtue of subsequent legislation and the provisions of the 1973 judgment of the courts, either directly or indirectly, by the repeal of the
and 1987 Constitutions. statute under which said judgment has been rendered.

The petitioners' contention that their liability had been erased is made to rest The legal principles governing the rights of self-organization and collective
upon the following premises: bargaining of rank-and-file employees in the government- particularly as
regards supervisory, and high level or managerial employees have undergone
1. Section 1, Article XII-B of the 1973 Constitution does indeed provide that alterations through the years.
the "Civil Service embraces every branch, agency, subdivision and
instrumentality of the government, including government-owned or Republic Act No. 875
controlled corporations, .. administered by an independent Civil Service

As already intimated, under RA 875 (the Industry Peace Act), 12 persons promulgated) ... by a fine not exceeding one thousand pesos or by
"employed in proprietary functions of the Government, including but not imprisonment not exceeding six months or both such fine and imprisonment
limited to governmental corporations," had the right of self-organization and in the discretion of the court." 17
collective bargaining, including the right to engage in concerted activities to
attain their objectives, e.g. strikes. The 1973 Constitution

But those "employed in governmental functions" were forbidden to "strike for The 1973 Constitution laid down the broad principle that "(t)he State shall
the purpose of securing changes or modification in their terms and conditions assure the rights of workers to self-organization, collective bargaining,
of employment" or join labor organizations which imposed on their members security of tenure, and just and humane conditions of work," 18 and directed
the duty to strike. The reason obviously was that the terms and conditions of that the "National Assembly shall provide for the standardization of
their employment were "governed by law" and hence could not be fixed, compensation of government officials and employees, including those in
altered or otherwise modified by collective bargaining. government-owned or controlled corporations, taking into account the nature
of the responsibilities pertaining to, and the qualifications required for, the
Supervisory employees were forbidden to join labor organizations composed positions concerned." 19
of employees under them, but could form their own unions. Considered
"supervisors' were those 'having authority in the interest of an employer to PD 442, The Labor Code
hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or
discipline other employees, or responsibly to direct them, and to adjust their The Labor Code of the Philippines, Presidential Decree No. 442, enacted
grievance or effectively to recommend such acts if, in connection with the within a year from effectivity of the 1973 Constitution, 20 incorporated the
foregoing, the exercise of such authority is not merely routinary or clerical in proposition that the "terms and conditions of employment of all government
nature but requires the use of independent judgment." 13 employees, including employees of government-owned and controlled
corporations ... (are) governed by the Civil Service Law, rules and
Republic Act No. 2260 regulations." 21 It incorporated, too, the constitutional mandate that the
salaries of said employees "shall be standardized by the National Assembly."
Similar provisions were found in R.A. No. 2260, the Civil Service Act of
1959. This Act declared that the "Philippine Civil Service ... (embraced) all The Labor Code, 22 however "exempted" government employees from the
branches, subdivisions and instrumentalities of the government including right to self-organization for purposes of collective bargaining. While the
government-owned and controlled corporations." 14 Code contained provisions acknowledging the right of "all persons employed
in commercial, industrial and agricultural enterprises, including religious,
It prohibited such civil service employees who were "employed in medical or educational institutions operating for profit" to "self-organization
governmental functions" to belong to any labor organization which imposed and to form, join or assist labor organizations for purposes of collective
on their members "the obligation to strike or to join strikes." And one of the bargaining," they "exempted from the foregoing provisions:
first issuances of the President after the proclamation of martial law in
September, 1972, was General Order No. 5 which inter alia banned strikes in a) security guards;
vital industries," as well as 'all rallies, demonstrations and other forms of
group actions." 15 b) government employees, including employees of government government-
owned and/ or controlled corporations;
Not so prohibited, however, were those "employed in proprietary
functions of the Government including, but not limited to, governmental c) managerial employees; and
corporations."16 The Act also penalized any person who "violates, refuses or
neglects to comply with any ... provisions (of the Act) or rules (thereunder
d) employees of religious, charitable, medical and educational institutions not Clarification of the matter seems to have been very shortly attempted by the
operating for profit, provided the latter do not have existing collective Civil Service Decree of the Philippines, Presidential Decree No. 807 (eff.,
agreements or recognized unions at the time of the effectivity of the code or Oct. 6,1975) which superseded the Civil Service Law of 1959 (RA
have voluntarily waived their exemption."23 2260) 27 and repealed or modified "all laws, rules and regulations or parts
thereof inconsistent with the provisions" thereof. The Decree categorically
The reason for denying to government employees the right to "self- described the scope and coverage of the "Civil Service" as embracing 44
organization and to form, join or assist labor organizations for purposes of every branch, agency, subdivision, and instrumentality of the
collective bargaining" is presumably the same as that under the Industrial government, including every government owned or controlled corporation
Peace Act, i.e., that the terms and conditions of government employment are whether performing governmental or propriety function. 28 The effect was
fixed by law and not by collective bargaining. seemingly to prohibit government employees (including those "employed in
proprietary functions of the Government") to "strike for the purpose of
Some inconsistency appears to have arisen between the Labor Code and the securing changes of their terms and conditions of employment," 29 something
Civil Service Act of 1959. Under the Civil Service Act, persons "employed which, as aforestated, they were allowed to do under the Civil Service Act of
in proprietary functions of the government including, but not limited to, 1959.30
governmental corporations'-not being within "the policy of the Government
that the employees therein shall not strike for the purpose of securing Be this as it may it seems clear that PD 807 (the Civil Service Decree) did
changes in their terms and conditions of employment"-could legitimately not modify the declared ineligibility of "managerial employees" from
bargain with their respective employers through their labor organizations, joining, assisting or forming any labor organization.
and corollarily engage in strikes and other concerted activities in an attempt
to bring about changes in the conditions of their work. They could not Executive Order No. 111
however do so under the Labor Code and its Implementing Rules and
Regulations; these provided that "government employees, including Executive Order No. 111, issued by President Corazon C. Aquino on
employees of government-owned and/or controlled corporations," without December 24, 1986 in the exercise of legislative powers under the Freedom
distinction as to function, were "exempted" (excluded is the better term) from Constitution, modified the general disqualification above mentioned of
"the right to self-organization and to form, join or assist labor organizations 'government employees, including employees of government-owned and/or
for purposes of collective bargaining," and by implication, excluded as well controlled corporations" from "the right to self-organization and to form, join
from the right to engage in concerted activities, such as strikes, as coercive or assist labor organizations for purposes of collective bargaining.' It granted
measures against their employers. to employees "of government corporations established under the
Corporation Code x x the right to organize and to bargain collectively with
Members of supervisory unions who were not managerial employees, were their respective employers." 31 To all 'other employees in the civil service, ...
declared by the Labor Code to be "eligible to join or assist the rank and file (it granted merely) the right to form associations for purposes not contrary to
labor organization, and if none exists, to form or assist in the forming of such law," 32 not for "purposes of collective bargaining."
rank and file organization " 24 Managerial employees, on the other hand, were
pronounced as 'not eligible to join, assist or form any labor The 1987 Constitution
organization." 25 A "managerial employee" was defined as one vested with
power or prerogatives to lay down and execute management policies and/or The provisions of the present Constitution on the matter appear to be
to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline somewhat more extensive. They declare that the "right to self organization
employees, or to effectively recommend such managerial actions." 26 shall not be denied to government employees;"33 that the State "shall
guarantee the rights of all workers to self-organization, collective bargaining
Presidential Decree No. 807 and negotiations, and peaceful concerted activities, including the right to
strike in accordance with law;" and that said workers "shall be entitled to
security of tenure, humane conditions of work, and a living wage, ... (and) activities for the attainment of their objectives, such as strikes, picketing,
also participate in policy and decision-making processes affecting their rights boycotts. But the right of government employees to "form, join or assist
and benefits as may be provided by law. 34 employees organizations of their own choosing" under Executive Order No.
180 is not regarded as existing or available for "purposes of collective
CSC Memorandum Circular No. 6 bargaining," but simply "for the furtherance and protection of their
interests." 38
Memorandum Circular No. 6 of the Civil Service Commission, issued on
April 21, 1987 enjoined strikes by government officials and employees, to In other words, the right of Government employees to deal and negotiate
wit: 35 with their respective employers is not quite as extensive as that of private
employees. Excluded from negotiation by government employees are the
... Prior to the enactment by Congress of applicable laws "terms and conditions of employment ... that are fixed by law," it being only
concerning strike by government employees, and those terms and conditions not otherwise fixed by law that "may be subject of
considering that there are existing laws which prohibit negotiation between the duly recognized employees' organizations and
government officials and employees from resorting to strike, appropriate government authorities," 39 And while EO No. 180 concedes to
the Commission enjoins, under pain of administrative government employees, like their counterparts in the private sector, the right
sanctions, all government officers and employees from to engage in concerted activities, including the right to strike, the executive
staging strikes, demonstrations, mass leaves, walk-outs and order is quick to add that those activities must be exercised in accordance
other forms of mass action which will result in temporary with law, i.e. are subject both to "Civil Service Law and rules" and "any
stoppage or disruption of public services. To allow otherwise legislation that may be enacted by Congress," 40 that "the resolution of
is to undermine or prejudice the government system. complaints, grievances and cases involving government employees" is not
ordinarily left to collective bargaining or other related concerted activities,
Executive Order No. 180 but to "Civil Service Law and labor laws and procedures whenever
applicable;" and that in case "any dispute remains unresolved after
The scope of the constitutional right to self-organization of "government exhausting all available remedies under existing laws and procedures, the
employees" above mentioned, was defined and delineated in Executive Order parties may jointly refer the dispute to the (Public Sector Labor-
No. 180 (eff. June 1, 1987). According to this Executive Order, the right of Management) Council for appropriate action."41 What is more, the Rules and
self-organization does indeed pertain to all "employees of all branches, Regulations implementing Executive Order No. 180 explicitly provide that
subdivisions, instrumentalities and agencies of the Government, including since the "terms and conditions of employment in the government, including
government-owned or controlled corporations with original charters;" 36 such any political subdivision or instrumentality thereof and government-owned
employees "shall not be discriminated against in respect of their employment and controlled corporations with original charters are governed by law, the
by reason of their membership in employees' organizations or participation in employees therein shall not strike for the purpose of securing changes
the normal activities of their organization x x (and their) employment shall thereof. 42
not be subject to the condition that they shall not join or shall relinquish their
membership in the employees' organizations. 37 On the matter of limitations on membership in labor unions of government
employees, Executive Order No. 180 declares that "high level employees
However, the concept of the government employees' right of self- whose functions are normally considered as policy making or managerial, or
organization differs significantly from that of employees in the private sector. whose duties are of a highly confidential nature shall not be eligible to join
The latter's right of self-organization, i.e., "to form, join or assist labor the organization of rank-and-file government employees. 43 A "high level
organizationsfor purposes of collective bargaining," admittedly includes the employee" is one "whose functions are normally considered policy
right to deal and negotiate with their respective employers in order to fix the determining, managerial or one whose duties are highly confidential in
terms and conditions of employment and also, to engage in concerted nature. A managerial function refers to the exercise of powers such as: 1. To
effectively recommend such managerial actions; 2. To formulate or execute Corporation Law in so far as they are not otherwise inconsistent with other
management policies and decisions; or 3. To hire, transfer, suspend, lay off, applicable law. 51 It is engaged essentially in insurance, a business that "is not
recall, dismiss, assign or discipline employees. 44 inherently or exclusively a governmental function, ... (but) is on the contrary,
in essence and practice, of a private nature and interest." 52
Republic Act No. 6715
1. The petitioners contend that the right of self-organization and
The rule regarding membership in labor organizations of managerial and collectivebargaining had been withdrawn by the Labor Code from
supervisory employees just adverted to, was clarified and refined by government employees including those in government-owned and controlled
Republic Act No. 6715, effective on March 21, 1989, further amending the corporations- chiefly for the reason that the terms and conditions of
Labor Code. government employment, all embraced in civil service, may not be modified
by collective bargaining because set by law. It is therefore immaterial, they
Under RA 6715 labor unions are regarded as organized either (a) "for say, whether supervisors are members of rank-and-file unions or not; after
purposes of negotiation," or (b) "for furtherance and protection"of the all, the possibility of the employer's control of the members of the union thru
members' rights. Membership in unions organized "for purposes of supervisors thus rendering collective bargaining illusory, which is the main
negotiation" is open only to rank-and-file employees. "Supervisory reason for the prohibition, is no longer of any consequence.
employees" are ineligible "for membership in a labor organization of the
rank-and-file employees but may join, assist or form separate labor This was true, for a time. As already discussed, both under the Labor Code
organizations of their own," i.e., one organized "for furtherance and and PD 807, government employees, including those in government-owned
protection" of their rights and interests. However, according to the Rules or controlled corporations, were indeed precluded from bargaining as regards
implementing RA 6715, "supervisory employees who are included in an terms and conditions of employment because these were set by law and
existing rank-and- file bargaining unit, upon the effectivity of Republic Act hence could not possibly be altered by negotiation.
No. 6715 shall remain in that unit ..." Supervisory employees are "those who,
in the interest of the employer, effectively recommend such managerial But EO 111 restored the right to organize and to negotiate and bargain of
actions 45 if the exercise of such authority is not merely routinary or clerical employees of "government corporations established under the Corporation
in nature but requires the use of independent judgment. 46 Code." And EO 180, and apparently RA 6715, too, granted to all government
employees the right of collective bargaining or negotiation except as regards
Membership in employees' organizations formed for purposes of negotiation those terms of their employment which were fixed by law; and as to said
are open to rank-and-file employees only, as above mentioned, and not terms fixed by law, they were prohibited to strike to obtain changes thereof.
to high level employees. 47 Indeed, "managerial employees" or "high level
employees" are, to repeat, "not eligible to join, assist or form any labor 2. The petitioners appear to be correct in their view of the disappearance
organization" at all. 48 A managerialemployee is defined as "one who is from the law of the prohibition on supervisors being members of labor
vested with powers or prerogatives to lay down and execute, management organizations composed of employees under their supervision. The Labor
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or Code (PD 442) allowed supervisors (if not managerial) to join rank-and-file
discipline employees."49 unions. And under the Implementing Rules of RA 6715, supervisors who
were members of existing labor organizations on the effectivity of said RA
This is how the law now stands, particularly with respect to supervisory 6715 were explicitly authorized to "remain therein."
employees vis a vis labor organizations of employees under them.
3. The correctness of the petitioners' theory that unfair labor practices ceased
Now, the GSIS performs proprietary functions. It is a non-stock corporation, to be crimes and were deemed merely administrative offenses in virtue of the
managed by a Board of Trustees exercising the "usual corporate powers."50 In Labor Code, cannot be gainsaid. Article 250 of the Labor Code did provide
other words, it exercises all the powers of a corporation under the as follows:
ART. 250. Concept of unfair labor practice.-The concept of Now, in a case decided as early as 1935, People v. Tamayo, 53 where the
unfair labor practice is hereby modified. Henceforth, it shall appellants had appealed from a judgment convicting them of a violation of a
be considered merely as an administrative offense rather than municipal -ordinance, and while their appeal was pending, the ordinance was
a criminal offense. Unfair labor practice complaints shall, repealed such that the act complained of ceased to be a criminal act but
therefore, be processed like any ordinary labor disputes. became legal, this Court dismissed the criminal proceedings, pronouncing the
effects of the repeal to be as follows:
But unfair labor practices were declared to be crimes again by later
amendments of the Labor Code effected by Batas Pambansa Blg. 70, In the leading case of the United States vs. Cuna (12 Phil.
approved on May 1, 1980. As thus amended, the Code now pertinently reads 241), and Wing vs. United States (218 U.S. 272), the doctrine
as follows: was clearly established that in the Philippines repeal of a
criminal act by its reenactment, even without a saving clause
ART. 248. Concept of unfair labor practice and procedure would not destroy criminal liability. But not a single
for prosecution thereof. — Unfair labor practices violate the sentence in either derision indicates that there was any desire
right of workers and employees to self organization, are to hold that a person could be prosecuted convicted, and
inimical to the legitimate interests of both labor and punished for acts no longer criminal.
management including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom There is no question that at common law and in America a
and mutual respect, and hinder the promotion of healthy and much more favorable attitude towards the accused exists
stable labor management relations. Consequently, unfair relative to statutes that have been repealed than has been
labor practices are not only violations of the civil rights of adopted here. Our rule is more in conformity with the
both labor and management but are also offenses against the Spanish doctrine, but even in Spain, where the offense
State which shall be subject to prosecution and punishment ceased to be criminal, petition cannot be had (1 Pacheco,
as herein provided. Commentaries, 296).

xxx xxx xxx The repeal here was absolute and not a reenactment and
repeal by implication. Nor was there any saving clause. The
Recovery of civil liability in the administrative proceedings legislative intent as shown by the action of the municipal is
shall bar recovery under the Civil Code. that such conduct, formerly denounced, is no longer deemed
criminal, and it would be illogical for this court to attempt to
No criminal prosecution under this title may be instituted sentence appellant for the offense that no longer exists.
without a final judgment, finding that an unfair labor practice
was committed having been first obtained in the preceding We are therefore of the opinion that the proceedings against
paragraph. ... appellant must be dismissed.

The decisive consideration is that at present, supervisors who were already To the same effect and in even more unmistakable language is People v.
members of a rank-and-file labor organization at the time of the effectivity of Almuete 54 where the defendants-appellees were charged under section 39 of
R.A. No. 6715, are authorized to "remain therein." It seems plain, in other Republic Act No. 1199, as amended (the Agricultural Land Tenancy Law of
words, that the maintenance by supervisors of membership in a rank-and-file 1954) which penalized pre-threshing by either agricultural tenant or his
labor organization even after the enactment of a statute imposing a landlord. They sought and secured a dismissal on the ground, among others,
prohibition on such membership, is not only not a crime, but is explicitly that there was no law punishing the act charged-a reference to the fact that
allowed, under present law. Republic Act No. 1199 had already been superseded by the Agricultural
Land Reform Code of 1963 which instituted the leasehold system and No. 5275-R and Crim. Case No. 4130-R rendered by the Trial Court, are
abolished share tenancy subject to certain conditions. On appeal by the REVERSED and the accused-appellants ACQUITTED of the charges against
Government, this Court upheld the dismissal, saying: them, with costs de officio.

The legislative intent not to punish anymore the tenant's act SO ORDERED.
of pre-reaping and pre-threshing without notice to the
landlord is inferable from the fact that, as already noted, the
Code of Agrarian Reforms did not reenact section 39 of the
Agricultural Tenancy Law and that it abolished share
tenancy which is the basis for penalizing clandestine pre-
reaping and pre-threshing.

xxx xxx xxx

As held in the Adillo case, 55 the act of pre-reaping and pre-

threshing without notice to the landlord, which is an offense
under the Agricultural Tenancy Law, had ceased to be an
offense under the subsequent law, the Code of Agrarian
Reforms. To prosecute it as an offense when the Code of
Agrarian Reforms is already in force would be repugnant or
abhorrent to the policy and spirit of that Code and would
subvert the manifest legislative intent not to punish anymore
pre-reaping and pre-threshing without notice to the

xxx xxx xxx

The repeal of a penal law deprives the courts of jurisdiction

to punish persons charged with a violation of the old penal
law prior to its repeal (People vs. Tamayo, 61 Phil. 225;
People vs. Sindiong and Pastor, 77 Phil. 1000; People vs.
Binuya, 61 Phil. 208; U.S. vs. Reyes, 10 Phil. 423; U.S. vs.
Academia, 10 Phil. 431. See dissent in Lagrimas vs. Director
of Prisons, 57 Phil. 247, 252, 254).

The foregoing precedents dictate absolution of the appellants of the offenses

imputed to them.

WHEREFORE, the judgments of conviction in CA-G.R. No. 14724-CR and

CA-G.R. No. 14856-CR, subject of the appeal, as well as those in Crim. Case

G.R. No. 96189 July 14, 1992 For its part, the University, through its General Counsel, 6 made of record its
view that there should be two (2) unions: one for academic, the other for non-
UNIVERSITY OF THE PHILIPPINES, petitioner, academic or administrative, personnel considering the dichotomy of interests,
vs. conditions and rules governing these employee groups.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor
Relations, Department of Labor and Employment, and THE ALL U.P. Director Calleja ruled on the matter on August 7, 1990. 7 She declared that
WORKERS' UNION, represented by its President, Rosario del "the appropriate organizational unit . . should embrace all the regular rank-
Rosario, respondent. and-file employees, teaching and non-teaching, of the University of the
Philippines, including all its branches" and that there was no sufficient
NARVASA, C.J.: evidence "to justify the grouping of the non-academic or administrative
personnel into an organization unit apart and distinct from that of the
In this special civil action of certiorari the University of the Philippines academic or teaching personnel." Director Calleja adverted to Section 9 of
seeks the nullification of the Order dated October 30, 1990 of Director Pura Executive Order No. 180, viz.:
Ferrer-Calleja of the Bureau of Labor Relations holding that "professors,
associate professors and assistant professors (of the University of the Sec. 9. The appropriate organizational unit shall be the
Philippines) are . . rank-and-file employees . . ;" consequently, they should, employer unit consisting of rank-and-file employees, unless
together with the so-called non-academic, non-teaching, and all other circumstances otherwise require.
employees of the University, be represented by only one labor
organization. 1 The University is joined in this undertaking by the Solicitor and Section 1, Rule IV of the Rules Implementing said EO 180 (as
General who "has taken a position not contrary to that of petitioner and, in amended by SEC. 2, Resolution of Public Sector Labor Management
fact, has manifested . . that he is not opposing the petition . . ." 2 Council dated May 14, 1989, viz.:

The case 3 was initiated in the Bureau of Labor Relations by a petition filed xxx xxx xxx
on March 2, 1990 by a registered labor union, the "Organization of Non-
Academic Personnel of UP" (ONAPUP). 4 Claiming to have a membership of For purposes of registration, an appropriate organizational
3,236 members — comprising more than 33% of the 9,617 persons unit may refer to:
constituting the non-academic personnel of UP-Diliman, Los Baños, Manila,
and Visayas, it sought the holding of a certification election among all said xxx xxx xxx
non-academic employees of the University of the Philippines. At a
conference thereafter held on March 22, 1990 in the Bureau, the University d. State universities or colleges, government-owned or
stated that it had no objection to the election. controlled corporations with original charters.

On April 18, 1990, another registered labor union, the "All UP Workers' She went on to say that the general intent of EO 180 was "not to
Union," 5 filed a comment, as intervenor in the certification election fragmentize the employer unit, as "can be gleaned from the definition
proceeding. Alleging that its membership covers both academic and non- of the term "accredited employees' organization," which refers to:
academic personnel, and that it aims to unite all UP rank-and-file employees
in one union, it declared its assent to the holding of the election provided the . . a registered organization of the rank-and-file employees as
appropriate organizational unit was first clearly defined. It observed in this defined in these rules recognized to negotiate for the
connection that the Research, Extension and Professional Staff (REPS), who employees in an organizational unit headed by an officer
are academic non-teaching personnel, should not be deemed part of the
organizational unit.
with sufficient authority to bind the agency, such as . . . . . . that of effectively recommending termination of appointments or initiating
state colleges and universities. appointments and promotions; and

The Director thus commanded that a certification election be "conducted 4) Not all teaching personnel may be deemed included in the term, "rank-
among rank-and-file employees, teaching and non-teaching" in all four and-file;" only those holding appointments at the instructor level may be so
autonomous campuses of the UP, and that management appear and bring considered, because those holding appointments from Assistant Professor to
copies of the corresponding payrolls for January, June, and July, 1990 at the Associate Professor to full Professor take part, as members of the University
"usual pre-election conference . . ." Council, a policy-making body, in the initiation of policies and rules with
respect to faculty tenure and promotion. 9
At the pre-election conference held on March 22, 1990 at the Labor
Organizational Division of the DOLE, 8 the University sought further The ONAPUP quite categorically made of record its position; that it was not
clarification of the coverage of the term, "rank-and-file" personnel, asserting opposing the University's proferred classification of rank-and file employees.
that not every employee could properly be embraced within both teaching On the other hand, the "All UP Workers' Union" opposed the University's
and non-teaching categories since there are those whose positions are in truth view, in a Position Paper presented by it under date of October 18, 1990.
managerial and policy-determining, and hence, excluded by law.
Director Calleja subsequently promulgated an Order dated October 30, 1990,
At a subsequent hearing (on October 4, 1990), the University filed a resolving the "sole issue" of "whether or not professors, associate professors
Manifestation seeking the exclusion from the organizational unit of those and assistant professors are included in the definition of high-level
employees holding supervisory positions among non-academic personnel, employee(s)" in light of Rule I, Section (1) of the Implementing Guidelines
and those in teaching staff with the rank of Assistant Professor or higher, of Executive Order No. 180, defining "high level employee" as follows:
submitting the following as grounds therefor:
1. High Level Employee — is one whose functions are
1) Certain "high-level employees" with policy-making, managerial, or normally considered policy determining, managerial or one
confidential functions, are ineligible to join rank-and-file employee whose duties are highly confidential in nature. A managerial
organizations under Section 3, EO 180: function refers to the exercise of powers such as:

Sec. 3. High-level employees whose functions are normally 1. To effectively recommend such
considered as policy-making or managerial or whose duties managerial actions;
are of a highly confidential nature shall not be eligible to join
the organization of rank-and file government employees; 2. To formulate or execute management
policies and decisions; or
2) In the University hierarchy, not all teaching and non-teaching personnel
belong the rank-and file: just as there are those occupying managerial 3. To hire, transfer, suspend, lay-off, recall,
positions within the non-teaching roster, there is also a dichotomy between dismiss, assign or discipline employees.
various levels of the teaching or academic staff;
The Director adjudged that said teachers are rank-and-file employees
3) Among the non-teaching employees composed of Administrative Staff and "qualified to join unions and vote in certification elections." According to her
Research personnel, only those holding positions below Grade 18 should be —
regarded as rank-and-file, considering that those holding higher grade
positions, like Chiefs of Sections, perform supervisory functions including

A careful perusal of the University Code . . shows that the employee, while a full Professor or Political Science with a Ph. D. and
policy-making powers of the Council are limited to academic several Honorary doctorates is classified as rank-and-file." 10
matters, namely, prescribing courses of study and rules of
discipline, fixing student admission and graduation The motion for reconsideration was denied by Director Calleja, by Order
requirements, recommending to the Board of Regents the dated November 20, 1990.
conferment of degrees, and disciplinary power over students.
The policy-determining functions contemplated in the The University would now have this Court declare void the Director's Order
definition of a high-level employee pertain to managerial, of October 30, 1990 as well as that of November 20, 1990. 11 A temporary
executive, or organization policies, such as hiring, firing, and restraining order was issued by the Court, by Resolution dated December 5,
disciplining of employees, salaries, teaching/working hours, 1990 conformably to the University's application therefor.
other monetary and non-monetary benefits, and other terms
and conditions of employment. They are the usual issues in Two issues arise from these undisputed facts. One is whether or not
collective bargaining negotiations so that whoever wields professors, associate professors and assistant professors are "high-level
these powers would be placed in a situation of conflicting employees" "whose functions are normally considered policy determining,
interests if he were allowed to join the union of rank-and-file managerial or . . highly confidential in nature." The other is whether or not,
employees. they, and other employees performing academic functions, 12 should
comprise a collective bargaining unit distinct and different from that
The University seasonably moved for reconsideration, seeking to make the consisting of the non-academic employees of the University, 13 considering
following points, to wit: the dichotomy of interests, conditions and rules existing between them.

1) UP professors do "wield the most potent managerial powers: the power to As regards the first issue, the Court is satisfied that it has been correctly
rule on tenure, on the creation of new programs and new jobs, and resolved by the respondent Director of Bureau Relations. In light of
conversely, the abolition of old programs and the attendant re-assignment of Executive Order No. 180 and its implementing rules, as well as the
employees. University's charter and relevant regulations, the professors, associate
professors and assistant professors (hereafter simply referred to as
2) To say that the Council is "limited to (acting on) academic matters" is professors) cannot be considered as exercising such managerial or highly
error, since academic decisions "are the most important decisions made in a confidential functions as would justify their being categorized as "high-level
University . . (being, as it were) the heart, the core of the University as a employees" of the institution.
The Academic Personnel Committees, through which the professors
3) Considering that the law regards as a "high level" employee, one who supposedly exercise managerial functions, were constituted "in order to
performs either policy-determining, managerial, or confidential functions, the foster greater involvement of the faculty and other academic personnel in
Director erred in applying only the "managerial functions" test, ignoring the appointments, promotions, and other personnel matters that directly affect
"policy-determining functions" test. them." 14 Academic Personnel Committees at the departmental and college
levels were organized "consistent with, and demonstrative of the very idea of
4) The Director's interpretation of the law would lead to absurd results, e.g.: consulting the faculty and other academic personnel on matters directly
"an administrative officer of the College of Law is a high level employee, affecting them" and to allow "flexibility in the determination of guidelines
while a full Professor who has published several treatises and who has peculiar to a particular department or college." 15
distinguished himself in argument before the Supreme Court is a mere rank-
and-file employee. A dormitory manager is classified as a high level Personnel actions affecting the faculty and other academic personnel should,
however, "be considered under uniform guidelines and consistent with the
Resolution of the Board (of Regents) adopted during its 789th Meeting (11- 3. Formulate policies, rules, and standards with respect to the
26-69) creating the University Academic Personnel Board." 16 Thus, the selection, compensation, and promotion of members of the
Departmental Academic Personnel Committee is given the function of academic staff.
"assist(ing) in the review of the recommendations initiated by the
Department Chairman with regard to recruitment, selection, performance 4. Assist the Chancellor in the review of recommendations
evaluation, tenure and staff development, in accordance with the general on academic promotions and on other matters affecting
guidelines formulated by the University Academic Personnel Board and the faculty status and welfare.
implementing details laid down by the College Academic Personnel
Committee;" 17 while the College Academic Personnel Committee is From the foregoing, it is evident that it is the University Academic Personnel
entrusted with the following functions: 18 Committee, composed of deans, the assistant for academic affairs and the
chief of personnel, which formulates the policies, rules and standards
1. Assist the Dean in setting up the details for the respecting selection, compensation and promotion of members of the
implementation of policies, rules, standards or general academic staff. The departmental and college academic personnel
guidelines as formulated by the University Academic committees' functions are purely recommendatory in nature, subject to
Personnel Board; review and evaluation by the University Academic Personnel Board.
In Franklin Baker Company of the Philippines vs. Trajano, 20 this Court
2. Review the recommendation submitted by the DAPCs reiterated the principle laid down in National Merchandising Corp. vs. Court
with regard to recruitment, selection, performance of Industrial Relations, 21 that the power to recommend, in order to qualify an
evaluation, tenure, staff development, and promotion of the employee as a supervisor or managerial employee "must not only
faculty and other academic personnel of the College; be effective but the exercise of such authority should not be merely of a
routinary or clerical nature but should require the use of independent
3. Establish departmental priorities in the allocation of judgment." Where such recommendatory powers, as in the case at bar, are
available funds for promotion; subject to evaluation, review and final action by the department heads and
other higher executives of the company, the same, although present, are not
4. Act on cases of disagreement between the Chairman and effective and not an exercise of independent judgment as required by law.
the members of the DAPC particularly on personnel matters
covered by this Order; Significantly, the personnel actions that may be recommended by the
departmental and college academic personnel committees must conform with
5. Act on complaints and/or protests against personnel the general guidelines drawn up by the university personnel academic
actions made by the Department Chairman and/or the committee. This being the case, the members of the departmental and college
DAPC. academic personnel committees are not unlike the chiefs of divisions and
sections of the National Waterworks and Sewerage Authority whom this
The University Academic Personnel Board, on the other hand, performs the Court considered as rank-and-file employees in National Waterworks &
following functions: 19 Sewerage Authority vs. NWSA Consolidated Unions, 22because "given ready
policies to execute and standard practices to observe for their execution, . . .
1. Assist the Chancellor in the review of the they have little freedom of action, as their main function is merely to carry
recommendations of the CAPC'S. out the company's orders, plans and policies."

2. Act on cases of disagreement between the Dean and the The power or prerogative pertaining to a high-level employee "to effectively
CAPC. recommend such managerial actions, to formulate or execute management
policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss,
assign or discipline employees" 23 is exercised to a certain degree by the xxx xxx xxx
university academic personnel board/committees and ultimately by the Board
of Regents in accordance with Section 6 of the University (f) To approve the courses of study and rules of discipline
Charter, 24 thus: drawn up by the University Council as hereinafter provided;
(e) To appoint, on the recommendation of the President of
the University, professors, instructors, lecturers and other Sec. 9. There shall be a University Council consisting of the
employees of the University; to fix their compensation, President of the University and of all instructors in the
hours of service, and such other duties and conditions as it university holding the rank of professor, associate professor,
may deem proper; to grant them in its discretion leave of or assistant professor. The Council shall have the power to
absence under such regulations as it may promulgate, any prescribe the courses of study and rules of discipline, subject
other provision of law to the contrary notwithstanding, and to the approval of the Board of Regents. It shall fix the
to remove them for cause after investigation and hearing requirements for admission to any college of the university,
shall have been had. as well as for graduation and the receiving of a degree. The
Council alone shall have the power to recommend students
Another factor that militates against petitioner's espousal of managerial or others to be recipients of degrees. Through its president or
employment status for all its professors through membership in the committees, it shall have disciplinary power over the
departmental and college academic personnel committees is that not all students within the limits prescribed by the rules of
professors are members thereof. Membership and the number of members in discipline approved by the Board of Regents. The powers
the committees are provided as follows: 25 and duties of the President of the University, in addition to
those specifically provided in this Act shall be those usually
Sec. 2. Membership in Committees. — Membership in pertaining to the office of president of a university.
committees may be made either through appointment,
election, or by some other means as may be determined by It is readily apparent that the policy-determining functions of the University
the faculty and other academic personnel of a particular Council are subject to review, evaluation and final approval by the Board of
department or college. Regents. The Council's power of discipline is likewise circumscribed by the
limits imposed by the Board of Regents. What has been said about the
Sec. 3. Number of Members. — In addition to the Chairman, recommendatory powers of the departmental and college academic personnel
in the case of a department, and the Dean in the case of a committees applies with equal force to the alleged policy-determining
college, there shall be such number of members representing functions of the University Council.
the faculty and academic personnel as will afford a fairly
representative, deliberative and manageable group that can Even assuming arguendo that UP professors discharge policy-determining
handle evaluation of personnel actions. functions through the University Council, still such exercise would not
qualify them as high-level employees within the context of E.O. 180. As
Neither can membership in the University Council elevate the professors to correctly observed by private respondent, "Executive Order No. 180 is a law
the status of high-level employees. Section 6 (f) and 9 of the UP Charter concerning public sector unionism. It must therefore be construed within that
respectively provide: 26 context. Within that context, the University of the Philippines represents the
government as an employer. 'Policy-determining' refers to policy-
Sec. 6. The Board of Regents shall have the following determination in university mattes that affect those same matters that may be
powers and duties . . . ; the subject of negotiation between public sector management and labor. The
reason why 'policy-determining' has been laid down as a test in segregating
rank-and-file from management is to ensure that those who lay down policies given case. 30 Thus, apart from the single descriptive word "appropriate," no
in areas that are still negotiable in public sector collective bargaining do not specific guide for determining the proper collective bargaining unit can be
themselves become part of those employees who seek to change these found in the statutes.
policies for their collective welfare." 27
Even Executive Order No. 180 already adverted to is not much help. All it
The policy-determining functions of the University Council refer to academic says, in its Section 9, is that "(t)he appropriate organizational unit shall be the
matters, i.e. those governing the relationship between the University and its employer unit consisting of rank-and-file employees, unless circumstances
students, and not the University as an employer and the professors as otherwise require." Case law fortunately furnishes some guidelines.
employees. It is thus evident that no conflict of interest results in the
professors being members of the University Council and being classified as When first confronted with the task of determining the proper collective
rank-and-file employees. bargaining unit in a particular controversy, the Court had perforce to rely on
American jurisprudence. In Democratic Labor Association vs. Cebu
Be that as it may, does it follow, as public respondent would propose, that all Stevedoring Company, Inc., decided on February 28, 1958, 31 the Court
rank-and-file employees of the university are to be organized into a single observed that "the issue of how to determine the proper collective bargaining
collective bargaining unit? unit and what unit would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on
A "bargaining unit" has been defined as a group of employees of a given the matter abound . . (to which resort may be had) considering that our
employer, comprised of all or less than all of the entire body of employees, present Magna Carta has been patterned after the American law on the
which the collective interest of all the employees, consistent with equity to subject." Said the Court:
the employer, indicate to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law. 28 . . . Under these precedents, there are various factors which
must be satisfied and considered in determining the proper
Our labor laws do not however provide the criteria for determining the proper constituency of a bargaining unit. No one particular factor is
collective bargaining unit. Section 12 of the old law, Republic Act No. 875 itself decisive of the determination. The weight accorded to
otherwise known as the Industrial Peace Act, simply reads as follows: 29 any particular factor varies in accordance with the particular
question or questions that may arise in a given case. What
Sec. 12. Exclusive Collective Bargaining Representation for are these factors? Rothenberg mentions a good number, but
Labor Organizations. — The labor organization designated the most pertinent to our case are: (1) will of the employees
or selected for the purpose of collective bargaining by the (Globe Doctrine); (2) affinity and unit of employees' interest,
majority of the employees in an appropriate collective such as substantial similarity of work and duties, or
bargaining unit shall be the exclusive representative of all similarity of compensation and working conditions; (3) prior
the employees in such unit for the purpose of collective collective bargaining history; and (4) employment status,
bargaining in respect to rates of pay, wages, hours of such as temporary, seasonal probationary employees. . . .
employment, or other conditions of employment; Provided,
That any individual employee or group of employees shall xxx xxx xxx
have the right at any time to present grievances to their
employer. An enlightening appraisal of the problem of defining an
appropriate bargaining unit is given in the 10th Annual
Although said Section 12 of the Industrial Peace Act was subsequently Report of the National Labor Relations Board wherein it is
incorporated into the Labor Code with minor changes, no guidelines were emphasized that the factors which said board may consider
included in said Code for determination of an appropriate bargaining unit in a and weigh in fixing appropriate units are: the history, extent
and type of organization of employees; the history of their Applying the same "community or mutuality of interests" test, but resulting
collective bargaining; the history, extent and type of in the formation of only one collective bargaining units is the case
organization of employees in other plants of the same of National Association of Free Trade Unions vs. Mainit Lumber
employer, or other employers in the same industry; the skill, Development Company Workers Union-United Lumber and General Workers
wages, work, and working conditions of the employees; the of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598. In said
desires of the employees; the eligibility of the employees for case, the Court ordered the formation of a single bargaining unit consisting of
membership in the union or unions involved; and the the Sawmill Division in Butuan City and the Logging Division in Zapanta
relationship between the unit or units proposed and the Valley, Kitcharao, Agusan Norte of the Mainit Lumber Development
employer's organization, management, and operation. . . . Company. The Court reasoned:

. . In said report, it is likewise emphasized that the basic test Certainly, there is a mutuality of interest among the
in determining the appropriate bargaining unit is that a unit, employees of the Sawmill Division and the Logging
to be appropriate, must affect a grouping of employees who Division. Their functions mesh with one another. One group
have substantial, mutual interests in wages, hours, working needs the other in the same way that the company needs
conditions and other subjects of collective bargaining (citing them both. There may be difference as to the nature of their
Smith on Labor Laws, 316-317; Francisco, Labor Laws, individual assignments but the distinctions are not enough to
162). . . . warrant the formation of a separate bargaining unit.

The Court further explained that "(t)he test of the grouping is community or In the case at bar, the University employees may, as already suggested, quite
mutuality of interests. And this is so because 'the basic test of an asserted easily be categorized into two general classes: one, the group composed of
bargaining unit's acceptability is whether or not it is fundamentally the employees whose functions are non-academic, i.e., janitors, messengers,
combination which will best assure to all employees the exercise of their typists, clerks, receptionists, carpenters, electricians, grounds-keepers,
collective bargaining rights' (Rothenberg on Labor Relations, 490)." Hence, chauffeurs, mechanics, plumbers; 32 and two, the group made up of those
in that case, the Court upheld the trial court's conclusion that two separate performing academic functions, i.e., full professors, associate professors,
bargaining units should be formed, one consisting of regular and permanent assistant professors, instructors — who may be judges or government
employees and another consisting of casual laborers or stevedores. executives — and research, extension and professorial staff. 33 Not much
reflection is needed to perceive that the community or mutuality of interests
Since then, the "community or mutuality of interests" test has provided the which justifies the formation of a single collective bargaining unit is wanting
standard in determining the proper constituency of a collective bargaining between the academic and non-academic personnel of the university. It
unit. In Alhambra Cigar & Cigarette Manufacturing Company, et al. vs. would seem obvious that teachers would find very little in common with the
Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting University clerks and other non-academic employees as regards
that the employees in the administrative, sales and dispensary departments of responsibilities and functions, working conditions, compensation rates, social
a cigar and cigarette manufacturing firm perform work which have nothing to life and interests, skills and intellectual pursuits, cultural activities, etc. On
do with production and maintenance, unlike those in the raw lead (malalasi), the contrary, the dichotomy of interests, the dissimilarity in the nature of the
cigar, cigarette, packing (precintera) and engineering and garage work and duties as well as in the compensation and working conditions of the
departments, authorized the formation of the former set of employees into a academic and non-academic personnel dictate the separation of these two
separate collective bargaining unit. The ruling in the Democratic Labor categories of employees for purposes of collective bargaining. The formation
Association case, supra, was reiterated in Philippine Land-Air-Sea Labor of two separate bargaining units, the first consisting of the rank-and-file non-
Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees academic personnel, and the second, of the rank-and-file academic
were barred from joining the union of the permanent and regular employees. employees, is the set-up that will best assure to all the employees the exercise
of their collective bargaining rights. These special circumstances, i.e., the
dichotomy of interests and concerns as well as the dissimilarity in the nature G.R. No. 107590 February 21, 1995
and conditions of work, wages and compensation between the academic and
non-academic personnel, bring the case at bar within the exception PAMANTASAN NG LUNGSOD NG MAYNILA (PLM), petitioner,
contemplated in Section 9 of Executive Order No. 180. It was grave abuse of vs.
discretion on the part of the Labor Relations Director to have ruled CIVIL SERVICE COMMISSION (CSC), PAMANTASAN NG
otherwise, ignoring plain and patent realities. LUNGSOD NG MAYNILA FACULTY ORGANIZATION (PLMFO),
WHEREFORE, the assailed Order of October 30, 1990 is hereby BANAGALE, NEMENCIO CABATUANDO, MANOLO HINA,
AFFIRMED in so far as it declares the professors, associate professors and ELEANOR JIMENEZ, ANITA LEYSON, JONATHAN MANZANO,
assistant professors of the University of the Philippines as rank-and-file JOSE MEJIA, ESTELITA PINEDA, LORDEO POQUIZ, ALFREDO
employees. The Order of August 7, 1990 is MODIFIED in the sense that the RAZON, MA. ZELDA REYES, SALVACION RODRIGUEZ,
non-academic rank-and-file employees of the University of the Philippines BELINDA SANTOS, and VIRGILIO ZAMORA respondents.
shall constitute a bargaining unit to the exclusion of the academic employees
of the institution — i.e., full professors, associate professors, assistant VITUG, J.:
professors, instructors, and the research, extension and professorial staff, who
may, if so minded, organize themselves into a separate collective bargaining This petition stemmed from a complaint for illegal dismissal and unfair labor
unit; and that, therefore, only said non-academic rank-and-file personnel of practice filed with public respondent Civil Service Commission ("CSC") by
the University of the Philippines in Diliman, Manila, Los Baños and the private respondents, through Pamantasan Ng Lungsod Ng Maynila Faculty
Visayas are to participate in the certification election. Organization ("PLMFO"), against petitioner Pamantasan Ng Lungsod Ng
Maynila ("PLM") and its officers.
The sixteen (16) individual private respondents were full-time instructors of
PLM under "temporary contracts" of employment renewable on a yearly
basis. They, among other instructors, joined the PLMFO.

Uniform notices of termination, all dated 24 April 1990, were individually

sent to private respondents informing them of "the expiration of their
temporary appointments at the close of office hours on 31 May 1990" and the
non-renewal of their appointments for the school year (SY) 1990-1991. A
series of letter-complaints addressed to the CSC by private respondents
evoked a letter-response from PLM, dated 16 May 1990, traversing the
complainants' right to compel a renewal of the appointments. They were
advised that their retention was not recommended by their respective Deans.

On 29 May 1990, private respondents, through PLMFO, filed with the CSC a
verified complaint for illegal dismissal and unfair labor practice against
petitioner and its officers.

In a letter-comment, dated 13 July 1990, petitioner denied having committed

any unfair labor practice or having illegally dismissed private respondents. In

its defense, PLM interposed (1) the temporary nature of private respondents' In the meantime, public respondent CSC, acting on the case forwarded to it
contracts of employment and (2) reasons that could justify the non- renewal by the PSLMC, issued its Resolution No. 92-814, dated 25 June 1992,
of the contracts. sustaining the findings of the PSLMC. The CSC, accordingly, directed the
reinstatement, with back salaries, of private respondents; thus —
Public respondent CSC referred the case to the Public Sector Labor-
Management Council1 ("PSLMC"). The latter, through its deputized hearing WHEREFORE, foregoing premises considered, the
officer, Med-Arbiter Hope Ruiz-Valenzuela of the Bureau of Labor Relations Commission hereby resolves to rule that the termination of
of the Department of Labor and Employment, after due notice, heard the case the services of Estelita Pineda, Vicente Banagale, Salvacion
(PSLMC Case No. 00-06-91). During the proceedings, petitioner relied in Rodriguez, Anita Leyson, Eleanor Jimenez, Ma. Zelda
main on the temporary nature of private respondents' employment contracts. Reyes, Belinda Santos, Lordeo Poquiz, Rolando Austria,
Jonathan Manzano, Manolo Hina, Nemencio Cabatuando,
In a Resolution,2 dated 16 December 1991, the PSLMC found petitioner Alfredo Razon, Virgilio Zamora, Roberto Amores and Jose
guilty of "Unfair Labor Practice" and held that private respondents "should Mejia, all of the Pamantasan ng Lungsod ng Maynila, is
be reinstated." The dispositive portion of its Resolution read: illegal.

WHEREFORE, premises considered, the Council finds that The PLM Management is hereby directed to reinstate these
PLM Management committed Unfair Labor Practice when it employees to their former or equivalent positions and pay
terminated the services of herein complainants, and for them back salaries and other benefits from the time of their
which the latter should be reinstated. illegal termination until their actual reinstatement.4

Accordingly, let this Resolution be forwarded to the Civil The request for the reconsideration of the order was denied by the CSC in its
Service Commission for appropriate action. Resolution No. 92-1573 of 20 October 1992. Respondent CSC, in denying
petitioner's motion, held, among other things, that the findings of fact by the
SO ORDERED.3 PSLMC deserved the respect of the Commission and that there was no
further need for it, to conduct a hearing of its own.
Petitioner's request for reconsideration was denied in PSLMC's Order of 30
April 1992. Forthwith, the PSLMC transmitted the case to the CSC for The PLM cites the following reasons for its instant petition
appropriate action. for certiorari (under Rule 65, not Rule 45 such as mistakenly referred to by
On 15 May 1992, petitioner filed with this Court a petition
for certiorari, entitled "Pamantasan Ng Lungsod Ng Maynila vs. Public 1. The Civil Service Commission acted with grave abuse of
Sector Labor-Management Council, et al.," docketed G.R. No. 105157, that discretion tantamount to lack of jurisdiction and denial of
sought the annulment of the aforementioned PSLMC resolutions. In a Minute due process when it adopted entirely, without according the
Resolution, dated 27 May 1992, the Court dismissed the petition for PLM's petitioner the opportunity to be heard, the findings of facts
failure to submit the certification required under Circular 28-91 on forum- and resolutions of the Public Sector Labor and Management
shopping. The motion for the reconsideration of this resolution was Council, a body separate and distinct and with different
dismissed with finality, no compelling reason having been shown to jurisdiction from that of the Commission.
reconsider the dismissal of the petition. On 30 July 1992, the resolution
became final and executory and, in due course, was recorded in the Book of 2. The Civil Service Commission acted with grave abuse
Entries of Judgment. discretion in effectively denying the petitioner the
opportunity to present evidence to substantiate its allegations
in its defense against the charge of illegal dismissal, to the the CSC has simply adopted the recommendations of the PSLMC in the
prejudice of civil service and public interest. unfair labor practice case in resolving the issue of illegal dismissal and
ordering the reinstatement of private respondents without conducting further
3. The Civil Service Commission committed a grave abuse proceedings of its own, it has effectively denied petitioner of its right to due
of discretion in directing reinstatement and payment of process.
backwages to private respondents whose temporary contracts
of employment had already expired. PSLMC's jurisdiction over the unfair labor practice case filed by private
respondents against petitioner is not disputed. The PSLMC, in case No. 00-
On 11 May 1993, this Court, acting on petitioner's motion for the issuance of 06-91, has conducted its proceedings in accordance with its legal
a writ of preliminary injunction, issued, on 18 May 1993, a temporary mandate.8The proceedings before Med-Arbiter Valenzuela, who had been
restraining order directing respondent CSC "to cease and desist from deputized to so act as the hearing officer, conform with the "Rules and
executing (its) assailed Resolutions No. 92-814 and No. 92-1573.5 Regulations to Govern the Exercise of the Right of Government Employees
to Self Organization" —
In our resolution, dated 17 August 1993, following the receipt of respondents'
comment, we gave due course to the petition and ordered the parties to file Sec. 3. The Council may call on any officer or agency for
their respective memoranda. assistance. It may deputize officers to hear and recommend
action on complaints or grievances filed with the council.
The Solicitor General took an adverse position to that of public respondent
and prayed that the petition be given due course, contending that it was Sec. 4. The procedure in the Council shall be non-adversarial
inappropriate for respondent CSC to rule on the aspect of illegal dismissal, an in nature. The parties may be required to submit their
act that involved an exercise of its original jurisdiction, without affording respective position papers, together with all evidences
anew petitioner an opportunity to be heard. available in support of their respective positions within 15
days from receipt of notices.
Public respondent CSC manifested its intention to file its own comment to
the instant petition; however, it failed to file any such comment within the Sec. 5. The decision of the Council shall be final.
allotted period. The Court finally dispensed with the filing of the comment
and ordered CSC to instead file its memorandum in accordance with this The conclusion of the PSLMC regarding petitioner's alleged commission of
Court's resolution of 24 August 1993.6 unfair labor practice against private respondents can no longer be considered
a proper issue either before the CSC or in this instance since this particular
On 20 January 1994, the Court dismissed the petition for failure to prosecute matter has already been adjudged with finality in accordance with this
on the part of petitioner, which likewise failed to file its memorandum, as Court's resolution in G.R. No. 105157 heretofore mentioned.
well as because of the "evident lack of interest of the parties"7 to pursue the
case. On petitioner's motion for reconsideration, however, the Court resolved, The PSLMC, in part, said:
on 24 February 1994, to reinstate the petition.
. . . Individual sixteen (16) complainants were part of the
Petitioner stresses that the CSC and the PSLMC both exercise quasi-judicial original founders of the PLMFO and claim to be active
functions but not on identical issues and subject matter; that the PSLMC members thereof. Complainants Vicente Benagale, Roberto
possesses jurisdiction only over the unfair labor practice aspect of private Amores, and Anita Leyson were the President, Treasurer and
respondents' complaint but that it is the CSC which alone can take Secretary, respectively, of the PLMFO. At the time of
cognizance over the question of illegal dismissal; and that, therefore, when complainants separation, the union had just secured its

public sector union registration. All 16 complainants had 6. Management refuses to allow the concerned faculty to
temporary employment contracts that were renewed on a participate in choosing the Chairperson in their respective
yearly basis. Half of the complainants had been with the departments;
PLM for a long time, ranging from four (4) to six and one-
half (6 1/2) years. 7. PLM's existing practice in the promotion of faculty
members either for permanent status or to the next higher
It appears that the Faculty had many long-standing issues rank as undermined the university's standard of excellence.
with the PLM Management, which complainants claim Out of the 223, close to 30% of the faculty had no previous
motivated the organization of the PLMFO. As gathered from teaching experience before joining PLM. There are only 29
the evidence, the following are some of the more salient assistant professors and 6 with the rank of professor. The
issues: teachers holding temporary appointments comprise, almost
half of the faculty.
1. Failure to appoint a true faculty representative to the
Board of Regents as provided in the PLM Charter; After securing its union registration, PLMFO began asserting
its rights.
2 No faculty participation in areas where normally the
faculty input is sought. i.e. xxx xxx xxx

a. revision of the student curriculum In its complaint, PLMFO alleged that their actions and
determination to see changes in the management of PLM
b. the development of criteria/policies angered PLM which prompted its decision to terminate the
regarding faculty development and services of the complainants.
xxx xxx xxx
3. While PLM has identified the academic qualifications and
teaching experience required for each level of hierarchy in Ordinarily, there is merit to respondent's argument that
the faculty, the actual mechanics of promotion are vague. employees who hold temporary contracts of employment
The faculty remains in the dark as to whether they have may not expect renewal of appointment as a matter of right,
already qualified and therefore can apply for the next faculty the decision being a management prerogative. However,
rank as a matter of right. The PLMFO maintains that this when the exercise of this privilege is alleged to be the means
vagueness in the procedure/policies for promotion is a by which management hinders unionism or outrightly bust
deliberate scheme to enable PLM management to establish unions and such allegation is supported by evidence, the act
the faculty according to its whim; needs to be examined and studied. It then becomes
incumbent upon Management to show that its intentions are
4. On the matter of promotion scheme, the faculty is not otherwise. Records of the case, however, reveal that despite
given the complete results of their performance evaluation; numerous opportunities to do so, PLM makes little attempt
to rebut the specific charges and instead rests its defense
5. The faculty is kept guessing about the official salary scale largely on the argument that since complainants possess only
according to rank, so that the implementation of such official temporary contracts of employment, PLM has the right not
salary scale can be arbitrary and discriminatory . . .; to renew their contracts without any need for justification.

There is sufficient evidence to show that the management of Management did not renew the appointments of these
PLM is not particularly enthusiastic about faculty members of the faculty with temporary contracts but those
participation in the formulation of policies concerning the who were hired as replacements possess even lesser
University and the Faculty itself, as shown from the very qualifications than the 16 complainants. Further, the PLM
nature of the majority of the complaints of the faculty against Management refused and still refuses to produce the results
the administration and the response/reaction of the of their evaluation of the performance of the complainants
management to earlier attempts by the faculty to bring about which can be an indication that presentation of such
changes. . . . evidence would be detrimental to its case. Hence, this issue
before us.
. . . . The facts on record show that management did not
respond to any of the faculty issues. One accurate example is Had complainants not been among those active officers
the matter of the teachers' performance evaluation ratings and/or members of the PLMFO, and had their qualifications,
which were the basis for "renewal of appointment and training, experience and performance rating not been
recommendation for permanent status." It was discussed in impressive, the Commission would have agreed that the
the dialogue that the over-all rating score of the faculty termination or non-renewal of the contracts of complainants
would include the Peer's evaluation. However, as can be seen does not constitute unfair labor practice. But the records
from the ratings of the complainants who were accused of reveal otherwise. Hence, there is indeed no reason for PLM
having poor performance, the Peer's evaluation was not Management to terminate the services of these employees
included as one of the factors for their evaluation. except to bust their organization. The Commission finds no
reason to disagree with the findings of facts by the PSLMC
xxx xxx xxx that PLM Management committed an unfair labor practice.

. . . . In its position paper and other subsequent pleadings, xxx xxx xxx
PLM has however, abandoned all efforts to pursue its line of
defense. It would appear therefore that the charges are false Even temporary employees enjoy that basic right to form
and untenable. If this is so, why was PLM so bold as to organization or association for purposes not contrary to law.
present them as grounds for the separation of complainants PLMFO is that organization. Thus, its members cannot be
in the first place? Perhaps, it was confident that because separated from the service for the simple reason of
complainants possessed temporary contracts of employment, membership in the said organization. And when the
no serious attempt would be made to examine PLMFO's appointment status of these members happens to be
complaint. Whatever other reasons PLM may have, the temporary in nature, such becomes merely incidental and the
circumstances obtaining in the instant case show that these doctrine that temporary employees have no security of tenure
charges were created as an attempt to confuse/mislead PLM's must yield or is not applicable. When the clear intent
real motivations on the matter.9 therefore of PLM Management in terminating the services of
these employees is to abridge their constitutional right to
In agreeing with the PSLMC, the CSC, in its own resolution of 25 June 1992, self-organization, the Commission has the duty to give them
stated: protection and uphold their basic right. This constitutional
right of employees is superior to the right of management not
In the arbitration proceedings, the PSLMC found that PLM to renew the temporary appointment of its employees. When
committed unfair labor practice when it terminated the the exercise of discretion by the management is calculated to
services of the complainants. It is undisputed that the PLM bust the union as what PLM Management had done, the
Commission has no choice but to declare it as a grave abuse 5. Reyes, Zelda Poor Performance
of discretion. 10
6. Santos, Belinda Tardiness in class, says negative
Petitioner insists that when CSC has ruled on the matter of illegal dismissal
without conducting any further hearing of its own, relying, instead, on comments during faculty meeting
PSLMC's finding of unfair labor practice on the part of petitioner, the latter
has thereby been denied due process. Unfortunately for petitioner, however, 7. Poquiz, Lorredo Seldom returns test papers, taught in another university
the two supposed independent issues, i.e., the unfair labor practice charge
and the complaint for illegal dismissal both filed by private respondents, are, 8. Austria, Rolando Taught in another school for 2nd Semester of 1989-1990
in fact, here unavoidably interlinked. The non-renewal of an employment
contract with a term, it is true, is ordinarily a valid mode of removal at the 9. Manzano, Jonathan Taught in another university
end of each
period. 11 This rule, however, must yield to the superior constitutional right of
10. Hina, Manalo Poor class performance
employees, permanent or temporary, to self-organization. While, a temporary
employment may be ended with or without cause, it certainly may not,
however, be terminated for an illegal cause. 11. Cabatuando, Nemensio Poor class performance, taught in another
Petitioner claims that it was denied "due process." It itself admitted, however,
that "it manifested (before the PSLMC) its intention to submit evidence (that 12. Rodriguez, Salvacion none given
it had other valid grounds for not renewing private respondents' temporary
contracts of employment) which, inadvertently or otherwise, it failed to 13. Razon, Alfredo none given
present . . . 12 This supposed evidence, if true and being material to
substantiate its defense against the unfair labor charge, should have been duly 14. Jimenez, Eleanor Tardiness during 2nd sem. in school
presented, but it did not. Petitioner should not now be heard to complain that
it was denied due process. We ruled, time and again, that "due process" was 15. Leyson, Anita Enrolled in another law school
designed to afford an opportunity to be heard,13 not that an actual hearing
should always and indispensably be held. 16. Pineda, Estelita Unbecoming conduct, tardiness 14

In any case, in its reply to public respondents' comment, PLM enumerates the The PSLMC has noted, however, that the charges are either false or
alleged causes for the non-renewal of the contracts, to wit: untenable; hence, its following findings:

Name Cause . . . In the case of complainants Zelda Reyes, Hina Manalo

and Nemencio Cabatuando, PLM alleged that they scored
1. Zamora, Virgilio Failure to finish MA after 2 years poorly in their performance evaluation ratings. However,
check with their actual performance scores (see pp. 252-264,
2. Benagale, Vicente Poor over-all performance records) shows that their grades are near perfect. PLMFO's
President Vicente Benagale was accused of having poor
3. Mejia, Jose Worked with DAR while with PLM class performance scores. His evaluation forms were,
however, not available for scrutiny.
4. Amores, Roberto Failure to complete MA

On two occasions, PLM was directed to produce the continuance of her studies. If this act was truly
evaluation results of the 16 complainants, the first, through objectionable, PLM should have questioned about her
an Order of Director Salvador Fernandez dated May 28, previous enrollment at the Arellano University.
1990 (see p. 148 records) and the second, in the conference
of January 24, 1990 (see p. 278, records). PLM failed to Moreover, this Council cannot help but comment that as part
comply on both occasions. This Council can only deduce of every person's basic human right, there is nothing to
that the presentation of such evidence would be detrimental prevent nor prohibit Ms. Leyson to enroll in the law school
to its case. of her choice. As borne out by her excellent
performance ratings, complainant has rendered an exemplary
Roberto Amores and Virgilio Zamora were separated on the service. Penalizing complainant for seeking to further
ground that they failed to complete their MA degrees. A improve herself is bordering on oppression.
glance at their number of years of service makes PLM's
charge spurious. In the case of Roberto Amores, records In the same conference of January 24, 1991, PLM was
show that he has been with PLM for 6 1/2 years and was still directed to further substantiate the validity of its charges
on a temporary appointment basis. Under Board Resolution against complainants. In its position paper and other
1025, he should be considered as a permanent employee, his subsequent pleadings, PLM has however, abandoned all
contract of employment having been renewed after the efforts to pursue its line of defense. It would appear therefore
interim period. If PLM were sincere in applying the rule that that the charges are false and untenable. If this is so, why
all permanent faculty must have a Masters Degree, it should was PLM so bold as to present them as grounds for the
have disqualified Mr. Amores after his interim period of separation of complainants in the first place? Perhaps, it was
appointment. It therefore appears that PLM sought to confident that because complainants possessed, temporary
enforce this rule only after Mr. Amores was elected union contracts of employment, no serious attempt would be made
treasurer. On the other hand, PLM's objection as regards to examine PLMFO's complaint. Whatever other reasons
Virgilio Zamora is premature. Mr. Zamora was only in his PLM may have, the circumstances obtaining in the instant
4th year at the university. Based on the concept of interim case show that these charges were created as an attempt to
appointment, he is given up to the fifth year to complete his confuse/mislead PLM's real motivations on the matter.15
The finding of the PSLMC that the non-renewal by petitioner of the
The cause for termination of Leyson's services was her questioned contracts of employment had been motivated by private
enrollment in another school without allegedly asking respondents' union activities is conclusive on the parties. Indeed, this Court's
permission from PLM management. On record (p. 507, resolution in G.R. No. 105157 (PLM vs. PSLMC et al.) which has long
records) is a letter dated January 7, 1989 of Anita Leyson to become final and executory should now render that matter a fait accompli.
the University, asking permission to continue her studies at
the Arellano Law School for the 2nd semester of 1989. PLM When the case was thus referred to the CSC by the PSLMC to take
challenges complainant to show proof that her request had "appropriate action" it understandably meant that the CSC should take the
been granted. Even if complainant, however, cannot produce necessary steps of reinstating the illegally dismissed employees.
any document showing that she was granted permission, in
like manner, neither can PLM present any document WHEREFORE, the petition for certiorari is DISMISSED and the appealed
expressly prohibiting her to enroll at the Arellano University. resolutions of the Civil Service Commission are AFFIRMED. The temporary
PLM's non-response, if this is indeed the case, must be restraining order issued by this Court on 18 May 1993, is LIFTED. No costs.
construed as consent. Complainant's request was for
SO ORDERED. Petitioner is a union of supervisory employees. It appears that on March 20,
1995 the union filed a petition for certification election on behalf of the route
managers at Pepsi-Cola Products Philippines, Inc. However, its petition was
denied by the med-arbiter and, on appeal, by the Secretary of Labor and
Employment, on the ground that the route managers are managerial
employees and, therefore, ineligible for union membership under the first
sentence of Art. 245 of the Labor Code, which provides:

Ineligibility of managerial employees to join any labor

organization; right of supervisory employees. — Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees
but may join, assist or form separate labor organizations of their

Petitioner brought this suit challenging the validity of the order dated August
31, 1995, as reiterated in the order dated September 22, 1995, of the
Secretary of Labor and Employment. Its petition was dismissed by the Third
Division for lack of showing that respondent committed grave abuse of
discretion. But petitioner filed a motion for reconsideration, pressing for
resolution its contention that the first sentence of Art. 245 of the Labor Code,
so far as it declares managerial employees to be ineligible to form, assist or
join unions, contravenes Art. III, §8 of the Constitution which provides:

The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes
not contrary to law shall not be abridged.

For this reason, the petition was referred to the Court en banc.

The Issues in this Case

G.R. No. 122226 March 25, 1998
Two questions are presented by the petition: (1) whether the route managers
at Pepsi-Cola Products Philippines, Inc. are managerial employees and (2)
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, whether Art. 245, insofar as it prohibits managerial employees from forming,
vs. joining or assisting labor unions, violates Art. III, §8 of the Constitution.
PHILIPPINES, INC. respondents.

In resolving these issues it would be useful to begin by defining who are FIRST-LINE MANAGERS — The lowest level in an organization at
"managerial employees" and considering the types of "managerial which individuals are responsible for the work of others is
employees." called first-line or first-level management. First-line managers direct
operating employees only; they do not supervise other
Types of Managerial Employees managers. Examples of first-line managers are the "foreman" or
production supervisor in a manufacturing plant, the technical
The term "manager" generally refers to "anyone who is responsible for supervisor in a research department, and the clerical supervisor in a
subordinates and other organizational resources."1 As a class, managers large office. First-level managers are often called supervisors.
constitute three levels of a pyramid:
MIDDLE MANAGERS — The term middle management can refer
Top management to more than one level in an organization. Middle managers direct
the activities of other managers and sometimes also those of
———————— operating employees. Middle managers' principal responsibilities are
to direct the activities that implement their organizations' policies
Middle and to balance the demands of their superiors with the capacities of
their subordinates. A plant manager in an electronics firm is an
example of a middle manager.
TOP MANAGERS — Composed of a comparatively small group of
executives, top management is responsible for the overall
management of the organization. It establishes operating policies and
First-Line guides the organization's interactions with its environment. Typical
titles of top managers are "chief executive
Management officer," "president," and "senior vice-president." Actual titles vary
from one organization to another and are not always a reliable guide
(also called to membership in the highest management classification.2

Supervisor) As can be seen from this description, a distinction exists between those who
have the authority to devise, implement and control strategic and operational
==================== policies (top and middle managers) and those whose task is simply to ensure
that such policies are carried out by the rank-and-file employees of an
Operatives organization (first-level managers/supervisors). What distinguishes them
from the rank-and-file employees is that they act in the interest of the
or employer in supervising such rank-and-file employees.

Operating "Managerial employees" may therefore be said to fall into two distinct
categories: the "managers" per se, who compose the former group described
Employees above, and the "supervisors" who form the latter group. Whether they belong
to the first or the second category, managers, vis-a-vis employers, are,
likewise, employees.3

The first question is whether route managers are managerial employees or On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92.
supervisors. entitled In Re: Petition for Direct Certification and/or Certification Election-
Route Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc.,
Previous Administrative Determinations of as follows:
the Question Whether Route Managers
are Managerial Employees The issue brought before us is not of first impression. At one time,
we had the occasion to rule upon the status of route manager in the
It appears that this question was the subject of two previous determinations same company vis a vis the issue as to whether or not it is
by the Secretary of Labor and Employment, in accordance with which this supervisory employee or a managerial employee. In the case
case was decided by the med-arbiter. of Workers Alliance Trade Unions (WATU) vs. Pepsi Cola Products,
Phils., Inc. (OS-MA-A-10-318-91 ), 15 November 1991, we ruled
In Case No. OS-MA-10-318-91, entitled Worker's Alliance Trade Union that a route manager is a managerial employee within the context of
(WATU) v. Pepsi-Cola Products Philippines, Inc., decided on November 13, the definition of the law, and hence, ineligible to join, form or assist
1991, the Secretary of Labor found: a union. We have once more passed upon the logic of our Decision
aforecited in the light of the issues raised in the instant appeal, as
We examined carefully the pertinent job descriptions of the subject well as the available documentary evidence on hand, and have come
employees and other documentary evidence on record vis-a- to the view that there is no cogent reason to depart from our earlier
vis paragraph (m), Article 212 of the Labor Code, as amended, and holding. Route Managers are, by the very nature of their functions
we find that only those employees occupying the position of route and the authority they wield over their subordinates, managerial
manager and accounting manager are managerial employees. The employees. The prescription found in Art. 245 of the Labor Code, as
rest i.e. quality control manager, yard/transport manager and amended therefore, clearly applies to them.4
warehouse operations manager are supervisory employees.
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations
To qualify as managerial employee, there must be a clear showing of Commission,5 however, petitioner argues that these previous administrative
the exercise of managerial attributes under paragraph (m), Article determinations do not have the effect of res judicata in this case, because
212 of the Labor Code as amended. Designations or titles of "labor relations proceedings" are "non-litigious and summary in nature
positions are not controlling. In the instant case, nothing on record without regard to legal technicalities."6 Nasipit Lumber Co. involved a
will support the claim that the quality control manager, clearance to dismiss an employee issued by the Department of Labor. The
yard/transport manager and warehouse operations manager are question was whether in a subsequent proceeding for illegal dismissal, the
vested with said attributes. The warehouse operations manager, for clearance was res judicata. In holding it was not, this Court made it clear that
example, merely assists the plant finance manager in planning, it was referring to labor relations proceedings of a non-adversary character,
organizing, directing and controlling all activities relative to thus:
development and implementation of an effective management
control information system at the sale offices. The exercise of The requirement of a clearance to terminate employment was a
authority of the quality control manager, on the other hand, needs the creation of the Department of labor to carry out the Labor Code
concurrence of the manufacturing manager. provisions on security of tenure and termination of employment. The
proceeding subsequent to the filing of an application for clearance to
As to the route managers and accounting manager, we are convinced terminate employment was outlined in Book V, Rule XIV of the
that they are managerial employees. Their job descriptions clearly Rules and Regulations Implementing the Labor Code. The fact that
reveal so. said rule allowed a procedure for the approval of the clearance with
or without the opposition of the employee concerned (Secs. 7 & 8),
demonstrates the non-litigious and summary nature of the supervisors may wittingly or unwittingly be classified as managerial
proceeding. The clearance requirement was therefore necessary only personnel and thus denied the right of self-organization, has decided to
as an expeditious shield against arbitrary dismissal without the review the record of this case.
knowledge and supervision of the Department of Labor. Hence, a
duly approved clearance implied that the dismissal was legal or for DOLE's Finding that Route Managers are
cause (Sec. 2).7 Managerial Employees Supported by
Substantial Evidence in the Record
But the doctrine of res judicata certainly applies to adversary administrative
proceedings. As early as 1956, in Brillantes v. Castro,8 we sustained the The Court now finds that the job evaluation made by the Secretary of Labor
dismissal of an action by a trial court on the basis of a prior administrative is indeed supported by substantial evidence. The nature of the job of route
determination of the same case by the Wage Administration Service, managers is given in a four-page pamphlet, prepared by the company, called
applying the principle of res judicata. Recently, in Abad v. NLRC9 we "Route Manager Position Description," the pertinent parts of which read:
applied the related doctrine of stare decisis in holding that the prior
determination that certain jobs at the Atlantic Gulf and Pacific Co., were A. BASIC PURPOSE
project employments was binding in another case involving another group of
employees of the same company. Indeed, in Nasipit Lumber Co., this Court A Manager achieves objectives through others.
clarified toward the end of its opinion that "the doctrine of res
judicata applies . . . to judicial or quasi judicial proceedings and not to the As a Route Manager, your purpose is to meet the
exercise of administrative powers."10 Now proceedings for certification sales plan; and you achieve this objective through
election, such as those involved in Case No. OS-M-A-10-318-91 and Case the skillful MANAGEMENT OF YOUR JOB AND
No. OS-A-3-71-92, are quasi judicial in nature and, therefore, decisions THE MANAGEMENT OF YOUR PEOPLE.
rendered in such proceedings can attain finality.11
These then are your functions as Pepsi-Cola Route
Thus, we have in this case an expert's view that the employees concerned are Manager. Within these functions — managing your
managerial employees within the purview of Art. 212 which provides: job and managing your people — you are
accountable to your District Manager for the
(m) "managerial employee" is one who is vested with powers or execution and completion of various tasks and
prerogatives to lay down and execute management policies and/or to activities which will make it possible for you to
hire, transfer, suspend, lay off, recall, discharge, assign or discipline achieve your sales objectives.
employees. Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial actions if the B. PRINCIPAL ACCOUNTABILITIES
exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment. All employees not
falling within any of the above definitions are considered rank-and-
file employees for purposes of this Book.
The Route Manager is accountable
for the following:
At the very least, the principle of finality of administrative determination
compels respect for the finding of the Secretary of Labor that route managers
are managerial employees as defined by law in the absence of anything to 1.1 SALES DEVELOPMENT
show that such determination is without substantial evidence to support it.
Nonetheless, the Court, concerned that employees who are otherwise
1.1.1 Achieve the suggested retail
sales plan. pricing.

1.1.2 Achieve all 1.1.9 Study from

distribution and time to time
new account individual route
objectives. coverage and
productivity for
1.1.3 Develop new possible
business adjustments to
opportunities thru maximize
personal contacts utilization of
with dealers. resources.

1.1.4 Inspect and 1.2 Administration

ensure that all
merchandizing [sic] 1.2.1 Ensure the
objectives are proper loading of
achieved in all route trucks before
outlets. check-out and the
proper sorting of
1.1.5 maintain and bottles before
improve check-in.
productivity of all
cooling equipment 1.2.2 Ensure the
and kiosks. upkeep of all route
sales reports and all
1.1.6 Execute and other related reports
control all and forms required
authorized on an accurate and
promotions. timely basis.

1.1.7 Develop and 1.2.3 Ensure proper

maintain dealer implementation of
goodwill. the various
company policies
1.1.8 Ensure all and procedures incl.
accounts comply but not limited to
with company shakedown; route
discipline; sorting; enhancement of
spoilages; effective sales and
credit/collection; merchandizing [sic]
accident; techniques of the
attendance. salesmen and
helpers. Conduct
1.2.4 Ensure group training at
collection of least 1 hour each
receivables and week on a
delinquent designated day and
accounts. of specific topic.

2.0 MANAGING YOUR PEOPLE 2.2 Code of Conduct

The Route Manager is accountable 2.2.1 Maintain the

for the following: company's
reputation through
2.1 Route Sales Team Development strict adherence to
PCPPI's code of
2.1.2 Conduct route conduct and the
rides to train, universal standards
evaluate and of unquestioned
develop all assigned business
route salesmen and ethics.12
helpers at least 3
days a week, to be Earlier in this opinion, reference was made to the distinction between
supported by managers per se (top managers and middle managers) and supervisors (first-
required route ride line managers). That distinction is evident in the work of the route managers
documents/reports which sets them apart from supervisors in general. Unlike supervisors who
& back check/spot basically merely direct operating employees in line with set tasks assigned to
check at least 2 them, route managers are responsible for the success of the company's main
days a week to be line of business through management of their respective sales teams. Such
supported by management necessarily involves the planning, direction, operation and
required evaluation of their individual teams and areas which the work of supervisors
documents/reports. does not entail.

2.1.2 Conduct sales The route managers cannot thus possibly be classified as mere supervisors
meetings and because their work does not only involve, but goes far beyond, the simple
morning huddles. direction or supervision of operating employees to accomplish objectives set
Training should by those above them. They are not mere functionaries with simple oversight
focus on the functions but business administrators in their own right. An idea of the role
of route managers as managersper se can be gotten from a memo sent by the
director of metro sales operations of respondent company to one of the route
managers. It reads:13

03 April 1995




Effective 01 April 1995, your basic monthly salary of P11,710 will be

increased to P12,881 or an increase of 10%. This represents the
added managerial responsibilities you will assume due to the recent The plasticized card given to route managers, quoted in the separate opinion
restructuring and streamlining of Metro Sales Operations brought of Justice Vitug, although entitled "RM's Job Description," is only a
about by the continuous losses for the last nine (9) months. summary of performance standards. It does not show whether route
managers are managers per se or supervisors. Obviously, these performance
standards have to be related to the specific tasks given to route managers in
Let me remind you that for our operations to be profitable, we have
the four-page "Route Manager Position Description," and, when this is done,
to sustain the intensity and momentum that your group and yourself
the managerial nature of their jobs is fully revealed. Indeed, if any, the card
have shown last March. You just have to deliver the desired volume
indicates the great latitude and discretion given to route managers — from
targets, better negotiated concessions, rationalized sustaining deals,
servicing and enhancing company goodwill to supervising and auditing
eliminate or reduced overdues, improved collections, more cash
accounts, from trade (new business) development to the discipline, training
accounts, controlled operating expenses, etc. Also, based on the
and monitoring of performance of their respective sales teams, and so forth,
agreed set targets, your monthly performance will be closely
— if they are to fulfill the company's expectations in the "key result areas."
Article 212(m) says that "supervisory employees are those who, in the
You have proven in the past that your capable of achieving your
interest of the employer, effectively recommend such managerial actions if
targets thru better planning, managing your group as a fighting
the exercise of such authority is not merely routinary or clerical in nature but
team, and thru aggressive selling. I am looking forward to your
requires the use of independent judgment." Thus, their only power is to
success and I expect that you just have to exert your doubly best in
recommend. Certainly, the route managers in this case more than merely
turning around our operations from a losing to a profitable one!
recommend effective management action. They perform operational, human
resource, financial and marketing functions for the company, all of which
Happy Selling!! involve the laying down of operating policies for themselves and their teams.
For example, with respect to marketing, route managers, in accordance with
B.1.1.1 to B.1.1.9 of( the Route Managers Job Description, are charged,
among other things,Swith expanding the dealership base of their respective
g the goodwill of current dealers, and distributing the
sales areas, maintaining
company's various promotional items as they see fit. It is difficult to see how
supervisors can be given such responsibility when this involves not just the
routine supervision of operating employees but the protection and expansion In accordance with the general definition above, this law defined
of the company's business vis-a-visits competitors. "supervisor" as follows:

While route managers do not appear to have the power to hire and fire Sec. 2. . . .
people (the evidence shows that they only "recommended" or "endorsed" the
taking of disciplinary action against certain employees), this is because this (k) "Supervisor" means any person having authority in the interest of
is a function of the Human Resources or Personnel Department of the an employer, to hire, transfer, suspend, lay-off, recall, discharge,
company.14 And neither should it be presumed that just because they are assign, recommend, or discipline other employees, or responsibly to
given set benchmarks to observe, they are ipso facto supervisors. Adequate direct them, and to adjust their grievances, or effectively to
control methods (as embodied in such concepts as "Management by recommend such acts, if, in connection with the foregoing, the
Objectives [MBO]" and "performance appraisals") which require a exercise of such authority is not of a merely routinary or clerical
delineation of the functions and responsibilities of managers by means of nature but requires the use of independent judgment.16
ready reference cards as here, have long been recognized in management as
effective tools for keeping businesses competitive. The right of supervisors to form their own organizations was affirmed:

This brings us to the second question, whether the first sentence of Art. 245 Sec. 3. Employees' Right to Self-Organization. — Employees shall
of the Labor Code, prohibiting managerial employees from forming, have the right to self-organization and to form, join or assist labor
assisting or joining any labor organization, is constitutional in light of Art. organizations of their own choosing for the purpose of collective
III, §8 of the Constitution which provides: bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective
The right of the people, including those employed in the public and bargaining and other mutual aid and protection. Individuals
private sectors, to form unions, associations, or societies for employed as supervisors shall not be eligible for membership in a
purposes not contrary to law shall not be abridged. labor organization of employees under their supervision but may
form separate organizations of their own.17
As already stated, whether they belong to the first category (managers per
se) or the second category (supervisors), managers are employees. For its part, the Supreme Court upheld in several of its decisions the right of
Nonetheless, in the United States, as Justice Puno's separate opinion notes, supervisors to organize for purposes of labor relations.18
supervisors have no right to form unions. They are excluded from the
definition of the term "employee" in §2(3) of the Labor-Management Although it had a definition of the term "supervisor," the Industrial Peace
Relations Act of 1947.15 In the Philippines, the question whether managerial Act did not define the term "manager." But, using the commonly-understood
employees have a right of self-organization has arisen with respect to first- concept of "manager," as above stated, it is apparent that the law used the
level managers or supervisors, as shown by a review of the course of labor term "supervisors" to refer to the sub-group of "managerial employees"
legislation in this country. known as front-line managers. The other sub-group of "managerial
employees," known as managers per se, was not covered.
Right of Self-Organization of Managerial
Employees under Pre-Labor Code Laws However, in Caltex Filipino Managers and Supervisors Association v. Court
of Industrial Relations,19 the right of all managerial employees to self-
Before the promulgation of the Labor Code in 1974, the field of labor organization was upheld as a general proposition, thus:
relations was governed by the Industrial Peace Act (R.A. No. 875).

It would be going too far to dismiss summarily the point raised by Payroll Position Title
respondent Company — that of the alleged identity of interest
between the managerial staff and the employing firm. That should Assistant to Mgr. — National Acct. Sales
ordinarily be the case, especially so where the dispute is between
management and the rank and file. It does not necessarily follow Jr. Sales Engineer
though that what binds the managerial staff to the corporation
forecloses the possibility of conflict between them. There could be a Retail Development Asst.
real difference between what the welfare of such group requires and
the concessions the firm is willing to grant. Their needs might not be Staff Asst. — 0 Marketing
attended to then in the absence of any organization of their own. Nor
is this to indulge in empty theorizing. The record of respondent
Sales Supervisor
Company, even the very case cited by it, is proof enough of their
uneasy and troubled relationship. Certainly the impression is
difficult to erase that an alien firm failed to manifest sympathy for Supervisory Assistant
the claims of its Filipino executives. To predicate under such
circumstances that agreement inevitably marks their relationship, Jr. Supervisory Assistant
ignoring that discord would not be unusual, is to fly in the face of
reality. Credit Assistant

. . . The basic question is whether the managerial personnel can Lab. Supvr. — Pandacan
organize. What respondent Company failed to take into account is
that the right to self-organization is not merely a statutory creation. Jr. Sales Engineer B
It is fortified by our Constitution. All are free to exercise such right
unless their purpose is contrary to law. Certainly it would be to Operations Assistant B
attach unorthodoxy to, not to say an emasculation of, the concept of
law if managers as such were precluded from organizing. Having Field Engineer
done so and having been duly registered, as did occur in this case,
their union is entitled to all the rights under Republic Act No. 875. Sr. Opers. Supvr. — MIA A/S
Considering what is denominated as unfair labor practice under
Section 4 of such Act and the facts set forth in our decision, there can Purchasing Assistant
be only one answer to the objection raised that no unfair labor
practice could be committed by respondent Company insofar as
Jr. Construction Engineer
managerial personnel is concerned. It is, as is quite obvious, in the
Sr. Sales Supervisor
Actually, the case involved front-line managers or supervisors only, as the
plantilla of employees, quoted in the main opinion,21 clearly indicates: Deport Supervisor A

CAFIMSA members holding the following Supervisory Payroll Terminal Accountant B

Position Title are Recognized by the Company
Dist. Sales Prom. Supvr. Finally, also deemed included are all other employees excluded from
the rank and file unions but not classified as managerial or
Instr. — Merchandising otherwise excludable by law or applicable judicial precedents.

Asst. Dist. Accountant B Right of Self-Organization of Managerial

Employees under the Labor Code
Sr. Opers. Supervisor
Thus, the dictum in the Caltex case which allowed at least for the theoretical
Jr. Sales Engineer A unionization of top and middle managers by assimilating them with the
supervisory group under the broad phrase "managerial personnel," provided
Asst. Bulk Ter. Supt. the lynchpin for later laws denying the right of self-organization not only to
top and middle management employees but to front line managers or
Sr. Opers. Supvr. supervisors as well. Following the Caltex case, the Labor Code, promulgated
in 1974 under martial law, dropped the distinction between the first and
second sub-groups of managerial employees. Instead of treating the terms
Credit Supervisor A
"supervisor" and "manager" separately, the law lumped them together and
called them "managerial employees," as follows:
Asst. Stores Supvr. A
Art. 212. Definitions . . . .
Ref. Supervisory Draftsman
(k) "Managerial Employee" is one who is vested with powers or
Refinery Shift Supvr. B prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, lay off, recall, discharge, assign or discipline
Asst. Supvr. A — Operations (Refinery) employees, or to effectively recommend such managerial actions. All
employees not falling within this definition are considered rank and
Refinery Shift Supvr. B file employees for purposes of this Book.22

Asst. Lab. Supvr. A (Refinery) The definition shows that it is actually a combination of the commonly
understood definitions of both groups of managerial employees,
St. Process Engineer B (Refinery) grammatically joined by the phrase "and/or."

Asst. Supvr. A — Maintenance (Refinery) This general definition was perhaps legally necessary at that time for two
reasons. First, the 1974 Code denied supervisors their right to self-organize
Asst. Supvr. B — Maintenance (Refinery) as theretofore guaranteed to them by the Industrial Peace Act. Second, it
stood the dictum in the Caltex case on its head by prohibiting all types of
Supervisory Accountant (Refinery) managers from forming unions. The explicit general prohibition was
contained in the then Art. 246 of the Labor Code.
Communications Supervisor (Refinery)
The practical effect of this synthesis of legal concepts was made apparent in
the Omnibus Rules Implementing the Labor Code which the Department of

Labor promulgated on January 19, 1975. Book V, Rule II, §11 of the Rules ESTABLISHMENTS. In other words, the section will now read as
provided: follows: "The right of the people WHETHER EMPLOYED BY THE
Supervisory unions and unions of security guards to cease operation. unions, or societies for purposes not contrary to law shall not be
— All existing supervisory unions and unions of security guards abridged."23
shall, upon the effectivity of the Code, cease to operate as such and
their registration certificates shall be deemed automatically Explaining his proposed amendment, he stated:
canceled. However, existing collective agreements with such unions,
the life of which extends beyond the date of effectivity of the Code, MR. LERUM. Under the 1935 Bill of Rights, the right to form
shall be respected until their expiry date insofar as the economic associations is granted to all persons whether or not they are
benefits granted therein are concerned. employed in the government. Under that provision, we allow unions
in the government, in government-owned and controlled
Members of supervisory unions who do not fall within the definition corporations and in other industries in the private sector, such as the
of managerial employees shall become eligible to join or assist the Philippine Government Employees' Association, unions in the GSIS,
rank and file labor organization, and if none exists, to form or assist the SSS, the DBP and other government-owned and controlled
in the forming of such rank and file organization. The determination corporations. Also, we have unions of supervisory employees and of
of who are managerial employees and who are not shall be the security guards. But what is tragic about this is that after the 1973
subject of negotiation between representatives of the supervisory Constitution was approved and in spite of an express recognition of
union and the employer. If no agreement is reached between the the right to organize in P.D. No. 442, known as the Labor Code, the
parties, either or both of them may bring the issue to the nearest right of government workers, supervisory employees and security
Regional Office for determination. guards to form unions was abolished.

The Department of Labor continued to use the term "supervisory unions" And we have been fighting against this abolition. In every tripartite
despite the demise of the legal definition of "supervisor" apparently because conference attended by the government, management and workers,
these were the unions of front line managers which were then allowed as a we have always been insisting on the return of these rights. However,
result of the statutory grant of the right of self-organization under the both the government and employers opposed our proposal, so
Industrial Peace Act. Had the Department of Labor seen fit to similarly ban nothing came out of this until this week when we approved a
unions of top and middle managers which may have been formed following provision which states:
the dictum in Caltex, it obviously would have done so. Yet it did not,
apparently because no such unions of top and middle managers really then Notwithstanding any provision of this article, the
existed. right to self-organization shall not be denied to
government employees.
Real Intent of the 1986 Constitutional Commission
We are afraid that without any corresponding provision covering the
This was the law as it stood at the time the Constitutional Commission private sector, the security guards, the supervisory employees or
considered the draft of Art. III, §8. Commissioner Lerum sought to amend the majority employees [sic] will still be excluded, and that is the
draft of what was later to become Art. III, §8 of the present Constitution: purpose of this amendment.

MR. LERUM. My amendment is on Section 7, page 2, line 19, which I will be very glad to accept any kind of wording as long as it will
is to insert between the words "people" and "to" the following: amount to absolute recognition of private sector employees, without
THE PRESIDENT. What does the Committee say? Art. 246. Managerial employees are not eligible to
join, assist, and form any labor organization.
FR. BERNAS. Certainly, the sense is very acceptable, but the point
raised by Commissioner Rodrigo is well-taken. Perhaps, we can THE PRESIDING OFFICER (Mr. Bengzon). What does the
lengthen this a little bit more to read: "The right of the people Committee say?

I want to avoid also the possibility of having this interpreted as THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has
applicable only to the employed. accepted the amendment, as amended.

MR. DE LOS REYES. Will the proponent accept an amendment to Is there any objection? (Silence) The Chair hears none; the
the amendment, Madam President? amendment, as amended, is approved.25

MR. LERUM. Yes, as long as it will carry the idea that the right of The question is what Commissioner Lerum meant in seeking to
the employees in the private sector is recognized.24 "automatically abolish" the then Art. 246 of the Labor Code. Did he simply
want "any kind of wording as long as it will amount to absolute recognition
Lerum thus anchored his proposal on the fact that (1) government employees, of private sector employees, without exception, to organize"?26 Or, did he
supervisory employees, and security guards, who had the right to organize instead intend to have his words taken in the context of the cause which
under the Industrial Peace Act, had been denied this right by the Labor moved him to propose the amendment in the first place, namely, the denial of
Code, and (2) there was a need to reinstate the right of these employees. In the right of supervisory employees to organize, because he said, "We are
consonance with his objective to reinstate the right of government, security, afraid that without any corresponding provision covering the private sector,
and supervisory employees to organize, Lerum then made his proposal: security guards, supervisory employees or majority [of] employees will still
be excluded, and that is the purpose of this amendment"?27
MR. LERUM. Mr. Presiding Officer, after a consultation with
several Members of this Commission, my amendment will now read It would seem that Commissioner Lerum simply meant to restore the right of
as follows: "The right of the people INCLUDING THOSE supervisory employees to organize. For even though he spoke of the need to
EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS to form "abolish" Art. 246 of the Labor Code which, as already stated, prohibited
associations, unions, or societies for purposes not contrary to law "managerial employees" in general from forming unions, the fact was that in
shall not be abridged. In proposing that amendment I ask to make of explaining his proposal, he repeatedly referred to "supervisory employees"
record that I want the following provisions of the Labor Code to be whose right under the Industrial Peace Act to organize had been taken away
automatically abolished, which read: by Art. 246. It is noteworthy that Commissioner Lerum never referred to the
then definition of "managerial employees" in Art. 212(m) of the Labor Code
Art. 245. Security guards and other personnel which put together, under the broad phrase "managerial employees," top and
employed for the protection and security of the middle managers and supervisors. Instead, his repeated use of the term
person, properties and premises of the employers "supervisory employees," when such term then was no longer in the statute
shall not be eligible for membership in a labor books, suggests a frame of mind that remained grounded in the language of
organization. the Industrial Peace Act.

Nor did Lerum ever refer to the dictum in Caltex recognizing the right of all similar absolute constitutional right to organize for labor purposes should be
managerial employees to organize, despite the fact that the Industrial Peace deemed to have been granted to top-level and middle managers. As to them
Act did not expressly provide for the right of top and middle managers to the right of self-organization may be regulated and even abridged
organize. If Lerum was aware of the Caltex dictum, then his insistence on the conformably to Art. III, §8.
use of the term "supervisory employees" could only mean that he was
excluding other managerial employees from his proposal. If, on the other Constitutionality of Art. 245
hand, he was not aware of the Caltex statement sustaining the right to
organize to top and middle managers, then the more should his repeated use Finally, the question is whether the present ban against managerial
of the term "supervisory employees" be taken at face value, as it had been employees, as embodied in Art. 245 (which superseded Art. 246) of the Labor
defined in the then Industrial Peace Act. Code, is valid. This provision reads:

At all events, that the rest of the Commissioners understood his proposal to Art. 245. Ineligibility of managerial employees to join any labor
refer solely to supervisors and not to other managerial employees is clear organization; right of supervisory employees. — Managerial
from the following account of Commissioner Joaquin G. Bernas, who writes: employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
In presenting the modification on the 1935 and 1973 texts, membership in a labor organization of the rank-and-file employees
Commissioner Eulogio R. Lerum explained that the modification but may join, assist or form separate labor organizations of their
included three categories of workers: (1) government employees, (2) own.29
supervisory employees, and (3) security guards. Lerum made of
record the explicit intent to repeal provisions of P.D. 442, the Labor This provision is the result of the amendment of the Labor Code in 1989 by
Code. The provisions referred to were: R.A. No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the
Industrial Peace Act or the provisions of the Labor Code which it
Art. 245. Security guards and other personnel superseded, R.A. No. 6715 provides separate definitions of the terms
employed for the protection and security of the "managerial" and "supervisory employees," as follows:
person, properties and premises of the employers
shall not be eligible for membership in a labor Art. 212. Definitions. . . .
(m) "managerial employee" is one who is vested with powers or
Art. 246. Managerial employees are not eligible to prerogatives to lay down and execute management policies and/or to
join, assist, and form any labor organization.28 hire transfer, suspend, lay off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of
Implications of the Lerum Proposal the employer, effectively recommend such managerial actions if the
exercise of such authority is not merely routinary or clerical in
In sum, Lerum's proposal to amend Art. III, §8 of the draft Constitution by nature but requires the use of independent judgment. All employees
including labor unions in the guarantee of organizational right should be not falling within any of the above definitions are considered rank-
taken in the context of statements that his aim was the removal of the and-file employees for purposes of this Book.
statutory ban against security guards and supervisory employees joining
labor organizations. The approval by the Constitutional Commission of his Although the definition of "supervisory employees" seems to have been
proposal can only mean, therefore, that the Commission intended the unduly restricted to the last phrase of the definition in the Industrial Peace
absolute right to organize of government workers, supervisory employees, Act, the legal significance given to the phrase "effectively recommends"
and security guards to be constitutionally guaranteed. By implication, no
remains the same. In fact, the distinction between top and middle managers, forming unions. After all, those who qualify as top or middle managers are
who set management policy, and front-line supervisors, who are merely executives who receive from their employers information that not only is
responsible for ensuring that such policies are carried out by the rank and confidential but also is not generally available to the public, or to their
file, is articulated in the present definition.30 When read in relation to this competitors, or to other employees. It is hardly necessary to point out that to
definition in Art. 212(m), it will be seen that Art. 245 faithfully carries out the say that the first sentence of Art. 245 is unconstitutional would be to
intent of the Constitutional Commission in framing Art. III, §8 of the contradict the decision in that case.
fundamental law.
WHEREFORE, the petition is DISMISSED.
Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban
against managerial employees forming a union. The right guaranteed in Art. SO ORDERED.
III, §8 is subject to the condition that its exercise should be for purposes "not
contrary to law." In the case of Art. 245, there is a rational basis for
prohibiting managerial employees from forming or joining labor
organizations. As Justice Davide, Jr., himself a constitutional commissioner,
said in his ponencia in Philips Industrial Development, Inc. v. NLRC:31

In the first place, all these employees, with the exception of the
service engineers and the sales force personnel, are confidential
employees. Their classification as such is not seriously disputed by
PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW
explicitly considered them as confidential employees. By the very
nature of their functions, they assist and act in a confidential
capacity to, or have access to confidential matters of, persons who
exercise managerial functions in the field of labor relations. As such,
the rationale behind the ineligibility of managerial employees to
form, assist or joint a labor union equally applies to them.

In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court

elaborated on this rationale, thus:

. . . The rationale for this inhibition has been stated

to be, because if these managerial employees would
belong to or be affiliated with a Union, the latter
might not be assured of their loyalty to the Union in
view of evident conflict of interests. The Union can
also become company-dominated with the presence
of managerial employees in Union membership.32

To be sure, the Court in Philips Industrial was dealing with the right of
confidential employees to organize. But the same reason for denying them the
right to organize justifies even more the ban on managerial employees from
G.R. No. 78755 July 19, 1989 Petitioner is a corporation engaged in the production of bananas for export.
Private respondent Union represents the employees/workers of petitioner
GOLDEN FARMS, INC., petitioner, corporation, who were the same signatories to an earlier Petition for
vs. Certification Election filed in 1984 before the Ministry of Labor known as
THE HONORABLE DIRECTOR PURA FERRER-CALLEJA, ROXI Case No. UR-70-84, which was dismissed by a Resolution issued by
BUREAU OF LABOR RELATIONS and NATIONAL FEDERATION Med-Arbiter Conchita Martinez when it was established that a collective
OF LABOR, respondents. bargaining unit (NFL) between the Corporation and the rank-and-file
employees was and is in existence at the time of the filing of the said petition
PARAS, J.: for certification election until the present filing. However, in the order of
dismissal, it was stated:
Petitioner Golden Farms, Inc., seeks a reversal of the resolution of public
respondent Department of Labor and Employment Director Pura Ferrer- After taking into consideration the functions exercised by the
Calleja in BLR Case No. A-2-56-87 which affirmed on appeal the decision of foremen as contained in their joint affidavits (Annexes "A-
Labor Arbiter Conrado O. Macasa, Sr., in NLRC Case No. R-418-ROXI- 1", "A-2" & "A-3", Petitioner's Position Paper) apparently,
MED-UR-8886, issuing a directive as follows: they fall within the classification of rank-and-file employees.
For, as consistently ruled in a long line of decisions, mere
In view of the foregoing, the herein petition for certification supervisory designations in the position titles, do not make
election filed by the National Federation of Labor (NFL) is the holders of such positions any less rank and filers, without
hereby DISMISSED; whereas, its resultant and relevant the convincing proof that such supervisory designations are
consequence of its recognized representation of the entire coupled with actual performance of managerial functions. In
rank-and-file employees of the bargaining unit should be the cases at bar, what was submitted by the respondent
given life and meaning, as it is hereby directed, and companies are only lists of employees holding the positions
Employer Golden Farms, Incorporated likewise enjoined to of foremen and confidential positions and as such are not
negotiate for a supplementary collective bargaining covered by the bargaining unit. Such piece of evidence alone
agreement, or for the inclusion of the herein monthly paid does not constitute convincing proof for us to adapt
rank-and- file employees at Luna, Kapalong, Davao del respondents' stance (Annexes "A", "B", "C", & "D").
Norte, and Lanang, Davao City in the still existing Comment on Petition). (p. 13, Rollo)
negotiated contract, whichever the parties may consider just
and appropriate under the circumstances. Having had no opportunity to contest the abovementioned statement in the
order of dismissal, petitioner herein as private respondent therein, filed a
SO ORDERED. (p. 29, Rollo) "Manifestation" stating among others:

The case originated as a Petition for Direct Certification Election or 2. That since the petitions were dismissed the herein
Recognition filed by herein private respondent in behalf of certain office employees make clear for the record that said view would
employees and foremen before Regional Office No. XI, Davao City of the run counter to the provision of the pertinent Collective
Ministry of Labor and Employment. Petitioner herein opposed said petition Bargaining Agreement whereby the foremen were already
on the ground among others that a perusal of the names allegedly supporting acknowledged and agreed upon to be managerial employees
the said petition showed that said persons by the nature of their jobs are and accordingly excluded from the coverage of the said
performing managerial functions and/or occupying confidential positions CBA;
such that they cannot validly constitute a separate or distinct group from the
existing collective bargaining unit also represented by private respondent.
3. That with respect to those employees holding confidential Respondents relied heavily on the alleged finding of Med-Arbiter Martinez
positions, it is a basic principle that they cannot be included that the employees who were signatories to the petition for certification
in any bargaining unit, the fact being that having access to election and represented by respondent Union are actually rank-and-file
confidential informations, said employees may be the source workers not disqualified from entering into a collective bargaining agreement
of undue advantage. Said employees may act as spies for with management. In said findings of fact, Med-Arbiter Martinez singled out
either parties to collective bargaining agreement. This is in her classification as rank-and-file employees the foremen of Petitioner
especially true in this case where the petitioning union is Corporation considered from their joint affidavits and for lack of convincing
already the bargaining agent of the rank-and-file employees proof that their supervisory designations are coupled with the actual
in the establishment. To allow confidential employees to join performance of managerial functions.
existing bargaining unit will defeat the very purpose for
which an employee holding confidential position was in the Whether or not such finding is supported by the evidence is beside the point.
first place excluded. (p. 68, Rollo) Respondents herein do not dispute that the signatories (listed in Annex "A",
page 30, Rollo) to the Petition for certification election subject of this case,
Private respondent herein as petitioner therein appealed the order of dismissal were holding the positions of cashier, purchasers, personnel officers, foremen
which was accordingly opposed (Annex "L" p. 69, Rollo) by Golden Farms, and employees having access to confidential information such as accounting
Inc., reiterating the grounds and arguments set forth in its Manifestation filed personnel, radio and telegraph operators and head of various sections. It is
earlier. The appeal was dismissed and subsequently the National Federation also a fact that respondent Union is the exclusive bargaining Unit of the rank-
of Labor Union refiled the Petition for Certification in NLRC Case No. R- and-file employees of petitioner corporation and that an existing CBA
418- ROX-MED-UR-88-86 which was also dismissed. Said order of between petitioner corporation and the Union representing these rank-and-
dismissal is now the subject of this review for containing directives not file employees was still enforced at the time the Union filed a petition for
within the power of a Med-Arbiter to issue. Petitioner Golden Farms, Inc., certification election in behalf of the aforementioned signatories. Under the
now poses the following questions: terms of said CBA (Annex "E", p. 40, Rollo) it is expressly provided that:

I HAS A MED-ARBITER THE POWER Section 1. The COMPANY and the UNION hereby agree
OR AUTHORITY TO DIRECT that the recognized bargaining unit for purposes of this
MANAGEMENT TO ENTER INTO A agreement shall consist of regular rank-and-file workers
SUPPLEMENTAL COLLECTIVE employed by the COMPANY at the plantation presently
BARGAINING AGREEMENT WITH A situated at Alejal, Carmen, Davao. Consequently, all
CONTRACTING UNION. managerial personnel like, superintendents, supervisor,
foremen, administrative, professional and confidential
II MAY SUPERVISORS, CASHIERS, employees, and those temporary, casual, contractual, and
FOREMEN, AND EMPLOYEES seasonal workers are excluded from the bargaining unit and
HOLDING therefore, not covered by this agreement.
BARGAINING AGREEMENT WITH Respondents do not dispute the existence of said collective bargaining
THEM. (p. 14, Rollo) agreement. We must therefore respect this CBA which was freely and
voluntarily entered into as the law between the parties for the duration of the
The petition merits Our consideration. period agreed upon. Until then no one can be compelled to accept changes in
the terms of the collective bargaining agreement.
Furthermore, the signatories to the petition for certification election are the G.R. No. L-98050 March 17, 1994
very type of employees by the nature of their positions and functions which
We have decreed as disqualified from bargaining with management in case PHILIPPINE PHOSPHATE FERTILIZER
of Bulletin Publishing Co. Inc. vs. Hon. Augusto Sanchez, etc. (144 SCRA CORPORATION, petitioner,
628) reiterating herein the rationale for such ruling as follows: if these vs.
managerial employees would belong to or be affiliated with a Union, the HON. RUBEN D. TORRES, Secretary of Labor and Employment, HON.
latter might not be assured of their loyalty to the Union in view of evident RODOLFO S. MILADO, Department of Labor and Employment
conflict of interests or that the Union can be company- dominated with the Mediator-Arbiter for Region VIII, Tacloban, City, and PHILPHOS
presence of managerial employees in Union membership. A managerial MOVEMENT FOR PROGRESS, INC. (PMPI), respondents.
employee is defined under Art. 212 (k) of the new Labor Code as "one who
is vested with powers or prerogatives to lay down and execute management BELLOSILLO, J.:
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees, or to effectively recommend such managerial actions. PHILIPPINE PHOSPHATE FERTILIZER CORPORATION (PHILPHOS)
All employees not falling within this definitions are considered rank-and-file assails the decision of the Secretary of Labor of 7 August 1990 affirming the
employees for purposes of this Book." order of the Mediator-Arbiter of 28 March 1990 which directed the
immediate conduct of a certification election among the supervisory,
This rationale holds true also for confidential employees such as accounting professional or technical, and confidential employees of petitioner
personnel, radio and telegraph operators, who having access to confidential corporation.
information, may become the source of undue advantage. Said employee(s)
may act as a spy or spies of either party to a collective bargaining agreement. On 7 July 1989, Philphos Movement for Progress, Inc. (PMPI for brevity),
This is specially true in the present case where the petitioning Union is filed with the Department of Labor and Employment a petition for
already the bargaining agent of the rank-and-file employees in the certification election among the supervisory employees of petitioner, alleging
establishment. To allow the confidential employees to join the existing Union that as a supervisory union duly registered with the Department of Labor and
of the rank-and-file would be in violation of the terms of the Collective Employment it was seeking to represent the supervisory employees of
Bargaining Agreement wherein this kind of employees by the nature of their Philippine Phosphate Fertilizer Corporation.
functions/positions are expressly excluded.
The petition for certification election filed by PMPI was not opposed by
As to the company foremen, while in the performance of supervisory PHILPHOS. In fact, on 11 August 1989, PHILPHOS submitted a position
functions, they may be the extension or alter ego of the management. paper with the Mediator-Arbiter stating that its management welcomed the
Adversely, the foremen, by their actuation, may influence the workers under creation of a supervisory employees' union provided the necessary requisites
their supervision to engage in slow down commercial activities or similar of law were properly observed, but exempting from the union
activities detrimental to the policy, interest or business objectives of the its superintendents who were managerial and not supervisory employees as
company or corporation, hence they also cannot join. they managed a division, subdivision or section, and were vested with
powers or prerogatives to lay down and execute management policies.
WHEREFORE, finding the assailed directive of Med-Arbiter Conrado O. PHILPHOS also asserted that its professional or technical employees were
Macasa, Sr. which was affirmed by Director Pura Ferrer-Calleja reiterating not within the definition of supervisory employees under the Labor Code as
the directive of Med- Arbiter Conchita Martinez "to negotiate for a they were immediately under the direction and supervision of its
supplementary collective bargaining agreement, or for the inclusion of the superintendents and supervisors. Moreover, the professional and technical
herein monthly paid rank-and- file employees" to be erroneous as it is in employees did not have a staff of workers under them. Consequently,
complete disregard of the terms of the collective bargaining agreement, the petitioner prayed for the exclusion of
same is hereby DECLARED to be without force and effect.
its superintendents andprofessional/technical employees from the PMPI There are two (2) issues raised by petitioner: (1) whether it was denied due
supervisory union. process in the proceedings before respondent Mediator-Arbiter; and, (2)
whether its professional/technical and confidential employees may validly
On 13 October 1989, Mediator-Arbiter Rodolfo S. Milado issued an order join respondent PMPI union which is composed of supervisors.
directing the holding of a certification election among the supervisory
employees of petitioner, excluding therefrom the superintendents and PHILPHOS claims that it was denied due process when respondent
theprofessional and technical employees. He also directed the parties to Mediator-Arbiter granted the amended petition of respondent PMPI without
attend the pre-election conference on 19 April 1990 for the determination of according PHILPHOS a new opportunity to be heard.
the mechanics of the election process and the qualifications and eligibility of
those allowed to vote. We do not see it the way PHILPHOS does here. The essence of due process
is simply an opportunity to be heard or, as applied to administrative
On 15 November 1989, PMPI filed an amended petition with the Mediator- proceedings, an opportunity to explain one's side or an opportunity to seek a
Arbiter wherein it sought to represent not only the supervisory employees of reconsideration of the action or ruling complained of.2 Where, as in the
petitioner but also its professional/technical and confidential employees. The instant case, petitioner PHILPHOS agreed to file its position paper with the
amended petition was filed in view of the amendment of the PMPI Mediator-Arbiter and to consider the case submitted for decision on the basis
Construction which included in its membership of the position papers filed by the parties, there was sufficient compliance
the professional/technical and confidential employees. with the requirement of due process, as petitioner was afforded reasonable
opportunity to present its side.3 Moreover, petitioner could have, if it so
On 14 December 1989, the parties therein agreed to submit their respective desired, insisted on a hearing to confront and examine the witnesses of the
position papers and to consider the amended petition submitted for decision other party. But it did
on the basis thereof and related documents. not; 4 instead, it opted to submit its position paper with the Mediator-Arbiter.
Besides, petitioner had all the opportunity to ventilate its arguments in its
On 28 March 1990, Mediator-Arbiter Milado issued an order granting the appeal to the Secretary of Labor.
petition and directing the holding of a certification election among
the "supervisory, professional (engineers, analysts, mechanics, accountants, As regards the second issue, we are with petitioner that being a supervisory
nurses, midwives, etc.), technical, and confidential employees" 1 to comprise union, respondent PMPI cannot represent
the proposed bargaining unit. the professional/technical and confidential employees of petitioner whose
positions we find to be more of the rank and file than supervisory.
On 16 April 1990, PHILPHOS appealed the order of 28 March 1990 to the
Secretary of Labor and Employment who on 7 August 1990 rendered a With the enactment in March 1989 of R.A. 6715, employees were thereunder
decision through Undersecretary Bienvenido Laguesma dismissing the reclassified into three (3) groups, namely: (a) managerial employees, (b)
appeal. PHILPHOS moved for reconsideration but the same was denied; supervisory employees, and (c) rank and file employees. The category of
hence, the instant petition alleging grave abuse of discretion on the part of supervisory employees is once again recognized in the present law.
public respondents in rendering the assailed rulings.
Article 212, par. (m), of the Labor Code, as amended, provides, that
On 8 July 1991, this Court issued a temporary restraining order enjoining "(s)upervisory employees are those who, in the interest of the employer,
respondents from holding the certification election among effectively recommend such managerial actions if the exercise of such
petitioner's supervisory, professional/technical, and confidential authority is not merely routinary or clerical in nature but requires the use of
employees scheduled on 12 July 1991. independent judgment." The definition of managerial employees is limited to
those having authority to hire and fire, while those who only recommend
effectively the hiring or firing or transfer of personnel; are considered closer
to rank and file employees. The exclusion therefore of mid-level executives effectively recommend managerial actions with the use of independent
from the category of managers has brought about a third classification, the judgment because they are under the supervision of superintendents and
supervisory employees. The peculiar role of supervisors is such that while supervisors. Because it is unrefuted that these professional/technical
they are not managers, when they recommend action implementing employees are performing non-supervisory functions, hence considered
management policy or ask for the discipline or dismissal of subordinates, admitted, they should be classified, at least for purposes of this case, as rank
they identify with the interests of the employer and may act contrary to the and file employees. Consequently, theseprofessional/technical
interests of the rank and file.5 employees cannot be allowed to join a union composed of supervisors.
Conversely, supervisory employees cannot join a labor organization of
In its position paper submitted to the Mediator-Arbiter, petitioner described employees under their supervision but may validly form a separate
the positions and functions of itsprofessional/technical employees, organization of their own.9 This is provided in Art. 245 of the Labor Code, as
(engineers, analysts, mechanics, accountants, nurses, and midwives). The amended by R.A. No. 6715, to wit:
guidelines, which were not refuted by respondent PMPI, state:
. . . Managerial employees are not eligible to join, assist or
. . . . Professional and Technical positions are those whose form any labor organization. Supervisory employees shall
primary duty consists of the performance of work directly not be eligible for membership in a labor organization of the
related to management programs; who customarily, regularly rank and file employees but may join, assist or form separate
and routinarily exercise judgment in the application of labor organizations of their own.
concepts, methods, systems and procedures in their
respective fields of specialization; who regularly and directly Respondent PMPI is supposed to be a union of 125 supervisors. If
assist a managerial and/or supervisory employee, execute the professional/technical employees are included as members, and records
under general supervision, work along specialized or show that they are 271 in all or much more than the supervisors, then PMPI
technical lines requiring special training, experience or will turn out to be a rank and file union with the supervisors as members.
knowledge, or execute under general supervision special
assignments and task . . . . They are immediately under the This is precisely the situation which the law prohibits. It would create an
direction and supervision of supervisors or superintendents. obvious conflict of views among the members, or at least between two (2)
They have no men under them but are regularly called upon groups of members espousing opposing interests. The intent of the law is to
by their supervisors or superintendents on some technical avoid a situation where supervisors would merge with the rank and file, or
matters.6 where the supervisors' labor organization would represent conflicting
interests, especially where, as in the case at bar, the supervisors will be
Moreover, Herculano, A. Duhaylungsod, Personnel Officer of petitioner, commingling with those employees whom they directly supervise in their
attested that there was no community of interests between the supervisors of own bargaining unit. Members of the supervisory union might refuse to carry
petitioner and the professional/technical employees; that as of 25 July 1990, out disciplinary measures against their co-member rank and file
personnel records showed that there were 125 supervisors and employees. 10
271 professional/technical employees; that of the 271 professional/technical
employees, 150 were directly under and being supervised by supervisors, Supervisors have the right to form their own union or labor organization.
while the rest were staff members of superintendents.7 What the law prohibits is a union whose membership comprises
of supervisors merging with the rank and file employees because this is
The certification of Personnel Officer Duhaylungsod that where conflict of interests may arise in the areas of discipline, collective
its professional/technical employees occupy positions that are non- bargaining and strikes. 11 The professional/technical employees of petitioner
supervisory is evidence that said employees belong to the rank and therefore may join the existing rank and file union, or form a union separate
file.8 Quite obviously, theseprofessional/technical employees cannot
and distinct from the existing union organized by the rank and file employees
of the same company.

As to the confidential employees of the petitioner, the latter has not shown
any proof or compelling reason to exclude them from joining respondent
PMPI and from participating in the certification election, unless these
confidential employees are the same professional/technical employees whom
we find to be occupying rank and file positions.

WHEREFORE, the petition is GRANTED. The decision of respondent

Secretary of Labor of 7 August 1990, as well as the order of the respondent
Mediator-Arbiter of 28 March 1990, is SET ASIDE. The
professional/technical employees of petitioner Philippine Phosphate Fertilizer
Corporation (PHILPHOS) are declared disqualified from affiliating with
respondent Philphos Movement for Progress, Inc. (PMPI).

The Department of Labor is directed to order immediately the conduct of

certification election among the supervisory employees of petitioner,
particularly excluding therefrom its professional and technical employees.


Cruz, Davide, Jr., Quiason and Kapunan, JJ., concur.

The petitioner argues that the affiliation of the respondent union of
Sycip, Salazar, Luna & Feliciano for petitioner. supervisors, the salesmen's association, and the Adamson and Adamson
independent Workers Union of rank and file personnel with the same
Jaime D. Lauron for respondents. national federation (FFW) violates Section 3 of the Industrial Peace Act, as
amended, because — (1) it results in the indirect affiliation Of supervisors
and rank-and-file employees with one labor organization; (2) since
respondent union and the unions of non-supervisors in the same company are
governed by the same constitution and by-laws of the national federation, in
practical effect, there is but one union; and (3) it would result in the
respondent union's losing its independence because it becomes the alter ego
Adamson and Adamson, Inc., filed this petition to set aside orders of the of the federation.
respondent Court of Industrial Relations (CIR) holding that the Adamson and
Adamson, Inc. supervisory Union (FFW) can legally represent supervisors of
The petitioner also submits that should affiliation be allowed, this would
the petitioner corporation notwithstanding the affiliation of the lank and file
violate the requirement of separateness of bar units under Section 12 of the
union of the same company with the same labor federation, the Federation of
Act because only one union will in fact represent both supervisors and rank-
Free Workers.
and-file employees of the petitioner.
The Adamson and Adamson, Inc. Supervisory Union (FFW) informed the
The respondents on the other hand argue that the supervisory employees of
petitioner about its having organized on the same date that the Adamson and
an employer may validly join an organization of the rank-and-file employees
Adamson, Inc. Salesmen Association (FFW) advised the petitioner that the
so long as the said rank and file employees are not under their supervision.
rank and file salesmen had formed their own union.
They submit that Adamson and Adamson Supervisory Union (FFW) is not
composed of sales supervisors and, therefore, the salesmen of the company
The CIR dismissed the petition in CIR Case No. 3267-MC entitled "In the are not under the supervision of the supervisory employees forming the
Matter of Representation of the Supervisory Employees of Adamson and union. Respondents also argue that even if the salesmen of the petitioner
Adamson, Inc., Petitioner " thus prompting the filing of this petition for company are under the supervision of the members of the supervisory union,
review on certiorari. the prohibition would not apply because the salesmen and the supervisory
employees of the company have their separate and distinct labor
Subsequently and during the pendency of the present petition, the rank and organizations, and, as a matter of fact, their respective unions sent separate
file employees formed their own union, naming it Adamson and Adamson proposal for collective bargaining agreements. They contend that their
Independent Workers (FFW). respective labor organizations, not the FFW, will represent their members in
the negotiations as well as in the signing of their respective contracts.
The petitioner made a lone assignment of error, to wit: Respondents further argue that the Federation of Free Workers has, as its
affiliates, supervisory as well as rank-and-file employees, and should both
the supervisory and the rank-and-file employees of a certain employer who collectively with the employer. (Government Service Insurance System v.
have separate certificates of registration affiliate with the same federation, Government Service Insurance System Supervisors' Union, 68 SCRA 418).
the prohibition does not apply as the federation is not the organization of the
supervisory employees contemplated in the law. The specific issue before us is whether or not a supervisor's union may
affiliate with a federation with which unions of rank and-file employees of
The issue presented involves the correct interpretation of Section 3 of the same employer are also affiliated. We find without merit the contentions
Republic Act No. 875, the Industrial Peace Act, as amended, which states: of petitioner that if affilation will be allowed, only one union will in fact
represent both supervisors and rank-and-file employees of the petitioner; that
Employees shall have the right to self-organization and to form join or assist there would be an indirect affiliation of supervisors and rank-and-file
labor organizations of their own choosing for the purpose 6f collective employees with one labor organization; that there would be emerging of two
bargaining through representatives of their own and to engage in concerted bargaining units ; and that the respondent union will loose its independence
activities for the purpose of collective bargaining and other mutual aid or because it becomes an alter ego of the federation.
protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision but In Elisco-Elirol Labor Union (NAFLU) v. Noriel (80 SCRA 681) and Liberty
may form separate organizations of their own. Cotton Mills Workers Union v. Liberty Cotton Mills, Inc. (66 SCRA 512), we
held :
The right of employees to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining xxx xxx xxx
and to engage in concerted activities for mutual aid or protection is a
fundamental right of labor that derives its existence from the Constitution. It ... the court expressly cited and affirmed the basic principle
is recognized and implemented through the abovecited Section 3 of the that '(T)he locals are separate and distinct units primarily
Industrial Peace Act as amended. designed to secure and maintain the equality of bargaining
power between the employer and their employee-member in
In interpreting the protection to labor and social justice provisions of the the economic struggle for the fruits of the joint productive
Constitution and the labor laws or rules and regulations implementing the effort of labor and capital; and the association of the locals
constitutional mandates, we have always adopted the liberal approach which into the national union (as PAFLU) was in the furtherance of
favors the exercise of labor rights. the same end. These association are concensual entities
capable of entering into such legal relations with their
In deciding this case, we start with the recognized rule that the right of members. The essential purpose was the affiliation of the
supervisory employees to organize under the Industrial Peace Act carries local unions into a common enterprise to increase by
certain restrictions but the right itself may not be denied or unduly abridged. collective action the common bargaining power in respect of
The supervisory employees of an employer cannot join any labor the terms and conditions of labor. Yet the locals remained
organization of employees under their supervision but may validly form a the basic units of association; free to serve their own and the
separate organization of their own. As stated in Caltex Filipino Managers common-interest of all, subject to the restraints imposed
and Supervisors Association v. Court of Industrial Relations (47 SCRA 112), by the Constitution and By-laws of the Association; and free
it would be to attach unorthodoxy to, not to say an emasculation of, the also to renounce the affiliation for mutual welfare upon the
concept of law if managers as such were precluded from organization. Thus, terms laid down in the agreement which brought it into
if Republic Act 875, in its Section 3, recognizes the right of supervisors to existence.
form a separate organization of their own, albeit they cannot be members of a
labor organization of employees under their supervision, that authority of We agree with the Court of Industrial Relations when it ruled that:
supervisors to form a separate labor union carries with it the right to bargain
xxx xxx xxx G.R. Nos. 174040-41 September 22, 2010

The confusion seems to have stemmed from the prefix of INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner,
FFW after the name of the local unions in the registration of vs.
both. Nonetheless, the inclusion of FWW in the registration WATERFRONT INSULAR HOTEL DAVAO, Respondent.
is merely to stress that they are its affiliates at the time of
registrations. It does not mean that said local unions cannot DECISION
stand on their own Neither can it be construed that their
personalities are so merged with the mother federation that PERALTA, J.:
for one difference or another they cannot pursue their own
ways, independently of the federation. This is borne by the Before this Court is a petition for review on certiorari,1 under Rule 45 of the
fact that FFW, like other federation is a legitimate labor Rules of Court, seeking to set aside the Decision2 dated October 11, 2005,
organization separate and distinct from its locals and and the Resolution3 dated July 13, 2006 of the Court of Appeals (CA) in
affiliates and to construe the registration certificates of the consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R.
aforecited unions, along the line of the Company's argument. SP No. 83657. Said Decision reversed the Decision4 dated the April 5, 2004
would tie up any affiliates to the shoe string of the of the Accredited Voluntary Arbitrator Rosalina L. Montejo (AVA Montejo).
federation. ...
The facts of the case, as culled from the records, are as follows:
The Adamson and Adamson Supervisory Union and the Adamson and
Adamson, Inc., Salesmen Association (FFW), have their own respective On November 6, 2000, respondent Waterfront Insular Hotel Davao
constitutions and by-laws. They are separately and independently registered (respondent) sent the Department of Labor and Employment (DOLE),
of each other. Both sent their separate proposals for collective bar agreements Region XI, Davao City, a Notice of Suspension of Operations5 notifying the
with their employer. There could be no employer influence on rank-and-file
same that it will suspend its operations for a period of six months due to
organizational activities nor their could be any rank and file influence on the severe and serious business losses. In said notice, respondent assured the
supervisory function of the supervisors because of the representation sought DOLE that if the company could not resume its operations within the six-
to be proscribed. month period, the company would pay the affected employees all the benefits
legally due to them.
WHEREFORE, the instant petition is DISMISSED for lack of merit. The
questioned order and the resolution en bancof the respondent Court of During the period of the suspension, Domy R. Rojas (Rojas), the President of
Industrial Relations are AFFIRMED. Davao Insular Hotel Free Employees Union (DIHFEU-NFL), the recognized
labor organization in Waterfront Davao, sent respondent a number of letters
SO ORDERED. asking management to reconsider its decision.

In a letter6 dated November 8, 2000, Rojas intimated that the members of the
Union were determined to keep their jobs and that they believed they too had
to help respondent, thus:


Sir, we are determined to keep our jobs and push the Hotel up from sinking. 2) Pay all the employees their benefits due, and put the length of
We believe that we have to help in this (sic) critical times. Initially, we intend service to zero with a minimum hiring rate. Payment of benefits may
to suspend the re-negotiations of our CBA. We could talk further on possible be on a staggered basis or as available.
adjustments on economic benefits, the details of which we are hoping to
discuss with you or any of your emissaries. x x x7 3) Night premium and holiday pays shall be according to law.
Overtime hours rendered shall be offsetted as practiced.
In another letter8 dated November 10, 2000, Rojas reiterated the Union's
desire to help respondent, to wit: 4) Reduce the sick leaves and vacation leaves to 15 days/15days.

We would like to thank you for giving us the opportunity to meet [with] your 5) Emergency leave and birthday off are hereby waived.
representatives in order for us to air our sentiments and extend our helping
hands for a possible reconsideration of the company's decision. 6) Duty meal allowance is fixed at ₱30.00 only. No more midnight
snacks and double meal allowance. The cook drinks be stopped as
The talks have enabled us to initially come up with a suggestion of solving practiced.
the high cost on payroll.
7) We will shoulder 50% of the group health insurance and family
We propose that 25 years and above be paid their due retirement benefits and medical allowance be reduced to 1,500.00 instead of 3,000.00.
put their length of service to zero without loss of status of employment with a
minimum hiring rate. 8) The practice of bringing home our uniforms for laundry be
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 9) Fixed manning shall be implemented, the rest of manpower
families of the employees because they will still have a job from where they requirements maybe sourced thru WAP and casual hiring. Manpower
could get their income. for fixed manning shall be 145 rank-and-file union members.

Moreover, we are also open to a possible reduction of some economic 10) Union will cooperate fully on strict implementation of house
benefits as our gesture of sincere desire to help. rules in order to attain desired productivity and discipline. The union
will not tolerate problem members.
We are looking forward to a more fruitful round of talks in order to save the
hotel.9 11) The union in its desire to be of utmost service would adopt multi-
tasking for the hotel to be more competitive.
In another letter10 dated November 20, 2000, Rojas sent respondent more
proposals as a form of the Union's gesture of their intention to help the It is understood that with the suspension of the CBA renegotiations, the same
company, thus: existing CBA shall be adopted and that all provisions therein shall remain
enforced except for those mentioned in this proposal.
1) Suspension of [the] CBA for ten years, No strike no lock-out shall
be enforced. These proposals shall automatically supersede the affected provisions of the

In a handwritten letter12 dated November 25, 2000, Rojas once again whether or not there was a diminution of wages and other benefits through an
appealed to respondent for it to consider their proposals and to re-open the unlawful MOA. In support of his authority to file the complaint, Joves,
hotel. In said letter, Rojas stated that manpower for fixed manning shall be assisted by Atty. Danilo Cullo (Cullo), presented several Special Powers of
one hundred (100) rank-and-file Union members instead of the one hundred Attorney (SPA) which were, however, undated and unnotarized.
forty-five (145) originally proposed.
On September 2, 2002, respondent filed with the NCMB a Manifestation
Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted with Motion for a Second Preliminary Conference,18 raising the following
to respondent a Manifesto13concretizing their earlier proposals. grounds:

After series of negotiations, respondent and DIHFEU-NFL, represented by 1) The persons who filed the instant complaint in the name of the
its President, Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino Insular Hotel Employees Union-NFL have no authority to represent
C. Bation, Jr., signed a Memorandum of Agreement14 (MOA) wherein the Union;
respondent agreed to re-open the hotel subject to certain concessions offered
by DIHFEU-NFL in its Manifesto. 2) The individuals who executed the special powers of attorney in
favor of the person who filed the instant complaint have no standing
Accordingly, respondent downsized its manpower structure to 100 rank-and- to cause the filing of the instant complaint; and
file employees as set forth in the terms of the MOA. Moreover, as agreed
upon in the MOA, a new pay scale was also prepared by respondent. 3) The existence of an intra-union dispute renders the filing of the
instant case premature.19
The retained employees individually signed a "Reconfirmation of
Employment"15 which embodied the new terms and conditions of their On September 16, 2002, a second preliminary conference was conducted in
continued employment. Each employee was assisted by Rojas who also the NCMB, where Cullo denied any existence of an intra-union dispute
signed the document. among the members of the union. Cullo, however, confirmed that the case
was filed not by the IHEU-NFL but by the NFL. When asked to present his
On June 15, 2001, respondent resumed its business operations. authority from NFL, Cullo admitted that the case was, in fact, filed by
individual employees named in the SPAs. The hearing officer directed both
On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be parties to elevate the aforementioned issues to AVA Olvida.20
local officers of the National Federation of Labor (NFL), filed a Notice of
Mediation16 before the National Conciliation and Mediation Board (NCMB), The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred
Region XI, Davao City. In said Notice, it was stated that the Union involved to AVA Olvida. Respondent again raised its objections, specifically arguing
was "DARIUS JOVES/DEBBIE PLANAS ET. AL, National Federation of that the persons who signed the complaint were not the authorized
Labor." The issue raised in said Notice was the "Diminution of wages and representatives of the Union indicated in the Submission Agreement nor were
other benefits through unlawful Memorandum of Agreement." they parties to the MOA. AVA Olvida directed respondent to file a formal
motion to withdraw its submission to voluntary arbitration.
On August 29, 2002, the NCMB called Joves and respondent to a conference
to explore the possibility of settling the conflict. In the said conference, On October 16, 2002, respondent filed its Motion to Withdraw.21 Cullo then
respondent and petitioner Insular Hotel Employees Union-NFL (IHEU-NFL), filed an Opposition22 where the same was captioned:
represented by Joves, signed a Submission Agreement17 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

NATIONAL FEDERATION OF LABOR on the question there of Union; which was filled up with Insular Hotel
And 79 Individual Employees, Union Members, Employees Union-NFL. There is nothing there that indicates that it is a
Complainants, complainant as the case is initiated by the individual workers and National
Federation of Labor, not by the local union. The local union was not included
-versus- as party-complainant considering that it was a party to the assailed MOA.27

Waterfront Insular Hotel Davao, On March 18, 2003, AVA Olvida issued a Resolution28 denying respondent's
Respondent. Motion for Reconsideration. He, however, ruled that respondent was correct
when it raised its objection to NFL as proper party-complainant, thus:
In said Opposition, Cullo reiterated that the complainants were not
representing IHEU-NFL, to wit: Anent to the real complainant in this instant voluntary arbitration case, the
respondent is correct when it raised objection to the National Federation of
xxxx Labor (NFL) and as proper party-complainants.

2. Respondent must have been lost when it said that the individuals The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-
who executed the SPA have no standing to represent the union nor to NFL, the recognized and incumbent bargaining agent of the rank-and-file
assail the validity of Memorandum of Agreement (MOA). What is employees of the respondent hotel. In the submission agreement of the
correct is that the individual complainants are not representing parties dated August 29, 2002, the party complainant written is INSULAR
the union but filing the complaint through their appointed attorneys- HOTEL EMPLOYEES UNION-NFL and not the NATIONAL
in-fact to assert their individual rights as workers who are entitled to FEDERATION OF LABOR and 79 other members.
the benefits granted by law and stipulated in the collective bargaining
agreement.23 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
On November 11, 2002, AVA Olvida issued a Resolution24 denying members or union and officers or members, as the case may be, in all stages
respondent's Motion to Withdraw. On December 16, 2002, respondent filed a of proceedings in courts or administrative bodies provided that the issue of
Motion for Reconsideration25 where it stressed that the Submission the case will involve labor-management relationship like in the case at bar.
Agreement was void because the Union did not consent thereto. Respondent
pointed out that the Union had not issued any resolution duly authorizing the The dispositive portion of the March 18, 2003 Resolution of AVA Olvida
individual employees or NFL to file the notice of mediation with the NCMB. reads:

Cullo filed a Comment/Opposition26 to respondent's Motion for WHEREFORE, premises considered, the motion for reconsideration filed by
Reconsideration. Again, Cullo admitted that the case was not initiated by the respondent is DENIED. The resolution dated November 11, 2002 is modified
IHEU-NFL, to wit: in so far as the party-complainant is concerned; thus, instead of "National
Federation of Labor and 79 individual employees, union members," shall be
The case was initiated by complainants by filling up Revised Form No. 1 of "Insular Hotel Employees Union-NFL et. al., as stated in the joint submission
the NCMB duly furnishing respondent, copy of which is hereto attached as agreement dated August 29, 2002. Respondent is directed to comply with the
Annex "A" for reference and consideration of the Honorable Voluntary decision of this Arbitrator dated November 11, 2002,
Arbitrator. There is no mention there of Insular Hotel Employees Union, but
only National Federation of Labor (NFL). The one appearing at the No further motion of the same nature shall be entertained.29
Submission Agreement was only a matter of filling up the blanks particularly

On May 9, 2003, respondent filed its Position Paper Ad Cautelam,30 where it 3. Ordering respondent management to immediately reinstate the
declared, among others, that the same was without prejudice to its earlier workers wage rates and other benefits that they were receiving and
objections against the jurisdiction of the NCMB and AVA Olvida and the enjoying before the signing of the invalid MOA;
standing of the persons who filed the notice of mediation.
4. Ordering the management respondent to pay attorney’s fees in an
Cullo, now using the caption "Insular Hotel Employees Union- amount equivalent to ten percent (10%) of whatever total amount
NFL, Complainant," filed a Comment31 dated June 5, 2003. On June 23, that the workers union may receive representing individual wage
2003, respondent filed its Reply.32 differentials.

Later, respondent filed a Motion for Inhibition33 alleging AVA Olvida's bias As to the other claims of the Union regarding diminution of other benefits,
and prejudice towards the cause of the employees. In an Order 34 dated July this accredited voluntary arbitrator is of the opinion that she has no authority
25, 2003, AVA Olvida voluntarily inhibited himself out of "delicadeza" and to entertain, particularly as to the computation thereof.
ordered the remand of the case to the NCMB.
On August 12, 2003, the NCMB issued a Notice requiring the parties to
appear before the conciliator for the selection of a new voluntary arbitrator. 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
In a letter35 dated August 19, 2003 addressed to the NCMB, respondent pay the covered workers their differentials in wages reckoned from the
reiterated its position that the individual union members have no standing to effectivity of the MOA up to the actual reinstatement of the reduced wages
file the notice of mediation before the NCMB. Respondent stressed that the and benefits. Cullos' petition was docketed as CA-G.R. SP No. 83831.
complaint should have been filed by the Union. Respondent, for its part, questioned among others the jurisdiction of the
NCMB. Respondent maintained that the MOA it had entered into with the
On September 12, 2003, the NCMB sent both parties a Notice36 asking them officers of the Union was valid. Respondent's petition was docketed as CA-
to appear before it for the selection of the new voluntary arbitrator. G.R. SP No. 83657. Both cases were consolidated by the CA.
Respondent, however, maintained its stand that the NCMB had no
jurisdiction over the case. Consequently, at the instance of Cullo, the NCMB On October 11, 2005, the CA rendered a Decision39 ruling in favor of
approved ex parte the selection of AVA Montejo as the new voluntary respondent, the dispositive portion of which reads:
WHEREFORE, premises considered, the petition for review in CA-G.R. SP
On April 5, 2004, AVA Montejo rendered a Decision37 ruling in favor of No. 83657 is hereby GRANTED, while the petition in CA-G.R. SP No.
Cullo, the dispositive portion of which reads: 83831 is DENIED. Consequently, the assailed Decision dated April 5, 2004
rendered by AVA Rosalina L. Montejo is hereby REVERSED and a new one
WHEREOF, in view of the all the foregoing, judgment is hereby rendered: entered declaring the Memorandum of Agreement dated May 8, 2001
VALID and ENFORCEABLE. Parties are DIRECTED to comply with the
1. Declaring the Memorandum of Agreement in question as invalid terms and conditions thereof.
as it is contrary to law and public policy;
2. Declaring that there is a diminution of the wages and other
benefits of the Union members and officers under the said invalid Aggrieved, Cullo filed a Motion for Reconsideration, which was, however,
MOA. denied by the CA in a Resolution41 dated July 13, 2006.

Hence, herein petition, with Cullo raising the following issues for this Court's of the local union thereby disregarding the Submission Agreement which
resolution, to wit: states the names of local union as Insular Hotel Employees Union-NFL.43

I. In its Memorandum,44 respondent maintains its position that the NCMB and
Voluntary Arbitrators had no jurisdiction over the complaint. Respondent,
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS however, now also contends that IHEU-NFL is a non-entity since it is
COMMITTED SERIOUS ERRORS IN FINDING THAT THE DIHFEU-NFL which is considered by the DOLE as the only registered union
ACCREDITED VOLUNTARY ARBITRATOR HAS NO JURISDICTION in Waterfront Davao.45 Respondent argues that the Submission Agreement
OVER THE CASE SIMPLY BECAUSE THE NOTICE OF MEDIATION does not name the local union DIHFEU-NFL and that it had timely
DOES NOT MENTION THE NAME OF THE LOCAL UNION BUT withdrawn its consent to arbitrate by filing a motion to withdraw.
THE SUBMISSION AGREEMENT DULY SIGNED BY THE PARTIES A review of the development of the case shows that there has been much
AND THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF confusion as to the identity of the party which filed the case against
THE LOCAL UNION. respondent. In the Notice of Mediation46 filed before the NCMB, it stated
that the union involved was "DARIUS JOVES/DEBBIE PLANAS ET. AL.,
II. National Federation of Labor." In the Submission Agreement,47 however, it
stated that the union involved was "INSULAR HOTEL EMPLOYEES
PROVISIONS OF THE CBA SIMPLY BECAUSE IT BELIEVED THE Furthermore, a perusal of the records would reveal that after signing the
UNPROVEN ALLEGATIONS OF RESPONDENT HOTEL THAT IT WAS Submission Agreement, respondent persistently questioned the authority and
SUFFERING FROM FINANCIAL CRISIS. standing of the individual employees to file the complaint. Cullo then
clarified in subsequent documents captioned as "National Federation of
III. Labor and 79 Individual Employees, Union Members, Complainants" that
the individual complainants are not representing the union, but filing the
THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY complaint through their appointed attorneys-in-fact.48 AVA Olvida, however,
ERRED IN CONCLUDING THAT ARTICLE 100 OF THE LABOR CODE in a Resolution dated March 18, 2003, agreed with respondent that the proper
ITS ADOPTION HENCEFORTH.42 x x x In the submission agreement of the parties dated August 29, 2002, the
party complainant written is INSULAR HOTEL EMPLOYEES UNION-
The petition is not meritorious. NFL and not the NATIONAL FEDERATION OF LABOR and 79 other
Anent the first error raised, Cullo argues that the CA erred when it
overlooked the fact that before the case was submitted to voluntary The dispositive portion of the Resolution dated March 18, 2003 of AVA
arbitration, the parties signed a Submission Agreement which mentioned the Olvida reads:
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 WHEREFORE, premises considered, the motion for reconsideration filed by
over the case simply because the Notice of Mediation did not state the name respondent is DENIED. The resolution dated November 11, 2002, is
modified in so far as the party complainant is concerned, thus, instead of
"National Federation of Labor and 79 individual employees, union From the foregoing, it is clear that only a certified or duly recognized
members," shall be "Insular Hotel Employees Union-NFL et. al., as stated in bargaining agent may file a notice or request for preventive mediation. It is
the joint submission agreement dated August 29, 2002. Respondent is curious that even Cullo himself admitted, in a number of pleadings, that the
directed to comply with the decision of this Arbitrator dated November 11, case was filed not by the Union but by individual members thereof. Clearly,
2002.50 therefore, the NCMB had no jurisdiction to entertain the notice filed before
After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted "Insular
Hotel Employees Union-NFL et. al., Complainant" as the caption in all his Even though respondent signed a Submission Agreement, it had, however,
subsequent pleadings. Respondent, however, was still adamant that neither immediately manifested its desire to withdraw from the proceedings after it
Cullo nor the individual employees had authority to file the case in behalf of became apparent that the Union had no part in the complaint. As a matter of
the Union. fact, only four days had lapsed after the signing of the Submission
Agreement when respondent called the attention of AVA Olvida in a
While it is undisputed that a submission agreement was signed by respondent "Manifestation with Motion for a Second Preliminary Conference"51 that the
and "IHEU-NFL," then represented by Joves and Cullo, this Court finds that persons who filed the instant complaint in the name of Insular Hotel
there are two circumstances which affect its validity: first, the Notice of Employees Union-NFL had no authority to represent the Union. Respondent
Mediation was filed by a party who had no authority to do so; second, that cannot be estopped in raising the jurisdictional issue, because it is basic that
respondent had persistently voiced out its objection questioning the authority the issue of jurisdiction may be raised at any stage of the proceedings, even
of Joves, Cullo and the individual members of the Union to file the complaint on appeal, and is not lost by waiver or by estoppel.
before the NCMB.
In Figueroa v. People,52 this Court explained that estoppel is the exception
Procedurally, the first step to submit a case for mediation is to file a notice of rather than the rule, to wit:
preventive mediation with the NCMB. It is only after this step that a
submission agreement may be entered into by the parties concerned. Applying the said doctrine to the instant case, the petitioner is in no way
estopped by laches in assailing the jurisdiction of the RTC, considering that
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file he raised the lack thereof in his appeal before the appellate court. At that
a notice of preventive mediation, to wit: time, no considerable period had yet elapsed for laches to attach. True, delay
alone, though unreasonable, will not sustain the defense of "estoppel by
Who may file a notice or declare a strike or lockout or request preventive laches" unless it further appears that the party, knowing his rights, has not
mediation. - sought to enforce them until the condition of the party pleading laches has in
good faith become so changed that he cannot be restored to his former state,
Any certified or duly recognized bargaining representative may file a if the rights be then enforced, due to loss of evidence, change of title,
notice or declare a strike or request for preventive mediation in cases of intervention of equities, and other causes. In applying the principle of
bargaining deadlocks and unfair labor practices. The employer may file a estoppel by laches in the exceptional case of Sibonghanoy, the Court therein
notice or declare a lockout or request for preventive mediation in the same considered the patent and revolting inequity and unfairness of having the
cases. In the absence of a certified or duly recognized bargaining judgment creditors go up their Calvary once more after more or less 15
representative, any legitimate labor organization in the establishment may years.The same, however, does not obtain in the instant case.
file a notice, request preventive mediation or declare a strike, but only on
grounds of unfair labor practice. We note at this point that estoppel, being in the nature of a forfeiture, is not
favored by law. It is to be applied rarely—only from necessity, and only in
extraordinary circumstances. The doctrine must be applied 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 company shall be referred to the grievance machinery or voluntary
injustice. x x x (Italics supplied.)53 arbitrators. (Emphasis and underscoring supplied.)55

The question to be resolved then is, do the individual members of the Union If the individual members of the Union have no authority to file the case,
have the requisite standing to question the MOA before the NCMB? On this does the federation to which the local union is affiliated have the standing to
note, Tabigue v. International Copra Export Corporation (INTERCO)54 is do so? On this note, Coastal Subic Bay Terminal, Inc. v. Department of
instructive: Labor and Employment56 is enlightening, thus:

Respecting petitioners’ thesis that unsettled grievances should be referred to x x x A local union does not owe its existence to the federation with which it
voluntary arbitration as called for in the CBA, the same does not lie.The is affiliated. It is a separate and distinct voluntary association owing its
pertinent portion of the CBA reads: creation to the will of its members. Mere affiliation does not divest the
local union of its own personality, neither does it give the mother
In case of any dispute arising from the interpretation or implementation of federation the license to act independently of the local union. It only gives
this Agreement or any matter affecting the relations of Labor and rise to a contract of agency, where the former acts in representation of the
Management, the UNION and the COMPANY agree to exhaust all latter. Hence, local unions are considered principals while the federation is
possibilities of conciliation through the grievance machinery. The committee deemed to be merely their agent. x x x57
shall resolve all problems submitted to it within fifteen (15) days after the
problems ha[ve] been discussed by the members. If the dispute or grievance Based on the foregoing, this Court agrees with approval with the disquisition
cannot be settled by the Committee, or if the committee failed to act on the of the CA when it ruled that NFL had no authority to file the complaint in
matter within the period of fifteen (15) days herein stipulated, behalf of the individual employees, to wit:
the UNION and the COMPANY agree to submit the issue to Voluntary
Arbitration. Selection of the arbitrator shall be made within seven (7) days Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction
from the date of notification by the aggrieved party. The Arbitrator shall be over the case. Waterfront contents that the Notice of Mediation does not
selected by lottery from four (4) qualified individuals nominated by in equal mention the name of the Union but merely referred to the National
numbers by both parties taken from the list of Arbitrators prepared by the Federation of Labor (NFL) with which the Union is affiliated. In the
National Conciliation and Mediation Board (NCMB). If the Company and subsequent pleadings, NFL's legal counsel even confirmed that the case was
the Union representatives within ten (10) days fail to agree on the Arbitrator, not filed by the union but by NFL and the individual employees named in the
the NCMB shall name the Arbitrator. The decision of the Arbitrator shall be SPAs which were not even dated nor notarized.
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 Even granting that petitioner Union was affiliated with NFL, still the
shall be borne equally by the parties. relationship between that of the local union and the labor federation or
national union with which the former was affiliated is generally understood
Petitioners have not, however, been duly authorized to represent the union. to be that of agency, where the local is the principal and the federation the
Apropos is this Court’s pronouncement in Atlas Farms, Inc. v. National agency. Being merely an agent of the local union, NFL should have
Labor Relations Commission, viz: presented its authority to file the Notice of Mediation. While We commend
NFL's zealousness in protecting the rights of lowly workers, We cannot,
x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall however, allow it to go beyond what it is empowered to do.
name or designate their respective representatives to the grievance machinery
and if the grievance is unsettled in that level, it shall automatically be As provided under the NCMB Manual of Procedures, only a certified or duly
referred to the voluntary arbitrators designated in advance by parties to a recognized bargaining representative and an employer may file a notice of
CBA. Consequently, only disputes involving the union and the mediation, declare a strike or lockout or request preventive mediation. The
Collective Bargaining Agreement (CBA), on the other, recognizes that In its Decision, the CA held that upholding the validity of the MOA would
DIHFEU-NFL is the exclusive bargaining representative of all permanent mean the continuance of the hotel's operation and financial viability, to wit:
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, x x x We cannot close Our eyes to the impending financial distress that an
however, mean that the local union cannot stand on its own. The local union employer may suffer should the terms of employment under the said CBA
owes its creation and continued existence to the will of its members and not continue.
to the federation to which it belongs. The spring cannot rise higher than its
source, so to speak.58 If indeed We are to tilt the balance of justice to labor, then We would be
inclined to favor for the nonce petitioner Waterfront. To uphold the validity
In its Memorandum, respondent contends that IHEU-NFL is a non-entity and of the MOA would mean the continuance of the hotel's operation and
that DIHFEU-NFL is the only recognized bargaining unit in their financial viability. Otherwise, the eventual permanent closure of the hotel
establishment. While the resolution of the said argument is already moot and would only result to prejudice of the employees, as a consequence thereof,
academic given the discussion above, this Court shall address the same will necessarily lose their jobs.62
In its petition before the CA, respondent submitted its audited financial
While the November 16, 2006 Certification59 of the DOLE clearly states that statements63 which show that for the years 1998, 1999, until September 30,
"IHEU-NFL" is not a registered labor organization, this Court finds that 2000, its total operating losses amounted to ₱48,409,385.00. Based on the
respondent is estopped from questioning the same as it did not raise the said foregoing, the CA was not without basis when it declared that respondent
issue in the proceedings before the NCMB and the Voluntary Arbitrators. A was suffering from impending financial distress. While the Wage Board
perusal of the records reveals that the main theory posed by respondent was denied respondent's petition for exemption, this Court notes that the denial
whether or not the individual employees had the authority to file the was partly due to the fact that the June 2000 financial statements then
complaint notwithstanding the apparent non-participation of the union. submitted by respondent were not audited. Cullo did not question nor
Respondent never put in issue the fact that DIHFEU-NFL was not the same discredit the accuracy and authenticity of respondent's audited financial
as IHEU-NFL. Consequently, it is already too late in the day to assert the statements. This Court, therefore, has no reason to question the veracity of
same. the contents thereof. Moreover, it bears to point out that respondent's audited
financial statements covering the years 2001 to 2005 show that it still
Anent the second issue raised by Cullo, the same is again without merit. continues to suffer losses.64

Cullo contends that respondent was not really suffering from serious losses Finally, anent the last issue raised by Cullo, the same is without merit.
as found by the CA. Cullo anchors his position on the denial by the Wage
Board of respondent's petition for exemption from Wage Order No. RTWPB- Cullo argues that the CA must have erred in concluding that Article 100 of
X1-08 on the ground that it is a distressed establishment.60 In said denial, the the Labor Code applies only to benefits already enjoyed at the time of the
Board ruled: promulgation of the Labor Code.

A careful analysis of applicant's audited financial statements showed that Article 100 of the Labor Code provides:
during the period ending December 31, 1999, it registered retained earnings
amounting to ₱8,661,260.00. Applicant's interim financial statements for PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF
the quarter ending June 30, 2000 cannot be considered, as the same was BENEFITS- Nothing in this Book shall be construed to eliminate or in any
not audited. Accordingly, this Board finds that applicant is not qualified for way diminish supplements, or other employee benefits being enjoyed at the
exemption as a distressed establishment pursuant to the aforecited criteria.61 time of the promulgation of this Code.

On this note, Apex Mining Company, Inc. v. NLRC65 is instructive, to wit: was also PALEA that voluntarily opted for the 10-year suspension of the
CBA. Either case was the union’s exercise of its right to collective
Clearly, the prohibition against elimination or diminution of benefits set out bargaining. The right to free collective bargaining, after all, includes the
in Article 100 of the Labor Code is specifically concerned with benefits right to suspend it.68
already enjoyed at the time of the promulgation of the Labor Code. Article
100 does not, in other words, purport to apply to situations arising after the Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's
promulgation date of the Labor Code x x x.66 Constitution and By-Laws specifically provides that "the results of the
collective bargaining negotiations shall be subject to ratification and approval
Even assuming arguendo that Article 100 applies to the case at bar, this by majority vote of the Union members at a meeting convened, or by
Court agrees with respondent that the same does not prohibit a union from plebiscite held for such special purpose."69 Accordingly, it is undisputed that
offering and agreeing to reduce wages and benefits of the employees. the MOA was not subject to ratification by the general membership of the
In Rivera v. Espiritu,67 this Court ruled that the right to free collective Union. The question to be resolved then is, does the non-ratification of the
bargaining, after all, includes the right to suspend it, thus: MOA in accordance with the Union's constitution prove fatal to the validity
A CBA is "a contract executed upon request of either the employer or the
exclusive bargaining representative incorporating the agreement reached It must be remembered that after the MOA was signed, the members of the
after negotiations with respect to wages, hours of work and all other terms Union individually signed contracts denominated as "Reconfirmation of
and conditions of employment, including proposals for adjusting any Employment."70 Cullo did not dispute the fact that of the 87 members of the
grievances or questions arising under such agreement." The primary purpose Union, who signed and accepted the "Reconfirmation of Employment," 71
of a CBA is the stabilization of labor-management relations in order to create are the respondent employees in the case at bar. Moreover, it bears to stress
a climate of a sound and stable industrial peace. In construing a CBA, the that all the employees were assisted by Rojas, DIHFEU-NFL's president,
courts must be practical and realistic and give due consideration to the who even co-signed each contract.
context in which it is negotiated and the purpose which it is intended to
serve. Stipulated in each Reconfirmation of Employment were the new salary and
benefits scheme. In addition, it bears to stress that specific provisions of the
The assailed PAL-PALEA agreement was the result of voluntary new contract also made reference to the MOA. Thus, the individual members
collective bargaining negotiations undertaken in the light of the severe of the union cannot feign knowledge of the execution of the MOA. Each
financial situation faced by the employer, with the peculiar and unique contract was freely entered into and there is no indication that the same was
intention of not merely promoting industrial peace at PAL, but attended by fraud, misrepresentation or duress. To this Court's mind, the
preventing the latter’s closure. We find no conflict between said agreement signing of the individual "Reconfirmation of Employment" should, therefore,
and Article 253-A of the Labor Code. Article 253-A has a two-fold purpose. be deemed an implied ratification by the Union members of the MOA.
One is to promote industrial stability and predictability. Inasmuch as the
agreement sought to promote industrial peace at PAL during its In Planters Products, Inc. v. NLRC,71 this Court refrained from declaring a
rehabilitation, said agreement satisfies the first purpose of Article 253- CBA invalid notwithstanding that the same was not ratified in view of the
A.1awphi1 The other is to assign specific timetables wherein negotiations fact that the employees had enjoyed benefits under it, thus:
become a matter of right and requirement. Nothing in Article 253-A,
prohibits the parties from waiving or suspending the mandatory timetables Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the
and agreeing on the remedies to enforce the same. Implementing Rules, the parties to a collective [bargaining] agreement are
required to furnish copies of the appropriate Regional Office with
In the instant case, it was PALEA, as the exclusive bargaining agent of accompanying proof of ratification by the majority of all the workers in a
PAL’s ground employees, that voluntarily entered into the CBA with PAL. It 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 RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized
enjoyed benefits from it. They cannot receive benefits under provisions to sign any and all documents to implement, and carry into effect, his
favorable to them and later insist that the CBA is void simply because other foregoing authority.75
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, Withal, while the scales of justice usually tilt in favor of labor, the peculiar
yet the employees are basing their present claims on these CBAs. It is circumstances herein prevent this Court from applying the same in the instant
iniquitous to receive benefits from a CBA and later on disclaim its petition. Even if our laws endeavor to give life to the constitutional policy on
validity.72 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
Applied to the case at bar, while the terms of the MOA undoubtedly reduced management has rights which are also entitled to respect and enforcement in
the salaries and certain benefits previously enjoyed by the members of the the interest of fair play.76
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 WHEREFORE, premises considered, the petition is DENIED. The
its financial distress. More importantly, the execution of the MOA allowed Decision dated October 11, 2005, and the Resolution dated July 13, 2006 of
respondents to keep their jobs. It would certainly be iniquitous for the the Court of Appeals in consolidated labor cases docketed as CA-G.R. SP
members of the Union to sign new contracts prompting the re-opening of the No. 83831 and CA-G.R. SP No. 83657, are AFFIRMED.
hotel only to later on renege on their agreement on the fact of the non-
ratification of the MOA. SO ORDERED.

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 Resolution74 to negotiate with respondent, the
pertinent portions of which read:


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

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
G.R. No. L-45824 June 19, 1985 of the questioned writ of execution issued by respondent
Bureau, dated April 4, 1977.
vs. Petitioner was once affiliated with the Associated Labor Union for Metal
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION Workers (ALUMETAL for short). On August 1, 1975, both unions, using the
FOR METAL, WORKERS, DMG, INC., PEOPLE'S CAR, INC., name Volkschel Labor Union Associated Labor Union for Metal Workers,
KARBAYAN INC., and RTC TRADING, INC., respondents. jointly entered into a collective bargaining agreement with respondent
companies. One of the subjects dealt with is the payment of union dues
Ignacio P. Lacsina for petitioner. which is provided for in Section 3, Article 1, of the CBA, which reads:

William D. Dichoso for respondent DMG, Inc. Section 3. CHECK-OFF. — The COMPANY agrees to
make payroll deductions not softener than twice a month of
Abraham B. Drapiza for private respondent. UNION membership dues and such special assessments fees
or fines as may be duly authorized by the UNION, provided
that the same is covered by the individual check-off
authorization of the UNION members. All said deductions
CUEVAS, J.: shall be promptly transmitted within five (5) days by the
COMPANY to the UNION Treasurer. The COMPANY shall
prepare two (2) checks. One (1) check will be under the
Petition for certiorari to review the Resolutions dated January 25, 1977 and
name of the local union as their local fund including local
March 14, 1977 of the Bureau of Labor Relations.
special assessment funds and the other check will be for the
ALU Regional Office regarding the remittance of the
On April 25. 1977, however, a Supplemental Petition was filed seeking the UNION dues deduction.
issuance of —
On March 10, 1976, a majority of petitioner's members decided to disaffiliate
(1) A preliminary mandatory injunction commanding from respondent federation in order to operate on its own as an independent
respondents to return to petitioner the union dues amounting labor group pursuant to Article 241 (formerly Article 240) of the Labor Code
to about P55,000.00 lawfully pertaining to it but illegally of the Philippines, the pertinent portion of which reads:
levied upon, collected and handed over by respondent
Bureau, acting through the NLRC sheriff, to respondent
Incumbent affiliates of existing federations or national
Associated Labor Union for Metal workers, with the
unions may disaffiliate only for the purpose of joining a
collusion of respondents DMG, Inc., Karbayan, Inc. and
federation or national union in the industry or region in
RTC Machineries, Inc.;
which it properly belongs or for the purpose of operating as
an independent labor group.
(2) A preliminary restraining order prohibiting respondents
from making further delivery to respondent Associated
Accordingly, a resolution was adopted and signed by petitioner's members
Labor Union for Metal workers of Union dues collected or to
revoking their check-off authorization in favor of ALUMETAL and notices
be collected through check-off from the wages of petitioner's
thereof were served on ALUMETAL and respondent companies.
members by respondents, DMG, Inc., Karbayan, Inc., RTC
Machineries, Inc., and People's Car, Inc., under or by virtue
Confronted with the predicament of whether or not to continue deducting
from employees' wages and remitting union dues to respondent,
ALUMETAL which wrote respondent companies advising them to continue I
deducting union dues and remitting them to said federation, respondent
companies sought the legal opinion of the respondent Bureau as regards the Is petitioner union's disaffiliation from respondent federation
controversy between the two unions. On November 11, 1976, Med-Arbiter valid?
George A. Eduvalla of respondent Bureau rendered a Resolution which in
effect found the disaffiliation legal but at the same time gave the opinion that, II
petitioner's members should continue paying their dues to ALUMETAL in
the concept of agency fees. 1 Do respondent companies have the right to effect union dues
collections despite revocation by the employees of the
From the said Resolution, of the Med-Arbiter both petitioner and respondent check-off authorization? and
ALUMETAL appealed to the Director of respondent Bureau. Petitioner'
contended that the Med-Arbiter's opinion to the effect that petitioner's III
members remained obligated to pay dues to respondent ALUMETAL was
inconsistent with the dispositive finding that petitioner's disaffiliation from Is respondent federation entitled to union dues payments
ALUMETAL was valid. ALUMETAL, on the other hand, assailed the from petitioner union's members notwithstanding their
Resolution in question asserting that the disaffiliation should have been disaffiliation from said federation?
declared contrary to law.
We resolve the first issue in the affirmative.
On January 25, 1977, respondent Bureau, through its Acting Director,
Francisco L. Estrella, REVERSED the Med-Arbiter's Resolution., and
The right of a local union to disaffiliate from its mother union is well-settled.
declared that the Bureau recognized "the continued affiliation of Volkschel
In previous cases, it has been repeatedly held that a local union, being a
Labor Union with the Associated Labor Union for Metal Workers." 2
separate and voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when circumstances
Petitioner appealed the Acting Director's Resolution to the Secretary of Labor warrant. 4 This right is consistent with the Constitutional guarantee of
know Minister of Labor and Employment) who, treating the appeal as a freedom of association (Article IV, Section 7, Philippine Constitution).
Motion for Reconsideration referred the same back to respondent Bureau On
March 14, 1977, the Bureau denied the appeal for lack of merit.
Petitioner contends that the disaffiliation was not due to any opportunists
motives on its part. Rather it was prompted by the federation's deliberate and
Hence, the instant petition. habitual dereliction of duties as mother federation towards petitioner union.
Employees' grievances were allegedly left unattended to by respondent
Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting federation to the detriment of the employees' rights and interests.
Secretary of Labor, Amado Gat Inciong, issued a of execution commanding
the Sheriff of the National Labor Relations Commission to enforce and In reversing the Med-Arbiter's resolution, respondent Bureau declared: the
execute the order of January 25, 1977, which has become final and Department of Labor is set on a task to restructure the labor movement to the
executory. 3 Pursuant thereto, the NLRC Sheriff enforced and implemented end that the workers will unite themselves along industry lines. Carried to its
the Order of January 25, 1977, as a result of which respondent companies complete fruition, only one union for every industry will remain to bargain
turned over and handed to respondent federation the union dues and other collectively for the workers. The clear policy therefore even now is to
assessments in accordance with the check-off provision of the CBA, conjoin workers and worker groups, not to dismember them. 5 This policy is
commendable. However, we must not lose sight of the constitutional mandate
From the pleadings filed and arguments of counsel, the following issues of protecting labor and the workers' right to self-organization. In the
present themselves for this Court's resolution.
implementation and interpretation of the provisions of the Labor Code and its execution dated April 4, 1977 issued by respondent Bureau. No costs. SO
implementing regulations, the workingman's welfare should be the ORDERED.
primordial and paramount consideration. In the case at bar, it would go
against the spirit of the labor law to restrict petitioner's right to self- G.R. No. 127374 January 31, 2002
organization due to the existence of the CBA. We agree with the Med-
Arbiter's opinion that "A disaffiliation does not disturb the enforceability and PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and
administration of a collective agreement; it does not occasion a change of FRANCISCO DAKILA, petitioners,
administrators of the contract nor even an amendment of the provisions vs.
thereof." 6 But nowhere in the record does it appear that the contract entered NATIONAL LABOR RELATIONS COMMISSION, LABOR
into by the petitioner and ALUMETAL prohibits the withdrawal of the ARBITER EMERSON TUMANON, PHILIPPINE ASSOCIATION OF
former from the latter. FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED
PAFLU) and SERAFIN AYROSO, respondents.
This now brings us to the second issue. Under Section 3, Article I, of the
CBA, the obligation of the respondent companies to deduct and remit dues to x---------------------------------------------------------x
ALUMETAL is conditioned on the individual check-off authorization of
petitioner's members, In other words, ALUMETAL is entitled to receive the G.R. No. 127431 January 31, 2002
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." 7 A contract between an MANUEL CADIENTE and HERMINIA RIOSA, petitioners,
employer and the parent organization as bargaining agent for the employees vs.
is terminated by the disaffiliation of the local of which the employees are
members. 8 Respondent companies therefore were wrong in continuing the
check-off in favor of respondent federation since they were duly notified of RELATIONS COMMISSION, SECOND DIVISION, respondents.
the disaffiliation and of petitioner's members having already rescinded their
check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling
This is a petition for certiorari1 seeking to set aside the 31 July 1996
further on the last issue. Suffice it to state that respondent federation is not
Decision2 of the National Labor Relations Commission affirming the 30 June
entitled to union dues payments from petitioner's members. "A local union
1995 Decision of the Labor Arbiter holding petitioners Philippine
which has validly withdrawn from its affiliation with the parent association
Skylanders, Inc., Mariles C. Romulo3 and Francisco Dakila as well as the
and which continues to represent the employees of an employer is entitled to
elected officers of the Philippine Skylanders Employees and Workers
the check-off dues under a collective bargaining contract." 9
Association-PAFLU4 guilty of unfair labor practice and ordering them to pay
private respondent Philippine Association of Free Labor Union (PAFLU)
WHEREFORE, the Resolutions of the Bureau of Labor Relations of January September5 ₱150,000.00 as damages. Petitioners likewise seek the reversal of
25, 1977 and March 14, 1977 are REVERSED and SET ASIDE. Respondent the 31 October 1996 Resolution of the NLRC denying their Motion for
ALUMETAL is ordered to return to petitioner union all the union dues Reconsideration.
enforced and collected through the NLRC Sheriff by virtue of the writ of
In November 1993 the Philippine Skylanders Employees Association company through its president and personnel manager, was also liable for
(PSEA), a local labor union affiliated with the Philippine Association of Free interfering with its employees' union activities.6
Labor Unions (PAFLU) September (PAFLU), won in the certification
election conducted among the rank and file employees of Philippine Two (2) days later or on 6 October 1994 Ayroso filed another complaint in
Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees behalf of PAFLU for unfair labor practice against Francisco Dakila. Through
Association-WATU (PSEA-WATU) immediately protested the result of the Ayroso PAFLU claimed that Dakila was present in PSEA's organizational
election before the Secretary of Labor. meeting thereby confirming his illicit participation in union activities. Ayroso
added that the members of the local union had unwittingly fallen into the
Several months later, pending settlement of the controversy, PSEA sent manipulative machinations of PSI and were lured into endorsing a collective
PAFLU a notice of disaffiliation citing as reason PAFLU's supposed bargaining agreement which was detrimental to their interests.7 The two (2)
deliberate and habitual dereliction of duty toward its members. Attached to complaints were thereafter consolidated.
the notice was a copy of the resolution adopted and signed by the officers and
members of PSEA authorizing their local union to disaffiliate from its mother On 1 February 1995 PAFLU amended its complaint by including the elected
federation. officers of PSEA-PAFLU as additional party respondents. PAFLU averred
that the local officers of PSEA-PAFLU, namely Macario Cabanias, Pepito
PSEA subsequently affiliated itself with the National Congress of Workers Rodillas, Sharon Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix,
(NCW), changed its name to Philippine Skylanders Employees Association - Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo
National Congress of Workers (PSEA-NCW), and to maintain continuity Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa, were
within the organization, allowed the former officers of PSEA-PAFLU to equally guilty of unfair labor practice since they brazenly allowed themselves
continue occupying their positions as elected officers in the newly-forged to be manipulated and influenced by petitioner Francisco Dakila.8
PSI, its president Mariles C. Romulo, and its personnel manager Dakila
On 17 March 1994 PSEA-NCW entered into a collective bargaining moved for the dismissal of the complaint on the ground that the issue of
agreement with PSI which was immediately registered with the Department disaffiliation was an inter-union conflict which lay beyond the jurisdiction of
of Labor and Employment. the Labor Arbiter. On the other hand, PSEA-NCW took the cudgels for its
officers who were being sued in their capacities as former officers of PSEA-
Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU PAFLU and asserted that since PSEA was no longer affiliated with PAFLU,
Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a Ayroso or PAFLU for that matter had no personality to file the instant
copy of PSI's audited financial statement. Ayroso explained that with the complaint. In support of this assertion, PSEA-NCW submitted in evidence
dismissal of PSEA-WATU's election protest the time was ripe for the parties a Katunayan signed by 111 out of 120 rank and file employees of PSI
to enter into a collective bargaining agreement. disauthorizing Ayroso or PAFLU from instituting any action in their behalf.9

On 30 July 1994 PSI through its personnel manager Francisco Dakila denied In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's
the request citing as reason PSEA's disaffiliation from PAFLU and its disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their
subsequent affiliation with NCW. respective officers guilty of unfair labor practice. The Decision explained
that despite PSEA-PAFLU's status as the sole and exclusive bargaining agent
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin of PSI's rank and file employees, the company knowingly sanctioned and
Ayroso filed a complaint for unfair labor practice against PSI, its president confederated with Dakila in actively assisting a rival union. This, according
Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged to the Labor Arbiter, was a classic case of interference for which PSI could
that aside from PSI's refusal to bargain collectively with its workers, the be held responsible. As PSEA-NCW's personality was not accorded
recognition, its collective bargaining agreement with PSI was struck down
for being invalid. Ayroso's legal personality to file the complaint was employee relationship between complainant Ayroso and PSI over which the
sustained on the ratiocination that under the Labor Code no petition Labor Arbiter could rightfully assert his jurisdiction; second, since the case
questioning the majority status of the incumbent bargaining agent shall be involved a dispute between PAFLU as mother federation and PSEA as local
entertained outside of the sixty (60)-day period immediately before the union, the controversy fell within the jurisdiction of the Bureau of Labor
expiry date of such five (5)-year term of the collective bargaining agreement Relations; and lastly, the relationship of principal-agent between PAFLU and
that the parties may enter into. Accordingly, judgment was rendered ordering PSEA had been severed by the local union through the lawful exercise of its
PSI, PSEA-PAFLU and their officers to pay PAFLU ₱150,000.00 in right of disaffiliation.14
Stripped of non-essentials, the fundamental issue tapers down to the
PSI, PSEA and their respective officers appealed to the National Labor legitimacy of PSEA's disaffiliation. To be more precise, may PSEA, which is
Relations Commission (NLRC). But the NLRC upheld the Decision of the an independent and separate local union, validly disaffiliate from PAFLU
Labor Arbiter and conjectured that since an election protest questioning pending the settlement of an election protest questioning its status as the sole
PSEA-PAFLU's certification as the sole and exclusive bargaining agent was and exclusive bargaining agent of PSI's rank and file employees?
pending resolution before the Secretary of Labor, PSEA could not validly
separate from PAFLU, join another national federation and subsequently At the outset, let it be noted that the issue of disaffiliation is an inter-union
enter into a collective bargaining agreement with its employer-company.11 conflict the jurisdiction of which properly lies with the Bureau of Labor
Relations (BLR) and not with the Labor Arbiter.15 Nonetheless, with due
Petitioners separately moved for reconsideration but both motions were recognition of this fact, we deem it proper to settle the controversy at this
denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW instance since to remand the case to the BLR would only mean intolerable
together with their respective officers pleading for a reversal of the NLRC's delay for the parties.
Decision which they claimed to have been rendered in excess of jurisdiction.
In due time, both petitions were consolidated. The right of a local union to disaffiliate from its mother federation is not a
novel thesis unillumined by case law. In the landmark case of Liberty Cotton
In these petitions, petitioner PSEA together with its officers argued that by Mills Workers Union vs. Liberty Cotton Mills, Inc.16 we upheld the right of
virtue of their disaffiliation PAFLU as a mere agent had no authority to local unions to separate from their mother federation on the ground that as
represent them before any proceedings. They further asserted that being an separate and voluntary associations, local unions do not owe their creation
independent labor union PSEA may freely serve the interest of all its and existence to the national federation to which they are affiliated but,
members and readily disaffiliate from its mother federation when instead, to the will of their members. The sole essence of affiliation is to
circumstances so warrant. This right, they averred, was consistent with the increase, by collective action, the common bargaining power of local unions
constitutional guarantee of freedom of association.12 for the effective enhancement and protection of their interests. Admittedly,
there are times when without succor and support local unions may find it
For their part, petitioners PSI, Romulo and Dakila alleged that their decision hard, unaided by other support groups, to secure justice for themselves.
to bargain collectively with PSEA-NCW was actuated, to a large extent, by
PAFLU's behavior. Having heard no objections or protestations from PAFLU Yet the local unions remain the basic units of association, free to serve their
relative to PSEA's disaffiliation, they reckoned that PSEA's subsequent own interests subject to the restraints imposed by the constitution and by-
association with NSW was done bona fide.13 laws of the national federation, and free also to renounce the affiliation upon
the terms laid down in the agreement which brought such affiliation into
The Solicitor General filed a Manifestation in Lieu of existence.
Comment recommending that both petitions be granted. In his Manifestation,
the Solicitor General argued against the Labor Arbiter's assumption of Such dictum has been punctiliously followed since then.17
jurisdiction citing the following as reasons: first, there was no employer-
Upon an application of the aforecited principle to the issue at hand, the otherwise, instead of protection, there would be disregard and neglect of the
impropriety of the questioned Decisions becomes clearly apparent. There is lowly workingmen.
nothing shown in the records nor is it claimed by PAFLU that the local union
was expressly forbidden to disaffiliate from the federation nor were there any WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine
conditions imposed for a valid breakaway. As such, the pendency of an Skylanders and Workers Association-NCW, together with their respective
election protest involving both the mother federation and the local union did officers, are GRANTED. The Decision of the National Labor Relations
not constitute a bar to a valid disaffiliation. Neither was it disputed by Commission of 31 July 1996 affirming the Decision of the Labor Arbiter of
PAFLU that 111 signatories out of the 120 members of the local union, or an 30 June 1995 holding petitioners Philippine Skylanders and Workers
equivalent of 92.5% of the total union membership supported the claim of Association-NCW, Philippine Skylanders, Inc. and their respective officers,
disaffiliation and had in fact disauthorized PAFLU from instituting any guilty of unfair labor practice and ordering them to pay damages to private
complaint in their behalf. Surely, this is not a case where one (1) or two (2) respondent Philippine Association of Free Labor Unions (PAFLU)
members of the local union decided to disaffiliate from the mother September (now UNIFIED PAFLU) as well as the Resolution of 31 October
federation, but it is a case where almost all local union members decided to 1996 denying reconsideration is REVERSED and SET ASIDE. No costs.
It was entirely reasonable then for PSI to enter into a collective bargaining
agreement with PSEA-NCW. As PSEA had validly severed itself from
PAFLU, there would be no restrictions which could validly hinder it from
subsequently affiliating with NCW and entering into a collective bargaining
agreement in behalf of its members.

There is a further consideration that likewise argues for the granting of the
petitions. It stands unchallenged that PAFLU instituted the complaint for
unfair labor practice against the wishes of workers whose interests it was
supposedly protecting. The mere act of disaffiliation did not divest PSEA of
its own personality; neither did it give PAFLU the license to act
independently of the local union. Recreant to its mission, PAFLU cannot
simply ignore the demands of the local chapter and decide for its welfare.
PAFLU might have forgotten that as an agent it could only act in
representation of and in accordance with the interests of the local union. The
complaint then for unfair labor practice lodged by PAFLU against PSI, PSEA
and their respective officers, having been filed by a party which has no legal
personality to institute the complaint, should have been dismissed at the first
instance for failure to state a cause of action.

Policy considerations dictate that in weighing the claims of a local union as

against those of a national federation, those of the former must be preferred.
Parenthetically though, the desires of the mother federation to protect its
locals are not altogether to be shunned. It will however be to err greatly
against the Constitution if the desires of the federation would be favored over
those of its members. That, at any rate, is the policy of the law. For if it were





ORTEGA, JOSEPHINE D. TALIMORO, TERESITA LORECA, organization with address at Suite 404, Trinity Building, T. M.
ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO, FE Kalaw Street, Manila, represented in this act by a Negotiating
PINEDA, and MARIA JESUS FRANCISCO, petitioners, Committee headed by its National President, Mr. Godofredo Paceno,
vs. Sr., referred to in this Agreement as the UNION.1
COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS The CBA includes, among others, the following pertinent provisions:
JR., MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO Sec. 1. Coverage and Scope. All employees who are covered by this
IBANEZ, AND RODRIGO AGUILING, respondents. Agreement and presently members of the UNION shall remain
members of the UNION for the duration of this Agreement as a
PURISIMA, J.: condition precedent to continued employment with the COMPANY.

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of xxx xxx xxx
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 Sec. 4. Dismissal. Any such employee mentioned in Section 2
company and the officers of its national federation. hereof, who fails to maintain his membership in the UNION for non-
payment of UNION dues, for resignation and for violation of
The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, UNION's Constitution and By-Laws and any new employee as
Inc., (B) (MSMG), hereinafter referred to as the "local union", is an affiliate defined in Section 2 of this Article shall upon written notice of such
of the private respondent, United Lumber and General Workers of the failure to join or to maintain membership in the UNION and upon
Philippines (ULGWP), referred to as the "federation". The collective written recommendation to the COMPANY by the UNION, be
bargaining agreement between MSMG and M. Greenfield, Inc., names the dismissed from the employment by the
parties as follows: COMPANY; provided, however, that the UNION shall hold the
COMPANY free and blameless from any and all liabilities that may
This agreement made and entered into by and between: arise should the dismissed employee question, in any manner, his
dismissal; provided, further that the matter of the employee's
M. GREENFIELD, INC. (B) a corporation duly organized in dismissal under this Article may be submitted as a grievance under
accordance with the laws of the Republic of the Philippines with Article XIII and, provided, finally, that no such written
office address at Km. 14, Merville Road, Parañaque, Metro Manila, recommendation shall be made upon the COMPANY nor shall
represented in this act by its General manager, Mr. Carlos T. COMPANY be compelled to act upon any such recommendation
Javelosa, hereinafter referred to as the Company; within the period of sixty (60) days prior to the expiry date of this
Agreement conformably to law.
Art. IX

Sec. 4. Program Fund — The Company shall provide the amount of pisyales na mahuli and dating sa takdang oras ng di lalampas sa isang
P10,000.00 a month for a continuing labor education program which oras ay magmumulta ng P25.00 at babawasin sa sahod sa
shall be remitted to the Federation . . .2 pamamagitan ng salary deduction at higit sa isang oras ng pagdating
ng huli ay ituturing na pagliban.3
On September 12, 1986, a local union election was held under the auspices of
the ULGWP wherein the herein petitioner, Beda Magdalena Villanueva, and On June 27, 1988, the local union wrote respondent company a letter
the other union officers were proclaimed as winners. Minutes of the said requesting it to deduct the union fines from the wages/salaries of those union
election were duly filed with the Bureau of Labor Relations on September members who failed to attend the general membership meeting. A portion of
29, 1986. the said letter stated:

On March 21, 1987, a Petition for Impeachment was filed with the national xxx xxx xxx
federation ULGWP by the defeated candidates in the aforementioned
election. In connection with Section 4 Article II of our existing Collective
Bargaining Agreement, please deduct the amount of P50.00 from
On June 16, 1987, the federation conducted an audit of the local union funds. each of the union members named in said annexes on the payroll of
The investigation did not yield any unfavorable result and the local union July 2-8, 1988 as fine for their failure to attend said general
officers were cleared of the charges of anomaly in the custody, handling and membership meeting.4
disposition of the union funds.1âwphi1.nêt
In a Memorandum dated July 3, 1988, the Secretary General of the national
The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the federation, Godofredo Paceño, Jr. disapproved the resolution of the local
local union officers with the DOLE NCR on November 5, 1987, docketed as union imposing the P50.00 fine. The union officers protested such action by
NCR-OD-M-11-780-87. However, the same was dismissed on March 2, the Federation in a Reply dated July 4, 1988.
1988, by Med-Arbiter Renato Parungo for failure to substantiate the charges
and to present evidence in support of the allegations. 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
On April 17, 1988, the local union held a general membership meeting at the members requesting that:
Caruncho Complex in Pasig. Several union members failed to attend the
meeting, prompting the Executive Board to create a committee tasked to . . . any and all future representations by MSMG affecting a number
investigate the non-attendance of several union members in the said of members be first cleared from the federation before corresponding
assembly, pursuant to Sections 4 and 5, Article V of the Constitution and By- action by the Company.5
Laws of the union, which read:
The following day, respondent company sent a reply to petitioner union's
Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa request in a letter, stating that it cannot deduct fines from the employees'
lahat ng hakbangin ng unyon ng sinumang kasapi o pinuno ay salary without going against certain laws. The company suggested that the
maaaring maging sanhi ng pagtitiwalag o pagpapataw ng multa ng union refer the matter to the proper government office for resolution in order
hindi hihigit sa P50.00 sa bawat araw na nagkulang. to avoid placing the company in the middle of the issue.

Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang The imposition of P50.00 fine became the subject of bitter disagreement
pulong ay ituturing na pagliban at maparusahan itong alinsunod sa between the Federation and the local union culminating in the latter's
Article V, Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o declaration of general autonomy from the former through Resolution No. 10

passed by the local executive board and ratified by the general membership education program fund to ULGWP and the other P5,000.00 to
on July 16, 1988. MSMG, both unions to use the same for its intended purpose.7

In retaliation, the national federation asked respondent company to stop the Meanwhile, on September 2, 1988, several local unions (Top Form, M.
remittance of the local union's share in the education funds effective August Greenfield, Grosby, Triumph International, General Milling, and Vander
1988. This was objected to by the local union which demanded that the Hons chapters) filed a Petition for Audit and Examination of the federation
education fund be remitted to it in full. 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
The company was thus constrained to file a Complaint for Interpleader with a examination of the books of account of ULGWP.
Petition for Declaratory Relief with the Med-Arbitration Branch of the
Department of Labor and Employment, docketed as Case No. OD-M-8-435- On September 30, 1988, the officials of ULGWP called a Special National
88. This was resolved on October 28, 1988, by Med-Arbiter Anastacio Bactin Executive Board Meeting at Nasipit, Agusan del Norte where a Resolution
in an Order, disposing thus: was passed placing the MSMG under trusteeship and appointing respondent
Cesar Clarete as administrator.
WHEREFORE, premises considered, it is hereby ordered:
On October 27, 1988, the said administrator wrote the respondent company
1. That the United Lumber and General Workers of the Philippines informing the latter of its designation of a certain Alfredo Kalingking as local
(ULGWP) through its local union officers shall administer the union president and "disauthorizing" the incumbent union officers from
collective bargaining agreement (CBA). representing the employees. This action by the national federation was
protested by the petitioners in a letter to respondent company dated
2. That petitioner company shall remit the P10,000.00 monthly labor November 11, 1988.
education program fund to the ULGWP subject to the condition that
it shall use the said amount for its intended purpose. On November 13, 1988, the petitioner union officers received identical letters
from the administrator requiring them to explain within 72 hours why they
3. That the Treasurer of the MSMG shall be authorized to collect should not be removed from their office and expelled from union
from the 356 union members the amount of P50.00 as penalty for membership.
their failure to attend the general membership assembly on April 17,
1988. On November 26, 1988, petitioners replied:

However, if the MSMG Officers could present the individual written (a) Questioning the validity of the alleged National Executive Board
authorizations of the 356 union members, then the company is Resolution placing their union under trusteeship;
obliged to deduct from the salaries of the 356 union members the
P50.00 fine.6 (b) Justifying the action of their union in declaring a general
autonomy from ULGWP due to the latter's inability to give proper
On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February educational, organizational and legal services to its affiliates and the
7, 1989, which modified in part the earlier disposition, to wit: pendency of the audit of the federation funds;

WHEREFORE, premises considered, the appealed portion is hereby (c) Advising that their union did not commit any act of disloyalty as
modified to the extent that the company should remit the amount of it has remained an affiliate of ULGWP;
five thousand pesos (P5,000.00) of the P10,000.00 monthly labor

(d) Giving ULGWP a period of five (5) days to cease and desist from the said federation "for committing acts of disloyalty and/or acts
further committing acts of coercion, intimidation and harassment.8 inimical to the interest of ULGWP and violative to its Constitution
and By-laws particularly Article V, Section 6, 9, and 12, Article XIII,
However, as early as November 21, 1988, the officers were expelled from the Section 8.
ULGWP. The termination letter read:
In subsequent letters dated 21 February and 4 March 1989, the
Effective today, November 21, 1988, you are hereby expelled from ULGWP reiterated its demand for your dismissal, pointing out that
UNITED LUMBER AND GENERAL WORKERS OF THE notwithstanding your expulsion from the federation, you have
PHILIPPINES (ULGWP) for committing acts of disloyalty and/or continued in your employment with the company in violation of Sec.
acts inimical to the interest and violative to the Constitution and by- 1 and 4 of Article II of our CBA, and of existing provisions of law.
laws of your federation.
In view thereof, we are left with no alternative but to comply with
You failed and/or refused to offer an explanation inspite of the time the provisions of the Union Security Clause of our CBA.
granted to you. Accordingly, we hereby serve notice upon you that we are
dismissing you from your employment with M. Greenfield, Inc.,
Since you are no longer a member of good standing, ULGWP is pursuant to Sections 1 and 4, Article II of the CBA effective
constrained to recommend for your termination from your immediately.10
employment, and provided in Article II Section 4, known as UNION
SECURITY, in the Collective Bargaining agreement.9 On that same day, the expelled union officers assigned in the first shift were
physically or bodily brought out of the company premises by the company's
On the same day, the federation advised respondent company of the security guards. Likewise, those assigned to the second shift were not
expulsion of the 30 union officers and demanded their separation from allowed to report for work. This provoked some of the members of the local
employment pursuant to the Union Security Clause in their collective union to demonstrate their protest for the dismissal of the said union officers.
bargaining agreement. This demand was reiterated twice, through letters Some union members left their work posts and walked out of the company
dated February 21 and March 4, 1989, respectively, to respondent company. premises.

Thereafter, the Federation filed a Notice of Strike with the National On the other hand, the Federation, having achieved its objective, withdrew
Conciliation and Mediation Board to compel the company to effect the the Notice of Strike filed with the NCMB.
immediate termination of the expelled union officers.
On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB,
On March 7, 1989, under the pressure of a threatened strike, respondent DOLE, Manila, docketed as Case No. NCMB-NCR-NS-03-216-89, alleging
company terminated the 30 union officers from employment, serving them the following grounds for the strike:
identical copies of the termination letter reproduced below:
(a) Discrimination
We received a demand letter dated 21 November 1988 from the
United Lumber and General Workers of the Philippines (ULGWP) (b) Interference in union activities
demanding for your dismissal from employment pursuant to the
provisions of Article II, Section 4 of the existing Collective (c) Mass dismissal of union officers and shop stewards
Bargaining Agreement (CBA). In the said demand letter, ULGWP
informed us that as of November 21, 1988, you were expelled from (d) Threats, coercion and intimidation

(e) Union busting and April 31, 1989, respectively. However, respondent company admitted
that only 261 employees were eventually accepted back to work. Those who
The following day, March 9, 1989, a strike vote referendum was conducted did not respond to the return-to-work notice were sent termination letters
and out of 2, 103 union members who cast their votes, 2,086 members voted dated May 17, 1989, reproduced below:
to declare a strike.
M. Greenfield Inc., (B)
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 Km. 14, Merville Rd., Parañaque, M.M.
of the Secretary of the Department of Labor and Employment praying for the
suspension of the effects of their termination from employment. However, May 17, 1989
the petition was dismissed by then Secretary Franklin Drilon on April 11,
1989, the pertinent portion of which stated as follows: xxx xxx xxx

At this point in time, it is clear that the dispute at M. Greenfield is On March 14, 1989, without justifiable cause and without
purely an intra-union matter. No mass lay-off is evident as the due notice, you left your work assignment at the prejudice of
terminations have been limited to those allegedly leading the the Company's operations. On March 27, April 11, and April
secessionist group leaving MSMG-ULGWP to form a union under 21, 1989, we sent you notices to report to the Company.
the KMU. . . . Inspite of your receipt of said notices, we have not heard
from you up to this date.
xxx xxx xxx
Accordingly, for your failure to report, it is construed that
WHEREFORE, finding no sufficient jurisdiction to warrant the you have effectively abandoned your employment and the
exercise of our extraordinary authority under Article 277 (b) of the Company is, therefore, constrained to dismiss you for said
Labor Code, as amended, the instant Petition is hereby DISMISSED cause.
for lack of merit.
Very truly yours,
On March 13 and 14, 1989, a total of 78 union shop stewards were placed
under preventive suspension by respondent company. This prompted the By:
union members to again stage a walk-out and resulted in the official
declaration of strike at around 3:30 in the afternoon of March 14, 1989. The WENZEL STEPHEN LIGOT
strike was attended with violence, force and intimidation on both sides Asst. HRD Manager 12
resulting to physical injuries to several employees, both striking and non-
striking, and damage to company properties. On August 7, 1989, the petitioners filed a verified complaint with the
Arbitration Branch, National Capital Region, DOLE, Manila, docketed as
The employees who participated in the strike and allegedly figured in the Case No. NCR-00-09-04199-89, charging private respondents of unfair labor
violent incident were placed under preventive suspension by respondent practice which consists of union busting, illegal dismissal, illegal suspension,
company. The company also sent return-to-work notices to the home interference in union activities, discrimination, threats, intimidation,
addresses of the striking employees thrice successively, on March 27, April 8 coercion, violence, and oppression.
After the filing of the complaint, the lease contracts on the respondent III. HOLDING THAT THE PETITIONER EMPLOYEES WERE
company's office and factory at Merville Subdivision, Parañaque expired and DEEMED TO HAVE ABANDONED THEIR WORK AND
were not renewed. Upon demand of the owners of the premises, the company HENCE, VALIDLY DISMISSED BY RESPONDENT COMPANY;
was compelled to vacate its office and factory. AND

Thereafter, the company transferred its administration and account/client IV. NOT FINDING RESPONDENT COMPANY AND
servicing department at AFP-RSBS Industrial Park in Taguig, Metro Manila. RESPONDENT FEDERATION OFFICERS GUILTY OF ACTS OF
For failure to find a suitable place in Metro Manila for relocation of its UNFAIR LABOR PRACTICE.
factory and manufacturing operations, the company was constrained to move
the said departments to Tacloban, Leyte. Hence, on April 16, 1990, Notwithstanding the several issues raised by the petitioners and respondents
respondent company accordingly notified its employees of a temporary in the voluminous pleadings presented before the NLRC and this Court, they
shutdown in operations. Employees who were interested in relocating to revolve around and proceed from the issue of whether or not respondent
Tacloban were advised to enlist on or before April 23, 1990. company was justified in dismissing petitioner employees merely upon the
labor federation's demand for the enforcement of the union security clause
The complaint for unfair labor practice was assigned to Labor Arbiter embodied in their collective bargaining agreement.
Manuel Asuncion but was thereafter reassigned to Labor Arbiter Cresencio
Ramos when respondents moved to inhibit him from acting on the case. Before delving into the main issue, the procedural flaw pointed out by the
petitioners should first be resolved.
On December 15, 1992, finding the termination to be valid in compliance
with the union security clause of the collective bargaining agreement, Labor Petitioners contend that the decision rendered by the First Division of the
Arbiter Cresencio Ramos dismissed the complaint. NLRC is not valid because Commissioner Tanodra, who is from the Third
Division, did not have any lawful authority to sit, much less write
Petitioners then appealed to the NLRC. During its pendency, Commissioner the ponencia, on a case pending before the First Division. It is claimed that a
Romeo Putong retired from the service, leaving only two commissioners, commissioner from one division of the NLRC cannot be assigned or
Commissioner Vicente Veloso III and Hon. Chairman Bartolome Carale in temporarily designated to another division because each division is assigned
the First Division. When Commissioner Veloso inhibited himself from the a particular territorial jurisdiction. Thus, the decision rendered did not have
case, Commissioner Joaquin Tanodra of the Third Division was temporarily any legal effect at all for being irregularly issued.
designated to sit in the First Division for the proper disposition of the case.
Petitioners' argument is misplaced. Article 213 of the Labor Code in
The First Division affirmed the Labor Arbiter's disposition. With the denial enumerating the powers of the Chairman of the National Labor Relations
of their motion for reconsideration on January 28, 1994, petitioners elevated Commission provides that:
the case to this Court, attributing grave abuse of discretion to public
respondent NLRC in: The concurrence of two (2) Commissioners of a division shall be
necessary for the pronouncement of a judgment or resolution.
I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS Whenever the required membership in a division is not complete and
BY RESPONDENT COMPANY AS VALID; the concurrence of two (2) commissioners to arrive at a judgment or
resolution cannot be obtained, the Chairman shall designate such
II. HOLDING THAT THE STRIKE STAGED BY THE number of additional Commissioners from the other divisions as may

It must be remembered that during the pendency of the case in the First made upon the demand of the federation pursuant to the union security clause
Division of the NLRC, one of the three commissioners, Commissioner of the CBA; the expelled officers of the local union were accorded due
Romeo Putong, retired, leaving Chairman Bartolome Carale and process of law prior to their expulsion from their federation; that the strike
Commissioner Vicente Veloso III. Subsequently, Commissioner Veloso conducted by the petitioners was illegal for noncompliance with the
inhibited himself from the case because the counsel for the petitioners was requirements; that the employees who participated in the illegal strike and in
his former classmate in law school. The First Division was thus left with only the commission of violence thereof were validly terminated from work; that
one commissioner. Since the law requires the concurrence of two petitioners were deemed to have abandoned their employment when they did
commissioners to arrive at a judgment or resolution, the Commission was not respond to the three return to work notices sent to them; that petitioner
constrained to temporarily designate a commissioner from another division to labor union has no legal personality to file and prosecute the case for and on
complete the First Division. There is nothing irregular at all in such a behalf of the individual employees as the right to do so is personal to the
temporary designation for the law empowers the Chairman to make latter; and that, the officers of respondent company cannot be liable because
temporary assignments whenever the required concurrence is not met. The as mere corporate officers, they acted within the scope of their authority.
law does not say that a commissioner from the first division cannot be
temporarily assigned to the second or third division to fill the gap or vice Public respondent, through the Labor Arbiter, ruled that the dismissed union
versa. The territorial divisions do not confer exclusive jurisdiction to each officers were validly and legally terminated because the dismissal was
division and are merely designed for administrative efficiency. 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
Going into the merits of the case, the court finds that the Complaint for unfair appeal. Moreover, the Labor Arbiter declared that notwithstanding the lack of
labor practice filed by the petitioners against respondent company which a prior administrative investigation by respondent company, under the union
charges union busting, illegal dismissal, illegal suspension, interference in security clause provision in the CBA, the company cannot look into the
union activities, discrimination, threats, intimidation, coercion, violence, and legality or illegality of the recommendation to dismiss by the union nd the
oppression actually proceeds from one main issue which is the termination of obligation to dismiss is ministerial on the part of the company.13
several employees by respondent company upon the demand of the labor
federation pursuant to the union security clause embodied in their collective This ruling of the NLRC is erroneous. Although this Court has ruled that
bargaining agreement. union security clauses embodied in the collective bargaining agreement may
be validly enforced and that dismissals pursuant thereto may likewise be
Petitioners contend that their dismissal from work was effected in an valid, this does not erode the fundamental requirement of due process. The
arbitrary, hasty, capricious and illegal manner because it was undertaken by reason behind the enforcement of union security clauses which is the sanctity
the respondent company without any prior administrative investigation; that, and inviolability of contracts14 cannot override one's right to due process.
had respondent company conducted prior independent investigation it would
have found that their expulsion from the union was unlawful similarly for In the case of Cariño vs. National Labor Relations Commission,15 this Court
lack of prior administrative investigation; that the federation cannot pronounced that while the company, under a maintenance of membership
recommend the dismissal of the union officers because it was not a principal provision of the collective bargaining agreement, is bound to dismiss any
party to the collective bargaining agreement between the company and the employee expelled by the union for disloyalty upon its written request, this
union; that public respondents acted with grave abuse of discretion when undertaking should not be done hastily and summarily. The company acts in
they declared petitioners' dismissals as valid and the union strike as illegal bad faith in dismissing a worker without giving him the benefit of a hearing.
and in not declaring that respondents were guilty of unfair labor practice.
The power to dismiss is a normal prerogative of the employer.
Private respondents, on the other hand, maintain that the thirty dismissed However, this is not without limitation. The employer is bound to
employees who were former officers of the federation have no cause of exercise caution in terminating the services of his employees
action against the company, the termination of their employment having been especially so when it is made upon the request of a labor union
pursuant to the Collective Bargaining Agreement, . . . Dismissals In its decision, public respondent also declared that if complainants (herein
must not be arbitrary and capricious. Due process must be observed petitioners) have any recourse in law, their right of action is against the
in dismissing an employee because it affects not only his position but federation and not against the company or its officers, relying on the findings
also his means of livelihood. Employers should respect and protect of the Labor Secretary that the issue of expulsion of petitioner union officers
the rights of their employees, which include the right to labor. by the federation is a purely intra-union matter.

In the case under scrutiny, petitioner union officers were expelled by the Again, such a contention is untenable. While it is true that the issue of
federation for allegedly committing acts of disloyalty and/or inimical to the expulsion of the local union officers is originally between the local union and
interest of ULGWP and in violation of its Constitution and By-laws. Upon the federation, hence, intra-union in character, the issue was later on
demand of the federation, the company terminated the petitioners without converted into a termination dispute when the company dismissed the
conducting a separate and independent investigation. Respondent company petitioners from work without the benefit of a separate notice and hearing. As
did not inquire into the cause of the expulsion and whether or not the a matter of fact, the records reveal that the termination was effective on the
federation had sufficient grounds to effect the same. Relying merely upon the same day that the termination notice was served on the petitioners.
federation's allegations, respondent company terminated petitioners from
employment when a separate inquiry could have revealed if the federation In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills,
had acted arbitrarily and capriciously in expelling the union officers. Inc.17, the Court held the company liable for the payment of backwages for
Respondent company's allegation that petitioners were accorded due process having acted in bad faith in effecting the dismissal of the employees.
is belied by the termination letters received by the petitioners which state that
the dismissal shall be immediately effective. . . . Bad faith on the part of the respondent company may be gleaned
from the fact that the petitioner workers were dismissed hastily and
As held in the aforecited case of Cariño, "the right of an employee to be summarily. At best, it was guilty of a tortious act, for which it must
informed of the charges against him and to reasonable opportunity to present assume solidary liability, since it apparently chose to summarily
his side in a controversy with either the company or his own union is not dismiss the workers at the union's instance secure in the union's
wiped away by a union security clause or a union shop clause in a collective contractual undertaking that the union would hold it "free from any
bargaining agreement. An employee is entitled to be protected not only from liability" arising from such dismissal.
a company which disregards his rights but also from his own union the
leadership of which could yield to the temptation of swift and arbitrary Thus, notwithstanding the fact that the dismissal was at the instance of the
expulsion from membership and mere dismissal from his job. 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
While respondent company may validly dismiss the employees expelled by remiss in its duty to accord the would-be dismissed employees their right to
the union for disloyalty under the union security clause of the collective be heard on the matter.
bargaining agreement upon the recommendation by the union, this dismissal
should not be done hastily and summarily thereby eroding the employees' Anent petitioners contention that the federation was not a principal party to
right to due process, self-organization and security of tenure. The the collective bargaining agreement between the company and the union,
enforcement of union security clauses is authorized by law provided such suffice it to say that the matter was already ruled upon in the Interpleader
enforcement is not characterized by arbitrariness, and always with due case filed by respondent company. Med-Arbiter Anastacio Bactin thus ruled:
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 After a careful examination of the facts and evidences presented by
accorded a separate hearing by respondent company. the parties, this Officer hereby renders its decision as follows:

1.) It appears on record that in Collective Bargaining Agreement In its decision, the Labor Arbiter declared that the act of disaffiliation and
(CBA) which took effect on July 1, 1986, the contracting parties are declaration of autonomy by the local union was part of its "plan to take over
M. Greenfield, Inc. (B) and Malayang Samahan ng Mga the respondent federation." This is purely conjecture and speculation on the
Manggagawa sa M. Greenfield, Inc. (B) (MSMG)/United Lumber part of public respondent, totally unsupported by the evidence.
and General Workers of the Philippines (ULGWP). However,
MSMG was not yet registered labor organization at the time of the A local union has the right to disaffiliate from its mother union or declare its
signing of the CBA. Hence, the union referred to in the CBA is the autonomy. A local union, being a separate and voluntary association, is free
ULGWP.18 to serve the interests of all its members including the freedom to disaffiliate
or declare its autonomy from the federation to which it belongs when
Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as circumstances warrant, in accordance with the constitutional guarantee of
follows: freedom of association.22

It is undisputed that ULGWP is the certified sole and exclusive The purpose of affiliation by a local union with a mother union or a
collective bargaining agent of all the regular rank-and-file workers of federation.
the company, M. Greenfield, Inc. (pages 31-32 of the records).
. . . is to increase by collective action the bargaining power in respect
It has been established also that the company and ULGWP signed a of the terms and conditions of labor. Yet the locals remained the
3-year collective bargaining agreement effective July 1, 1986 up to basic units of association, free to serve their own and the common
June 30, 1989.19 interest of all, subject to the restraints imposed by the Constitution
and By-Laws of the Association, and free also to renounce the
Although the issue of whether or not the federation had reasonable grounds affiliation for mutual welfare upon the terms laid down in the
to expel the petitioner union officers is properly within the original and agreement which brought it into existence.23
exclusive jurisdiction of the Bureau of Labor Relations, being an intra-union
conflict, this Court deems it justifiable that such issue be nonetheless ruled Thus, a local union which has affiliated itself with a federation is free to
upon, as the Labor Arbiter did, for to remand the same to the Bureau of sever such affiliation anytime and such disaffiliation cannot be considered
Labor Relations would be to intolerably delay the case. disloyalty. In the absence of specific provisions in the federation's
constitution prohibiting disaffiliation or the declaration of autonomy of a
The Labor Arbiter found that petitioner union officers were justifiably local union, a local may dissociate with its parent union.24
expelled from the federation for committing acts of disloyalty when it
"undertook to disaffiliate from the federation by charging ULGWP with The evidence on hand does not show that there is such a provision in
failure to provide any legal, educational or organizational support to the ULGWP's constitution. Respondents' reliance upon Article V, Section 6, of
local. . . . and declared autonomy, wherein they prohibit the federation from the federation's constitution is not right because said section, in fact, bolsters
interfering in any internal and external affairs of the local union."20 the petitioner union's claim of its right to declare autonomy:

It is well-settled that findings of facts of the NLRC are entitled to great Sec. 6. The autonomy of a local union affiliated with ULGWP shall
respect and are generally binding on this Court, but it is equally well-settled be respected insofar as it pertains to its internal affairs, except as
that the Court will not uphold erroneous conclusions of the NLRC as when provided elsewhere in this Constitution.
the Court finds insufficient or insubstantial evidence on record to support
those factual findings. The same holds true when it is perceived that far too There is no disloyalty to speak of, neither is there any violation of the
much is concluded, inferred or deduced from the bare or incomplete facts federation's constitution because there is nothing in the said constitution
appearing of record.21
which specifically prohibits disaffiliation or declaration of autonomy. Hence, Another reason why the Labor Arbiter declared the strike illegal is due to the
there cannot be any valid dismissal because Article II, Section 4 of the union existence of a no strike no lockout provision in the CBA. Again, such a
security clause in the CBA limits the dismissal to only three (3) grounds, to ruling is erroneous. A no strike, no lock out provision can only be invoked
wit: failure to maintain membership in the union (1) for non-payment of when the strike is economic in nature, i.e. to force wage or other concessions
union dues, (2) for resignation; and (3) for violation of the union's from the employer which he is not required by law to grant.26 Such a
Constitution and By-Laws. provision cannot be used to assail the legality of a strike which is grounded
on unfair labor practice, as was the honest belief of herein petitioners. Again,
To support the finding of disloyalty, the Labor Arbiter gave weight to the fact whether or not there was indeed unfair labor practice does not affect the
that on February 26, 1989, the petitioners declared as vacant all the strike.
responsible positions of ULGWP, filled these vacancies through an election
and filed a petition for the registration of UWP as a national federation. It On the allegation of violence committed in the course of the strike, it must be
should be pointed out, however, that these occurred after the federation had remembered that the Labor Arbiter and the Commission found that "the
already expelled the union officers. The expulsion was effective November parties are agreed that there were violent incidents . . . resulting to injuries to
21, 1988. Therefore, the act of establishing a different federation, entirely both sides, the union and management."27 The evidence on record show that
separate from the federation which expelled them, is but a normal retaliatory the violence cannot be attributed to the striking employees alone for the
reaction to their expulsion. company itself employed hired men to pacify the strikers. With violence
committed on both sides, the management and the employees, such violence
With regard to the issue of the legality or illegality of the strike, the Labor cannot be a ground for declaring the strike as illegal.
Arbiter held that the strike was illegal for the following reasons: (1) it was
based on an intra-union dispute which cannot properly be the subject of a With respect to the dismissal of individual petitioners, the Labor Arbiter
strike, the right to strike being limited to cases of bargaining deadlocks and declared that their refusal to heed respondent's recall to work notice is a clear
unfair labor practice (2) it was made in violation of the "no strike, no lock- indication that they were no longer interested in continuing their employment
out" clause in the CBA, and (3) it was attended with violence, force and and is deemed abandonment. It is admitted that three return to work notices
intimidation upon the persons of the company officials, other employees were sent by respondent company to the striking employees on March 27,
reporting for work and third persons having legitimate business with the April 11, and April 21, 1989 and that 261 employees who responded to the
company, resulting to serious physical injuries to several employees and notice were admitted back to work.
damage to company property.
However, jurisprudence holds that for abandonment of work to exist, it is
On the submission that the strike was illegal for being grounded on a non- essential (1) that the employee must have failed to report for work or must
strikeable issue, that is, the intra-union conflict between the federation and have been absent without valid or justifiable reason; and (2) that there must
the local union, it bears reiterating that when respondent company dismissed have been a clear intention to sever the employer-employee relationship
the union officers, the issue was transformed into a termination dispute and manifested by some overt acts.28 Deliberate and unjustified refusal on the
brought respondent company into the picture. Petitioners believed in good part of the employee to go back to his work post amd resume his employment
faith that in dismissing them upon request by the federation, respondent must be established. Absence must be accompanied by overt acts unerringly
company was guilty of unfair labor practice in that it violated the petitioner's pointing to the fact that the employee simply does not want to work
right to self-organization. The strike was staged to protest respondent anymore.29 And the burden of proof to show that there was unjustified refusal
company's act of dismissing the union officers. Even if the allegations of to go back to work rests on the employer.
unfair labor practice are subsequently found out to be untrue, the
presumption of legality of the strike prevails.25 In the present case, respondents failed to prove that there was a clear
intention on the part of the striking employees to sever their employer-
employee relationship. Although admittedly the company sent three return to
work notices to them, it has not been substantially proven that these notices of notice and hearing, a procedure that must be observed before termination
were actually sent and received by the employees. As a matter of fact, some of employment can be legally effected.
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 In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No.
advised to secure a clearance from ULGWP and to sign a waiver. Some 117040, January 27, 2000), the Court ruled that an employee who is
employees who responded to the notice were allegedly told to wait for further dismissed, whether or not for just or authorized cause but without prior
notice from respondent company as there was lack of work. notice of his termination, is entitled to full backwages from the time he was
terminated until the decision in his case becomes final, when the dismissal
Furthermore, this Court has ruled that an employee who took steps to protest was for cause; and in case the dismissal was without just or valid cause, the
his lay-off cannot be said to have abandoned his work.30 The filing of a backwages shall be computed from the time of his dismissal until his actual
complaint for illegal dismissal is inconsistent with the allegation of reinstatement. In the case at bar, where the requirement of notice and hearing
abandonment. In the case under consideration, the petitioners did, in fact, file was not complied with, the aforecited doctrine laid down in the Serrano case
a complaint when they were refused reinstatement by respondent company. applies.

Anent public respondent's finding that there was no unfair labor practice on WHEREFORE, the Petition is GRANTED; the decision of the National
the part of respondent company and federation officers, the Court sustains the Labor Relations Commission in Case No. NCR-00-09-04199-89 is
same. As earlier discussed, union security clauses in collective bargaining REVERSED and SET ASIDE; and the respondent company is hereby
agreements, if freely and voluntarily entered into, are valid and binding. ordered to immediately reinstate the petitioners to their respective positions.
Corollary, dismissals pursuant to union security clauses are valid and legal Should reinstatement be not feasible, respondent company shall pay
subject only to the requirement of due process, that is, notice and hearing separation pay of one month salary for every year of service. Since
prior to dismissal. Thus, the dismissal of an employee by the company petitioners were terminated without the requisite written notice at least 30
pursuant to a labor union's demand in accordance with a union security days prior to their termination, following the recent ruling in the case
agreement does not constitute unfair labor practice.31 of Ruben Serrano vs. National Labor Relations Commission and Isetann
Department Store, the respondent company is hereby ordered to pay full
However, the dismissal was invalidated in this case because of respondent backwages to petitioner-employees while the Federation is also ordered to
company's failure to accord petitioners with due process, that is, notice and pay full backwages to petitioner-union officers who were dismissed upon its
hearing prior to their termination. Also, said dismissal was invalidated instigation. Since the dismissal of petitioners was without cause, backwages
because the reason relied upon by respondent Federation was not valid. shall be computed from the time the herein petitioner employees and union
Nonetheless, the dismissal still does not constitute unfair labor practice. officers were dismissed until their actual reinstatement. Should reinstatement
be not feasible, their backwages shall be computed from the time petitioners
Lastly, the Court is of the opinion, and so holds, that respondent company were terminated until the finality of this decision. Costs against the
officials cannot be held personally liable for damages on account of the respondent company.1âwphi1.nêt
employees' dismissal because the employer corporation has a personality
separate and distinct from its officers who merely acted as its agents. SO ORDERED.

It has come to the attention of this Court that the 30-day prior notice
requirement for the dismissal of employees has been repeatedly violated and
the sanction imposed for such violation enunciated in Wenphil Corporation
vs. NLRC32 has become an ineffective deterrent. Thus, the Court recently
promulgated a decision to reinforce and make more effective the requirement

G.R. No. L-43495-99 January 20, 1990


CAPAGNGAN, VICTORINO ABORRO, VIDAL MANTOS, This is a petition for certiorari under Rule 65 seeking to set aside the
DALMACIO DALDE, LUCIO PIASAN, CANUTO LABADAN, decisions of the public respondents Secretary of Labor and National Labor
TERESO ROMERDE, CONRADO ENGALAN, SALVADOR NERVA, Relations Commission which reversed the Arbitrators rulings in favor of
BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING, The following factual background of this case appears from the record:
PERALES, ROMEO MAGRAMO, GODOFREDO CAMINOS, On January 2, 1968, the rank and file workers of the Tropical Hut Food
GILDARDO DUMAS, JORGE SALDIVAR, GENARO MADRIO, Market Incorporated, referred to herein as respondent company, organized a
SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR JAPAY, local union called the Tropical Hut Employees Union, known for short as the
ROGELIO CUIZON, RENATO ANTIPADO, GREGORIO CUEVO, THEU, elected their officers, adopted their constitution and by-laws and
MARTIN BALAZUELA, CONSTANCIO CHU, CRISPIN TUBLE, immediately sought affiliation with the National Association of Trade Unions
FLORENCIO CHIU, FABIAN CAHUCOM, EMILIANO VILLAMOR, (NATU). On January 3, 1968, the NATU accepted the THEU application for
RESTITUTO HANDAYAN, VICTORINO ESPEDILLA, NOEL CHUA, affiliation. Following such affiliation with NATU, Registration Certificate
ARMANDO ALCORANO, ELEUTERIO TAGUIK, SAMSON CRUDA, No. 5544-IP was issued by the Department of Labor in the name of the
DANILO CASTRO, CENON VALLENAS, DANILO CAWALING, Tropical Hut Employees Union — NATU. It appears, however, that NATU
SIMPLICIO GALLEROS, PERFECTO CUIZON, PROCESO itself as a labor federation, was not registered with the Department of Labor.
BAGOHIN, IRENEO SUPANGAN, RODRIGO CAGATIN, TEODORO After several negotiations were conducted between THEU-NATU,
ORENCIO, ARMANDO LUAYON, JAIME NERVA, NARCISO represented by its local president and the national officers of the NATU,
CUIZON, ALFREDO DEL ROSARIO, EDUARDO LORENZO, particularly Ignacio Lacsina, President, Pacifico Rosal, Executive Vice-
PEDRO ARANGO, VICENTE SUPANGAN, JACINTO BANAL AND President and Marcelino Lontok, Jr., Vice President, and respondent Tropical
BONIFACIO PUERTO, petitioners, Hut Food Market, Incorporated, thru its President and General Manager,
vs. Cesar Azcona, Sr., a Collective Bargaining Agreement was concluded
TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE, between the parties on April 1, 1968, the term of which expired on March 31,
ARTURO DILAG, MARCELINO LONTOK JR., NATIONAL 1971. Said agreement' contained these clear and unequivocal terms:
This Agreement made and entered into this __________ day of
___________, 1968, by and between:
BLAS F. OPLE, respondents.
The Tropical Hut Food Market, Inc., a corporation duly organized
Pacifico C. Rosal for petitioners.
and existing under and by virtue of the laws of the Republic of the
Marcelino Lontok, Jr. for private respondents.
Philippines, with principal office at Quezon City, represented in this
Act by its President, Cesar B. Azcona (hereinafter referred to as the
Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and Company)
—and— And attached to the Agreement as Appendix "A" is a check-off Authorization
Form, the terms of which are as follows:
The Tropical Hut Employees Union — NATU, a legitimate labor
organization duly organized and existing in accordance with the laws We, the undersigned, hereby designate the NATIONAL Association
of the Republic of the Philippines, and affiliated with the National of Trade Unions, of which the TROPICAL HUT EMPLOYEES
Association of Trade Unions, with offices at San Luis Terraces, UNION is an affiliate as sole collective bargaining agent in all
Ermita, Manila, and represented in this Act by its undersigned matters relating to salary rates, hours of work and other terms and
officers (hereinafter referred to as the UNION) conditions of employment in the Tropical Hut Food Market, Inc. and
we hereby authorize the said company to deduct the amount of Four
Witnesseth: (P 4.00) Pesos each every month as our monthly dues and to deliver
the amount to the Treasurer of the Union or his duly authorized
xxx xxx xxx representatives. (Rollo, pp. 680-684)

Article I On May 21, 1971, respondent company and THEU-NATU entered into a
new Collective Bargaining Agreement which ended on March 31, 1974. This
Coverage and Effectivity new CBA incorporated the previous union-shop security clause and the
attached check-off authorization form.
Sec. 1. The COMPANY recognizes the UNION as the sole and
exclusive collective bargaining agent for all its workers and Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-
employees in all matters concerning wages, hours of work, and other NATU, was appointed by the respondent company as Assistant Unit
terms and conditions of employment. Manager. On July 24, 1973, he wrote the general membership of his union
that for reason of his present position, he was resigning as President of the
xxx xxx xxx 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.
Article III
On December 19,1973, NATU received a letter dated December 15, 1973,
Union Membership and Union Check-off
jointly signed by the incumbent officers of the local union informing the
NATU that THEU was disaffiliating from the NATU federation. On
Sec. 1 —. . . Employees who are already members of the UNION at December 20, 1973, the Secretary of the THEU, Nemesio Barro, made an
the time of the signing of this Agreement or who become so announcement in an open letter to the general membership of the THEU,
thereafter shall be required to maintain their membership therein as a concerning the latter's disaffiliation from the NATU and its affiliation with
condition of continued employment. the Confederation of General Workers (CGW). The letter was passed around
among the members of the THEU-NATU, to which around one hundred and
xxx xxx xxx thirty-seven (137) signatures appeared as having given their consent to and
acknowledgment of the decision to disaffiliate the THEU from the NATU.
Sec. 3—Any employee who is expelled from the UNION for joining
another federation or forming another union, or who fails or refuses On January 1, 1974, the general membership of the so-called THEU-CGW
to maintain his membership therein as required, . . . shall, upon held its annual election of officers, with Jose Encinas elected as President.
written request of the UNION be discharged by the COMPANY. On January 3, 1974, Encinas, in his capacity as THEU-CGW President,
(Rollo, pp. 667-670) informed the respondent company of the result of the elections. On January
9, 1974, Pacifico Rosal, President of the Confederation of General Workers of NLRC Case No. LR-2511 on January 11, 1974 against private respondents
(CGW), wrote a letter in behalf of complainant THEU-CGW to the herein, charging them of unfair labor practice.
respondent company demanding the remittance of the union dues collected
by the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this On January 15,1974, upon the request of NATU, respondent company
was refused by the respondent company. applied for clearance with the Secretary of Labor to dismiss the other officers
and members of THEU-CGW. The company also suspended them effective
On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, that day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual
Jr., wrote Vidal Mantos, requiring the latter to assume immediately the complainants against private respondents for unfair labor practices.
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 On January 19, 1974, Lontok, acting as temporary chairman, presided over
Encinas in a letter, concerning the request made by the NATU federation to the election of officers of the remaining THEU-NATU in an emergency
the respondent company to dismiss him (Encinas) in view of his violation of meeting pending the holding of a special election to be called at a later date.
Section 3 of Article III of the Collective Bargaining Agreement. Encinas was In the alleged election, Arturo Dilag was elected acting THEU-NATU
also advised in the letter that NATU was returning the letter of disaffiliation President together with the other union officers. On February 14, 1974, these
on the ground that: temporary officers were considered as having been elected as regular officers
for the year 1974.
1. Under the restructuring program NOT of the Bureau of Labor but
of the Philippine National Trade Union Center in conjunction with On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce
the NATU and other established national labor centers, retail clerks Enrile, Secretary of National Defense, complaining of the unfair labor
and employees such as our members in the Tropical Hut pertain to practices committed by respondent company against its members and
Industry II which by consensus, has been assigned already to the requesting assistance on the matter. The aforementioned letter contained the
jurisdiction of the NATU; signatures of one hundred forty-three (143) members.

2. The right to disaffiliate belongs to the union membership who — On February 24,1974, the secretary of THEU-NATU, notified the entire rank
on the basis of verified reports received by — have not even been and file employees of the company that they will be given forty-eight (48)
consulted by you regarding the matter; hours upon receipt of the notice within which to answer and affirm their
membership with THEU-NATU. When the petitioner employees failed to
3. Assuming that the disaffiliation decision was properly reached; reply, Arturo Dilag advised them thru letters dated February 26, March 2 and
your letter nevertheless is unacceptable in view of Article V, Section 5, 1974, that the THEU-NATU shall enforce the union security clause set
1, of the NATU Constitution which provides that "withdrawal from forth in the CBA, and that he had requested respondent company to dismiss
the organization shall he valid provided three (3) months notice of them.
intention to withdraw is served upon the National Executive
Council." (p. 281, Rollo) Respondent company, thereafter, wrote the petitioner employees demanding
the latter's comment on Dilag's charges before action was taken thereon.
In view of NATU's request, the respondent company, on the same day, which However, no comment or reply was received from petitioners. In view of
was January 11, 1974, suspended Encinas pending the application for this, Estelita Que, President/General Manager of respondent company, upon
clearance with the Department of Labor to dismiss him. On January 12, Dilag's request, suspended twenty four (24) workers on March 5, 1974,
1974, members of the THEU-CGW passed a resolution protesting the another thirty seven (37) on March 8, 1974 and two (2) more on March 11,
suspension of Encinas and reiterated their ratification and approval of their 1974, pending approval by the Secretary of Labor of the application for their
union's disaffiliation from NATU and their affiliation with the Confederation dismissal.
of General Workers (CGW). It was Encinas' suspension that caused the filing
As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an SO ORDERED. (pp. 147-148, Rollo)
unnumbered case were filed by petitioners against Tropical Hut Food
Market, Incorporated, Estelita Que, Hernando Sarmiento and Arturo Dilag. From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases
No. LR-2511 and LR-2521 and by Arbitrator Cleto Villatuya in NLRC Cases
It is significant to note that the joint letter petition signed by sixty-seven (67) Nos. LR-2971, LR-3015, and the unnumbered case, all parties thereto,
employees was filed with the Secretary of Labor, the NLRC Chairman and namely, petitioners herein, respondent company, NATU and Dilag appealed
Director of Labor Relations to cancel the words NATU after the name of to the National Labor Relations Commission.
Tropical Hut Employee Union under Registration Certificate No. 5544 IP.
Another letter signed by one hundred forty-six (146) members of THEU- In a decision rendered on August 1, 1975, the National Labor Relations
CGW was sent to the President of the Philippines informing him of the unfair Commission found the private respondents' appeals meritorious, and
labor practices committed by private respondents against THEU-CGW stated, inter alia:
WHEREFORE, in view of the foregoing premises, the Order of
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed Arbitrator Lucas in NLRC CASE NOS. LR-2511, 2521 and the
with the Labor Arbiter, Arbitrator Daniel Lucas issued an order dated March decision of Arbitrator Villatuya in NLRC CASE NOS. LR-2971,
21, 1974, holding that the issues raised by the parties became moot and 3015 and the unnumbered Case are hereby REVERSED.
academic with the issuance of NLRC Order dated February 25, 1974 in Accordingly, the individual complainants are deemed to have lost
NLRC Case No. LR-2670, which directed the holding of a certification their status as employees of the respondent company. However,
election among the rank and file workers of the respondent company between considering that the individual complainants are not presumed to be
the THEU-NATU and THEU-CGW. He also ordered: a) the reinstatement of familiar with nor to have anticipated the legal mesh they would find
all complainants; b) for the respondent company to cease and desist from themselves in, after their "disaffiliation" from National Association
committing further acts of dismissals without previous order from the NLRC of Trade Unions and the THEU-NATU, much less the legal
and for the complainant Tropical Hut Employees UNION-CGW to file consequences of the said action which we presume they have taken
representation cases on a case to case basis during the freedom period in all good faith; considering, further, that the thrust of the new
provided for by the existing CBA between the parties (pp. 91-93, Rollo). orientation in labor relations is not towards the punishment of acts
violative of contractual relations but rather towards fair adjustments
With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered of the resulting complications; and considering, finally, the
case, Arbitrator Cleto T. Villatuya rendered a decision dated October 14, consequent economic hardships that would be visited on the
1974, the dispositive portion of which states: individual complainants, if the law were to be strictly enforced
against them, this Commission is constrained to be magnanimous in
Premises considered, a DECISION is hereby rendered ordering this instant, notwithstanding its obligation to give full force and
respondent company to reinstate immediately the sixty three (63) effect to the majesty of the law, and hereby orders the respondent
complainants to their former positions with back wages from the company, under pain of being cited for contempt for failure to do so,
time they were illegally suspended up to their actual reinstatement to give the individual complainants a second chance by reemploying
without loss of seniority and other employment rights and privileges, them upon their voluntary reaffirmation of membership and loyalty
and ordering the respondents to desist from further committing acts to the Tropical Hut Employees Union-NATU and the National
of unfair labor practice. The respondent company's application for Association of Trade Unions in the event it hires additional
clearance filed with the Secretary of Labor to terminate the subject personnel.
complainants' services effective March 20 and 23, 1974, should be
denied. SO ORDERED. (pp. 312-313, Rollo)

The petitioner employees appealed the decision of the respondent National Court without an appeal having been made to the Office of the President; 2)
Labor Relations Commission to the Secretary of Labor. On February 23, whether or not the disaffiliation of the local union from the national
1976, the Secretary of Labor rendered a decision affirming the findings of the federation was valid; and 3) whether or not the dismissal of petitioner
Commission, which provided inter alia: employees resulting from their unions disaffiliation for the mother federation
was illegal and constituted unfair labor practice on the part of respondent
We find, after a careful review of the record, no sufficient company and federation.
justification to alter the decision appealed from except that portion of
the dispositive part which states: We find the petition highly meritorious.

. . . this Commission . . . hereby orders respondent company The applicable law then is the Labor Code, PD 442, as amended by PD 643
under pain of being cited for contempt for failure to do so, to on January 21, 1975, which states:
give the individual complainants a second chance by
reemploying them upon their voluntary reaffirmation of Art. 222. Appeal — . . .
membership and loyalty to the Tropical Hut Employees
UNION-NATU and the National Association of Trade xxx xxx xxx
Union in the event it hires additional personnel.
Decisions of the Secretary of Labor may be appealed to the President
Compliance by respondent of the above undertaking is not of the Philippines subject to such conditions or limitations as the
immediately feasible considering that the same is based on an President may direct. (Emphasis ours)
uncertain event, i.e., reemployment of individual complainants "in
the event that management hires additional personnel," after they The remedy of appeal from the Secretary of Labor to the Office of the
shall have reaffirmed their loyalty to THEU-NATU, which is President is not a mandatory requirement before resort to courts can be had,
unlikely. but an optional relief provided by law to parties seeking expeditious
disposition of their labor disputes. Failure to avail of such relief shall not in
In lieu of the foregoing, and to give complainants positive relief any way served as an impediment to judicial intervention. And where the
pursuant to Section 9, Implementing Instruction No. 1. dated issue is lack of power or arbitrary or improvident exercise thereof, decisions
November 9, 1972, respondent is hereby ordered to grant to all the of the Secretary of Labor may be questioned in a certiorari proceeding
individual complainants financial assistance equivalent to one (1) without prior appeal to the President (Arrastre Security Association —
month salary for every year of service. TUPAS v. Ople, No. L-45344, February 20, 1984, 127 SCRA 580). Since the
instant petition raises the same issue of grave abuse of discretion of the
WHEREFORE, with the modification as above indicated, the Secretary of Labor amounting to lack of or in excess of jurisdiction in
Decision of the National Labor Relations Commission is hereby deciding the controversy, this Court can properly take cognizance of and
affirmed. resolve the issues raised herein.

SO ORDERED.(pp. 317-318, Rollo) This brings Us to the question of the legality of the dismissal meted to
petitioner employees. In the celebrated case of Liberty Cotton Mills Workers
From the various pleadings filed and arguments adduced by petitioners and Union v. Liberty Cotton Mills, L-33187, September 4, 1975, 66 SCRA 512,
respondents, the following issues appear to be those presented for resolution We held that the validity of the dismissals pursuant to the union security
in this petition to wit: 1) whether or not the petitioners failed to exhaust clause in the collective bargaining agreement hinges on the validity of the
administrative remedies when they immediately elevated the case to this disaffiliation of the local union from the federation.

The right of a local union to disaffiliate from its mother federation is well- The inclusion of the word NATU after the name of the local union THEU in
settled. A local union, being a separate and voluntary association, is free to the registration with the Department of Labor is merely to stress that the
serve the interest of all its members including the freedom to disaffiliate THEU is NATU's affiliate at the time of the registration. It does not mean
when circumstances warrant. This right is consistent with the constitutional that the said local union cannot stand on its own. Neither can it be interpreted
guarantee of freedom of association (Volkschel Labor Union v. Bureau of to mean that it cannot pursue its own interests independently of the
Labor Relations, No. L-45824, June 19, 1985, 137 SCRA 42). 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.
All employees enjoy the right to self organization and to form and join labor
organizations of their own choosing for the purpose of collective bargaining When the local union withdrew from the old federation to join a new
and to engage in concerted activities for their mutual aid or protection. This federation, it was merely exercising its primary right to labor organization for
is a fundamental right of labor that derives its existence from the the effective enhancement and protection of common interests. In the
Constitution. In interpreting the protection to labor and social justice absence of enforceable provisions in the federation's constitution preventing
provisions of the Constitution and the labor laws or rules or regulations, We disaffiliation of a local union a local may sever its relationship with its parent
have always adopted the liberal approach which favors the exercise of labor (People's Industrial and Commercial Employees and Workers Organization
rights. (FFW) v. People's Industrial and Commercial Corporation, No. 37687,
March 15, 1982, 112 SCRA 440).
Relevant on this point is the basic principle We have repeatedly in affirmed
in many rulings: There is nothing in the constitution of the NATU or in the constitution of the
THEU-NATU that the THEU was expressly forbidden to disaffiliate from the
. . . The locals are separate and distinct units primarily designed to federation (pp. 62, 281, Rollo), The alleged non-compliance of the local
secure and maintain an equality of bargaining power between the union with the provision in the NATU Constitution requiring the service of
employer and their employee-members in the economic struggle for three months notice of intention to withdraw did not produce the effect of
the fruits of the joint productive effort of labor and capital; and the nullifying the disaffiliation for the following grounds: firstly, NATU was not
association of the locals into the national union (PAFLU) was in even a legitimate labor organization, it appearing that it was not registered at
furtherance of the same end. These associations are consensual that time with the Department of Labor, and therefore did not possess and
entities capable of entering into such legal relations with their acquire, in the first place, the legal personality to enforce its constitution and
member. The essential purpose was the affiliation of the local unions laws, much less the right and privilege under the Labor Code to organize and
into a common enterprise to increase by collective action the affiliate chapters or locals within its group, and secondly, the act of non-
common bargaining power in respect of the terms and conditions of compliance with the procedure on withdrawal is premised on purely technical
labor. Yet the locals remained the basic units of association, free to grounds which cannot rise above the fundamental right of self-organization.
serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws of the Respondent Secretary of Labor, in affirming the decision of the respondent
Association, and free also to renounce the affiliation for mutual Commission, concluded that the supposed decision to disaffiliate was not the
welfare upon the terms laid down in the agreement which brought it subject of a free and open discussion and decision on the part of the THEU-
into existence. (Adamson & Adamson, Inc. v. CIR, No. L-35120, NATU general membership (p. 305, Rollo). This, however, is contradicted by
January 31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union the evidence on record. Moreover, We are inclined to believe Arbitrator
(NAFLU) v. Noriel, No. L-41955, December 29, 1977, 80 SCRA Villatuya's findings to the contrary, as follows:
681; Liberty Cotton Mills Workers Union v. Liberty Cotton Mills,
Inc., supra). . . . . 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, is expelled from the union for joining another federation or for forming
1974 to the Department of Labor signed by 165 members (Exhs. "I to another union or who fails or refuses to maintain membership therein. The
I-10"); d) letter dated January 30, 1974 to the Secretary of the case at bar does not involve the withdrawal of merely some employees from
National Defense signed by 144 members (Exhs. "0 to 0-5") and; e) the union but of the whole THEU itself from its federation. Clearly, since
letter dated March 6, 1974 signed by 146 members addressed to the there is no violation of the union security provision in the CBA, there was no
President of the Philippines (Exhs. "HH to HH-5"), to show that in sufficient ground to terminate the employment of petitioners.
several instances, the members of the THEU-NATU have
acknowledged their disaffiliation from NATU. The letters of the Public respondents considered the existence of Arturo Dilag's group as the
complainants also indicate that an overwhelming majority have remaining true and valid union. We, however, are inclined to agree instead
freely and voluntarily signed their union's disaffiliation from NATU, with the Arbitrator's findings when he declared:
otherwise, if there was really deception employed in securing their
signatures as claimed by NATU/ Dilag, it could not be possible to . . . . Much more, the so-called THEU-NATU under Dilag's group
get their signatures in five different documents. (p. 144, Rollo) which assumes to be the original THEU-NATU has a very doubtful
and questionable existence not to mention that the alleged president
We are aware of the time-honored doctrine that the findings of the NLRC is performing supervisory functions and not qualified to be a bona
and the Secretary of Labor are binding on this Court if supported by fide member of the rank and file union. (p. 146, Rollo)
substantial evidence. However, in the same way that the findings of facts
unsupported by substantial and credible evidence do not bind this Court, Records show that Arturo Dilag had resigned in the past as President of
neither will We uphold erroneous conclusions of the NLRC and the Secretary THEU-NATU because of his promotion to a managerial or supervisory
of Labor when We find that the latter committed grave abuse of discretion in position as Assistant Unit Manager of respondent Company. Petitioner Jose
reversing the decision of the labor arbiter (San Miguel Corporation v. NLRC, Encinas replaced Dilag as President and continued to hold such position at
L-50321, March 13, 1984, 128 SCRA 180). In the instant case, the factual the time of the disaffiliation of the union from the federation. It is therefore
findings of the arbitrator were correct against that of public respondents. improper and contrary to law for Dilag to reassume the leadership of the
remaining group which was alleged to be the true union since he belonged to
Further, there is no merit in the contention of the respondents that the act of the managerial personnel who could not be expected to work for the
disaffiliation violated the union security clause of the CBA and that their betterment of the rank and file employees. Besides, managers and supervisors
dismissal as a consequence thereof is valid. A perusal of the collective are prohibited from joining a rank and file union (Binalbagan Isabela Sugar
bargaining agreements shows that the THEU-NATU, and not the NATU Co., Inc. (BISCOM) v. Philippine Association of Free Labor Unions
federation, was recognized as the sole and exclusive collective bargaining (PAFLU), et al., L-18782, August 29, 1963, 8 SCRA 700). Correspondingly,
agent for all its workers and employees in all matters concerning wages, if a manager or supervisor organizes or joins a rank and file union, he will be
hours of work and other terms and conditions of employment (pp. 667- required to resign therefrom (Magalit, et al. v. Court of Industrial Relations,
706, Rollo). Although NATU was designated as the sole bargaining agent in et al., L-20448, May 25, 1965,14 SCRA 72).
the check-off authorization form attached to the CBA, this simply means it
was acting only for and in behalf of its affiliate. The NATU possessed the Public respondents further submit that several employees who disaffiliate
status of an agent while the local union remained the basic principal union their union from the NATU subsequently retracted and reaffirmed their
which entered into contract with the respondent company. When the THEU membership with the THEU-NATU. In the decision which was affirmed by
disaffiliated from its mother federation, the former did not lose its legal respondent Secretary of Labor, the respondent Commission stated that:
personality as the bargaining union under the CBA. Moreover, the union
security clause embodied in the agreements cannot be used to justify the . . . out of the alleged one hundred and seventy-one (171) members
dismissals meted to petitioners since it is not applicable to the circumstances of the THEU-CGW whose signatures appeared in the "Analysis of
obtaining in this case. The CBA imposes dismissal only in case an employee Various Documents Signed by Majority Members of the THEU-
CGW, (Annex "T", Complainants), which incidentally was relied adjudged guilty of unfair labor practice for having dismissed its employees in
upon by Arbitrator Villatuya in holding that complainant THEU- line with a closed shop provision if they were not given a proper hearing
CGW commanded the majority of employees in respondent (Binalbagan-Isabela Sugar Co., Inc.,(BISCOM) v. Philippine Association of
company, ninety-three (93) of the alleged signatories reaffirmed their Free Labor Unions (PAFLU) et al., L-18782, August 29, 1963, 8 SCRA 700).
membership with the THEU-NATU and renounced whatever
connection they may have had with other labor unions, (meaning the In view of the fact that the dispute revolved around the mother federation and
complainant THEU-CGW) either through resolution or membership its local, with the company suspending and dismissing the workers at the
application forms they have unwittingly signed." (p. 306, Rollo) instance of the mother federation then, the company's liability should be
limited to the immediate reinstatement of the workers. And since their
Granting arguendo, that the fact of retraction is true, the evidence on record dismissals were effected without previous hearing and at the instance of
shows that the letters of retraction were executed on various dates beginning NATU, this federation should be held liable to the petitioners for the
January 11, 1974 to March 8, 1974 (pp. 278-280, Rollo). This shows that the payment of their backwages, as what We have ruled in the Liberty Cotton
retractions were made more or less after the suspension pending dismissal on Mills Case (supra).
January 11, 1974 of Jose Encinas, formerly THEU-NATU President, who
became THEU-CGW President, and the suspension pending their dismissal ACCORDINGLY, the petition is hereby GRANTED and the assailed
of the other elected officers and members of the THEU-CGW on January 15, decision of respondent Secretary of Labor is REVERSED and SET ASIDE,
1974. It is also clear that some of the retractions occurred after the and the respondent company is hereby ordered to immediately reinstate all
suspension of the first set of workers numbering about twenty-four (24) on the petitioner employees within thirty (30) days from notice of this decision.
March 5, 1974. There is no use in saying that the retractions obliterated the If reinstatement is no longer feasible, the respondent company is ordered to
act of disaffiliation as there are doubts that they were freely and voluntarily pay petitioners separation pay equivalent to one (1) month pay for every year
done especially during such time when their own union officers and co- of service. The respondent NATU federation is directed to pay petitioners the
workers were already suspended pending their dismissal. amount of three (3) years backwages without deduction or qualification. This
decision shall be immediately executory upon promulgation and notice to the
Finally, with regard to the process by which the workers were suspended or parties.
dismissed, this Court finds that it was hastily and summarily done without
the necessary due process. The respondent company sent a letter to
petitioners herein, advising them of NATU/Dilag's recommendation of their
dismissal and at the same time giving them forty-eight (48) hours within
which to comment (p. 637, Rollo). When petitioners failed to do so,
respondent company immediately suspended them and thereafter effected
their dismissal. This is certainly not in fulfillment of the mandate of due
process, which is to afford the employee to be dismissed an opportunity to be

The prerogative of the employer to dismiss or lay-off an employee should be

done without abuse of discretion or arbitrainess, 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 employee from his employment is null and void where
the employee was not formally investigated and given the opportunity to
refute the alleged findings made by the company (De Leon v. NLRC, L-
52056, October 30, 1980, 100 SCRA 691). Likewise, an employer can be
G.R. No. 87266-69 July 30, 1990 small part of the whole picture and decide only on the basis of what it could
see. In what follows, we have tried to put the whole picture together and to
ASSOCIATED WORKERS UNION-PTGWO, petitioner, render comprehensive and substantial justice to all the parties.
THE NATIONAL LABOR RELATIONS COMMISION (EN BANC), On 26 October 1984, petitioner Associated Workers Union ("AWU")—
METRO PORT SERVICE, INC., MARINA PORT SERVICES, INC., PTGWO, the then bargaining representative of the dockworkers at South
ADRIANO S. YUMUL and 10 OTHER INDIVIDUAL RESPONDENTS Harbor, Port Area, Manila, filed a Notice of Strike against respondent Metro
REPRESENTED BY ATTY. EPIFANIO JACOSALEM, respondents. Port Service, Inc. ("Metro"), the then arrastre contractor in the South Harbor,
on the issues, among others, of unfilled vacancies and union busting. This
G.R. Nos. 91223-26 JULY 30, 1990 was docketed as NLRC Case No. NCR-NS-10-288-84.

MANILA PORT SERVICES, INC., petitioner, On 3 April 1985, the abovementioned case was certified in an Order by the
vs. then Minister of Labor and Employment to the NLRC for compulsory
HON. ARTHUR G. AMANSEC AND ADRIANO YUMUL, PABLITO arbitration; the Order also forbade the holding of strikes or lock-outs. 1 The
REANDELAR, MACARIO DE LUNA, JR., ADAN MENDOAZA, case was docketed as Certified NLRC Case No. 0403-85. In the latter case,
SMITH CARLOTA, EMERECIANO VERGARA, ROMEO ABACAN, one of the demands raised by AWU was that Metro terminate the
LEONARDO ROMULO, ELINO JOSE, and CATINDIANO employment of respondents Adriano Yumul and ten (10) others (individual
CALAUAG (COLLECTIVELY CALLED AWUM), respondents. respondents), for having organized, on 26 October 1984, the Associated
Workers Union in Metroport ("AWUM") among the rank-and-file employees
D.T. Dagum, Jr. and P.T. De Quiroz for petitioner in G.R. Nos. 87266-69. of Metro, ostensibly as a local or chapter of AWU. AWU had earlier expelled
individual respondents from membership in AUW for disloyalty and,
Ramon N. Nalipay, Jr. for petitioner in G.R. Nos. 91223-26. pursuant to the closed-shop provision of the existing AWU-Metro collective
bargaining agreement ("CBA"), sought the termination of their employment.
Cruz, Durian, Agabin, Atienza, Alday & Tuason for respondent MPSI.
Metro initially resisted AWU's request to terminate the employment of
Udarbe & Jacosalem for private respondents in G.R. Nos. 91223-26. individual respondents, contending that the termination would be premature
as individual respondents had not been afforded due process, and that the
termination would be violative of the status quo agreement in NLRC Case
No. NCR-NS-10-288-84. 2 Metro, however, eventually relented and
suspended individual respondents after AWU—despite the express
FELICIANO, J.: prohibition in the Order dated 3 April 1985—staged a strike against it. On 18
April 1985, Metro executed a Compromise Agreement ("Agreement") with
These cases have been usually difficult for the Court, not because the issues AWU to end the strike, item No. 2 of which stipulated:
posed are in themselves intellectually demanding, but because of problems
generated by the procedure adopted by the parties in coming before this At the instance of the union, [Metro] agrees to preventively
Court. The incidents subject of these cases spawned multiple cases and suspend [individual respondents] effective immediately. 3
petitions before the National Labor Relations Commission ("NLRC"). After
the NLRC rendered a consolidated decision, the parties, in turn, filed
The Agreement was attested to by then Deputy Labor Minister Carmelo
multiple separate certioraripetitions to the Court — on a staggered and
piecemeal basis. This situation resulted in a number of discrete discussions of
issues actually inter-related, since the Court, at any one time, could only see a
As a result of Metro's implementation of the Agreement, individual suspension or dismissal of individual respondents as illegal and, in relation to
respondents on 30 April 1985 filed a complaint against Metro, docketed as NLRC Injuction Case No. 993, ordered their reinstatement with backwages,
NLRC Case No. NCR-4-1372-85. Metro in that case filed in turn a third- to be paid solidarily by AWU and respondent Metro.
party complaint against AWU and its officers.
In NLRC Case No. NCR-4-1341-85, the NLRC found the strike staged by
Metro in April 1985 also filed a complaint for illegal strike with damages AWU not illegal, holding that AWU was of the belief, although erroneously,
against AWU and its officers, docketed as NLRC Case No. NCR-4-1341-85. that it could validly stage a strike during the pendency of its motion for
On 21 June 1985, Labor Arbiter Ceferina Diosana in an Order directed Metro reconsideration of the Minister's Order dated 3 April 1985 enjoining a strike
provisionally to reinstate individual respondents pending resolution of the or lockout.
issues raised therein, with which Order Metro complied.
Both AWU and Metro filed separate motions for reconsideration of the
On 15 July 1985, AWU filed a petition for injunction against Metro, consolidated Decision.
docketed as NLRC Injunction Case No. 993, praying for issuance of a
temporary restraining order stopping the implementation of the Order of Meanwhile, on 21 July 1986, petitioner Marina Port Services, Inc.
provisional reinstatement, and for Metro's compliance with the Agreement ("Marina"), by virtue of a Special Permit issued by the Philippine Ports
providing for the suspension of individual respondents. On 1 August 1985, Authority, started operations as the arrastre operator at the Manila South
the NLRC in an En Banc Resolution directed Metro to comply with the Harbor vice Metro. On November 1986, individual respondents in a
Agreement, and Metro complied and re-suspended individual respondents. Motion/Manifestation prayed that Marina be included as party-respondent.
Individual respondents' petition before the NLRC for preliminary mandatory
injunction on 30 August 1985, praying "that pursuant to the Implementing On 27 July 1987, the NLRC in a Resolution denied AWU's and Metro's
Rules of Batas Pambansa Blg. 130, [Metro] be ordered to pay their salaries motions for reconsideration of the consolidated Decision dated 4 September
and allowances from and after their initial preventive suspension of thirty 1986, but (acting on individual respondents' Motion/Manifestation) with the
(30) days and until their actual reinstatement," was not acted upon. modification limiting Metro's liability for backwages to wages accruing up to
July 20, 1986 and ordering Marina to reinstate individual respondents with
All the above-mentioned cases, to wit: (a) Certified NLRC Case No. 0403-85 backwages and allowances starting from 21 July 1986. Marina complied with
(NCR No. NS-10-288-84); (b) NLRC Case No. NCR-4-1341-85; (c) NLRC the Resolution by reinstating individual respondents through its payroll
Case No. NCR-4-1372-85; and (d) NLRC Injunction Case No. 993, were retroactive to 21 July 1986.
ordered consolidated before the NLRC en banc.
AWU thereafter in G.R. Nos. 87266-69 filed with the Court a Petition
On 4 September 1986, the NLRC rendered a consolidated Decision. In for certiorari on 14 March 1989 praying for the reversal of the decision of
Certified NLRC Case No. 0403-85, the NLRC ruled that: (a) respondent the NLRC in NLRC Case No. NCR-NS-10-288-84 and NLRC Injunction
Metro cannot be compelled to fill up vacancies with AWU's recommendees; Case No. 993 (praying principally for reversal of the order holding that
(b) respondent Metro cannot be held liable for union busting, the issue of the respondent Metro could not be compelled to fill up vacancies with AWUs
medically impaired workers having become moot and academic; and (c) the recommendees) and in NLRC Case No. NCR-4-1372-85 (praying chiefly for
compulsory retirement of AWUs members who have reached the age of 60 reversal of the order reinstating the eleven [11] private respondents to their
years is a valid exercise of management prerogative. former positions with backwages payable solidarily by AWU and respondent
Metro). These cases (G.R. Nos. 87266-69) were assigned to the Third
In NLRC Case No. NCR-4-1372-85, the NLRC, finding that AWU was a Division of the Court.
national union, and that individual respondents have the right to organize
themselves into a local chapter thereof, the formation of which was a Marina, meantime, had gone to the Court on certiorari on 14 June 1988 in
protected activity and could not be considered as disloyalty, held the G.R. Nos. 81256-59 entitled "Marina Port Services, Inc. v. National Labor
Relations Commission, Metro Port Service, Inc, Associated Workers petitioner's liability, however, should not extend to the time
Union ["AWU"-PTGWO], and Associated Workers Union in Metro Port that respondent NLRC ordered it to re-suspend the private
[AWUM]" protesting, on grounds of alleged denial of due process, its respondents. 5 (Emphasis supplied)
inclusion by the NLRC as a party in NLRC Case No. NCR-4-1372-85 and its
being required to reinstate individual respondents with backwages. In Judgment was entered in G.R. Nos. 81256-59 and G.R. No. 82705 on 23
dismissing these cases (G.R. Nos. 81256-59) on 3 August 1988, the Court September 1988 and 4 July 1989, respectively, and the cases were remanded
held that: to the Labor Arbiter of origin for execution.

. . . [t]he decision to include Marina in the questioned On 18 September 1989, the Labor Arbiter issued a writ of execution against
[NLRC Resolution dated 17 July 1987] is based on Par. "7" Marina to reinstate individual respondents and to pay them the amount of
of the Special Permit granted to Marina which states that P154,357.00 representing salary adjustments. Marina moved to quash the
"Labor and personnel of previous operator, except those writ of execution questioning the award of P154,357.00, but without success.
positions of trust and confidence, shall be absorbed by the Marina thereafter appealed to the NLRC assailing the Labor Arbiter's refusal
grantee." Besides, the petitioner was able to file not only a to quash the writ of execution.
Motion for Reconsideration of the Questioned Resolution
but also a Motion to Set Aside Motion/Manifestation and On 23 November 1989, Marina received an Order from the Executive Labor
Remarks on the Comment of Metro Port. The lack of due Arbiter dated 15 November 1989, requiring the release of any garnished
process at the beginning, if any, was cured by the above deposit from its bank, holding that no seasonable appeal from the 7
motions that the petitioner was able to file.4 November 1989 Order denying Marina's motion to quash had been taken.
Marina filed a Manifestation dated 23 November 1989, arguing that it had
On 13 April 1988, Metro in G.R. No. 82705 (entitled "Metro Port Services, filed an appeal with the NLRC within the 10-day reglementary period.
Inc. v. National Labor Relations Commission, Associated Workers Union-
PTGWO, Marina Port Services, Inc., and Adriano Yumul [and 10 others]") On 6 December 1989, the Executive Labor Arbiter issued a writ of execution
went to this court again and assailed the NLRC ruling in NLRC Case No. requiring Marina: (a) to reinstate individual respondents and to pay them the
NCR-4-1372-85 and NLRC Injunction Case No. 993. Metro claimed that it amount of P154,357.00 representing salary adjustments; and (b) to
should not have been held solidary liable with AWU because it had merely implement and honor the legality of the organization and registration of
suspended individual respondents pursuant to the Agreement dated 18 April AWUM as the local chapter of AWU. Marina then once more went to the
1985 it had executed with AWU and, later, had merely obeyed the Resolution Court in G.R. Nos. 91223-26 and filed a Petition for certiorari to invalidate
of the NLRC dated 1 August 1985 ordering Metro to re-suspend individual the writ of execution, pleading that: (a) execution had been ordered without
respondents. In similarly dismissing Metro's petition, the Court in G.R. No. due regard for its right of appeal from the Labor Arbiter's Order; and (b)
82705, held: execution would result in its being made to pay more than what is called for
by the ruling of the Court in G.R. No. 82705, where the Court affirmed the
. . . Considering that the petitioner was a party to the NLRC ruling that Marina "should be made solidarily liable with AWU for
compromise agreement with AWU which provided that "at the backwages and allowances that the private respondents may have been
the instance of the union, the company agrees to preventively entitled to during their suspension [although liability] should not extend to
suspend Adriano S. Yumul and eleven associates effective the time that respondent NLRC ordered it to re-suspend the private
immediately" and accordingly suspended the private respondents." These cases (G.R. Nos. 91223-26) were assigned to the First
respondents despite the suspension being contrary to law, the Division of the Court. On 20 December 1989, a temporary restraining order
petitioner should be made solidarity liable with AWU for the was issued by the First Division of the Court to enjoin the implementation of
backwages and allowances that the private respondents may the Executive Labor Arbiter's Order of 6 December 1989.
have been entitled to during their suspension. The
On 16 April 1990, G.R. Nos. 91223-26 were consolidated with G.R. Nos. around 2,000 of these were members of AWU 9 It is evident that individual
87266-69. respondents had failed to muster the necessary majority in order to
justify their disaffiliation. (In fact, it was only on 5 December 1985 that
I individual respondents were finally able to register an independent
union called Metroport Workers Union [MWU]. 10 Even then, in the
1. Deliberating on the instant Petition for Certiorari, the Court in G.R. Nos. absence of allegation by AWUM [MWU] of the exact number of its
87266-69 considers that petitioner AWU has failed to show grave abuse of members, the Court presumes that only twenty percent [20%] of the
discretion or any act without or in excess of jurisdiction on the part of the employees of Metro had joined MWU) 11 Thus, in the referendum held
NLRC in Certified NLRC Case No. 0403-85 (NCR No. NS-10-288-84). The on 7 January 1985 at the PTGWO compound (where representatives of
NLRC was correct there in holding that respondent Metro cannot be the Ministry of Labor and Employment were present) to determine
compelled to fill up vacancies with AWU's recommendees, as the CBA whether individual respondents should be expelled from AWU, 1,229
between AWU and respondent Metro granted the latter the right to "fill or not members (out of 1,695 members present) voted for expulsion of
to fill-up vacancies"; that the issue of the medically impaired employees had individual respondents. 12
already been raised in another Notice of Strike filed by AWU against
respondent Metro on 16 September 1985, and both parties had agreed to The individual respondents here have failed to present proof of their
abide by the recommendation and decision of an examining physician allegation that the 1,695 members of AWU were not employees of
selected by them; and that the existing CBA grants respondent Metro the respondent Metro alone; the Court therefore presumes that those who voted
right to compulsorily retire any member of AWU who had reached 60 years for their expulsion were bona fide employees of respondent Metro.
of age, which right has been exercised by Metro. Moreover, individual respondents failed to allege that their expulsion for
disloyalty violated AWU's constitution and by-laws. 13 In sum, the attempted
2. The NLRC, however, misappreciated the relevant facts in NLRC Case No. disaffiliation of the eleven (11) private respondents from the petitioner
NCR-4-1372-85 and NLRC Injunction Case No. 993. While it is true that mother union and the effort to organize either a new local of the mother
AWUM as a local union, being an entity separate and distinct from AWU, is union or an entirely new and separate union, did not, under the circumstances
free to serve the interest of all its members and enjoys the freedom to of this case, constitute protected activities of the eleven (11) individual
disaffiliate, such right to disaffiliate may be exercised, and is thus considered respondents.
a protected labor activity, only when warranted by circumstances. Generally,
a labor union may disaffiliate from the mother union to form a local or II
independent union only during the 60-day freedom period immediately
preceding the expiration of the CBA.6 Even before the onset of the freedom In view of the conclusion reached above in G.R. Nos. 87266-69, i.e., that
period (and despite the closed-shop provision in the CBA between the AWU was justified in expelling from its membership the eleven (11)
mother union and management) disaffiliation may still be carried out, individual respondents, the question now arises: how and to what extent does
but such disaffiliation must be effected by a majority of the members in the such conclusion affect the liability of Metro, and Marina (as successor-
bargaining unit. 7 This happens when there is a substantial shift in allegiance employer)? It will be recalled that the Resolutions of this Court in G.R. Nos.
on the part of the majority of the members of the union. In such a case, 81256-59 and 82705 dismissing the Petitions for certiorari of both Metro and
however, the CBA continues to bind the members of the new or disaffiliated Marina assailing the NLRC consolidated Decision of 4 September 1986
and independent union up to the CBA's expiration date.8 insofar as their (Metro's and Marina's) liability for reinstatement and
backwages of the individual respondents thereunder is concerned, became
The record does not show that individual respondents had disaffiliated during final and judgment entered therein, sometime ago.
the freedom period. The record does, however, show that only eleven (11)
members of AWU (individual respondents) had decided to disaffiliate from 1. So far as concerns AWU's liability under the NLRC consolidated
AWU and form AWUM. Respondent Metro had about 4,000 employees, and Decision, it should in the first place be pointed out that the Court did not
make any pronouncement either in G.R. Nos. 81256-59 or in G.R. No. 82705 First Period: From 18 April 1985 to 21 June 1985: the
concerning AWU's liability. In G.R. No. 82705, the Court merely acted on Compromise Agreement between Metro and AWU to end
the issue raised by petitioner Metro: that Metro should not be liable at all for the strike, in which Metro agreed to preventively suspend the
reinstatement and backwages considering that Metro was only pressed into eleven (11) individual respondents, was effected on 18 April
suspending individual respondents because of AWUs threat to strike. In 1985 and implemented immediately. The Labor Arbiter on
dismissing Metro's Petition, the Court in G.R. No. 82705 in effect merely 21 June 1985 ordered Metro to reinstate provisionally the
held that Metro, whatever the liability of AWU might be in respect of the eleven (11) individual respondents and Metro complied.
expulsion of individual respondents, could not escape liability by throwing
all responsibility upon AWU; and that Metro could not validly plead that it Second Period: From 1 August 1985 up to 27 July 1987: the
was under duress when it executed the Agreement with AWU providing for, NLRC, pursuant to the urging of AWU, ordered Metro to re-
among other things, the preventive suspension of individual respondents. suspend the individual respondents on 1 August 1985 and
Metro again complied with this Order. Approximately two
The Court is, of course, aware that AWU was a party-respondent in both (2) years later, on 27 July 1987, NLRC ordered
G.R. Nos. 81256-59 and 82705, and that AWU had in fact filed a Comment Metro/Marina to reinstate the individual respondents and
in both G.R. Nos. 81256-59 and 82705. Nonetheless, the Court did not either Marina complied by reinstating the individual respondents
in G.R. Nos. 82156-59 or in G.R. No. 82705 in fact make a determination of on the payroll, i.e., paying their salaries although they were
the legality of AWU's expulsion of individual respondents from its not allowed to work on their jobs.
membership. The Court in G.R. No. 82705 held only that the liability of
Metro was solidary in nature, i.e., solidary with AWU, whatever AWU's Third Period: From 28 July 1987 to 18 September 1989: on
liability might be; and it may be well to recall that solidary liability is 18 September 1989, the Labor Arbiter issued the questioned
different from secondary liability. In G.R. Nos. 81256-59, the Court simply writ of execution ordering, among other things, Marina to
held that Marina was properly impleaded in the underlying cases and could reinstate formally the individual respondents.
not be absolved from responsibility for reinstatement and backwages upon
the ground of denial of due process. Under the consolidated NLRC Decision, Metro/Marina are liable for the
backwages accruing during the First and Third Periods above indicated. In
2. Thus, so far as concerns the liability of Metro and Marina for respect of the Second Period, however, the Court in G.R. No. 82705, as
reinstatement with backwages of individual respondents under the already pointed out earlier, held that Metro/Marina should not be held liable
consolidated NLRC Decision, the pre-eminent fact is that the Court's for backwages accruing during that period. Strictly speaking, in view of our
Resolutions in G.R. Nos. 81256-59 and 82705 dismissing their Petitions are conclusion above that AWU was justified in expelling individual respondents
already final. The liabilities of Metro and Marina for reinstatement and from its membership, neither AWU nor Metro/Marina would be liable to
backwages under the consolidated NLRC Decision have become fixed and individual respondents for the backwages accruing during this Second
definite, with the modification decreed by the Court in G.R. No. 82705 in so Period.
far as backwages were concerned. Thus, the conclusion we today have
reached in G.R. Nos. 87266-69 cannot benefit Metro and Marina and will not 4. In the interest of substantial and expeditious justice, however, we believe
dissolve their already fixed and definite liabilities. that the backwages accruing during the Second Period should be paid and
shared by AWU and by Metro Marina, on a 50-50 basis. We here establish
3. Turning to the question of the backwages due to the eleven (11) individual this equitable allocation of ultimate responsibility in order to forestall further
respondents, three (3) different time periods are relevant here and must be litigation between AWU and Metro/Marina and individual respondents in
distinguished from one another: respect of claims and countering claims for payment or reimbursement or
contribution and to put a definite end to this prolonged and costly
confrontation among the several parties.
The equitable considerations which impel us to hold AWU liable for one-half (3) Periods above mentioned during which the individual respondents were
(½) of the backwages during the Second Period include: suspended. The salary differentials, as we understands it, refer to increases in
the prevailing wages accruing partly during the Second Period and partly
(a) the fact that Metro had been reluctant to comply with the during the Third Period as above indicated. In other words, the salary
demand of AWU to terminate the services of individual differentials accruing from 20 July 1986 up to 27 July 1987 should be borne
respondents and had wanted to give the latter procedural due on a 50-50 basis by AWU on the one hand and Metro/Marina on the other.
process, but gave in to the demands of AWU; The salary differentials accruing from 28 July 1987 up to 18 September 1989
shall be borne exclusively by Marina.
(b) that AWU had pressed Metro very hard and indeed went
on strike against Metro when Metro refused simply to 7. The portion of the Writ of Execution issued by the Executive Labor
terminate the services of the individual respondents; Arbiter which requires Marina to recognize the legality of the organization
and registration of AWUM (now MWU) as a local chapter of AWU, is
(c) that AWU, instead of waiting for final judicial inconsistent with the conclusions we have set forth in Part I above, and must
determination of the legality of its expulsion of individual be deleted. What was in fact eventually established by individual respondents
respondents, chose to importune the NLRC to issue the order was a separate, independent union called Metro Port Workers Union (MWU)
requiring the re-suspension of the individual respondents on which was not entitled, during the time periods here relevant, to recognition
1 August 1985, with which order Metro eventually complied. as the bargaining unit in CBA negotiations.

5. Turning to Metro/Marina we note that, apart from the finality of the ACCORDINGLY, the Court Resolved:
Court's Resolutions in G.R. Nos. 81256-59 and 82705, there is independent
basis for holding Metro/Marina responsible for reinstatement with backwages In G.R. Nos. 87266-69:
accruing throughout the three (3) periods above indicated. The equitable
considerations which lead us to hold Metro/Marina responsible for one-half (a) to DISMISS the Petition for Certiorari in respect of
(½) of the backwages accruing during the above Second Period relate to the Certified NLRC Case No. 0403-855 (NCR-NS-10-288-84)
failure of Metro to accord individual respondents procedural due process by for lack of merit; and
giving them reasonable opportunity to explain their side before suspending or
dismissing them. Such dismissal was accordingly in violation of the Labor (b) to GRANT partially the Petition for Certiorari in respect
Code.14Notwithstanding AWU's closed-shop clause in the CBA, Metro was of NLRC Case No. NCR-4-1372-85 and NLRC Injunction
bound to conduct its own inquiry to determine the existence of substantial Case No. 993. The consolidated Decision of the NLRC dated
basis for terminating the employment of individual respondents. 15 That 4 September 1986 ordering AWU and Marina to pay
AWU, disregarding the Minister of Labor and Employment's express order, solidarily the backwages of individual respondents, as well
had threatened to go on strike, and indeed actually went on strike, if Metro as the NLRC Resolution of 27 July 1987 denying AWUs and
had continued with the services of individual respondents, did not relieve Metro's Motions for Reconsideration, are hereby
Metro from the duty to accord procedural due process to individual MODIFIED so as to require AWU and Metro/Marina to pay,
respondents. 16 on a 50-50 basis, to individual respondents the backwages
which accrued during the Second Period, i.e., from 1 August
6. The portion of the Writ of Execution issued by the Executive Labor 1985 up to 27 July 1987.
Arbiter requiring Marina to pay salary differentials in the total amount of
P154,357.00 accruing during the period from 20 July 1986 up to October In G.R. Nos. 91223-26:
1989, should be modified to conform with the above legal and equitable
allocation of liability for the backwages which had accrued during the three
to GRANT partially the Petition. The Order of the Executive
Labor Arbiter dated 6 December 1989 is hereby MODIFIED
so as (a) to require AWU and Metro/Marina on a 50-50 basis
to pay the salary differentials accruing during the period
from 20 July 1986 up to 27 July 1987, and Marina alone to
pay the salary differentials accruing from 28 July 1987 up to
31 October 1989, and so as (b) to delete the portion requiring
Marina to recognize AWU. (MWU) as the local chapter of
AWU. The Temporary Restraining Order issued by the
Court on 20 December 1989 is hereby LIFTED so as to
permit enforcement of the Order of the Executive Labor
Arbiter as herein modified.

No pronouncement as to costs.


G.R. No. L-50283-84 April 20, 1983 the Med-Arbiter's Office, Regional Office No. 4 of the Ministry of Labor and
Employment. The petition was, however, opposed by the Philippine
DOLORES VILLAR, ROMEO PEQUITO, DIONISIO RAMOS, Association of Free Labor Unions (hereinafter referred to as PAFLU) with
BENIGNO MAMARALDO, ORLANDO ACOSTA, RECITACION whom, as stated earlier, the Amigo Employees Union was at that time
BERNUS, ANSELMA ANDAN, ROLANDO DE GUZMAN and RITA affiliated. PAFLU's opposition cited the "Code of Ethics" governing inter-
LLAGAS, petitioners, federation disputes among and between members of the Trade Unions
vs. Congress of the Philippines (hereinafter referred to as TUCP). Consequently,
THE HON. AMADO G. INCIONG, as Deputy Minister of the Ministry the Med-Arbiter indorsed the case to TUCP for appropriate action but before
of Labor, AMIGO MANUFACTURING INCORPORATED and any such action could be taken thereon, the petitioners disauthorized FUR
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS from continuing the petition for certification election for which reason FUR
(PAFLU), respondents. withdrew the petition.

Aniceto Haber for petitioners. On February 7, 1977, the same employees who had signed the petition filed
by FUR signed a joint resolution reading in toto as follows:
Roberto T. Neri for respondents.
Sama-Samang Kapasiyahan

1. TUMIWALAG bilang kasaping Unyon ng Philippine

GUERRERO, J.: Association of Free Labor Unions (PAFLU) at kaalinsabay
nito, inaalisan namin ang PAFLU ng kapangyarihan na
Petition for review by certiorari to set aside the Order dated February 15, katawanin kami sa anumang pakikipagkasundo (CBA) sa
1979 of respondent Deputy Minister Amado G. Inciong affirming the Pangasiwaan ng aming pinapasukan at kung sila man ay
Decision of the OIC of Regional Office No. 4 dated October 14, 1978 which nagkasundo o magkakasundo sa kabila ng pagtitiwalag na
jointly resolved RO4-Case No. T-IV-3549-T and RO4-Case No. RD 4-4088- ito, ang nasabing kasunduan ay hindi namin pinagtitibay at
77-T. tahasang aming itinatakwil/tinatanggihan;

The facts are as follows: 2. BINABAWI namin ang aming pahintulot sa Federation of
Unions of Rizal (FUR) na katawanin kami sa Petition for
Petitioners were members of the Amigo Employees Union-PAFLU, a duly Certification Election (RO4-MED Case No. 743-77) at/o sa
registered labor organization which, at the time of the present dispute, was sama-samang pakikipagkasundo sa aming patrons;
the existing bargaining agent of the employees in private respondent Amigo
Manufacturing, Inc. (hereinafter referred to as Company). The Company and 3. PANATILIHIN na nagsasarili (independent) ang aming
the Amigo Employees Union-PAFLU had a collective bargaining agreement samahan, AMIGO EMPLOYEES' UNION, alinsunod sa
governing their labor relations, which agreement was then about to expire on Artikulo 240 ng Labor Code;
February 28, 1977. Within the last sixty (60) days of the CBA, events
transpired giving rise to the present dispute. 4. MAGHAIN KAAGAD ang aming Unyong nagsasarili, sa
pamumuno ng aming pangsamantalang Opisyal na
On January 5, 1977, upon written authority of at least 30% of the employees kinatawan, si Ginang DOLORES VILLAR, ng Petition for
in the company, including the petitioners, the Federation of Unions of Rizal Certification Election sa Department of Labor, para kilalanin
(hereinafter referred to as FUR) filed a petition for certification election with ang aming Unyong nagsasarili bilang Tanging kinatawan ng

mga manggagawa sa sama-samang pakikipagkasundo acts of disloyalty inimical to the interest of the local union, as well as
(CBA); directing the Trial Committee to subpoena the complainants (Amigo
Employees Union-PAFLU) and the respondents (herein petitioners) for
5. BIGYAN ng kopya nito ang bawa't kinauukulan at ang investigation, to conduct the said investigation and to submit its findings and
mga kapasiyahang ito ay magkakabisa sa oras na matanggap recommendations for appropriate action.
ng mga kinauukulan ang kani-kanilang sipi nito.1
And on the same date of February 15, 1977, the Amigo Employees Union-
Immediately thereafter or on February 9, 1977, petitioner Dolores Villar, PAFLU and the Company concluded a new CBA which, besides granting
representing herself to be the authorized representative of the Amigo additional benefits to the workers, also reincorporated the same provisions of
Employees Union, filed a petition for certification election in the Company the existing CBA, including the union security clause reading, to wit:
before Regional Office No. 4, with the Amigo Employees Union as the
petitioner. The Amigo Employees Union-PAFLU intervened and moved for ARTICLE III
the dismissal of the petition for certification election filed by Dolores Villar, UNION SECURITY WITH RESPECT TO PRESENT
citing as grounds therefor, viz: (a) the petition lacked the mandatory requisite MEMBERS
of at least 30% of the employees in the bargaining unit; (2) Dolores Villar
had no legal personality to sign the petition since she was not an officer of All members of the UNION as of the signing of this
the union nor is there factual or legal basis for her claim that she was the Agreement shall remain members thereof in good standing.
authorized representative of the local union; (3) there was a pending case for Therefore, any members who shall resign, be expelled, or
the same subject matter filed by the same individuals; (4) the petition was shall in any manner cease to be a member of the UNION,
barred by the new CBA concluded on February 15, 1977; (5) there was no shall be dismissed from his employment upon written
valid disaffiliation from PAFLU; and (6) the supporting signatures were request of the UNION to the Company. 2
procured through false pretenses.
Subsequently, petitioners were summoned to appear before
Finding that the petition involved the same parties and causes of action as the the PAFLU Trial Committee for the aforestated investigation
case previously indorsed to the TUCP, the Med-Arbiter dismiss the petition of the charges filed against them by the Amigo Employees
filed by herein petitioner Villar, which dismissal is still pending appeal Union-PAFLU. Petitioners, however, did not attend but
before the Bureau of Labor Relations. requested for a "Bill of Particulars" of the charges, which
charges were stated by the Chairman of the committee as
In the meantime, on February 14, 1977, the Amigo Employees Union- follows:
PAFLU called a special meeting of its general membership. A Resolution
was thereby unanimously approved which called for the investigation by the 1. Disaffiliating from PAFLU and affiliating with the
PAFLU national president, pursuant to the constitution and by-laws of the Federation of Unions of Rizal (FUR).
Federation, of all of the petitioners and one Felipe Manlapao, for
"continuously maligning, libelling and slandering not only the incumbent 2. Filling petition for certification election with the Bureau
officers but even the union itself and the federation;" spreading 'false of Labor Relations and docketed as Case No. R04-MED-
propaganda' that the union officers were 'merely appointees of the 830-77 and authorizing a certain Dolores Villar as your
management', and for causing divisiveness in the union. authorized representative without the official sanction of the
mother Federation- PAFLU.
Pursuant to the Resolution approved by the Amigo Employees Union-
PAFLU, the PAFLU, through its national President, formed a Trial
Committee to investigate the local union's charges against the petitioners for
3. Maligning, libelling and slandering the incumbent officers Excepting Felipe Manlapao, the expulsion from the AMIGO
of the union as well as of the PAFLU Federation. EMPLOYEES UNION of all the other nine (9) respondents,
Dionisio Ramos, Recitation Bernus, Dolores Villar, Romeo
4. By spreading false propaganda among members of the Dequito, Rolando de Guzman, Anselma Andan, Rita Llagas,
Amigo Employees Union-PAFLU that the incumbent union Benigno Mamaradlo and Orlando Acosta is hereby ordered,
officers are 'merely appointees' of the management. and as a consequence the Management of the employer,
AMIGO MANUFACTURING, INC. is hereby requested to
5. By sowing divisiveness instead of togetherness among terminate them from their employment in conformity with
members of the Amigo Employees Union-PAFLU. the security clause in the collective bargaining agreement.
Further, the Trial Committee is directed to investigate Felipe
6. By conduct unbecoming as members of the Amigo Manlapao when he shall have reported back for duty. 4
Employees Union- PAFLU which is highly prejudicial to the
union as well as to the PAFLU Federation. Petitioners appealed the Decision to the PAFLU, citing the same grounds as
before, and in addition thereto, argued that the PAFLU decision cannot
All these charges were formalized in a resolution of the legally invoke a CBA which was unratified, not certified, and entered into
incumbent officers of the Amigo Employees Union-PAFLU without authority from the union general membership, in asking the
dated February 14, 1977. 3 Company to terminate them from their employment. The appeal was,
likewise, denied by PAFLU in a Resolution dated March 28, 1977.
Not recognizing PAFLU's jurisdiction over their case, petitioners again
refused to participate in the investigation rescheduled and conducted on After denying petitioner's appeal, PAFLU on March 28, 1977 sent a letter to
March 9, 1979. Instead, petitioners merely appeared to file their Answer to the Company stating, to wit,
the charges and moved for a dismissal.
We are furnishing you a copy of our Resolution on the
Petitioners contend in their Answer that neither the disaffiliation of the Appeal of the respondent in Administrative Case No. 2,
Amigo Employees Union from PAFLU nor the act of filing the petition for Series of 1977, Amigo Employees Union-PAFLU vs.
certification election constitute disloyalty as these are in the exercise of their Dionisio Ramos, et al.
constitutional right to self-organization. They further contended that PAFLU
was without jurisdiction to investigate their case since the charges, being In view of the denial of their appeal and the Decision of
intra-union problems within the Amigo Employees Union-PAFLU, should be March 15, 1977 having become final and executory we
conducted pursuant to the provisions of Article XI, Sections 2, 3, 4 and 5 of would appreciate full cooperation on your part by
the local union's constitution and by-laws. implementing the provision of our CBA on security clause
by terminating the respondents concerned from their
The complainants, all of whom were the then incumbent officers of the employment.5
Amigo Employees Union-PAFLU, however, appeared and adduced their
evidence supporting the charges against herein petitioners. This was followed by another letter from PAFLU to the Company dated
April 25, 1977, reiterating the demand to terminate the employment of the
Based on the findings and recommendations of the PAFLU trial committee, petitioners pursuant to the security clause of the CBA, with a statement
the PAFLU President, on March 15, 1977, rendered a decision finding the absolving the Company from any liability or damage that may arise from
petitioners guilty of the charges and disposing in the last paragraph thereof, petitioner's termination.
to wit,

Acting on PAFLU's demand, the Company informed PAFLU that it will first On October 14, 1977, Vicente Leogardo, Jr., Officer-in-Charge of Regional
secure the necessary clearances to terminate petitioners. By letter dated April Office No. 4, rendered a decision jointly resolving said two cases, the
28, 1977, PAFLU requested the Company to put petitioners under preventive dispositive portion of which states, to wit,
suspension pending the application for said clearances to terminate the
petitioners, upon a declaration that petitioners' continued stay within the IN VIEW OF THE FOREGOING, judgment is hereby
work premises will "result in the threat to the life and limb of the other rendered granting the application of the Amigo
employees of the company."6 Manufacturing, Inc., for clearance to terminate the
employment of Dolores D. Villar, Dionisio Ramos, Benigno
Hence, on April 29, 1977, the Company filed the request for clearance to Mamaraldo, Orlando Acosta, Recitacion Bernus, Anselma
terminate the petitioners before the Department of Labor, Regional Office Andan, Rolando de Guzman, and Rita Llagas. The
No. 4. The application, docketed as RO4-Case No. 7-IV-3549-T, stated as application of oppositors, under RO4-Case No. RD-4-4088-
cause therefor, "Demand by the Union Pursuant to the Union Security 77, for a preliminary injunction to restrain the Amigo
Clause," and further, as effectivity date, "Termination-upon issuance of Manufacturing, Inc. from terminating their employment and
clearance; Suspension-upon receipt of notice of workers from placing them under preventive suspension, is hereby
concerned." Petitioners were then informed by memorandum dated April DISMISSED. 10
29, 1977 that the Company has applied for clearance to terminate them upon
demand of PAFLU, and that each of them were placed under preventive Not satisfied with the decision, petitioners appealed to the Office of the
suspension pending the resolution of the said applications. The security guard Secretary of Labor. By Order dated February 15, 1979, the respondent
was, likewise, notified to refuse petitioners entry into the work premises. 8 Amado G. Inciong, Deputy Minister of Labor, dismissed their appeal for lack
of merit. 11
In an earlier development, on April 25, 1977, or five days before petitioners
were placed under preventive suspension, they filed a complaint with Hence, the instant petition for review, raising the following issues:
application for preliminary injunction before the same Regional Office No. 4,
docketed as RO4-Case No. RD-4-4088-77-T, praying that after due notice A. Is it not error in both constitutional and statutory law by
and hearing, "(1) A preliminary injunction be issued forthwith to restrain the the respondent Minister when he affirmed the decision of the
respondents from doing the act herein complained of, namely: the dismissal RO4-Officer-in-Charge allowing the preventive suspension
of the individual complainants from their employment; (2) After due hearing and subsequent dismissal of petitioners by reason of the
on the merits of the case, an Order be entered denying and/or setting aside exercise of their right to freedom of association?
the Decision dated March 15, 1977 and the Resolution dated March 28, 1977,
issued by respondent Onofre P. Guevara, National President of respondent B. Is it not error in law by the respondent Minister when he
PAFLU; (3) The Appeal of the individual complainants to the General upheld the decision of the RO4 OIC which sustained the
Membership of the complainant AMIGO EMPLOYEES UNION, dated availment of the respondent PAFLU's constitution over that
March 22, 1977, pursuant to Sections 2, 3, 4 & 5, Article XI in relation of of the local union constitution in the settlement of intra-
Section 1, Article XII of the Union Constitution and By-Laws, be given due union dispute?
course; and (4) Thereafter, the said preliminary injunction be made
permanent, with costs, and with such further orders/reliefs that are just and C. Is it not error in law amounting to grave abuse of
equitable in the premises."9 discretion by the Minister in affirming the conclusion made
by the RO4 OIC, upholding the legal applicability of the
In these two cases filed before the Regional Office No. 4, the parties adopted security clause of a CBA over alleged offenses committed
their previous positions when they were still arguing before the PAFLU trial earlier than its conclusion, and within the 60-day freedom
committee. period of an old CBA? 12
The main thrust of the petition is the alleged illegality of the dismiss of the Stripped of non-essentials, the basic and fundamental issue
petitioners by private respondent Company upon demand of PAFLU which in this case tapers down to the determination of WHETHER
invoked the security clause of the collective bargaining agreement between OR NOT PAFLU HAD THE AUTHORITY TO
the Company and the local union, Amigo Employees Union-PAFLU. INVESTIGATE OPPOSITORS AND, THEREAFTER,
Petitioners contend that the respondent Deputy Minister acted in grave abuse EXPEL THEM FROM THE ROLL OF MEMBERSHIP OF
of discretion when he affirmed the decision granting the clearance to THE AMIGO EMPLOYEES UNION-PAFLU.
terminate the petitioners and dismissed petitioners' complaint, and in support
thereof, allege that their constitutional right to self-organization had been Recognized and salutary is the principle that when a labor
impaired. Petitioner's contention lacks merit. union affiliates with a mother union, it becomes bound by
the laws and regulations of the parent organization. Thus, the
It is true that disaffiliation from a labor union is not open to legal objection. It Honorable Secretary of Labor, in the case of Amador
is implicit in the freedom of association ordained by the Constitution. 13 But Bolivar, et al. vs. PAFLU, et al., NLRC Case No. LR-133 &
this Court has laid down the ruling that a closed shop is a valid form of union MC-476, promulgated on December 3, 1973, declared-
security, and such provision in a collective bargaining agreement is not a
restriction of the right of freedom of association guaranteed by the When a labor union affiliates with a parent organization or
Constitution. 14 mother union, or accepts a charter from a superior body, it
becomes subject to the laws of the superior body under
In the case at bar, it appears as an undisputed fact that on February 15, 1977, whose authority the local union functions. The constitution,
the Company and the Amigo Employees Union-PAFLU entered into a by-laws and rules of the parent body, together with the
Collective Bargaining Agreement with a union security clause provided for charter it issues pursuant thereto to the subordinate union,
in Article XII thereof which is a reiteration of the same clause in the old constitute an enforceable contract between the parent body
CBA. The quoted stipulation for closed-shop is clear and unequivocal and it and the subordinate union, and between the members of the
leaves no room for doubt that the employer is bound, under the collective subordinate union inter se. (Citing Labor Unions, Dangel
bargaining agreement, to dismiss the employees, herein petitioners, for non- and Shriber, pp. 279-280).
union membership. Petitioners became non-union members upon their
expulsion from the general membership of the Amigo Employees Union- It is undisputable that oppositors were members of the
PAFLU on March 15, 1977 pursuant to the Decision of the PAFLU national Amigo Employees Union at the time that said union
president. affiliated with PAFLU; hence, under the afore-quoted
principle, oppositors are bound by the laws and regulations
We reject petitioners' theory that their expulsion was not valid upon the of PAFLU.
grounds adverted to earlier in this Decision. That PAFLU had the authority to
investigate petitioners on the charges filed by their co-employees in the local Likewise, it is undeniable that in the investigation of the
union and after finding them guilty as charged, to expel them from the roll of charges against them, oppositors were accorded 'due
membership of the Amigo Employees Union-PAFLU is clear under the process', because in this jurisdiction, the doctrine is deeply
constitution of the PAFLU to which the local union was affiliated. And entrenched that the term 'due process' simply means that the
pursuant to the security clause of the new CBA, reiterating the same clause in parties were given the opportunity to be heard. In the instant
the old CBA, PAFLU was justified in applying said security clause. We find case, ample and unmistakable evidence exists to show that
no abuse of discretion on the part of the OIC of Regional Office No. 4 in the oppositors were afforded the opportunity to present their
upholding the validity of the expulsion and on the part of the respondent evidence, but they themselves disdained or spurned the said
Deputy Minister of Labor in sustaining the same. We agree with the OIC's opportunity given to them.
decision, pertinent portion of which reads:
PAFLU, therefore, correctly and legally acted when, constitution and by-laws. However, it has been held that this requirement is
pursuant to its Constitution and By-Laws, it conducted and not absolute but yields to exception under varying circumstances. Thus,
proceeded with the investigation of the charges against the in Kapisanan ng mga Manggagawa sa MRR vs. Hernandez, 20 SCRA 109,
oppositors and found them guilty of acts prejudicial and We held:
inimical to the interests of the Amigo Employees Union-
PAFLU, to wit: that of falsely and maliciously slandering the In the case at bar, noteworthy is the fact that the complaint
officers of the union; spreading false propaganda among the was filed against the union and its incumbent officers, some
members of the Amigo Employees Union-PAFLU; calling of whom were members of the board of directors. The
the incumbent officers as mere appointees and robots of constitution and by-laws of the union provide that charges
management; calling the union company-dominated or for any violations thereof shall be filed before the said board.
assisted union; committing acts unbecoming of the members But as explained by the lower court, if the complainants had
of the union and destructive of the union and its members. done so the board of directors would in effect be acting as
respondent investigator and judge at the same time. To
Inherent in every labor union, or any organization for that follow the procedure indicated would be a farce under the
matter, is the right of self-preservation. When members of a circumstances, where exhaustion of remedies within the
labor union, therefore, sow the seeds of dissension and strife union itself would practically amount to a denial of justice or
within the union; when they seek the disintegration and would be illusory or vain, it will not be insisted upon,
destruction of the very union to which they belong, they particularly where property rights of the members are
thereby forfeit their rights to remain as members of the union involved, as a condition to the right to invoke the aid of a
which they seek to destroy. Prudence and equity, as well as court.
the dictates of law and justice, therefore, compelling
mandate the adoption by the labor union of such corrective The facts of the instant petition stand on all fours with the aforecited case that
and remedial measures in keeping with its laws and the principle therein enunciated applies here as well. In the case at bar, the
regulations, for its preservation and continued existence; lest petitioners were charged by the officers of the Amigo Employees Union-
by its folly and inaction, the labor union crumble and fall. PAFLU themselves who were also members of the Board of Directors of the
Amigo Employees Union-PAFLU. Thus, were the petitioners to be charged
Correctly and legally, therefore, the PAFLU acted when, and investigated according to the local union's constitution, they would have
after proper investigation and finding of guilt, it decided to been tried by a trial committee of three (3) elected from among the members
remove the oppositors from the list of members of the of the Board who are themselves the accusers. (Section 2, Article 11,
Amigo Employees Union-PAFLU, and thereafter, Constitution of the Local Union). Petitioners would be in a far worse position
recommended to the Amigo Manufacturing, Inc.; the had this procedure been followed. Nonetheless, petitioners admit in their
termination of the employment of the oppositors. 15 petition that two (2) of the six (6) charges, i.e. disaffiliation and filing a
petition for certification election, are not intra-union matters and, therefore,
We see no reason to disturb the same. are cognizable by PAFLU.

The contention of petitioners that the charges against them being intra-union Petitioners insist that their disaffiliation from PAFLU and filing a petition for
problems, should have been investigated in accordance with the constitution certification election are not acts of disloyalty but an exercise of their right to
and by-laws of the Amigo Employees Union-PAFLU and not of the PAFLU, self-organization. They contend that these acts were done within the 60-day
is not impressed with merit. It is true that under the Implementing Rules and freedom period when questions of representation may freely be raised. Under
Regulations of the Labor Code, in case of intra-union disputes, redress must the peculiar facts of the case, We find petitioners' insistence untenable.
first be sought within the organization itself in accordance with its
In the first place, had petitioners merely disaffiliated from the. Amigo law to legitimate labor organizations upon issuance of the certificate of
Employees Union-PAFLU, there could be no legal objections thereto for it registration. Article 234 of the New Labor Code specifically provides:
was their right to do so. But what petitioners did by the very clear terms of
their "Sama-Samang Kapasiyahan" was to disaffiliate the Amigo Employees Art. 234. Requirements of Registration.—Any applicant
Union-PAFLU from PAFLU, an act which they could not have done with labor organization, association, or group of unions or
any effective consequence because they constituted the minority in the workers shall acquire legal personality and shall be entitled
Amigo Employees Union-PAFLU. to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration.
Extant from the records is the fact that petitioners numbering ten (10), were ....
among the ninety-six (96) who signed the "Sama-Samang Kapasiyahan"
whereas there are two hundred thirty four (234) union members in the Amigo In Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40,
Employees Union-PAFLU. Hence, petitioners constituted a small minority We had occasion to interpret Section 23 of R.A. No. 875 (Industrial Peace
for which reason they could not have successfully disaffiliated the local Act) requiring of labor unions registration by the Department of Labor in
union from PAFLU. Since only 96 wanted disaffiliation, it can be inferred order to qualify as "legitimate labor organization," and We said:
that the majority wanted the union to remain an affiliate of PAFLU and this
is not denied or disputed by petitioners. The action of the majority must, The theory to the effect that Section 23 of Republic Act No.
therefore, prevail over that of the minority members. 16 875 unduly curtails the freedom of assembly and association
guaranteed in the Bill of Rights is devoid of factual basis.
Neither is there merit to petitioners' contention that they had the right to The registration prescribed in paragraph (b) of said
present representation issues within the 60-day freedom period. It is true, as section 17 is not a limitation to the right of assembly or
contended by petitioners, that under Article 257 of the Labor Code and association, which may be exercised with or without said
Section 3, Rule 2, Book 2 of its Implementing Rules, questions of exclusive registration. The latter is merely a condition sine qua non for
bargaining representation are entertainable within the sixty (60) days prior to the acquisition of legal personality by labor organizations,
the expiry date of an existing CBA, and that they did file a petition for associations or unions and the possession of the 'rights and
certification election within that period. But the petition was filed in the privileges granted by law to legitimate labor organizations.'
name of the Amigo Employees Union which had not disaffiliated from The Constitution does not guarantee these rights and
PAFLU, the mother union. Petitioners being a mere minority of the local privileges, much less said personality, which are mere
union may not bind the majority members of the local union. statutory creations, for the possession and exercise of which
registration is required to protect both labor and the public
Moreover, the Amigo Employees Union, as an independent union, is not duly against abuses, fraud, or impostors who pose as organizers,
registered as such with the Bureau of Labor Relations. The appealed decision although not truly accredited agents of the union they
of OIC Leogardo of Regional Office No. 4 states as a fact that there is no purport to represent. Such requirement is a valid exercise of
record in the Bureau of Labor Relations that the Amigo Employees Union the police power, because the activities in which labor
(Independent) is registered, and this is not disputed by petitioners, organizations, associations and union or workers are engaged
notwithstanding their allegation that the Amigo Employees Union is a duly affect public interest, which should be protected.
registered labor organization bearing Ministry of Labor Registration
Certification No. 5290-IP dated March 27, 1967. But the independent union Simply put, the Amigo Employees Union (Independent) Which petitioners
organized after the "Sama-Samang Kapasiyahan" executed February 7, 1977 claim to represent, not being a legitimate labor organization, may not validly
could not have been registered earlier, much less March 27, 1967 under present representation issues. Therefore, the act of petitioners cannot be
Registration Certificate No. 5290-IP. As such unregistered union, it acquires considered a legitimate exercise of their right to self-organization. Hence, We
no legal personality and is not entitled to the rights and privileges granted by affirm and reiterate the rationale explained in Phil Association of Free Labor
Unions vs. Sec. of Labor case, supra, in order to protect legitimate labor and and on February 15, 1977 PAFLU and the Company entered into and
at the same time maintain discipline and responsibility within its ranks. concluded a new collective bargaining agreement, petitioners may not escape
the effects of the security clause under either the old CBA or the new CBA
The contention of petitioners that the new CBA concluded between Amigo by claiming that the old CBA had expired and that the new CBA cannot be
Employees Union-PAFLU and the Company on February 15, 1977 given retroactive enforcement. To do so would be to create a gap during
containing the union security clause cannot be invoked as against the which no agreement would govern, from the time the old contract expired to
petitioners for offenses committed earlier than its conclusion, deserves scant the time a new agreement shall have been entered into with the union. As this
consideration. We find it to be the fact that the union security clause provided Court said in Seno vs. Mendoza, 21 SCRA 1124, "without any agreement to
in the new CBA merely reproduced the union security clause provided in the govern the relations between labor and management in the interim, the
old CBA about to expire. And since petitioners were expelled from Amigo situation would well be productive of confusion and result in breaches of the
Employees Union-PAFLU on March 28, 1982 upon denial of their Motion law by either party. "
for Reconsideration of the decision expelling them, the CBA of February 15,
1977 was already applicable to their case. The "closed-shop provision" in the The case of Seno vs. Mendoza, 21 SCRA 1124 mentioned previously needs
CBA provides: further citation of the facts and the opinion of the Court, speaking through
Justice Makalintal who later became Chief Justice, and We quote:
All members of the UNION as of the signing of this
Agreement shall remain members thereof in good standing. It appears that petitioners other than Januario T. Seno who is
Therefore, any members who shall resign, be expelled, or their counsel, were members of the United Seamen's Union
shall in any manner cease to be a member of the UNION, of the Philippines. Pursuant to a letter-request of the Union
shall be dismissed from his employment upon written stating that they 'had ceased to be members in good standing'
request of the UNION to the Company. (Art. III) and citing a closed shop clause in its bargaining agreement
with respondent Carlos A. Go Thong & Co., the latter
A closed-shop is a valid form of union security, and a provision therefor in a dismissed said petitioners. Through counsel, petitioners
collective bargaining agreement is not a restriction of the right of freedom of requested that they be reinstated to their former positions and
association guaranteed by the Constitution. (Manalang, et al. vs. Artex paid their backwages, otherwise they would picket
Development Co., Inc., et al., L-20432, October 30, 1967, 21 SCRA 561). respondents' offices and vessels. The request was denied on
Where in a closed-shop agreement it is stipulated that union members who the ground that the dismissal was unavoidable under the
cease to be in good standing shall immediately be dismissed, such dismissal terms of the collective bargaining agreement. ...
does not constitute an unfair labor practice exclusively cognizable by the
Court of Industrial Relations. (Seno vs. Mendoza, 21 SCRA 1124). We, therefore, hold and rule that petitioners, although entitled to disaffiliate
from their union and form a new organization of their own, must, however,
Finally, We reject petitioners' contention that respondent Minister committed suffer the consequences of their separation from the union under the security
error in law amounting to grave abuse of discretion when he affirmed the clause of the CBA.
conclusion made by the RO4 OIC, upholding the legal applicability of the
security clause of a CBA over alleged offenses committed earlier than its WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed
conclusion and within the 60-day freedom period of an old CBA. In the first from affirming the joint decision of the OIC of Regional Office No. 4 in
place, as We stated earlier, the security clause of the new CBA is a RO4-Case No. T-IV-3549-T and RO4 Case No. RD-4-4088-77-T granting
reproduction or reiteration of the same clause in the old CBA. While clearance to terminate petitioners as well as dismissing their complaint with
petitioners were charged for alleged commission of acts of disloyalty application for preliminary injunction, is hereby AFFIRMED. No costs.
inimical to the interests of the Amigo Employees Union-PAFLU in the
Resolution of February 14, 1977 of the Amigo Employees Union- PAFLU SO ORDERED.
G.R. No. L-24189 August 30, 1968 date to return to work. Thru a public address system, strikers were then urged
to go back to their jobs. Notices addressed to the strikers which read — "All
ITOGON-SUYOC MINES, INC., petitioner, of you are required to report immediately to your respective work otherwise
vs. you will be considered AWOL [absent without leave] and will be dropped
SANGILO-ITOGON WORKERS' UNION in behalf of BARTOLOME from the rolls"1 were posted on the Itogon Labor Union bulletin board, the
MAYO, BERNARDO AQUINO, ET AL.,respondents. Itogon store, and at 1300 checkpoint — the main entrance to the company's
mining premises. These notices did rot contain the fifteen (15) days' grace
Reyes and Cabato for petitioner. period aforesaid.
Benjamin C. Rillera for respondents.
On November 18, 1958, a CIR prosecutor in behalf of Sañgilo charged
SANCHEZ, J.: petitioner and Claude Fertig, its general superintendent, with unfair labor
practice for the dismissal of two company employees A. Manaois and Jose
Petitioner's appeal seeks reversal of the judgment of the Court of Industrial Baldo on June 9, 1957 and March 5, 1958, respectively, allegedly because of
Relations (CIR) directing reinstatement of the fifteen individual respondents their affiliation with Sañgilo and for having testified against petitioner in
"to their former positions or substantially equivalent employment in the Certification Case No. 3-MC-Pang.2 The complaint prayed for reinstatement
company, with full back wages from the time of their dismissal to their actual and back wages. Petitioner asserted just cause in defense.
reinstatement, without loss of seniority and other privileges."
On October 5, 1960, CIR adjudged that the dismissal of A. Manaois was just
The controversy arose because prior to May 28, 1958, Itogon-Suyoc Mines, and legal, but that petitioner was guilty of unfair labor practice in dismissing
Inc., through its general superintendent Claude Fertig, had been dismissing Jose Baldo. CIR thus ordered Baldo's reinstatement with back wages. The
from its employ members of respondent Sañgilo-Itogon Workers' Union CIR judgment for Jose Baldo was elevated by petitioner to this Court.3 On
(Sañgilo, for short). Fifty-four members of Sañgilo were already fired when December 24, 1964, we affirmed.
Department of Labor conciliators conferred with petitioner's representative to
explore the possibility of their reinstatement. Petitioner refused Meanwhile, on March 3, 1961, CIR's prosecutor — on Sañgilo's charge filed
reinstatement, alleged that dismissal of the 54 was for cause. with CIR on July 12, 1960, — lodged an unfair labor practice complaint
against herein petitioner, its general superintendent Claude Fertig, and the
On May 28, 1958, sensing that its members were being eased out of Itogon Labor Union.4 Averment was there made of the arbitrary dismissal of
employment one by one, Sañgilo called a strike, accompanied by picketing 107 of Sañgilo's members because of membership and/or affiliation with said
carried out at or near petitioner's mine premises in Itogon. Work was union and for having testified or about to testify in Certification Case G.R.
paralyzed. On the fourth or fifth day of the strike, company policemen drove No. 3-MC-Pang.; that Sañgilo's president, Bartolome Mayo, was dismissed
the strikers out of petitioner's premises. The strike lasted until about June 2, also because of his refusal to dissolve the union; and that said company and
1958. its general superintendent Claude Fertig "had given aid and support to ...
Itogon Labor Union, another labor organization" existing in said company
On that day, June 2, 1958, petitioner filed an injunction suit against some "by allowing the officers and members thereof, to hold meetings inside the
strikers in the Court of First Instance of Baguio (Civil Case No. 774). mine premises and the theatre building owned" by the company and also
Nothing clear appears of record as to the present status of this suit. allowing them to use the company's light facilities — privileges which were
denied Sañgilo. The prayer was for judgment declaring respondents therein
guilty of unfair labor practice; enjoining them from further committing unfair
On the same day, too, petitioner's officials conferred with the officers of the
labor practice acts; ordering the dissolution of Itogon Labor Union, "it being
other labor union in the company, the Itogon Labor Union. They hammered
a company dominated union"; and directing reinstatement of the dismissed
out an agreement whereby all strikers were given fifteen (15) days from said

107 employees mentioned in the complaint, with full back wages from the Chayon Pogay, (12) Roman Quinto, (13) Jose Santos, (14) Simplicio
time of dismissal up to actual reinstatement. Tambaoan, and (15) Tomas Valerio, to their former positions or substantially
equivalent employment in the company, with full backwages from the time
The mining company and Claude Fertig in their answer aver that the May 27, of their dismissal to their actual reinstatement, without loss of seniority and
1958 strike was illegal; that thereafter "many of respondent company's other privileges. The complaint with respect to the remaining members of
workers left for their respective home towns, abandoning their jobs, and complainant Sañgilo-Itogon Workers' Union and with respect to the company
never reported for work until the present; that some of the persons listed in domination charge against respondent Itogon Labor Union is hereby
the complaint are still working; and some of them left respondent company's DISMISSED."
employ even earlier than May 27, 1958 voluntarily or were discharged for
cause." The company's principal defense is that the action for reinstatement Its motion to reconsider having been denied by CIR en banc, petitioner
with back wages is barred by laches. appealed to this Court.

Itogon Labor Union's defense is that the concessions it enjoyed were in 1. Petitioner's brief 7 challenges Sañgilo's capacity to sue. Sañgilo, so
pursuance of a collective bargaining contract between said union and the petitioner says, ceased to be a legitimate labor union on March 31, 1960
company. when the Department of Labor cancelled the former's registration permit for
failure to comply with statutory requirements. Contrariwise Sañgilo avers
Of the 107 dismissed employees, 10 manifested in writing that they had that at the time the complaint below was filed it was a legitimate labor
never been members of Sañgilo, were actually working with the company organization, and continues to be so. 1äwphï1.ñët
and not interested at all in the prosecution of the suit.5 One of the named
dismissed employees, Graciano Mejia, died on October 26, 1957.6 Of the Judicial inquiry was made by CIR on this issue. A subpoena duces tecum was
remaining individual complainants, only 15 appeared and testified in court. issued to the registrar of labor organizations of the Department of Labor
They were amongst the strikers. requiring him or his duly authorized representative "[t]o bring with [him] the
following: (1) the list of membership of the Sañgilo-Itogon Workers' Union;
Came the CIR decision of May 20, 1964. Associate Judge Jose S. Bautista (2) the revocation, if any, of the registration permit of the Sañgilo-Itogon
there observed that "the picketing was conducted peacefully, as the strikers Workers' Union dated March 22, 1960; and (3) the cancellation proceedings
did not commit acts of violence or cause injuries to persons or damage to of the Sañgilo-Itogon Workers' Union which took place sometime in 1960."8
property" and that "the union members staged the strike for the reason that
their fellow members were being eased out of employment little by little by Atty. Narciso Fabella, the duly authorized representative, answered the
respondent company." . subpoena. With the record of the cancellation proceedings of Sañgilo with
him, he testified before the CIR hearing officer that on March 31, 1960,
On the charge that the Itogon Labor Union was company dominated, CIR Sañgilo's registration permit [No. 2141-IP issued on May 21, 1957] was
declared that "the privilege of respondent union in holding meetings inside cancelled by the Department of Labor under Cancellation Proceedings
the company's mine premises and theater building, and in using the 1722;9 that his office then received a motion for reconsideration of said
company's light facilities, is one of the concessions obtained by said union in cancellation; that on April 27, 1960, an order was issued advising Sañgilo to
accordance with the collective bargaining agreement entered into by the comply with the requirement it failed to satisfy and which was the cause of
respondent Company and the Itogon Labor Union." . the cancellation of Sañgilo's permit; that on March 9, 1962, Sañgilo filed a
manifestation and motion to lift resolution with the request that it be given
CIR's judgment thus directed "respondent Itogon-Suyoc Mines, Inc. to fifteen days within which to present evidence of compliance; that on March
reinstate (1) Bartolome Mayo, (2) Bernardo Aquino, (3) Florentino Ceralde, 23, 1962, an order was issued directing the union to submit, within fifteen
(4) Marcelo Datuin, (5) Antonio Deogracias, (6) Domingo Deray, (7) Pedro days from notice, a copy of its financial report for the period from May 12,
Espiritu, (8) Mariano Idos, (9) Antonio Laop, (10) Gregorio Laureta, (11) 1957 to May 11, 1958, sworn to by its treasurer, Ernesto Aragon, pursuant to
Sangilo's constitution and by-laws and Section 17(k) of Republic Act 875; interest. It is no ground for reversal. 12 At this stage this Court may even
and that no financial report had been submitted to the Department of Labor. strike out Sañgilo-Itogon Workers' Union and leave the fifteen individual
respondents alone. 13
And then, the witness testified as follows:
2. Next to be considered is petitioner's claim that respondents were guilty of
ATTY. RILLERA [Counsel for Sañgilo]: splitting their cause of action.

Q Now, Mr. Fabella, per your records, do you have the final order Petitioner argues that the first unfair labor practice suit (CIR Case 50-ULP-
cancelling the permit of the complainant union, or is the proceeding Pang.) heretofore mentioned covers the second unfair labor practice suit - the
still going on? case at hand. And this, because "[a]ll acts of unfair labor practice allegedly
committed by the herein petitioner [the company] prior to November 18,
WITNESS 1958 [when CIR Case 50-ULP-Pang. was filed] against the members of
respondent union [Sañgilo] constituted one single cause of action." Petitioner
A As far as the record is concerned, it seems that the proceeding continues onto say that since CIR Case 50-ULP-Pang, has been finally
is still going on because there is no other order pertaining [to] the decided by this Court in a decision promulgated on December 24, 1964, said
non-submittal of the union of the financial report required within case is a bar to the present action.
fifteen (15) days.10
We do not go along with petitioner.
So it is, that there is no order final in character cancelling Sañgilo's
registration permit and dropping its name from the roster of legitimate labor The rule against splitting of a cause of action applies only where the actions
unions. Sangilo's status does not appear in the record to have changed. are between the same parties. 14 Here, the parties in the two cases aforecited
Therefore, Sañgilo still enjoys all the rights accorded by law to a legitimate are different. The first case involves only two (2) laborers, namely, Jose
labor union. One of those rights is the right to sue. 1äwphï1.ñët Baldo and A. Manaois the second refers to the claim of other laborers
numbering 107 in all. These two cases, it is true, were brought in the name of
Even assuming that Sañgilo later lost its registration permit in the course of Sañgilo. However, the real parties in interest in both cases are the dismissed
the present proceedings, still Sañgilo may continue as a party without need employees. Sañgilo merely represented its members before CIR. 15 CIR
of substitution of parties, "subject however to the understanding that found that the members "are not situated under similar circumstances", and
whatever decision may be rendered therein will only be binding upon those that their alleged dismissal "took pace on different dates". 16 Each one of
members of the union who have not signified their desire to withdraw from these employees has a cause of action arising from his particular dismissal.
the case before its trial and decision on the merits." 11 And the cause of action of one is separate and distinct from the
others. 17 Although, of course, they may be joined and brought in the name of
Really, we perceive of no reason why the judgment in favor of the fifteen the union. Res judicata has not attached.
individual respondent laborers should be overturned simply because the
union of which they were members ceased to be a legitimate labor union. It 3. Petitioner's averment that it gave out notices for a return to work would not
cannot be disputed that CIR's prosecutor brought this case not merely for be of help to its cause. On this point, the court said: "The Court is aware of
Sañgilo; it was also on behalf of the 107 employees enumerated therein. This the offer of the company to the strikers to return to work, but it is even more
accounts for the fact that CIR's judgment for reinstatement and backpay was cognizant of the fact that passions and emotions among the striking
rendered in favor of the fifteen respondent laborers. To accept petitioner's employees were running high at the heat of the strike." 18 The validity of this
argument as valid is to shunt aside substance to give way to form. Error, if reasoning we do not find cause to dispute.
any, was harmless. It does not affect the substantial rights of the parties in

And then, evidence there is that the individual respondents were driven out of in the filing of suit should not hamper their suit. We must not for a moment
and denied admission into the company's mine premises because they staged forget that these fifteen laborers' belong to the lower economic stratum of our
a strike. They were turned out of the bunkhouses they rented in the premises society. They are not expected to possess the intelligence or foresight of
as living quarters. They were virtually locked out. Evidence there is, too, that those who have been favored by high formal education. 23 Individually, they
because of the strike the laborers were not allowed to go back to their jobs. 19 may not be in a position to file suit; they may not have the means. Thrown
out of job, driven off, and refused entrance to, the company's premises, each
4. Petitioner seeks to nullify individual respondents' right to reinstatement has to go his own way. They had to return — as most of them did — to their
and backpay upon the ground that they are guilty of laches. Really the families in the lowlands, far from the mine site. And yet they were not remiss
present case was started after the lapse of almost two years and two months in their duty to report the matter to their president. But the president,
after the strike. 1äwphï1.ñët respondent Bartolome Mayo, was then in the Baguio General Hospital. Mayo
lost no time in reporting the laborers' plight to the union counsel. The
Laches has been defined as "such delay in enforcing one's rights as works laborers had every right to assume that their union was doing something for
disadvantage to another" and "in a general sense is the neglect, for an them. They had done their part. They had to depend on the action taken by
unreasonable and unexplained length of time, under circumstances permitting their union leaders. A labor union certainly would not be of much use if it
diligence, to do what in law should have been done." 20 As we go into the does not act for the welfare of its members.
core of this problem, we are reminded that for the doctrine of stale demand to
apply, four essential requisites must be present, viz: "(1) conduct on the part As to respondent Mayo himself, evidence appears on record that from the
of the defendant, or of one under whom he claims, giving rise to the situation time of his dismissal, he had personally and by telephone asked
of which complaint is made and for which the complaint seeks a remedy; (2) Superintendent Fertig for his reinstatement. He was brushed off with the
delay in asserting the complainant's rights, the complainant having had reply: "Your union went on strike". 24 On one occasion after the strike, when
knowledge or notice of the defendant's conduct and having been afforded an Mayo met Fertig in Baguio, the former repeated his request for reinstatement,
opportunity to institute a suit; (3) lack of knowledge or notice on the part of but received the same answer: "You are still on strike". 25
the defendant that the complainant would assert the right on which he bases
his suit; and (4) injury or prejudice to the defendant in the event relief is Laches, if any, we must say, is not solely to be laid at the door of
accorded to the complainant, or the suit is not held barred." 21 respondents. The company contributed too in the delay of the filing of the
present suit. And this because, as testified to by the union president in court,
With these as guideposts, let us look at the facts. such delay in filing the present ULP case was due to the fact that the legality
of their strike precisely was being litigated in the Court of First Instance of
It is true that CIR declared Sañgilo and its members who did not come to Baguio in Injunction Case 774 filed on June 2, 1958 by the very company
court and testify guilty of laches. 22 But as to the 15 individual respondents, itself against some of the strikers. Naturally, if the strike is there declared
the question of laches was passed by — sub silentio. Clearly implicit in this illegal, the strikers including the herein fifteen respondents would lose their
is that CIR is of the opinion that laches is not a bar to reinstatement and right to reinstatement and backpay. But as said suit became apparently
recovery of back wages for these 15 individual respondents who actually dormant, the union, on behalf of respondents, decided to lodge their present
testified in court. For CIR, despite a categorical finding of laches on the part complaint with the CIR.
of the union and some of its complaining members, proceeded to order
reinstatement and back wages for the 15 respondents. By and large, Thus it is, that the taint of laches cannot attach to individual respondents. For
appreciation of laches rests mainly with the trial court. Absent a clear abuse, the second element required for the defense of laches to prosper is here
we are not to disturb its ruling thereon. absent.

Indeed, these fifteen respondents showed sufficient interest in their case.

They went to court and supported their cause by their own testimony. Delay
5. The judgment below directs petitioner to pay individual respondents back
wages from the time of their dismissal to their actual reinstatement without
loss of seniority and privileges.

Since the dismissal of respondents in 1958, more than ten years had elapsed.
It would not seem out of place to restate the guidelines to be observed in the
ascertainment of the total back wages payable under the judgment below.
These are:.1äwphï1.ñët

First. To be deducted from the back wages accruing to each of the

laborers to be reinstated is the total amount of earnings obtained by
him from other employment(s) from the date of dismissal to the date
of reinstatement. Should the laborer decide that it is preferable not to
return to work, the deduction should be made up to the time
judgment becomes final. And these, for the reason that employees
should not be permitted to enrich themselves at the expense of their
employer. 26 Besides, there is the "law's abhorrence for double
compensation." 27

Second. Likewise, in mitigation of the damages that the dismissed

respondents are entitled to, account should be taken of whether in the
exercise of due diligence respondents might have obtained income
from suitable remunerative employment. 28 We are prompted to give
out this last reminder because it is really unjust that a discharged
employee should, with folded arms, remain inactive in the
expectation that a windfall would come to him. A contrary view
would breed idleness; it is conducive to lack of initiative on the part
of a laborer. Both bear the stamp of undesirability.

For the reasons given, the judgment under review is hereby affirmed.

Let the record of this case be returned to the Court of Industrial Relations
with instructions to forthwith ascertain the amount of back wages due
individual respondents in accordance with the guidelines herein set forth.
Costs against petitioner. So ordered. 1äwphï1.ñët

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro,

Angeles and Fernando, JJ., concur.