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FIRST DIVISION Superintendent.

Sometime in June 1996, the supervisory personnel


[G.R. No. 164561. August 30, 2006.] of CAPASCO launched a move to organize a union among their
CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA ranks, later known as private respondent CUSE. Private respondent
JR., VIRGILIO AGERO, and LEONARDO VISORRO, JR., Tamondong actively involved himself in the formation of the union
petitioners, vs. HON. COURT OF APPEALS, CAPASCO UNION and was even elected as one of its officers after its creation.
OF SUPERVISORY EMPLOYEES (CUSE) and ENRIQUE Consequently, petitioner CAPASCO sent a memo 8 dated 3 February
TAMONDONG III, respondents. 1997, to private respondent Tamondong requiring him to explain
DECISION and to discontinue from his union activities, with a warning that a
CHICO-NAZARIO, J p: continuance thereof shall adversely affect his employment in the
This is a special civil action for Certiorari under Rule 65 of the Rules company. Private respondent Tamondong ignored said warning and
of Court seeking to annul and set aside, on the ground of grave made a reply letter 9 on 5 February 1997, invoking his right as a
abuse of discretion amounting to lack or excess of jurisdiction, (1) supervisory employee to join and organize a labor union. In view of
the Decision 1 of the Court of Appeals in CA-G.R. SP No. 57179 that, on 6 February 1997, petitioner CAPASCO through a memo 10
dated 28 October 2003 which annulled the Decision 2 of the terminated the employment of private respondent Tamondong on
National Labor Relations Commission (NLRC) in NLRC Case No. the ground of loss of trust and confidence, citing his union activities
017822-99 dated 25 August 1999, thereby, reinstating the Decision as acts constituting serious disloyalty to the company.
3 of Acting Executive Labor Arbiter Pedro C. Ramos dated 7 August Private respondent Tamondong challenged his dismissal for being
1998; and (2) the Resolution 4 of the same court, dated 3 June illegal and as an act involving unfair labor practice by filing a
2004, which denied the petitioners' Motion for Reconsideration. Complaint for Illegal Dismissal and Unfair Labor Practice before the
Herein petitioners are Cathay Pacific Steel Corporation (CAPASCO), NLRC, Regional Arbitration Branch IV. According to him, there was
a domestic corporation engaged in the business of manufacturing no just cause for his dismissal and it was anchored solely on his
steel products; Benjamin Chua, Jr. (now deceased), the former involvement and active participation in the organization of the
CAPASCO President; Virgilio Agerro, CAPASCO's Vice-President; and union of supervisory personnel in CAPASCO. Though private
Leonardo Visorro, Jr., CAPASCO's Administrative-Personnel Manager. respondent Tamondong admitted his active role in the formation of
Herein private respondents are Enrique Tamondong III, the a union composed of supervisory personnel in the company, he
Personnel Superintendent of CAPASCO who was previously assigned claimed that such was not a valid ground to terminate his
at the petitioners' Cainta Plant, and CAPASCO Union of Supervisory employment because it was a legitimate exercise of his
Employees (CUSE), a duly registered union of CAPASCO. constitutionally guaranteed right to self-organization.
The facts of the case are as follows: In contrast, petitioner CAPASCO contended that by virtue of private
Four former employees of CAPASCO originally filed this labor case respondent Tamondong's position as Personnel Superintendent and
before the NLRC, namely: Fidel Lacambra, Armando Dayson, the functions actually performed by him in the company, he was
Reynaldo Vacalares, and Enrique Tamondong III. However, in the considered as a managerial employee, thus, under the law he was
course of the proceedings, Fidel Lacambra 5 and Armando Dayson prohibited from joining a union as well as from being elected as one
6 executed a Release and Quitclaim, thus, waiving and abandoning of its officers. Accordingly, petitioners maintained their argument
any and all claims that they may have against petitioner CAPASCO. that the dismissal of private respondent Tamondong was perfectly
On 3 November 1999, Reynaldo Vacalares also signed a Quitclaim/ valid based on loss of trust and confidence because of the latter's
Release/Waiver. 7 Hence, this Petition shall focus solely on issues active participation in the affairs of the union.
affecting private respondent Tamondong. On 7 August 1998, Acting Executive Labor Arbiter Pedro C. Ramos
Petitioner CAPASCO, hired private respondent Tamondong as rendered a Decision in favor of private respondent Tamondong,
Assistant to the Personnel Manager for its Cainta Plant on 16 decreeing as follows:
February 1990. Thereafter, he was promoted to the position of WHEREFORE, premises considered, judgment is hereby rendered
Personnel/Administrative Officer, and later to that of Personnel finding [petitioner CAPASCO] guilty of unfair labor practice and
illegal dismissal. Concomitantly, [petitioner CAPASCO] is hereby under Rule 65 of the Rules of Court before the Court of Appeals,
ordered: alleging grave abuse of discretion on the part of the NLRC. Then,
1. To cease and desist from further committing acts of unfair labor the Court of Appeals in its Decision dated 28 October 2003, granted
practice, as charged; the said Petition. The dispositive of which states that:
2. To reinstate [private respondent Tamondong] to his former WHEREFORE, premises considered, the instant Petition for
position without loss of seniority rights and other privileges and his Certiorari is GRANTED and the herein assailed Decision dated
full backwages inclusive of allowances, and to his other benefits or August 25, 1999 of the NLRC, Third Division is ANNULLED and SET
their monetary equivalent, computed from the time his ASIDE. Accordingly, the Decision dated August 7, 1998 of NLRC,
compensation was withheld from him up to the time of his actual RAB IV Acting Executive Labor Arbiter Pedro C. Ramos, insofar as
reinstatement, and herein partially computed as follows: [private respondent Tamondong] is concerned is hereby
a) P167,076.00 — backwages from February 7, 1997 to August 7, REINSTATED. 14
1998; Consequently, petitioners filed a Motion for Reconsideration of the
b) P18,564.00 — 13th month pay for 1997 and 1998; aforesaid Decision of the Court of Appeals. Nonetheless, the Court
c) P4,284.00 — Holiday pay for 12 days; of Appeals denied the said Motion for Reconsideration for want of
d) P3,570.00 — Service Incentive Leave for 1997 and 1998. convincing and compelling reason to warrant a reversal of its
————— judgment.
P193,494.00 — Total partial backwages and benefits. 11 Hence, this present Petition for Certiorari under Rule 65 of the 1997
Aggrieved, petitioners appealed the afore-quoted Decision to the Rules of Civil Procedure.
NLRC. On 25 August 1999, the NLRC rendered its Decision In the Memorandum 15 filed by petitioners, they aver that private
modifying the Decision of the Acting Executive Labor Arbiter Pedro respondent Tamondong as Personnel Superintendent of CAPASCO
C. Ramos, thus: was performing functions of a managerial employee because he
WHEREFORE, premises all considered, the decision appealed from is was the one laying down major management policies on personnel
hereby MODIFIED: relations such as: issuing memos on company rules and
a) Dismissing the Complaint for Illegal Dismissal filed by [private regulations, imposing disciplinary sanctions such as warnings and
respondent Tamondong] for utter lack of merit; suspensions, and executing the same with full power and
b) Dismissing the Complaint for Unfair Labor Practice for lack of discretion. They claim that no further approval or review is
factual basis; necessary for private respondent Tamondong to execute these
c) Deleting the awards to [private respondent Tamondong] of functions, and the notations "NOTED BY" of petitioner Agerro, the
backwages, moral and exemplary damages, and attorney's fees; Vice-President of petitioner CAPASCO, on the aforesaid memos are
d) Affirming the awards to [private respondent Tamondong], nothing but mere notice that petitioner Agerro was aware of such
representing 13th month pay for 1997 and 1998, holiday pay for 12 company actions performed by private respondent Tamondong.
days, and service incentive leave for 1997 totaling P26,418.00; and Additionally, private respondent Tamondong was not only a
e) Ordering the payment of backwages to [private respondent managerial employee but also a confidential employee having
Tamondong] reckoned from 16 September 1998 up to the date of knowledge of confidential information involving company policies on
this Decision. 12 personnel relations. Hence, the Court of Appeals acted with grave
Pe t i t i o n e r s f i l e d a M o t i o n f o r C l a r i f i c a t i o n a n d Pa r t i a l abuse of discretion amounting to lack or excess of jurisdiction when
Reconsideration, while, private respondent Tamondong filed a it held that private respondent Tamondong was not a managerial
Motion for Reconsideration of the said NLRC Decision, but the NLRC employee but a mere supervisory employee, therefore, making him
affirmed its original Decision in its Resolution 13 dated 25 eligible to participate in the union activities of private respondent
November 1999. CUSE.
Dissatisfied with the above-mentioned Decision of the NLRC, private Petitioners further argue that they are not guilty of illegal dismissal
respondents Tamondong and CUSE filed a Petition for Certiorari and unfair labor practice because private respondent Tamondong
was validly dismissed and the reason for preventing him to join a adequate remedy in the ordinary course of law. 17 Excess of
labor union was the nature of his position and functions as jurisdiction as distinguished from absence of jurisdiction means that
Personnel Superintendent, which position was incompatible and in an act, though within the general power of a tribunal, board or
conflict with his union activities. Consequently, it was grave abuse officer is not authorized, and invalid with respect to the particular
of discretion on the part of the Court of Appeals to rule that proceeding, because the conditions which alone authorize the
petitioner CAPASCO was guilty of illegal dismissal and unfair labor exercise of the general power in respect of it are wanting. 18
practice. Without jurisdiction means lack or want of legal power, right or
authority to hear and determine a cause or causes, considered
Lastly, petitioners maintain that the Court of Appeals gravely either in general or with reference to a particular matter. It means
abused its discretion when it reinstated the Decision of Executive lack of power to exercise authority. 19 Grave abuse of discretion
Labor Arbiter Pedro C. Ramos holding CAPASCO liable for implies such capricious and whimsical exercise of judgment as is
backwages, 13th month pay, service incentive leave, moral equivalent to lack of jurisdiction or, in other words, where the
damages, exemplary damages, and attorney's fees. power is exercised in an arbitrary manner by reason of passion,
On the other hand, private respondents, assert that the assailed prejudice, or personal hostility, and it must be so patent or gross as
Decision being a final disposition of the Court of Appeals is to amount to an evasion of a positive duty or to a virtual refusal to
appealable to this Court by a Petition for Review on Certiorari under perform the duty enjoined or to act at all in contemplation of law.
Rule 45 of the Rules of Court and not under Rule 65 thereof. They 20
also claim that petitioners new ground that private respondent In the case before this Court, petitioners fail to meet the third
Tamondong was a confidential employee of CAPASCO, thus, requisite for the proper invocation of Petition for Certiorari under
prohibited from participating in union activities, is not a valid Rule 65, to wit: that there is no appeal or any plain, speedy, and
ground to be raised in this Petition for Certiorari seeking the adequate remedy in the ordinary course of law. They simply alleged
reversal of the assailed Decision and Resolution of the Court of that the Court of Appeals gravely abuse its discretion which amount
Appeals. to lack or excess of jurisdiction in rendering the assailed Decision
Now, given the foregoing arguments raise by both parties, the and Resolution. They did not bother to explain why an appeal
threshold issue that must first be resolved is whether or not the cannot possibly cure the errors committed by the appellate court. It
Petition for Certiorari under Rule 65 of the 1997 Rules of Civil must be noted that the questioned Decision of the Court of Appeals
Procedure is the proper remedy for the petitioners, to warrant the was already a disposition on the merits; this Court has no
reversal of the Decision and Resolution of the Court of Appeals remaining issues to resolve, hence, the proper remedy available to
dated 28 October 2003 and 3 June 2004, respectively. the petitioners is to file Petition for Review under Rule 45 not under
The petition must fail. Rule 65.
The special civil action for Certiorari is intended for the correction of Additionally, the general rule is that a writ of certiorari will not issue
errors of jurisdiction only or grave abuse of discretion amounting to where the remedy of appeal is available to the aggrieved party. The
lack or excess of jurisdiction. Its principal office is only to keep the remedies of appeal in the ordinary course of law and that of
inferior court within the parameters of its jurisdiction or to prevent certiorari under Rule 65 of the Revised Rules of Court are mutually
it from committing such a grave abuse of discretion amounting to exclusive and not alternative or cumulative. 21 Time and again this
lack or excess of jurisdiction. 16 Court reminded members of the bench and bar that the special civil
The essential requisites for a Petition for Certiorari under Rule 65 action of Certiorari cannot be used as a substitute for a lost appeal
are: (1) the writ is directed against a tribunal, a board, or an officer 22 where the latter remedy is available. Such a remedy will not be
exercising judicial or quasi-judicial function; (2) such tribunal, a cure for failure to timely file a Petition for Review on Certiorari
board, or officer has acted without or in excess of jurisdiction, or under Rule 45. Nor can it be availed of as a substitute for the lost
with grave abuse of discretion amounting to lack or excess of remedy of an ordinary appeal, especially if such loss or lapse was
jurisdiction; and (3) there is no appeal or any plain, speedy, and
occasioned by one's own negligence or error in the choice of In any event, granting arguendo, that the present petition is proper,
remedies. 23 still it is dismissible. The Court of Appeals cannot be said to have
In the case at bar, petitioners received on 9 June 2004 the acted with grave abuse of discretion amounting to lack or excess of
Resolution of the Court of Appeals dated 3 June 2004 denying their jurisdiction in annulling the Decision of the NLRC because the
Motion for Reconsideration. Upon receipt of the said Resolution, findings of the Court of Appeals that private respondent Tamondong
they had 15 days or until 24 June 2004 within which to file an was indeed a supervisory employee and not a managerial
appeal by way of Petition for Review under Rule 45, but instead of employee, thus, eligible to join or participate in the union activities
doing so, they just allowed the 15 day period to lapse, and then on of private respondent CUSE, were supported by evidence on record.
the 61st day from receipt of the Resolution denying their Motion for In the Decision of the Court of Appeals dated 28 October 2003, it
Reconsideration, they filed this Petition for Certiorari under Rule 65 made reference to the Memorandum 28 dated 12 September 1996,
alleging grave abuse of discretion on the part of the appellate court. which required private respondent Tamondong to observe fixed
Admittedly, this Court, in accordance with the liberal spirit daily working hours from 8:00 am to 12:00 noon and from 1:00 pm
pervading the Rules of Court and in the interest of justice, has the to 5:00 pm. This imposition upon private respondent Tamondong,
discretion to treat a Petition for Certiorari as a Petition for Review according to the Court of Appeals, is very uncharacteristic of a
on Certiorari under Rule 45, especially if filed within the managerial employee. To support such a conclusion, the Court of
reglementary period for filing a Petition for Review. 24 However, in Appeals cited the case of Engineering Equipment, Inc. v. NLRC 29
the present case, this Court finds no compelling reason to justify a where this Court held that one of the essential characteristics 30 of
liberal application of the rules, as this Court did in the case of an employee holding a managerial rank is that he is not
Delsan Transport Lines, Inc. v. Court of Appeals. 25 In the said subjected to the rigid observance of regular office hours or
case, this Court treated the Petition for Certiorari filed by the maximum hours of work.
petitioner therein as having been filed under Rule 45 because said Moreover, the Court of Appeals also held that upon careful
Petition was filed within the 15-day reglementary period for filing a examination of the documents submitted before it, it found out
Petition for Review on Certiorari. Petitioner's counsel therein that:
received the Court of Appeals Resolution denying their Motion for [Private respondent] Tamondong may have possessed enormous
Reconsideration on 26 October 1993 and filed the Petition for powers and was performing important functions that goes with the
Certiorari on 8 November 1993, which was within the 15-day position of Personnel Superintendent, nevertheless, there was no
reglementary period for filing a Petition for Review on Certiorari. It clear showing that he is at liberty, by using his own discretion and
cannot therefore be claimed that the Petition was used, as a disposition, to lay down and execute major business and
substitute for appeal after that remedy has been lost through the operational policies for and in behalf of CAPASCO. [Petitioner]
fault of the petitioner. 26 Conversely, such was not the situation in CAPASCO miserably failed to establish that [private respondent]
the present case. Hence, this Court finds no reason to justify a Tamondong was authorized to act in the interest of the company
liberal application of the rules. using his independent judgment. . . . . Withal, [private respondent]
Accordingly, where the issue or question involves or affects the Tamondong may have been exercising certain important powers,
wisdom or legal soundness of the decision, and not the jurisdiction such as control and supervision over erring rank-and-file
of the court to render said decision, the same is beyond the employees, however, . . . he does not possess the power to hire,
province of a petition for certiorari. 27 It is obvious in this case that transfer, terminate, or discipline erring employees of the company.
the arguments raised by the petitioners delved into the wisdom or At the most, the record merely showed that [private respondent]
legal soundness of the Decision of the Court of Appeals, therefore, Tamondong informed and warned rank-and-file employees with
the proper remedy is a Petition for Review on Certiorari under Rule respect to their violations of CAPASCO's rules and regulations. . . . .
45. Consequently, it is incumbent upon this Court to dismiss this [Also, the functions performed by private respondent such as]
Petition. issuance of warning 31 to employees with irregular attendance and
unauthorized leave of absences and requiring employees to explain
regarding charges of abandonment of work, are normally SP No. 57179, which annulled the Decision of the NLRC in NLRC
performed by a mere supervisor, and not by a manager. 32 Case No. 017822-99 dated 25 August 1999, thereby, reinstating
the Decision of Acting Executive Labor Arbiter Pedro C. Ramos
Accordingly, Article 212(m) of the Labor Code, as amended, dated 7 August 1998, is hereby AFFIRMED. With costs against
differentiates supervisory employees from managerial employees, petitioners.
to wit: supervisory employees are those who, in the interest of the SO ORDERED.
employer, effectively recommend such managerial actions, if the Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Callejo,
exercise of such authority is not merely routinary or clerical in Sr., JJ., concur.
nature but requires the use of independent judgment; whereas,
managerial employees are those who are vested with powers or
prerogatives to lay down and execute management policies and/or
hire, transfer, suspend, lay off, recall, discharge, assign or discipline
employees. Thus, from the foregoing provision of the Labor Code, it
can be clearly inferred that private respondent Tamondong was just
a supervisory employee. Private respondent Tamondong did not
perform any of the functions of a managerial employee as stated in
the definition given to it by the Code. Hence, the Labor Code 33
provisions regarding disqualification of a managerial employee from
joining, assisting or forming any labor organization does not apply
to herein private respondent Tamondong. Being a supervisory
employee of CAPASCO, he cannot be prohibited from joining or
participating in the union activities of private respondent CUSE, and
in making such a conclusion, the Court of Appeals did not act
whimsically, capriciously or in a despotic manner, rather, it was
guided by the evidence submitted before it. Thus, given the
foregoing findings of the Court of Appeals that private respondent is
a supervisory employee, it is indeed an unfair labor practice 34 on
the part of petitioner CAPASCO to dismiss him on account of his
union activities, thereby curtailing his constitutionally guaranteed
right to self-organization. 35
With regard to the allegation that private respondent Tamondong
was not only a managerial employee but also a confidential
employee, the same cannot be validly raised in this Petition for
Certiorari. It is settled that an issue which was not raised in the
trial court cannot be raised for the first time on appeal. This
principle applies to a special civil action for certiorari under Rule 65.
36 In addition, petitioners failed to adduced evidence which will
prove that, indeed, private respondent was also a confidential
employee.
WHEREFORE, premises considered, the instant Petition is
DISMISSED. The Decision and Resolution of the Court of Appeals
dated 28 October 2003 and 3 June 2004, respectively, in CA-G.R.
SECOND DIVISION that there is no legal prohibition against confidential
[G.R. No. 110399. August 15, 1997.] employees who are not performing managerial function to
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT form and join a union. Anent the issue of employees of the three
UNION AND ERNESTO L. PONCE, President, petitioners, vs. plants constitute one single bargaining unit, the Court has held that
HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY petitioner's contention is meritorious. It is readily seen that the
AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, employees in the instant case have community or mutuality
HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS of interest, which is the standard in determining the proper
MED-ARBITER AND SAN MIGUEL CORPORATION, constituency of a collective bargaining agreement. The fact that
respondents. three plants are located in different places is immaterial.
Benigno I. Vivar, Jr. for petitioners. Geographical location can be completely disregarded if the
Siguion Reyna Montecillo & Ongsiako for private respondent. communal or mutual interests of the employees are not
SYNOPSIS sacrificed. Accordingly, the Court set aside the assailed order and
This is a Petition for Certiorari with prayer for the issuance of the order of the Med-Arbiter is reinstated.
preliminary injunction filed by petitioner San Miguel Corporation SYLLABUS
Supervisors and Exempt Union seeking to reverse and set aside the 1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR
Order of public respondent Undersecretary of the Department of RELATIONS; CONFIDENTIAL EMPLOYEES, DEFINED. — Confidential
Labor and Employment Bienvenido Laguesma excluding the employees are those who (1) assist or act in a confidential capacity,
employees under supervisory levels 3 and 4 and the so-called (2) to persons who formulate, determine, and effectuate
exempt employees from the proposed bargaining unit and ruled out management policies in the field of labor relations. The two criteria
their participation in the certification election. The questioned are cumulative, and both must be met if an employee is to be
order declared that Supervisory 3 and 4 and the so-called considered a confidential employee — that is, the confidential
exempt employees are confidential employees and therefore relationship must exist between the employee and his supervisor,
they are not allowed to form, join or assist a labor union for and the supervisor must handle the prescribed responsibilities
purposes of collective bargaining. Consequently, they are not relating to labor relations. SDTaHc
allowed to participate in the certification election. In the 2. ID.; ID.; ID.; "CONFIDENTIAL EMPLOYEE RULE"; CONSTRUED. —
instant case, petitioners posed the issue of whether or not The exclusion from bargaining units of employees who, in the
supervisory employees 3 and 4 and the exempt employees normal course of their duties, become aware of management
fall under the category of "confidential employees" and if policies relating to labor relations is a principal objective sought to
not, do the employees of the three plants constitute one be accomplished by the "confidential employee rule." The broad
single bargaining unit. rationale behind this rule is that employees should not be placed in
The Supreme Court ruled that petitioner employees do not fall a position involving a potential conflict of interests. "Management
within the term confidential employees who may be prohibited from should not be required to handle labor relations matters through
joining the union. In the case at bar, supervisors 3 and above may employees who are represented by the union with which the
not be considered confidential employees merely because company is required to deal and who in the normal performance of
they handle confidential data. They must first be strictly their duties may obtain advance information of the company's
classified as pertaining to labor relations for them to fall position with regard to contract negotiations, the disposition of
under said restrictions. Clearly, the informations they handle are grievances, or other labor relations matters." An important element
properly classifiable as technical and internal business operation of the "confidential employee rule" is the employee's need to use
data which has no relevance to negotiations and settlement of labor relations information. Thus, in determining the confidentiality
grievances wherein the interests of a union and the management of certain employees, a key question frequently considered is the
are invariably adversarial. Furthermore, even assuming that they employees' necessary access to confidential labor relations
are confidential employees, jurisprudence has established information. "Access to information which is regarded by the
employer to be confidential from the business standpoint, such as constituency of a collective bargaining unit. It is undisputed that
financial information or technical trade secrets, will not render an they all belong to the Magnolia Poultry Division of San Miguel
employee a confidential employee." As held in Westinghouse Corporation. This means that, although they belong to three
Electric Corporation v. National Labor Relations Board, [(CA6) 398 different plants, they perform work of the same nature, receive the
P2d 669 (1968)] "an employee may not be excluded from same wages and compensation, and most importantly, share a
appropriate bargaining unit merely because he has access to common stake in concerted activities. The fact that the three plants
confidential information concerning employer's internal business are located in three different places, namely, in Cabuyao, Laguna,
operations and which is not related to the field of labor relations." It in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is
must be borne in mind that Section 3 of Article XIII of the 1987 immaterial. Geographical location can be completely disregarded if
Constitution mandates the State to guarantee to "all" workers the the communal or mutual interests of the employees are not
right to self-organization. Hence, confidential employees who may sacrificed. The distance among the three plants is not productive of
be excluded from bargaining unit must be strictly defined so as not insurmountable difficulties in the administration of union affairs.
to needlessly deprive many employees of their right to bargain Neither are there regional differences that are likely to impede the
collectively through representatives of their choosing. operations of a single bargaining representative.
3. ID.; ID.; ID.; LABOR ORGANIZATION; INELIGIBILITY OF DECISION
MANAGERIAL EMPLOYEES TO JOIN THEREOF; NOT APPLICABLE IN ROMERO, J p:
CASE AT BAR. — There is no question that the employees of San This is a Petition for Certiorari with Prayer for the Issuance of
Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, Preliminary Injunction seeking to reverse and set aside the Order of
San Fernando and Otis, supervisors and exempt employees, are not public respondent, Undersecretary of the Department of Labor and
vested with the powers and prerogatives to lay down and execute Employment, Bienvenido E. Laguesma, dated March 11, 1993, in
management policies and/or to hire, transfer, suspend, layoff, Case No. OS MA A-2-70-91 1 entitled "In Re: Petition for
recall, discharge or dismiss employees. They are, therefore, not Certification Election Among the Supervisory and Exempt
qualified to be classified as managerial employees who, under Employees of the San Miguel Corporation Magnolia Poultry Products
Article 245 of the Labor Code, are not eligible to join, assist or form Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation
any labor organization. In the very same provision, they are not Supervisors and Exempt Union, Petitioner." The Order excluded the
allowed membership in a labor organization of the rank-and-file employees under supervisory levels 3 and 4 and the so-called
employees but may join, assist or form separate labor organizations exempt employees from the proposed bargaining unit and ruled out
of their own. their participation in the certification election. LexLib
4. ID.; ID.; ID.; APPROPRIATE BARGAINING UNIT; DEFINED. — An The antecedent facts are undisputed:
appropriate bargaining unit may be defined as "a group of On October 5, 1990, petitioner union filed before the
employees of a given employer, comprised of all or less than all of Department of Labor and Employment (DOLE) a Petition for
the entire body of employees, which the collective interest of all the Direct Certification or Certification Election among the
employees, consistent with equity to the employer, indicate to be supervisors and exempt employees of the SMC Magnolia
best suited to serve the reciprocal rights and duties of the parties Poultry Products Plants of Cabuyao, San Fernando and Otis.
under the collective bargaining provisions of the law." On December 19, 1990, Med-Arbiter Danilo L. Reynante issued
5. ID.; ID.; ID.; ID.; STANDARD IN DETERMINING PROPER an Order ordering the conduct of certification election
CONSTITUENCY THEREOF; PRESENT IN CASE AT BAR. — A unit to among the supervisors and exempt employees of the SMC
be appropriate must effect a grouping of employees who have Magnolia Poultry Products Plants of Cabuyao, San Fernando and
substantial, mutual interests in wages, hours, working conditions Otis as one bargaining unit.
and other subjects of collective bargaining. It is readily seen that On January 18, 1991, respondent San Miguel Corporation filed a
the employees in the instant case have "community or mutuality of Notice of Appeal with Memorandum on Appeal, pointing out,
interests," which is the standard in determining the proper among others, the Med-Arbiter's error in grouping together
all three (3) separate plants, Otis, Cabuyao and San 1. Whether Supervisory employees 3 and 4 and the exempt
Fernando, into one bargaining unit, and in including employees of the company are considered confidential employees,
supervisory levels 3 and above whose positions are hence ineligible from joining a union.
confidential in nature. 2. If they are not confidential employees, do the employees of the
three plants constitute an appropriate single bargaining unit.
On July 23, 1991, the public respondent, Undersecretary On the first issue, this Court rules that said employees do not
Laguesma, granted respondent company's Appeal and ordered the fall within the term "confidential employees" who may be
remand of the case to the Med-Arbiter of origin for prohibited from joining a union.
determination of the true classification of each of the There is no question that the said employees, supervisors and the
employees sought to be included in the appropriate exempt employees, are not vested with the powers and
bargaining unit. prerogatives to lay down and execute management policies
Upon petitioner-union's motion dated August 7, 1991, and/or to hire, transfer, suspend, layoff, recall, discharge or
Undersecretary Laguesma granted the reconsideration prayed for dismiss employees. They are, therefore, not qualified to be
on September 3, 1991 and directed the conduct of separate classified as managerial employees who, under Article 245 4 of the
certification elections among the supervisors ranked as Labor Code, are not eligible to join, assist or form any labor
supervisory levels 1 to 4 (S1 to S4) and the exempt organization. In the very same provision, they are not allowed
employees in each of the three plants at Cabuyao, San membership in a labor organization of the rank-and-file employees
Fernando and Otis. but may join, assist or form separate labor organizations of their
On September 21, 1991, respondent company, San Miguel own. The only question that need be addressed is whether these
Corporation filed a Motion for Reconsideration with Motion to employees are properly classified as confidential employees or not.
suspend proceedings. Confidential employees are those who (1) assist or act in a
On March 11, 1993, an Order was issued by the public respondent confidential capacity, (2) to persons who formulate,
granting the Motion, citing the doctrine enunciated in Philips determine, and effectuate management policies in the field
Industrial Development, Inc. v. NLRC 2 case. Said Order reads in of labor relations. 5 The two criteria are cumulative, and both
part: must be met if an employee is to be considered a confidential
". . . Confidential employees, like managerial employees, are not employee — that is, the confidential relationship must exist
allowed to form, join or assist a labor union for purposes of between the employee and his supervisor, and the supervisor must
collective bargaining. handle the prescribed responsibilities relating to labor relations. 6
In this case, S3 and S4 Supervisors and the so-called exempt The exclusion from bargaining units of employees who, in the
employees are admittedly confidential employees and normal course of their duties, become aware of management
therefore, they are not allowed to form, join or assist a labor policies relating to labor relations is a principal objective sought to
union for purposes of collective bargaining following the be accomplished by the "confidential employee rule." The broad
above court's ruling. Consequently, they are not allowed to rationale behind this rule is that employees should not be placed in
participate in the certification election. a position involving a potential conflict of interests. 7 "Management
WHEREFORE, the Motion is hereby granted and the Decision of this should not be required to handle labor relations matters through
Office dated 03 September 1991 is hereby modified to the extent employees who are represented by the union with which the
that employees under supervisory levels 3 and 4 (S3 and S4) and company is required to deal and who in the normal performance of
the so-called exempt employees are not allowed to join the their duties may obtain advance information of the company's
proposed bargaining unit and are therefore excluded from those position with regard to contract negotiations, the disposition of
who could participate in the certification election." 3 grievances, or other labor relations matters." 8
Hence this petition. There have been ample precedents in this regard, thus in Bulletin
For resolution in this case are the following issues: Publishing Company v. Hon. Augusto Sanchez, 9 the Court held
that "if these managerial employees would belong to or be to the companies with which the union deals, or which the
affiliated with a Union, the latter might not be assured of association represents, will not cause an employee to be excluded
their loyalty to the Union in view of evident conflict of from the bargaining unit representing employees of the union or
interest. The Union can also become company-dominated association." 17 "Access to information which is regarded by
with the presence of managerial employees in Union the employer to be confidential from the business
membership." The same rationale was applied to confidential standpoint, such as financial information 18 or technical
employees in "Golden Farms, Inc. v. Ferrer-Calleja" 10 and in the trade secrets, will not render an employee a confidential
more recent case of "Philips Industrial Development, Inc. v. NLRC " employee." 19
11 which held that confidential employees, by the very nature of
their functions, assist and act in a confidential capacity to, or have Herein listed are the functions of supervisors 3 and higher:
access to confidential matters of, person who exercise managerial 1. To undertake decisions to discontinue/temporarily stop shift
functions in the field of labor relations. Therefore, the rationale operations when situations require.
behind the ineligibility of managerial employees to form, assist or 2. To effectively oversee the quality control function at the
join a labor union was held equally applicable to them. 12 processing lines in the storage of chicken and other products.
An important element of the "confidential employee rule" is 3. To administer efficient system of evaluation of products in the
the employee's need to use labor relations information. Thus, outlets.
in determining the confidentiality of certain employees, a key 4. To be directly responsible for the recall, holding and rejection of
question frequently considered is the employees' necessary access direct manufacturing materials.
to confidential labor relations information. 13 5. To recommend and initiate actions in the maintenance of
It is the contention of respondent corporation that sanitation and hygiene throughout the plant. 20
Supervisory employees 3 and 4 and the exempt employees It is evident that whatever confidential data the questioned
come within the meaning of the term "confidential employees may handle will have to relate to their functions. From
employees" primarily because they answered in the the foregoing functions, it can be gleaned that the confidential
affirmative when asked "Do you handle confidential data or information said employees have access to concern the
documents?" in the Position Questionnaires submitted by the employer's internal business operations. As held in
Union. 14 In the same questionnaire, however, it was also stated Westinghouse Electric Corporation v. National Labor Relations
that the confidential information handled by questioned employees Board, 21 "an employee may not be excluded from
relate to product formulation, product standards and appropriate bargaining unit merely because he has access to
product specification which by no means relate to "labor confidential information concerning employer's internal
relations." 15 business operations and which is not related to the field of
Granting arguendo that an employee has access to confidential labor relations." cdrep
labor relations information but such is merely incidental to his It must be borne in mind that Section 3 of Article XIII of the 1987
duties and knowledge thereof is not necessary in the Constitution mandates the State to guarantee to "all" workers the
performance of such duties, said access does not render the right to self-organization. Hence, confidential employees who
employee a confidential employee. 16 "If access to confidential may be excluded from bargaining unit must be strictly
labor relations information is to be a factor in the determination of defined so as not to needlessly deprive many employees of
an employee's confidential status, such information must relate to their right to bargain collectively through representatives of
the employer's labor relations policies. Thus, an employee of a their choosing. 22
labor union, or of a management association, must have access to In the case at bar, supervisors 3 and above may not be
confidential labor relations information with respect to his employer, considered confidential employees merely because they
the union, or the association, to be regarded a confidential handle "confidential data" as such must first be strictly
employee, and knowledge of labor relations information pertaining classified as pertaining to labor relations for them to fall
under said restrictions. The information they handle are properly wages and compensation, and most importantly, share a
classifiable as technical and internal business operations data common stake in concerted activities.
which, to our mind, has no relevance to negotiations and In light of these considerations, the Solicitor General has opined
settlement of grievances wherein the interests of a union that separate bargaining units in the three different plants of
and the management are invariably adversarial. Since the the division will fragmentize the employees of the said
employees are not classifiable under the confidential type, this division, thus greatly diminishing their bargaining leverage.
Court rules that they may appropriately form a bargaining unit Any concerted activity held against the private respondent for a
for purposes of collective bargaining. Furthermore, even labor grievance in one bargaining unit will, in all probability, not
assuming that they are confidential employees, create much impact on the operations of the private respondent.
jurisprudence has established that there is no legal The two other plants still in operation can well step up their
prohibition against confidential employees who are not production and make up for the slack caused by the bargaining unit
performing managerial functions to form and join a union. engaged in the concerted activity. This situation will clearly
23 frustrate the provisions of the Labor Code and the mandate of the
Constitution. 27
In this connection, the issue of whether the employees of San The fact that the three plants are located in three different places,
Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and
San Fernando, and Otis constitute a single bargaining unit needs to in San Fernando, Pampanga is immaterial. Geographical location
be threshed out. can be completely disregarded if the communal or mutual
It is the contention of the petitioner union that the creation interests of the employees are not sacrificed as demonstrated
of three (3) separate bargaining units, one each for Cabuyao, in UP v. Calleja-Ferrer where all non-academic rank and file
Otis and San Fernando as ruled by the respondent Undersecretary, employees of the University of the Philippines in Diliman, Quezon
is contrary to the one-company, one-union policy. It adds that City, Padre Faura, Manila, Los Baños, Laguna and the Visayas were
Supervisors level 1 to 4 and exempt employees of the three plants allowed to participate in a certification election. We rule that the
have a similarity or a community of interests. distance among the three plants is not productive of
This Court finds the contention of the petitioner meritorious. insurmountable difficulties in the administration of union
An appropriate bargaining unit may be defined as "a group affairs. Neither are there regional differences that are likely
of employees of a given employer, comprised of all or less to impede the operations of a single bargaining
than all of the entire body of employees, which the collective representative.
interest of all the employees, consistent with equity to the WHEREFORE, the assailed Order of March 11, 1993 is hereby SET
employer, indicate to be best suited to serve the reciprocal ASIDE and the Order of the Med-Arbiter on December 19, 1990 is
rights and duties of the parties under the collective REINSTATED under which a certification election among the
bargaining provisions of the law." 24 supervisors (level 1 to 4) and exempt employees of the San Miguel
A unit to be appropriate must effect a grouping of employees who Corporation Magnolia Poultry Products Plants of Cabuyao, San
have substantial, mutual interests in wages, hours, working Fernando, and Otis as one bargaining unit is ordered conducted.
conditions and other subjects of collective bargaining. 25 cdphil
It is readily seen that the employees in the instant case have SO ORDERED.
"community or mutuality of interests," which is the standard Regalado, Puno, Mendoza and Torres, Jr., JJ ., concur.

in determining the proper constituency of a collective
bargaining unit. 26 It is undisputed that they all belong to the
Magnolia Poultry Division of San Miguel Corporation. This
means that, although they belong to three different plants,
they perform work of the same nature, receive the same
THIRD DIVISION Resolution dated January 26, 2004, 6 the CA dismissed their
[G.R. No. 161933. April 22, 2008.] petition and affirmed the Secretary's Orders.
STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEU- Hence, herein petition based on the following grounds:
NUBE), petitioner, vs. STANDARD CHARTERED BANK and I.
ANNEMARIE DURBIN, in her capacity as Chief Executive THE COURT A QUO ERRED IN DECIDING THAT THERE WAS NO
Officer, Philippines, Standard Chartered Bank, respondents. BASIS FOR REVISING THE SCOPE OF EXCLUSIONS FROM THE
DECISION APPROPRIATE BARGAINING UNIT UNDER THE CBA.
AUSTRIA-MARTINEZ, J p: II.
For resolution is an appeal by certiorari filed by petitioner under THE COURT A QUO ERRED IN DECIDING THAT A ONE-MONTH OR
Rule 45 of the Rules of Court, assailing the Decision 1 dated LESS TEMPORARY OCCUPATION OF A POSITION (ACTING
October 9, 2002 and Resolution 2 dated January 26, 2004 issued CAPACITY) DOES NOT MERIT ADJUSTMENT IN REMUNERATION. 7
by the Court of Appeals (CA), dismissing their petition and affirming The resolution of this case has been overtaken by the
the Secretary of Labor and Employment's Orders dated May 31, execution of the parties' 2003-2005 CBA. While this would
2001 and August 30, 2001. render the case moot and academic, nevertheless, the
Petitioner and the Standard Chartered Bank (Bank) began likelihood that the same issues will come up in the parties'
negotiating for a new Collective Bargaining Agreement future CBA negotiations is not far-fetched, thus compelling
(CBA) in May 2000 as their 1998-2000 CBA already expired. Due its resolution. Courts will decide a question otherwise moot if it is
to a deadlock in the negotiations, petitioner filed a Notice of capable of repetition yet evading review. 8
Strike prompting the Secretary of Labor and Employment to The CBA provisions in dispute are the exclusion of certain
assume jurisdiction over the labor dispute. employees from the appropriate bargaining unit and the adjustment
On May 31, 2001, Secretary Patricia A. Sto. Tomas of the of remuneration for employees serving in an acting capacity for one
Department of Labor and Employment (DOLE) issued an Order with month.
the following dispositive portion: In their proposal, petitioner sought the exclusion of only the
WHEREFORE, PREMISES CONSIDERED, the Standard Chartered following employees from the appropriate bargaining unit — all
Bank and the Standard Chartered Bank Employees Union are managers who are vested with the right to hire and fire employees,
directed to execute their collective bargaining agreement confidential employees, those with access to labor relations
effective 01 April 2001 until 30 March 2003 incorporating therein materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex
the foregoing dispositions and the agreements they reached Department and one Human Resources (HR) staff. 9
in the course of negotiations and conciliation. All other In the previous 1998-2000 CBA, 10 the excluded employees
submitted issues that were not passed upon are dismissed. are as follows:
The charge of unfair labor practice for bargaining in bad faith A. All covenanted and assistant officers (now called National
and the claim for damages relating thereto are hereby Officers)
dismissed for lack of merit. B. One confidential secretary of each of the:
Finally, the charge of unfair labor practice for gross violation 1. Chief Executive, Philippine Branches
of the economic provisions of the CBA is hereby dismissed 2. Deputy Chief Executive/Head, Corporate Banking Group
for want of jurisdiction. 3. Head, Finance
SO ORDERED. 3 4. Head, Human Resources
Both petitioner and the Bank filed their respective motions for 5. Manager, Cebu
reconsideration, which were denied by the Secretary per Order 6. Manager, Iloilo
dated August 30, 2001. 4 7. Covenanted Officers provided said positions shall be filled by new
Petitioner sought recourse with the CA via a petition for certiorari, recruits.
and in the assailed Decision dated October 9, 2002 5 and
C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Department and HR staff are confidential employees, such that they
Iloilo, and in any other branch that the BANK may establish in the should be excluded.
country. As regards the qualification of bank cashiers as confidential
D. Personnel of the Telex Department employees, National Association of Trade Unions (NATU) — Republic
E. All Security Guards Planters Bank Supervisors Chapter v. Torres 16 declared that they
F. Probationary employees, without prejudice to Article 277 (c) of are confidential employees having control, custody and/or access to
the Labor Code, as amended by R.A. 6715, casuals or emergency confidential matters, e.g., the branch's cash position, statements of
employees; and financial condition, vault combination, cash codes for telegraphic
G. One (1) HR Staff 11 transfers, demand drafts and other negotiable instruments,
The Secretary, however, maintained the previous exclusions pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint
because petitioner failed to show that the employees sought custody, and therefore, disqualified from joining or assisting a
to be removed from the list qualify for exclusion. 12 union; or joining, assisting or forming any other labor organization.
With regard to the remuneration of employees working in an acting 17
capacity, it was petitioner's position that additional pay should be Golden Farms, Inc. v. Ferrer-Calleja 18 meanwhile stated that
given to an employee who has been serving in a temporary/acting "confidential employees such as accounting personnel, radio and
capacity for one week. The Secretary likewise rejected petitioner's telegraph operators who, having access to confidential
proposal and instead, allowed additional pay for those who had information, may become the source of undue advantage. Said
been working in such capacity for one month. The Secretary agreed employee(s) may act as spy or spies of either party to a collective
with the Bank's position that a restrictive provision would curtail bargaining agreement". 19
management's prerogative, and at the same time, recognized that Finally, in Philips Industrial Development, Inc. v. National Labor
employees should not be made to work in an acting capacity for Relations Commission, 20 the Court designated personnel staff,
long periods of time without adequate compensation. in which human resources staff may be qualified, as confidential
The Secretary's disposition of the issues raised by petitioner were employees because by the very nature of their functions, they
affirmed by the CA. 13 The Court sustains the CA. assist and act in a confidential capacity to, or have access to
Whether or not the employees sought to be excluded from the confidential matters of, persons who exercise managerial functions
appropriate bargaining unit are confidential employees is a question in the field of labor relations.
of fact, which is not a proper issue in a petition for review under Petitioner insists that the foregoing employees are not confidential
Rule 45 of the Rules of Court. 14 This holds more true in the employees; however, it failed to buttress its claim. Aside from its
present case in which petitioner failed to controvert with evidence generalized arguments, and despite the Secretary's finding that
the findings of the Secretary and the CA. there was no evidence to support it, petitioner still failed to
The disqualification of managerial and confidential employees from substantiate its claim. Petitioner did not even bother to state the
joining a bargaining unit for rank and file employees is already well- nature of the duties and functions of these employees, depriving
entrenched in jurisprudence. While Article 245 of the Labor Code the Court of any basis on which it may be concluded that they are
limits the ineligibility to join, form and assist any labor organization indeed confidential employees. As aptly stated by the CA:
to managerial employees, jurisprudence has extended this While We agree that petitioner's proposed revision is in accordance
prohibition to confidential employees or those who by reason of with the law, this does not necessarily mean that the list of
their positions or nature of work are required to assist or act in a exclusions enumerated in the 1998-2000 CBA is contrary to law. As
fiduciary manner to managerial employees and hence, are likewise found by public respondent, petitioner failed to show that the
privy to sensitive and highly confidential records. 15 employees sought to be removed from the list of exclusions are
In this case, the question that needs to be answered is whether the actually rank and file employees who are not managerial or
Bank's Chief Cashiers and Assistant Cashiers, personnel of the Telex confidential in status and should, accordingly, be included in the
appropriate bargaining unit.
Absent any proof that Chief Cashiers and Assistant Cashiers, Secretary) and the appellate court on the matter coincide, as in this
personnel of the Telex department and one (1) HR Staff have case at bar. The Rule limits that function of the Court to the review
mutuality of interest with the other rank and file employees, then or revision of errors of law and not to a second analysis of the
they are rightfully excluded from the appropriate bargaining unit. . . evidence. . . . Thus, absent any showing of whimsical or capricious
. 21 (Emphasis supplied) exercise of judgment, and unless lack of any basis for the
Petitioner cannot simply rely on jurisprudence without explaining conclusions made by the appellate court be amply demonstrated,
how and why it should apply to this case. Allegations must be we may not disturb such factual findings. 23
supported by evidence. In this case, there is barely any at all. WHEREFORE, the petition is DENIED.
There is likewise no reason for the Court to disturb the conclusion SO ORDERED.
of the Secretary and the CA that the additional remuneration Ynares-Santiago, Chico-Nazario, Nachura and Reyes, JJ., concur.
should be given to employees placed in an acting capacity for one
month. The CA correctly stated:
Likewise, We uphold the public respondent's Order that no
employee should be temporarily placed in a position (acting
capacity) for more than one month without the corresponding
adjustment in the salary. Such order of the public respondent is not
in violation of the "equal pay for equal work" principle, considering
that after one (1) month, the employee performing the job in an
acting capacity will be entitled to salary corresponding to such
position.

xxx xxx xxx


In arriving at its Order, the public respondent took all the relevant
evidence into account and weighed both parties arguments
extensively. Thus, public respondent concluded that a restrictive
provision with respect to employees being placed in an acting
capacity may curtail management's valid exercise of its prerogative.
At the same time, it recognized that employees should not be made
to perform work in an acting capacity for extended periods of time
without being adequately compensated. . . . 22
Thus, the Court reiterates the doctrine that:
[T]he office of a petition for review on certiorari under Rule 45 of
the Rules of Court requires that it shall raise only questions of law.
The factual findings by quasi-judicial agencies, such as the
Department of Labor and Employment, when supported by
substantial evidence, are entitled to great respect in view of their
expertise in their respective fields. Judicial review of labor cases
does not go so far as to evaluate the sufficiency of evidence on
which the labor official's findings rest. It is not our function to
assess and evaluate all over again the evidence, testimonial and
documentary, adduced by the parties to an appeal, particularly
where the findings of both the trial court (here, the DOLE
THIRD DIVISION Viewed in the light of all the foregoing, this Office finds the
[G.R. No. 157117. November 20, 2006.] simultaneous filing of the instant petitions to be invalid and
COASTAL SUBIC BAY TERMINAL, INC., petitioner, vs. unwarranted. Consequently, this Office has no recourse but to
DEPARTMENT OF LABOR and EMPLOYMENT — OFFICE OF THE dismiss both petitions without prejudice to the refiling of either.
SECRETARY, COASTAL SUBIC BAY TERMINAL, INC. cEDaTS
SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY WHEREFORE, PREMISES CONSIDERED, let the instant petitions be,
TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP, as they are hereby DISMISSED.
respondents. SO ORDERED. 5
DECISION Both parties appealed to the Secretary of Labor and
QUISUMBING, J p: Employment, who reversed the decision of the Med-Arbiter.
For review on certiorari is the Court of Appeals' Decision 1 dated The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-
August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution 2 SU and CSBTI-RFU have separate legal personalities to file
dated February 5, 2003, denying petitioner's motion for their separate petitions for certification election. The
reconsideration. The Court of Appeals had affirmed the Decision 3 Secretary held that APSOTEU is a legitimate labor organization
dated March 15, 1999 of the Secretary of the Department of Labor because it was properly registered pursuant to the 1989 Revised
and Employment (DOLE) reversing the Mediator Arbiter's dismissal Rules and Regulations implementing Republic Act No. 6715, the
of private respondents' petitions for certification election. rule applicable at the time of its registration. It further ruled that
The facts are as follows: ALU and APSOTEU are separate and distinct labor unions having
On July 8, 1998, private respondents Coastal Subic Bay Terminal, separate certificates of registration from the DOLE. They also have
Inc. Rank-and-File Union (CSBTI-RFU) and Coastal Subic Bay different sets of locals. The Secretary declared CSBTI-RFU and
Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate CSBTI-SU as legitimate labor organizations having been chartered
petitions for certification election before Med-Arbiter Eladio respectively by ALU and APSOTEU after submitting all the
de Jesus of the Regional Office No. III. The rank-and-file union requirements with the Bureau of Labor Relations (BLR).
insists that it is a legitimate labor organization having been issued a Accordingly, the Secretary ordered the holding of separate
charter certificate by the Associated Labor Union (ALU), and the certification election, viz:
supervisory union by the Associated Professional, Supervisory, WHEREFORE, the decision of the Med-Arbiter, Regional Office No.
Office and Technical Employees Union (APSOTEU). Private III is hereby REVERSED. Let separate certification elections be
respondents also alleged that the establishment in which conducted immediately among the appropriate employees of
they sought to operate was unorganized. CSBTI, after the usual pre-election conference, with the following
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both choices:
petitions for certification election alleging that the rank-and- I. For all rank and file employees of CSBTI:
file union and supervisory union were not legitimate labor 1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-
organizations, and that the proposed bargaining units were ALU-TUCP; and
not particularly described. 2. NO UNION.
Without ruling on the legitimacy of the respondent unions, the Med- II. For all supervisory employees of CSBTI:
Arbiter dismissed, without prejudice to refiling, both petitions which 1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES
had been consolidated. The Med-Arbiter held that the ALU and UNION-APSOTEU; and
APSOTEU are one and the same federation having a common 2. NO UNION.
set of officers. Thus, the supervisory and the rank-and-file The latest payroll of the employer, including its payrolls for the last
unions were in effect affiliated with only one federation. 4 three months immediately preceding the issuance of this decision,
The Med-Arbiter ruled as follows: shall be the basis for determining the qualified list of voters.
SO DECIDED. 6
The motion for reconsideration was also denied. 7 certificates of registration issued by the DOLE Regional Director
On appeal, the Court of Appeals affirmed the decision of the pursuant to the rules are questionable, and possibly even void ab
Secretary. 8 It held that there was no grave abuse of discretion on initio for being ultra vires; and that the Court of Appeals erred
the part of the Secretary; its findings are supported by evidence on when it ruled that the law applicable at the time of APSOTEU's
record; and thus should be accorded with respect and finality. 9 registration was the 1989 Revised Implementing Rules and
The motion for reconsideration was likewise denied. 10 Hence, the Regulations of Rep. Act No. 6715.
instant petition by the company anchored on the following grounds: Petitioner insists that APSOTEU lacks legal personality, and its
I chartered affiliate CSBTI-SU cannot attain the status of a legitimate
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE labor organization to file a petition for certification election. It relies
"1989 REVISED RULES AND REGULATIONS IMPLEMENTING RA on Villar v. Inciong, 13 where we held therein that Amigo
6715" AS BASIS TO RECOGNIZE PRIVATE RESPONDENT APSOTEU'S Employees Union was not a duly registered independent union
REGISTRATION BY THE DOLE REGIONAL DIRECTOR. CaDSHE absent any record of its registration with the Bureau.
II Pertinent is Article 235 14 of the Labor Code which provides that
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED applications for registration shall be acted upon by the Bureau.
PUBLIC RESPONDENT'S APPLICATION OF THE PRINCIPLE OF STARE "Bureau" as defined under the Labor Code means the BLR and/or
DECISIS TO HASTILY DISPOSE OF THE LEGAL PERSONALITY ISSUE the Labor Relations Division in the Regional Offices of the
OF APSOTEU. Department of Labor. 15 Further, Section 2, Rule II, Book V of the
III 1989 Revised Implementing Rules of the Labor Code (Implementing
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD Rules) provides that:
WITH LAW AND JURISPRUDENCE WHEN IT AFFIRMED PUBLIC Section 2. Where to file application; procedure — Any national labor
RESPONDENT'S APPLICATION OF THE "UNION AUTONOMY" organization or labor federation or local union may file an
THEORY. application for registration with the Bureau or the Regional Office
IV where the applicant's principal offices is located. The Bureau or the
IN AFFIRMING PUBLIC RESPONDENT'S FINDING THAT PRIVATE Regional Office shall immediately process and approve or deny the
RESPONDENTS ARE "SEPARATE FEDERATIONS," THE HONORABLE application. In case of approval, the Bureau or the Regional Office
COURT OF APPEALS: shall issue the registration certificate within thirty (30) calendar
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING days from receipt of the application, together with all the
NATURE OF A MED-ARBITER'S FACTUAL FINDINGS; AND requirements for registration as hereinafter provided. 16
(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL The Implementing Rules specifically Section 1, Rule III of Book V,
COMMINGLING." 11 as amended by Department Order No. 9, thus:
Plainly, the issues are (1) Can the supervisory and the rank- SECTION 1. Where to file applications. — The application for
and-file unions file separate petitions for certification registration of any federation, national or industry union or trade
election?; (2) Was the Secretary's decision based on stare decisis union center shall be filed with the Bureau. Where the application is
correct?; and (3) Were private respondents engaged in filed with the Regional Office, the same shall be immediately
commingling? forwarded to the Bureau within forty-eight (48) hours from filing
The issue on the status of the supervisory union CSBTI-SU depends thereof, together with all the documents supporting the
on the status of APSOTEU, its mother federation. registration. SDAcaT
Petitioner argues that APSOTEU improperly secured its registration The applications for registration of an independent union shall be
from the DOLE Regional Director and not from the BLR; that it is filed with and acted upon by the Regional Office where the
the BLR that is authorized to process applications and issue applicant's principal office is located . . . .
certificates of registration in accordance with our ruling in Phil. xxx xxx xxx
Association of Free Labor Unions v. Secretary of Labor; 12 that the
The DOLE issued Department Order No. 40-03, which took effect on The petitioner contends that applying by analogy, the doctrine of
March 15, 2003, further amending Book V of the above piercing the veil of corporate fiction, APSOTEU and ALU are the
implementing rules. The new implementing rules explicitly provide same federation. Private respondents disagree. EIcSDC
that applications for registration of labor organizations shall be filed First, as earlier discoursed, once a labor union attains the status of
either with the Regional Office or with the BLR. 17 a legitimate labor organization, it continues as such until its
Even after the amendments, the rules did not divest the Regional certificate of registration is cancelled or revoked in an independent
Office and the BLR of their jurisdiction over applications for action for cancellation. 23 In addition, the legal personality of a
registration by labor organizations. The amendments to the labor organization cannot be collaterally attacked. 24 Thus, when
implementing rules merely specified that when the application was the personality of the labor organization is questioned in the same
filed with the Regional Office, the application would be acted upon manner the veil of corporate fiction is pierced, the action partakes
by the BLR. the nature of a collateral attack. Hence, in the absence of any
The records in this case showed that APSOTEU was registered on independent action for cancellation of registration against either
March 1, 1991. Accordingly, the law applicable at that time was APSOTEU or ALU, and unless and until their registrations are
Section 2, Rule II, Book V of the Implementing Rules, and not cancelled, each continues to possess a separate legal personality.
Department Order No. 9 which took effect only on June 21, 1997. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct
Thus, considering further that APSOTEU's principal office is located and separate federations, despite the commonalities of APSOTEU
in Diliman, Quezon City, and its registration was filed with the NCR and ALU.
Regional Office, the certificate of registration is valid. Under the rules implementing the Labor Code, a chartered local
The petitioner misapplied Villar v. Inciong. 18 In said case, there union acquires legal personality through the charter certificate
was no record in the BLR that Amigo Employees Union was issued by a duly registered federation or national union, and
registered. 19 reported to the Regional Office in accordance with the rules
implementing the Labor Code. 25 A local union does not owe its
Did the Court of Appeals err in its application of stare decisis when existence to the federation with which it is affiliated. It is a separate
it upheld the Secretary's ruling that APSOTEU is a legitimate labor and distinct voluntary association owing its creation to the will of its
organization and its personality cannot be assailed unless in an members. Mere affiliation does not divest the local union of its own
independent action for cancellation of registration certificate? 20 personality, neither does it give the mother federation the license to
We think not. act independently of the local union. It only gives rise to a contract
Section 5, Rule V, Book V of the Implementing Rules states: of agency, where the former acts in representation of the latter. 26
Section 5. Effect of registration — The labor organization or Hence, local unions are considered principals while the federation is
workers' association shall be deemed registered and vested with deemed to be merely their agent. 27 As such principals, the unions
legal personality on the date of issuance of its certificate of are entitled to exercise the rights and privileges of a legitimate
registration. Such legal personality cannot thereafter be subject to labor organization, including the right to seek certification as the
collateral attack, but maybe questioned only in an independent sole and exclusive bargaining agent in the appropriate employer
petition for cancellation in accordance with these Rules. 21 unit.
Thus, APSOTEU is a legitimate labor organization and has authority A word of caution though, under Article 245 of the Labor Code, 28
to issue charter to its affiliates. 22 It may issue a local charter supervisory employees are not eligible for membership in a labor
certificate to CSBTI-SU and correspondingly, CSBTI-SU is union of rank-and-file employees. The supervisory employees are
legitimate. allowed to form their own union but they are not allowed to join the
Are ALU, a rank-and-file union and APSOTEU, a supervisory union rank-and-file union because of potential conflicts of interest. 29
one and the same because of the commonalities between them? Further, to avoid a situation where supervisors would merge with
Are they commingled? the rank-and-file or where the supervisors' labor union would
represent conflicting interests, a local supervisors' union should not
be allowed to affiliate with the national federation of unions of rank-
and-file employees where that federation actively participates in the
union activity within the company. 30 Thus, the limitation is not
confined to a case of supervisors wanting to join a rank-and-file
union. The prohibition extends to a supervisors' local union applying
for membership in a national federation the members of which
include local unions of rank-and-file employees. 31 In De La Salle
University Medical Center and College of Medicine v. Laguesma, we
reiterated the rule that for the prohibition to apply, it is not enough
that the supervisory union and the rank-and-file union are affiliated
with a single federation. In addition, the supervisors must have
direct authority over the rank-and-file employees. 32
In the instant case, the national federations that exist as separate
entities to which the rank-and-file and supervisory unions are
separately affiliated with, do have a common set of officers. In
addition, APSOTEU, the supervisory federation, actively participates
in the CSBTI-SU while ALU, the rank-and-file federation, actively
participates in the CSBTI-RFU, giving occasion to possible conflicts
of interest among the common officers of the federation of rank-
and-file and the federation of supervisory unions. For as long as
they are affiliated with the APSOTEU and ALU, the supervisory and
rank-and-file unions both do not meet the criteria to attain the
status of legitimate labor organizations, and thus could not
separately petition for certification elections.
The purpose of affiliation of the local unions into a common
enterprise is to increase the collective bargaining power in respect
of the terms and conditions of labor. 33 When there is commingling
of officers of a rank-and-file union with a supervisory union, the
constitutional policy on labor is circumvented. Labor organizations
should ensure the freedom of employees to organize themselves for
the purpose of leveling the bargaining process but also to ensure
the freedom of workingmen and to keep open the corridor of
opportunity to enable them to do it for themselves. EIAScH
WHEREFORE, the petition is GRANTED. The Court of Appeals'
Decision dated August 31, 2001, in CA-G.R. SP No. 54128 and the
Resolution dated February 5, 2003 are SET ASIDE. The decision of
the Med-Arbiter is hereby AFFIRMED. SO ORDERED. 

THIRD DIVISION 6. Confidential and Executive Secretaries
[G.R. No. 162025. August 3, 2010.] 7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA 9. Probationary Employees
BREWERY, petitioner, vs. ASIA BREWERY, INC., respondent. 10. Security and Fire Brigade Personnel
DECISION 11. Monthly Employees
VILLARAMA, JR., J p: 12. Purchasing and Quality Control Staff 6 [EMPHASIS SUPPLIED.]
For resolution is an appeal by certiorari filed by petitioner under Subsequently, a dispute arose when ABI's management stopped
Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing deducting union dues from eighty-one (81) employees, believing
the Decision 1 dated November 22, 2002 and Resolution 2 dated that their membership in BLMA-INDEPENDENT violated the CBA.
January 28, 2004 rendered by the Court of Appeals (CA) in CA-G.R. Eighteen (18) of these affected employees are QA Sampling
SP No. 55578, granting the petition of respondent company and Inspectors/Inspectresses and Machine Gauge Technician who
reversing the Voluntary Arbitrator's Decision 3 dated October 14, formed part of the Quality Control Staff. Twenty (20) checkers are
1999. assigned at the Materials Department of the Administration
The facts are: Division, Full Goods Department of the Brewery Division and
Respondent Asia Brewery, Inc. (ABI) is engaged in the Packaging Division. The rest are secretaries/clerks directly under
manufacture, sale and distribution of beer, shandy, bottled water their respective division managers. 7
and glass products. ABI entered into a Collective Bargaining BLMA-INDEPENDENT claimed that ABI's actions restrained the
Agreement (CBA), 4 effective for five (5) years from August 1, employees' right to self-organization and brought the matter to the
1997 to July 31, 2002, with Bisig at Lakas ng mga Manggagawa sa grievance machinery. As the parties failed to amicably settle the
Asia-Independent (BLMA-INDEPENDENT), the exclusive bargaining controversy, BLMA-INDEPENDENT lodged a complaint before the
representative of ABI's rank-and-file employees. On October 3, National Conciliation and Mediation Board (NCMB). The parties
2000, ABI and BLMA-INDEPENDENT signed a renegotiated CBA eventually agreed to submit the case for arbitration to resolve the
effective from August 1, 2000 to 31 July 2003. 5 issue of "[w]hether or not there is restraint to employees in the
Article I of the CBA defined the scope of the bargaining unit, as exercise of their right to self-organization." 8
follows: In his Decision, Voluntary Arbitrator Bienvenido Devera sustained
Section 1. Recognition. — The COMPANY recognizes the UNION as the BLMA-INDEPENDENT after finding that the records submitted by
the sole and exclusive bargaining representative of all the regular ABI showed that the positions of the subject employees qualify
rank-and-file daily paid employees within the scope of the under the rank-and-file category because their functions are merely
appropriate bargaining unit with respect to rates of pay, hours of routinary and clerical. He noted that the positions occupied by the
work and other terms and conditions of employment. The UNION checkers and secretaries/clerks in the different divisions are not
shall not represent or accept for membership employees managerial or supervisory, as evident from the duties and
outside the scope of the bargaining unit herein defined. responsibilities assigned to them. With respect to QA Sampling
Section 2. Bargaining Unit. — The bargaining unit shall be Inspectors/Inspectresses and Machine Gauge Technician, he ruled
comprised of all regular rank-and-file daily-paid employees of the that ABI failed to establish with sufficient clarity their basic
COMPANY. However, the following jobs/positions as herein defined functions as to consider them Quality Control Staff who were
shall be excluded from the bargaining unit, to wit: ADCIca excluded from the coverage of the CBA. Accordingly, the subject
1. Managers employees were declared eligible for inclusion within the bargaining
2. Assistant Managers unit represented by BLMA-INDEPENDENT. 9
3. Section Heads On appeal, the CA reversed the Voluntary Arbitrator, ruling that:
4. Supervisors WHEREFORE, foregoing premises considered, the questioned
5. Superintendents decision of the Honorable Voluntary Arbitrator Bienvenido De Vera
is hereby REVERSED and SET ASIDE, and A NEW ONE ENTERED employees or those who by reason of their positions or nature of
DECLARING THAT: DHEACI work are required to assist or act in a fiduciary manner to
a) the 81 employees are excluded from and are not eligible for managerial employees and hence, are likewise privy to sensitive
inclusion in the bargaining unit as defined in Section 2, Article I of and highly confidential records. 14 Confidential employees are thus
the CBA; excluded from the rank-and-file bargaining unit. The rationale for
b) the 81 employees cannot validly become members of respondent their separate category and disqualification to join any labor
and/or if already members, that their membership is violative of organization is similar to the inhibition for managerial employees
the CBA and that they should disaffiliate from respondent; and because if allowed to be affiliated with a Union, the latter might not
c) petitioner has not committed any act that restrained or tended to be assured of their loyalty in view of evident conflict of interests
restrain its employees in the exercise of their right to self- and the Union can also become company-denominated with the
organization. presence of managerial employees in the Union membership. 15
NO COSTS. Having access to confidential information, confidential employees
SO ORDERED. 10 may also become the source of undue advantage. Said employees
BLMA-INDEPENDENT filed a motion for reconsideration. In the may act as a spy or spies of either party to a collective bargaining
meantime, a certification election was held on August 10, 2002 agreement. 16 AHDcCT
wherein petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia In Philips Industrial Development, Inc. v. NLRC, 17 this Court held
(TPMA) won. As the incumbent bargaining representative of ABI's that petitioner's "division secretaries, all Staff of General
rank-and-file employees claiming interest in the outcome of the Management, Personnel and Industrial Relations Department,
case, petitioner filed with the CA an omnibus motion for Secretaries of Audit, EDP and Financial Systems" are confidential
reconsideration of the decision and intervention, with attached employees not included within the rank-and-file bargaining unit. 18
petition signed by the union officers. 11 Both motions were denied Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-
by the CA. 12 Confesor, 19 we declared that legal secretaries who are tasked
The petition is anchored on the following grounds: with, among others, the typing of legal documents, memoranda
(1) and correspondence, the keeping of records and files, the giving of
THE COURT OF APPEALS ERRED IN RULING THAT THE 81 and receiving notices, and such other duties as required by the
EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR legal personnel of the corporation, fall under the category of
INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION 2, confidential employees and hence excluded from the bargaining
ARTICLE 1 OF THE CBA[;] unit composed of rank-and-file employees. 20
(2) Also considered having access to "vital labor information" are the
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81 executive secretaries of the General Manager and the executive
EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS, THAT secretaries of the Quality Assurance Manager, Product Development
THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT THEY Manager, Finance Director, Management System Manager, Human
SHOULD DISAFFILIATE FROM RESPONDENT; Resources Manager, Marketing Director, Engineering Manager,
(3) Materials Manager and Production Manager. 21
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT In the present case, the CBA expressly excluded "Confidential and
PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT COMMITTED Executive Secretaries" from the rank-and-file bargaining unit, for
ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN ITS which reason ABI seeks their disaffiliation from petitioner.
EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF- Petitioner, however, maintains that except for Daisy Laloon, Evelyn
ORGANIZATION. 13 Mabilangan and Lennie Saguan who had been promoted to monthly
Although Article 245 of the Labor Code limits the ineligibility to join, paid positions, the following secretaries/clerks are deemed included
form and assist any labor organization to managerial employees, among the rank-and-file employees of ABI: 22
jurisprudence has extended this prohibition to confidential
NAME Mr. Andres G. Co
DEPARTMENT 6.
IMMEDIATE SUPERIOR Briones, Catalina P.
Materials
C1 ADMIN DIVISION Mr. Andres G. Co
7.
Caralipio, Juanita P.
1. Materials
Angeles, Cristina C. Mr. Andres G. Co
Transportation 8.
Mr. Melito K. Tan Elmido, Ma. Rebecca S.
2. Materials
Barraquio, Carina P. Mr. Andres G. Co
Transportation 9.
Mr. Melito K. Tan Giron, Laura P.
3. Materials
Cabalo, Marivic B. Mr. Andres G. Co
Transportation 10.
Mr. Melito K. Tan Mane, Edna A.
4. Materials
Fameronag, Leodigario C. Mr. Andres G. Co
Transportation xxx xxx xxx
Mr. Melito K. Tan
1. C2 BREWERY DIVISION
Abalos, Andrea A.
Materials
Mr. Andres G. Co 1.
2. Laloon, Daisy S.
Algire, Juvy L. Brewhouse
Materials Mr. William Tan
Mr. Andres G. Co
3.
Anoñuevo, Shirley P.
Materials
Mr. Andres G. Co 1.
4. Arabit, Myrna F.
Aviso, Rosita S. Bottling Production
Materials Mr. Julius Palmares
Mr. Andres G. Co 2.
5. Burgos, Adelaida D.
Barachina, Pauline C. Bottling Production
Materials Mr. Julius Palmares
3.
Menil, Emmanuel S.
Bottling Production 1.
Mr. Julius Palmares Alcoran, Simeon A.
4. Full Goods
Nevalga, Marcelo G. Mr. Tsoi Wah Tung
Bottling Production 2.
Mr. Julius Palmares ACaDTH Cervantes, Ma. Sherley Y.
Full Goods
Mr. Tsoi Wah Tung
3.
Diongco, Ma. Teresa M.
1. Full Goods
Mapola, Ma. Esraliza T. Mr. Tsoi Wah Tung
Bottling Maintenance 4.
Mr. Ernesto Ang Mabilangan, Evelyn M.
2. Full Goods
Velez, Carmelito A. Mr. Tsoi Wah Tung
Bottling Maintenance 5.
Mr. Ernesto Ang Rivera, Aurora M.
Full Goods
Mr. Tsoi Wah Tung
6.
Salandanan, Nancy G.
1. Full Goods
Bordamonte, Rhumela D. Mr. Tsoi Wah Tung
Bottled Water
Mr. Faustino Tetonche
2.
Deauna, Edna R.
Bottled Water 1.
Mr. Faustino Tetonche Magbag, Ma. Corazon C.
3. Tank Farm/
Punongbayan, Marylou F. Mr. Manuel Yu Liat
Bottled Water
Mr. Faustino Tetonche
4. Cella Services
Saguan, Lennie Y.
Bottled Water 1.
Mr. Faustino Tetonche Capiroso, Francisca A.
Quality Assurance
Ms. Regina Mirasol
Castillo, Ma. Riza R.
GP Production
Mr. Tsai Chen Chih
5.
1. Lamadrid, Susana C.
Alconaba, Elvira C. GP Production
Engineering Mr. Robert Bautista
Mr. Clemente Wong 6.
2. Mendoza, Jennifer L.
Bustillo, Bernardita E. GP Technical
Electrical Mr. Mel Oña
Mr. Jorge Villarosa As can be gleaned from the above listing, it is rather curious that
3. there would be several secretaries/clerks for just one (1)
Catindig, Ruel A. department/division performing tasks which are mostly routine and
Civil Works clerical. Respondent insisted they fall under the "Confidential and
Mr. Roger Giron Executive Secretaries" expressly excluded by the CBA from the
4. rank-and-file bargaining unit. However, perusal of the job
Sison, Claudia B. descriptions of these secretaries/clerks reveals that their assigned
Utilities duties and responsibilities involve routine activities of recording and
Mr. Venancio Alconaba monitoring, and other paper works for their respective departments
xxx xxx xxx while secretarial tasks such as receiving telephone calls and filing of
office correspondence appear to have been commonly imposed as
C3 PACKAGING DIVISION additional duties. 23 Respondent failed to indicate who among
these numerous secretaries/clerks have access to confidential data
relating to management policies that could give rise to potential
conflict of interest with their Union membership. Clearly, the
rationale under our previous rulings for the exclusion of executive
secretaries or division secretaries would have little or no
significance considering the lack of or very limited access to
1. confidential information of these secretaries/clerks. It is not even
Alvarez, Ma. Luningning L. farfetched that the job category may exist only on paper since they
GP Administration are all daily-paid workers. Quite understandably, petitioner had
Ms. Susan Bella earlier expressed the view that the positions were just being
2. "reclassified" as these employees actually discharged routine
Cañiza, Alma A. functions. ASTIED
GP Technical We thus hold that the secretaries/clerks, numbering about forty
Mr. Chen Tsai Tyan (40), are rank-and-file employees and not confidential employees.
3. With respect to the Sampling Inspectors/Inspectresses and the
Cantalejo, Aida S. Gauge Machine Technician, there seems no dispute that they form
GP Engineering part of the Quality Control Staff who, under the express terms of
Mr. Noel Fernandez the CBA, fall under a distinct category. But we disagree with
4. respondent's contention that the twenty (20) checkers are similarly
confidential employees being "quality control staff" entrusted with Not being confidential employees, the secretaries/clerks and
the handling and custody of company properties and sensitive checkers are not disqualified from membership in the Union of
information. respondent's rank-and-file employees. Petitioner argues that
Again, the job descriptions of these checkers assigned in the respondent's act of unilaterally stopping the deduction of union
storeroom section of the Materials Department, finishing section of dues from these employees constitutes unfair labor practice as it
the Packaging Department, and the decorating and glass sections of "restrained" the workers' exercise of their right to self-organization,
the Production Department plainly showed that they perform as provided in Article 248 (a) of the Labor Code. AEcTaS
routine and mechanical tasks preparatory to the delivery of the Unfair labor practice refers to "acts that violate the workers' right to
finished products. 24 While it may be argued that quality control organize." The prohibited acts are related to the workers' right to
extends to post-production phase — proper packaging of the self organization and to the observance of a CBA. For a charge of
finished products — no evidence was presented by the respondent unfair labor practice to prosper, it must be shown that ABI was
to prove that these daily-paid checkers actually form part of the motivated by ill will, "bad faith, or fraud, or was oppressive to labor,
company's Quality Control Staff who as such "were exposed to or done in a manner contrary to morals, good customs, or public
sensitive, vital and confidential information about [company's] policy, and, of course, that social humiliation, wounded feelings or
products" or "have knowledge of mixtures of the products, their grave anxiety resulted . . ." 28 from ABI's act in discontinuing the
defects, and even their formulas" which are considered 'trade union dues deduction from those employees it believed were
secrets'. Such allegations of respondent must be supported by excluded by the CBA. Considering that the herein dispute arose
evidence. 25 from a simple disagreement in the interpretation of the CBA
Consequently, we hold that the twenty (20) checkers may not be provision on excluded employees from the bargaining unit,
considered confidential employees under the category of Quality respondent cannot be said to have committed unfair labor practice
Control Staff who were expressly excluded from the CBA of the that restrained its employees in the exercise of their right to self-
rank-and-file bargaining unit. organization, nor have thereby demonstrated an anti-union stance.
Confidential employees are defined as those who (1) assist or act in WHEREFORE, the petition is GRANTED. The Decision dated
a confidential capacity, (2) to persons who formulate, determine, November 22, 2002 and Resolution dated January 28, 2004 of the
and effectuate management policies in the field of labor relations. Court of Appeals in CA-G.R. SP No. 55578 are hereby REVERSED
The two (2) criteria are cumulative, and both must be met if an and SET ASIDE. The checkers and secretaries/clerks of
employee is to be considered a confidential employee — that is, the respondent company are hereby declared rank-and-file employees
confidential relationship must exist between the employee and his who are eligible to join the Union of the rank-and-file employees.
supervisor, and the supervisor must handle the prescribed No costs.
responsibilities relating to labor relations. The exclusion from SO ORDERED.
bargaining units of employees who, in the normal course of their Carpio Morales, Brion, Bersamin and Abad, * JJ., concur.
duties, become aware of management policies relating to labor 

relations is a principal objective sought to be accomplished by the
"confidential employee rule." 26 There is no showing in this case
that the secretaries/clerks and checkers assisted or acted in a
confidential capacity to managerial employees and obtained
confidential information relating to labor relations policies. And
even assuming that they had exposure to internal business
operations of the company, respondent claimed, this is not per se
ground for their exclusion in the bargaining unit of the daily-paid
rank-and-file employees. 27
THIRD DIVISION On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued
SAN MIGUEL FOODS, INCORPORATED v. SAN MIGUEL an Order[5] directing Election Officer Cynthia Tolentino to proceed
CORPORATION SUPERVISORS and EXEMPT UNION, with the conduct of certification election in accordance with Section
Respondent. 2, Rule XII of Department Order No. 9.
G.R. No. 146206
DECISION On September 30, 1998, a certification election was conducted and
PERALTA, J.: it yielded the following results,[6] thus:
The issues in the present case, relating to the inclusion of
employees in supervisor levels 3 and 4 and the exempt employees Cabuyao San Fernando Total
in the proposed bargaining unit, thereby allowing their participation Plant Plant
in the certification election; the application of the community or Yes 23 23 46
mutuality of interests test; and the determination of the employees No 0 0 0
who belong to the category of confidential employees, are not Spoiled 2 0 2
novel. Segregated 41 35 76
In G.R. No. 110399, entitled San Miguel Corporation Supervisors Total Votes
and Exempt Union v. Laguesma,[1] the Court held that even if they Cast 66 58 124
handle confidential data regarding technical and internal business
operations, supervisory employees 3 and 4 and the exempt
employees of petitioner San Miguel Foods, Inc. (SMFI) are not to be On the date of the election, September 30, 1998, petitioner filed
considered confidential employees, because the same do not the Omnibus Objections and Challenge to Voters,[7] questioning the
pertain to labor relations, particularly, negotiation and settlement of eligibility to vote by some of its employees on the grounds that
grievances. Consequently, they were allowed to form an some employees do not belong to the bargaining unit which
appropriate bargaining unit for the purpose of collective bargaining. respondent seeks to represent or that there is no existence of
The Court also declared that the employees belonging to the three employer-employee relationship with petitioner. Specifically, it
different plants of San Miguel Corporation Magnolia Poultry Products argued that certain employees should not be allowed to vote as
Plants in Cabuyao, San Fernando, and Otis, having community or they are: (1) confidential employees; (2) employees assigned to
mutuality of interests, constitute a single bargaining unit. They the live chicken operations, which are not covered by the
perform work of the same nature, receive the same wages and bargaining unit; (3) employees whose job grade is level 4, but are
compensation, and most importantly, share a common stake in performing managerial work and scheduled to be promoted; (4)
concerted activities. It was immaterial that the three plants have employees who belong to the Barrio Ugong plant; (5) non-SMFI
different locations as they did not impede the operations of a single employees; and (6) employees who are members of other unions.
bargaining representative.[2]
On October 21, 1998, the Med-Arbiter issued an Order directing
Pursuant to the Court's decision in G.R. No. 110399, the respondent to submit proof showing that the employees in the
Department of Labor and Employment National Capital Region submitted list are covered by the original petition for certification
(DOLE-NCR) conducted pre-election conferences.[3] However, there election and belong to the bargaining unit it seeks to represent and,
was a discrepancy in the list of eligible voters, i.e., petitioner likewise, directing petitioner to substantiate the allegations
submitted a list of 23 employees for the San Fernando plant and 33 contained in its Omnibus Objections and Challenge to Voters.[8]
for the Cabuyao plant, while respondent listed 60 and 82,
respectively.[4] In compliance thereto, respondent averred that (1) the bargaining
unit contemplated in the original petition is the Poultry Division of
San Miguel Corporation, now known as San Miguel Foods, Inc.; (2)
it covered the operations in Calamba, Laguna, Cavite, and Batangas
and its home base is either in Cabuyao, Laguna or San Fernando, In the Decision[17] dated April 28, 2000, in CA-G.R. SP No. 55510,
Pampanga; and (3) it submitted individual and separate entitled San Miguel Foods, Inc. v. The Honorable Office of the
declarations of the employees whose votes were challenged in the Secretary of Labor, Bureau of Labor Relations, and San Miguel
election.[9] Corporation Supervisors and Exempt Union, the Court of Appeals
(CA) affirmed with modification the Resolution dated July 30, 1999
Adding the results to the number of votes canvassed during the of the DOLE Undersecretary, stating that those holding the
September 30, 1998 certification election, the final tally showed positions of Human Resource Assistant and Personnel Assistant are
that: number of eligible voters 149; number of valid votes cast excluded from the bargaining unit.
121; number of spoiled ballots - 3; total number of votes cast 124, Petitioners Motion for Partial Reconsideration[18] dated May 23,
with 118 (i.e., 46 + 72 = 118 ) Yes votes and 3 No votes.[10] 2000 was denied by the CA in the Resolution[19] dated November
28, 2000.
The Med-Arbiter issued the Resolution[11] dated February 17, 1999
directing the parties to appear before the Election Officer of the Hence, petitioner filed this present petition raising the following
Labor Relations Division on March 9, 1999, 10:00 a.m., for the issues:
opening of the segregated ballots. Thereafter, on April 12, 1999,
the segregated ballots were opened, showing that out of the 76 I.
segregated WHETHER THE COURT OF APPEALS DEPARTED FROM
votes, 72 were cast for Yes and 3 for No, with one spoiled ballot.[12] JURISPRUDENCE WHEN IT EXPANDED THE SCOPE OF THE
BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R. NO.
Based on the results, the Med-Arbiter issued the Order[13] dated 110399.
April 13, 1999, stating that since the Yes vote received 97% of the
valid votes cast, respondent is certified to be the exclusive II.
bargaining agent of the supervisors and exempt employees of WHETHER THE COURT OF APPEALS DEPARTED FROM
petitioner's Magnolia Poultry Products Plants in Cabuyao, San JURISPRUDENCE - SPECIFICALLY, THIS COURT'S DEFINITION OF A
Fernando, and Otis. CONFIDENTIAL EMPLOYEE - WHEN IT RULED FOR THE INCLUSION
OF THE PAYROLL MASTER POSITION IN THE BARGAINING UNIT.
On appeal, the then Acting DOLE Undersecretary, in the
Resolution[14] dated July 30, 1999, in OS-A-2-70-91 (NCR-OD-
M-9010-017), affirmed the Order dated April 13, 1999, with III.
modification that George C. Matias, Alma Maria M. Lozano, WHETHER THIS PETITION IS A REHASH OR A RESURRECTION OF
Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from THE ISSUES RAISED IN G.R. NO. 110399, AS ARGUED BY PRIVATE
the bargaining unit which respondent seeks to represent. She RESPONDENT.
opined that the challenged voters should be excluded from the
bargaining unit, because Matias and Lozano are members of Petitioner contends that with the Court's ruling in G.R. No.
Magnolia Poultry Processing Plants Monthly Employees Union, while 110399[20] identifying the specific employees who can participate in
Delos Reyes and Pajaron are employees of San Miguel Corporation, the certification election, i.e., the supervisors (levels 1 to 4) and
which is a separate and distinct entity from petitioner. exempt employees of San Miguel Poultry Products Plants in
Cabuyao, San Fernando, and Otis, the CA erred in expanding the
Petitioners Partial Motion for Reconsideration[15] dated August 14, scope of the bargaining unit so as to include employees who do not
1999 was denied by the then Acting DOLE Undersecretary in the belong to or who are not based in its Cabuyao or San Fernando
Order[16] dated August 27, 1999. plants. It also alleges that the employees of the Cabuyao, San
Fernando, and Otis plants of petitioners predecessor, San Miguel Logging Division. Their functions mesh with one another. One group
Corporation, as stated in G.R. No. 110399, were engaged in needs the other in the same way that the company needs them
dressed chicken processing, i.e., handling and packaging of chicken both. There may be differences as to the nature of their individual
meat, while the new bargaining unit, as defined by the CA in the assignments, but the distinctions are not enough to warrant the
present case, includes employees engaged in live chicken formation of a separate bargaining unit.[24]
operations, i.e., those who breed chicks and grow chickens.
Thus, applying the ruling to the present case, the Court affirms the
Respondent counters that petitioners proposed exclusion of certain finding of the CA that there should be only one bargaining unit for
employees from the bargaining unit was a rehashed issue which the employees in Cabuyao, San Fernando, and Otis[25] of Magnolia
was already settled in G.R. No. 110399. It maintains that the issue Poultry Products Plant involved in dressed chicken processing and
of union membership coverage should no longer be raised as a Magnolia Poultry Farms engaged in live chicken operations. Certain
certification election already took place on September 30, 1998, factors, such as specific line of work, working conditions, location of
wherein respondent won with 97% votes. work, mode of compensation, and other relevant conditions do not
affect or impede their commonality of interest. Although they seem
Petitioners contentions are erroneous. In G.R. No. 110399, the separate and distinct from each other, the specific tasks of each
Court explained that the employees of San Miguel Corporation division are actually interrelated and there exists mutuality of
Magnolia Poultry Products Plants of Cabuyao, San Fernando, and interests which warrants the formation of a single bargaining unit.
Otis constitute a single bargaining unit, which is not contrary to the
one-company, one-union policy. An appropriate bargaining unit is Petitioner asserts that the CA erred in not excluding the position of
defined as a group of employees of a given employer, comprised of Payroll Master in the definition of a confidential employee and,
all or less than all of the entire body of employees, which the thus, prays that the said position and all other positions with access
collective interest of all the employees, consistent with equity to the to salary and compensation data be excluded from the bargaining
employer, indicate to be best suited to serve the reciprocal rights unit.
and duties of the parties under the collective bargaining provisions
of the law.[21] This argument must fail. Confidential employees are defined as
those who (1) assist or act in a confidential capacity, in regard (2)
In National Association of Free Trade Unions v. Mainit Lumber to persons who formulate, determine, and effectuate management
Development Company Workers Union United Lumber and General policies in the field of labor relations.[26] The two criteria are
Workers of the Phils,[22] the Court, taking into account the cumulative, and both must be met if an employee is to be
community or mutuality of interests test, ordered the formation of considered a confidential employee - that is, the confidential
a single bargaining unit consisting of the Sawmill Division in Butuan relationship must exist between the employee and his supervisor,
City and the Logging Division in Zapanta Valley, Kitcharao, Agusan and the supervisor must handle the prescribed responsibilities
[Del] Norte of the Mainit Lumber Development Company. It held relating to labor relations. The exclusion from bargaining units of
that while the existence of a bargaining history is a factor that may employees who, in the normal course of their duties, become aware
be reckoned with in determining the appropriate bargaining unit, of management policies relating to labor relations is a principal
the same is not decisive or conclusive. Other factors must be objective sought to be accomplished by the confidential employee
considered. The test of grouping is community or mutuality of rule.[27]
interest. This is so because the basic test of an asserted bargaining
units acceptability is whether or not it is fundamentally the A confidential employee is one entrusted with confidence on
combination which will best assure to all employees the exercise of delicate, or with the custody, handling or care and protection of the
their collective bargaining rights.[23] Certainly, there is a mutuality employers property.[28] Confidential employees, such as accounting
of interest among the employees of the Sawmill Division and the personnel, should be excluded from the bargaining unit, as their
access to confidential information may become the source of undue and administrative investigations, and securing legal advice for
advantage.[29] However, such fact does not apply to the position of labor issues from the petitioners team of lawyers, and
Payroll Master and the whole gamut of employees who, as implementation of company programs. Therefore, in the discharge
perceived by petitioner, has access to salary and compensation of their functions, both gain access to vital labor relations
data. The CA correctly held that the position of Payroll Master does information which outrightly disqualifies them from union
not involve dealing with confidential labor relations information in membership.
the course of the performance of his functions. Since the nature of
his work does not pertain to company rules and regulations and The proceedings for certification election are quasi-judicial in nature
confidential labor relations, it follows that he cannot be excluded and, therefore, decisions rendered in such proceedings can attain
from the subject bargaining unit. finality.[36] Applying the doctrine of res judicata, the issue in the

Corollarily, although Article 245[30] of the Labor Code limits the present case pertaining to the coverage of the employees who
ineligibility to join, form and assist any labor organization to would constitute the bargaining unit is now a foregone conclusion.
managerial employees, jurisprudence has extended this prohibition
to It bears stressing that a certification election is the sole concern of
confidential employees or those who by reason of their positions or the workers; hence, an employer lacks the personality to dispute
nature of work are required to assist or act in a fiduciary manner to the same. The general rule is that an employer has no standing to
managerial employees and, hence, are likewise privy to sensitive question the process of certification election, since this is the sole
and highly confidential records.[31] Confidential employees are thus concern of the workers.[37] Law and policy demand that employers
excluded from the rank-and-file bargaining unit. The rationale for take a strict, hands-off stance in certification elections. The
their separate category and disqualification to join any labor bargaining representative of employees should be chosen free from
organization is similar to the inhibition for managerial employees, any extraneous influence of management. A labor bargaining
because if allowed to be affiliated with a union, the latter might not representative, to be effective, must owe its loyalty to the
be assured of their loyalty in view of evident conflict of interests employees alone and to no other.[38] The only exception is where
and the union can also become company-denominated with the the employer itself has to file the petition pursuant to Article 258[39]
presence of managerial employees in the union membership.[32] of the Labor Code because of a request to bargain collectively.[40]
Having access to confidential information, confidential employees
may also become the source of undue advantage. Said employees With the foregoing disquisition, the Court writes finis to the issues
may act as a spy or spies of either party to a collective bargaining raised so as to forestall future suits of similar nature.
agreement.[33]
WHEREFORE, the petition is DENIED. The Decision dated April 28,
In this regard, the CA correctly ruled that the positions of Human 2000 and Resolution dated November 28, 2000 of the Court of
Resource Assistant and Personnel Assistant belong to the category Appeals, in CA-G.R. SP No. 55510, which affirmed with modification
of confidential employees and, hence, are excluded from the the Resolutions dated July 30, 1999 and August 27, 1999 of the
bargaining unit, considering their respective positions and job Secretary of Labor, are AFFIRMED.
descriptions. As Human Resource Assistant,[34] the scope of ones
work necessarily involves labor relations, recruitment and selection SO ORDERED.

of employees, access to employees' personal files and
compensation package, and human resource management. As
regards a Personnel Assistant,[35] one's work includes the recording
of minutes for management during collective bargaining
negotiations, assistance to management during grievance meetings
FIRST DIVISION conference was suspended until further notice because of the
[G.R. No. 172132. July 23, 2014.] repeated non-appearance of NUWHRAIN-HHMSC. 4 SEcAIC
THE HERITAGE HOTEL MANILA, ACTING THROUGH ITS On January 29, 2000, NUWHRAIN-HHMSC moved for the conduct of
OWNER, GRAND PLAZA HOTEL CORPORATION, petitioner, vs. the pre-election conference. The petitioner primarily filed its
SECRETARY OF LABOR AND EMPLOYMENT; MED-ARBITER comment on the list of employees submitted by NUWHRAIN-
TOMAS F. FALCONITIN; and NATIONAL UNION OF WORKERS HHMSC, and simultaneously sought the exclusion of some from the
IN THE HOTEL, RESTAURANT and ALLIED INDUSTRIES- list of employees for occupying either confidential or managerial
HERITAGE HOTEL MANILA SUPERVISORS CHAPTER positions. 5 The petitioner filed a motion to dismiss on April 17,
(NUWHRAIN-HHMSC), respondents. 2000, 6 raising the prolonged lack of interest of NUWHRAIN-
DECISION HHMSC to pursue its petition for certification election.
BERSAMIN, J p: On May 12, 2000, the petitioner filed a petition for the cancellation
Although case law has repeatedly held that the employer was but a of NUWHRAIN-HHMSC's registration as a labor union for failing to
bystander in respect of the conduct of the certification election to submit its annual financial reports and an updated list of members
decide the labor organization to represent the employees in the as required by Article 238 and Article 239 of the Labor Code,
bargaining unit, and that the pendency of the cancellation of union docketed as Case No. NCR-OD-0005-004-IRD entitled The Heritage
registration brought against the labor organization applying for the Hotel Manila, acting through its owner, Grand Plaza Hotel
certification election should not prevent the conduct of the Corporation v. National Union of Workers in the Hotel, Restaurant
certification election, this review has to look again at the seemingly and Allied Industries-Heritage Hotel Manila Supervisors Chapter
never-ending quest of the petitioner employer to stop the conduct (NUWHRAIN-HHSMC). 7 It filed another motion on June 1, 2000 to
of the certification election on the ground of the pendency of seek either the dismissal or the suspension of the proceedings on
proceedings to cancel the labor organization's registration it had the basis of its pending petition for the cancellation of union
initiated on the ground that the membership of the labor registration. 8
organization was a mixture of managerial and supervisory The following day, however, the Department of Labor and
employees with the rank-and-file employees. Employment (DOLE) issued a notice scheduling the certification
Under review at the instance of the employer is the decision elections on June 23, 2000. 9
promulgated on December 13, 2005, 1 whereby the Court of Dissatisfied, the petitioner commenced in the CA on June 14, 2000
Appeals (CA) dismissed its petition for certiorari to assail the a special civil action for certiorari, 10 alleging that the DOLE
resolutions of respondent Secretary of Labor and Employment gravely abused its discretion in not suspending the certification
sanctioning the conduct of the certification election initiated by election proceedings. On June 23, 2000, the CA dismissed the
respondent labor organization. 2 petition for certiorari for non-exhaustion of administrative
Antecedents remedies. 11
On October 11, 1995, respondent National Union of Workers in The certification election proceeded as scheduled, and NUWHRAIN-
Hotel Restaurant and Allied Industries-Heritage Hotel Manila HHMSC obtained the majority vote of the bargaining unit. 12 The
Supervisors Chapter (NUWHRAIN-HHMSC) filed a petition for petitioner filed a protest (with motion to defer the certification of
certification election, 3 seeking to represent all the supervisory the election results and the winner), 13 insisting on the illegitimacy
employees of Heritage Hotel Manila. The petitioner filed its of NUWHRAIN-HHMSC.
opposition, but the opposition was deemed denied on February 14, Ruling of the Med-Arbiter
1996 when Med-Arbiter Napoleon V. Fernando issued his order for On January 26, 2001, Med-Arbiter Tomas F. Falconitin issued an
the conduct of the certification election. order, 14 ruling that the petition for the cancellation of union
The petitioner appealed the order of Med-Arbiter Fernando, but the registration was not a bar to the holding of the certification
appeal was also denied. A pre-election conference was then election, and disposing thusly: aTCAcI
scheduled. On February 20, 1998, however, the pre-election
WHEREFORE, premises considered, respondent employer/ election under Section 11, par. II, Rule XI of Department Order No.
protestant's protest with motion to defer certification of results and 9; that the appropriate remedy was to exclude the ineligible
winner is hereby dismissed for lack of merit. employees from the bargaining unit during the inclusion-exclusion
Accordingly, this Office hereby certify pursuant to the rules that proceedings; 20 that the dismissal of the petition for the
petitioner/protestee, National Union of Workers in Hotels, certification election based on the legitimacy of the petitioning
Restaurants and Allied Industries-Heritage Hotel Manila Supervisory union would be inappropriate because it would effectively allow a
Chapter (NUWHRAIN-HHSMC) is the sole and exclusive bargaining collateral attack against the union's legal personality; and that a
agent of all supervisory employees of the Heritage Hotel Manila collateral attack against the personality of the labor organization
acting through its owner, Grand Plaza Hotel Corporation for was prohibited under Section 5, Rule V of Department Order No. 9,
purposes of collective bargaining with respect to wages, and hours Series of 1997. 21
of work and other terms and conditions of employment. Upon denial of its motion for reconsideration, the petitioner
SO ORDERED. elevated the matter to the CA by petition for certiorari. 22
The petitioner timely appealed to the DOLE Secretary claiming that: Ruling of the CA
(a) the membership of NUWHRAIN-HHMSC consisted of managerial, On December 13, 2005, 23 the CA dismissed the petition for
confidential, and rank-and-file employees; (b) NUWHRAIN-HHMSC certiorari, giving its following disquisition:
failed to comply with the reportorial requirements; and (c) Med- The petition for certiorari filed by the petitioner is, in essence, a
Arbiter Falconitin simply brushed aside serious questions on the continuation of the debate on the relevance of the Toyota Motor,
illegitimacy of NUWHRAIN-HHMSC. 15 It contended that a labor Dunlop Slazenger and Progressive Development cases to the issues
union of mixed membership of supervisory and rank-and-file raised.
employees had no legal right to petition for the certification election Toyota Motor and Dunlop Slazenger are anchored on the provisions
pursuant to the pronouncements in Toyota Motor Philippines of Article 245 of the Labor Code which prohibit managerial
Corporation v. Toyota Motor Philippines Corporation Labor Union 16 employees from joining any labor union and permit supervisory
(Toyota Motor) and Dunlop Slazenger (Phils.) v. Secretary of Labor employees to form a separate union of their own. The language
and Employment 17 (Dunlop Slazenger). naturally suggests that a labor organization cannot carry a mixture
Ruling of the DOLE Secretary of supervisory and rank-and-file employees. Thus, courts have held
On August 21, 2002, then DOLE Secretary Patricia A. Sto. Tomas that a union cannot become a legitimate labor union if it shelters
issued a resolution denying the appeal, 18 and affirming the order under its wing both types of employees. But there are elements of
of Med-Arbiter Falconitin, viz.: an elliptical reasoning in the holding of these two cases that a
WHEREFORE, the appeal is DENIED. The order of the Med-Arbiter petition for certification election may not prosper until the
dated 26 January 2001 is hereby AFFIRMED. composition of the union is settled therein. Toyota Motor, in
SO RESOLVED. particular, makes the blanket statement that a supervisory union
DOLE Secretary Sto. Tomas observed that the petitioner's reliance has no right to file a certification election for as long as it counts
on Toyota Motor and Dunlop Slazenger was misplaced because both rank-and-file employees among its ranks. More than four years
rulings were already overturned by SPI Technologies, Inc. v. after Dunlop Slazenger, the Court clarified in Tagaytay Highlands
Department of Labor and Employment, 19 to the effect that once a International Golf Club, Inc. vs. Tagaytay Highlands Employees
union acquired a legitimate status as a labor organization, it Union-PTGWO that while Article 245 prohibits supervisory
continued as such until its certificate of registration was cancelled employees from joining a rank-and-file union, it does not provide
or revoked in an independent action for cancellation. what the effect is if a rank-and-file union takes in supervisory
The petitioner moved for reconsideration. employees as members, or vice versa. Toyota Motor and Dunlop
In denying the motion on October 21, 2002, the DOLE Secretary Slazenger jump into an unnecessary conclusion when they foster
declared that the mixture or co-mingling of employees in a union the notion that Article 245 carries with it the authorization to
was not a ground for dismissing a petition for the certification inquire collaterally into the issue wherever it rears its ugly head.
Tagaytay Highlands proclaims, in the light of Department Order 9, Hence, this appeal, with the petitioner insisting that:
that after a certificate of registration is issued to a union, its legal I
personality cannot be subject to a collateral attack. It may be THE COURT OF APPEALS ERRED IN RULING THAT TAGAYTAY
questioned only in an independent petition for cancellation. In fine, HIGHLANDS APPLIES TO THE CASE AT BAR
Toyota and Dunlop Slazenger are a spent force. Since Tagaytay II
Highlands was handed down after these two cases, it constitutes [THE HONORABLE COURT OF APPEALS] SERIOUSLY ERRED WHEN
the latest expression of the will of the Supreme Court and IT DISREGARDED PROGRESSIVE DEVELOPMENT CORPORATION —
supersedes or overturns previous rulings inconsistent with it. From PIZZA HUT V. LAGUESMA WHICH HELD THAT IT WOULD BE MORE
this perspective, it is needless to discuss whether SPI Technologies PRUDENT TO SUSPEND THE CERTIFICATION CASE UNTIL THE
as a mere resolution of the Court may prevail over a full-blown ISSUE OF THE LEGALITY OF THE REGISTRATION OF THE UNION IS
decision that Toyota Motor or Dunlop Slazenger was. The ruling in FINALLY RESOLVED
SPI Technologies has been echoed in Tagaytay Highlands, for which III
reason it is with Tagaytay Highlands, not SPI Technologies, that the BECAUSE OF THE PASSAGE OF TIME, RESPONDENT UNION NO
petitioner must joust. EHCDSI LONGER POSSESSES THE MAJORITY STATUS SUCH THAT A NEW
The fact that the cancellation proceeding has not yet been resolved CERTIFICATION ELECTION IS IN ORDER 25
makes it obvious that the legal personality of the respondent union The petitioner maintains that the ruling in Tagaytay Highlands
is still very much in force. The DOLE has thus every reason to International Golf Club, Inc. v. Tagaytay Highlands Employees
proceed with the certification election and commits no grave abuse Union-PTGWO 26 (Tagaytay Highlands) was inapplicable because it
of discretion in allowing it to prosper because the right to be involved the co-mingling of supervisory and rank-and-file
certified as collective bargaining agent is one of the legitimate employees in one labor organization, while the issue here related to
privileges of a registered union. It is for the petitioner to expedite the mixture of membership between two employee groups — one
the cancellation case if it wants to put an end to the certification vested with the right to self-organization (i.e., the rank-and-file and
case, but it cannot place the issue of the union's legitimacy in the supervisory employees), and the other deprived of such right (i.e.,
certification case, for that would be tantamount to making the managerial and confidential employees); that suspension of the
collateral attack the DOLE has staunchly argued to be certification election was appropriate because a finding of "illegal
impermissible. mixture" of membership during a petition for the cancellation of
The reference made by the petitioner to another Progressive union registration determined whether or not the union had met the
Development case that it would be more prudent for the DOLE to 20% representation requirement under Article 234 (c) of the Labor
suspend the certification case until the issue of the legality of the Code; 27 and that in holding that mixed membership was not a
registration is resolved, has also been satisfactorily answered. ground for canceling the union registration, except when such was
Section 11, Rule XI of Department Order 9 provides for the grounds done through misrepresentation, false representation or fraud
for the dismissal of a petition for certification election, and the under the circumstances enumerated in Article 239 (a) and (c) of
pendency of a petition for cancellation of union registration is not the Labor Code, the CA completely ignored the 20% requirement
one of them. Like Toyota Motor and Dunlop Slazenger, the second under Article 234 (c) of the Labor Code.
Progressive case came before Department Order 9. The petitioner posits that the grounds for dismissing a petition for
IN VIEW OF THE FOREGOING, the disputed resolutions of the the certification election under Section 11, Rule XI of Department
Secretary of Labor and Employment are AFFIRMED, and the petition Order No. 9, Series of 1997, were not exclusive because the other
is DISMISSED. grounds available under the Rules of Court could be invoked; that
SO ORDERED. in Progressive Development Corporation v. Secretary, Department
The petitioner sought reconsideration, 24 but its motion was of Labor and Employment, 28 the Court ruled that prudence could
denied. justify the suspension of the certification election proceedings until
Issues the issue of the legality of the union registration could be finally
resolved; that the non-submission of the annual financial challenges it posed against the certification election proceedings
statements and the list of members in the period from 1996 to were rightly denied.
1999 constituted a serious challenge to NUWHRAIN-HHMSC's right Under the long established rule, too, the filing of the petition for the
to file its petition for the certification election; and that from the cancellation of NUWHRAIN-HHMSC's registration should not bar the
time of the conduct of the certification election on June 23, 2000, conduct of the certification election. 35 In that respect, only a final
the composition of NUWHRAIN-HHMSC had substantially changed, order for the cancellation of the registration would have prevented
thereby necessitating another certification election to determine the NUWHRAIN-HHMSC from continuing to enjoy all the rights
true will of the bargaining unit. conferred on it as a legitimate labor union, including the right to the
In short, should the petition for the cancellation of union petition for the certification election. 36 This rule is now enshrined
registration based on mixed membership of supervisors and in Article 238-A of the Labor Code, as amended by Republic Act No.
managers in a labor union, and the non-submission of reportorial 9481, 37 which reads:
requirements to the DOLE justify the suspension of the proceedings Article 238-A. Effect of a Petition for Cancellation of Registration. —
for the certification elections or even the denial of the petition for A petition for cancellation of union registration shall not suspend
the certification election? the proceedings for certification election nor shall it prevent the
Ruling filing of a petition for certification election.
We deny the petition for review on certiorari. xxx xxx xxx
Basic in the realm of labor union rights is that the certification Still, the petitioner assails the failure of NUWHRAIN-HHMSC to
election is the sole concern of the workers, 29 and the employer is submit its periodic financial reports and updated list of its members
deemed an intruder as far as the certification election is concerned. pursuant to Article 238 and Article 239 of the Labor Code. It
30 Thus, the petitioner lacked the legal personality to assail the contends that the serious challenges against the legitimacy of
proceedings for the certification election, 31 and should stand aside NUWHRAIN-HHMSC as a union raised in the petition for the
as a mere bystander who could not oppose the petition, or even cancellation of union registration should have cautioned the Med-
appeal the Med-Arbiter's orders relative to the conduct of the Arbiter against conducting the certification election.
certification election. 32 As the Court has explained in Republic v. The petitioner does not convince us.
Kawashima Textile Mfg., Philippines, Inc. 33 (Kawashima): In The Heritage Hotel Manila v. National Union of Workers in the
Except when it is requested to bargain collectively, an employer is a Hotel, Restaurant and Allied Industries-Heritage Hotel Manila
mere bystander to any petition for certification election; such Supervisors Chapter (NUWHRAIN-HHMSC), 38 the Court declared
proceeding is non-adversarial and merely investigative, for the that the dismissal of the petition for the cancellation of the
purpose thereof is to determine which organization will represent registration of NUWHRAIN-HHMSC was proper when viewed against
the employees in their collective bargaining with the employer. The the primordial right of the workers to self-organization, collective
choice of their representative is the exclusive concern of the bargaining negotiations and peaceful concerted actions, viz.:
employees; the employer cannot have any partisan interest xxx xxx xxx
therein; it cannot interfere with, much less oppose, the process by [Articles 238 and 239 of the Labor Code] give the Regional Director
filing a motion to dismiss or an appeal from it; not even a mere ample discretion in dealing with a petition for cancellation of a
allegation that some employees participating in a petition for union's registration, particularly, determining whether the union still
certification election are actually managerial employees will lend an meets the requirements prescribed by law. It is sufficient to give
employer legal personality to block the certification election. The the Regional Director license to treat the late filing of required
employer's only right in the proceeding is to be notified or informed documents as sufficient compliance with the requirements of the
thereof. law. After all, the law requires the labor organization to submit the
The petitioner's meddling in the conduct of the certification election annual financial report and list of members in order to verify if it is
among its employees unduly gave rise to the suspicion that it still viable and financially sustainable as an organization so as to
intended to establish a company union. 34 For that reason, the protect the employer and employees from fraudulent or fly-by-night
unions. With the submission of the required documents by (a) Misrepresentation, false statement or fraud in connection with
respondent, the purpose of the law has been achieved, though the adoption or ratification of the constitution and by-laws or
belatedly. amendments thereto, the minutes of ratification, and the list of
We cannot ascribe abuse of discretion to the Regional Director and members who took part in the ratification;
the DOLE Secretary in denying the petition for cancellation of (b) Misrepresentation, false statements or fraud in connection with
respondent's registration. The union members and, in fact, all the the election of officers, minutes of the election of officers, and the
employees belonging to the appropriate bargaining unit should not list of voters;
be deprived of a bargaining agent, merely because of the (c) Voluntary dissolution by the members.
negligence of the union officers who were responsible for the R.A. No. 9481 also inserted in the Labor Code Article 242-A, which
submission of the documents to the BLR. provides:
Labor authorities should, indeed, act with circumspection in treating ART. 242-A. Reportorial Requirements. — The following are
petitions for cancellation of union registration, lest they be accused documents required to be submitted to the Bureau by the
of interfering with union activities. In resolving the petition, legitimate labor organization concerned:
consideration must be taken of the fundamental rights guaranteed (a) Its constitution and by-laws, or amendments thereto, the
by Article XIII, Section 3 of the Constitution, i.e., the rights of all minutes of ratification, and the list of members who took part in the
workers to self-organization, collective bargaining and negotiations, ratification of the constitution and by-laws within thirty (30) days
and peaceful concerted activities. Labor authorities should bear in from adoption or ratification of the constitution and by-laws or
mind that registration confers upon a union the status of legitimacy amendments thereto;
and the concomitant right and privileges granted by law to a (b) Its list of officers, minutes of the election of officers, and list of
legitimate labor organization, particularly the right to participate in voters within thirty (30) days from election;
or ask for certification election in a bargaining unit. Thus, the (c) Its annual financial report within thirty (30) days after the close
cancellation of a certificate of registration is the equivalent of of every fiscal year; and
snuffing out the life of a labor organization. For without such (d) Its list of members at least once a year or whenever required
registration, it loses — as a rule — its rights under the Labor Code. by the Bureau. EaDATc
It is worth mentioning that the Labor Code's provisions on Failure to comply with the above requirements shall not be a
cancellation of union registration and on reportorial requirements ground for cancellation of union registration but shall subject the
have been recently amended by Republic Act (R.A.) No. 9481, An erring officers or members to suspension, expulsion from
Act Strengthening the Workers' Constitutional Right to Self- membership, or any appropriate penalty.
Organization, Amending for the Purpose Presidential Decree No. xxx xxx xxx
442, As Amended Otherwise Known as the Labor Code of the The ruling thereby wrote, finis to the challenge being posed by the
Philippines, which lapsed into law on May 25, 2007 and became petitioner against the illegitimacy of NUWHRAIN-HHMSC.
effective on June 14, 2007. The amendment sought to strengthen The remaining issue to be resolved is which among Toyota Motor,
the workers' right to self-organization and enhance the Philippines' Dunlop Slazenger and Tagaytay Highlands applied in resolving the
compliance with its international obligations as embodied in the dispute arising from the mixed membership in NUWHRAIN-HHMSC.
International Labor Organization (ILO) Convention No. 87, This is not a novel matter. In Kawashima, 39 we have reconciled
pertaining to the non-dissolution of workers' organizations by our rulings in Toyota Motor, Dunlop Slazenger and Tagaytay
administrative authority. Thus, R.A. No. 9481 amended Article 239 Highlands by emphasizing on the laws prevailing at the time of
to read: filing of the petition for the certification election.
ART. 239. Grounds for Cancellation of Union Registration. — The Toyota Motor and Dunlop Slazenger involved petitions for
following may constitute grounds for cancellation of union certification election filed on November 26, 1992 and September
registration: 15, 1995, respectively. In both cases, we applied the Rules and
Regulations Implementing R.A. No. 6715 (also known as the 1989 employees to prove that there were supervisors in the petitioning
Amended Omnibus Rules), the prevailing rule then. union for rank-and-file employees. In Dunlop Slazenger, the Court
The 1989 Amended Omnibus Rules was amended on June 21, 1997 observed that the labor union of supervisors included employees
by Department Order No. 9, Series of 1997. Among the occupying positions that apparently belonged to the rank-and-file.
amendments was the removal of the requirement of indicating in In both Toyota Motor and Dunlop Slazenger, the employers were
the petition for the certification election that there was no co- able to adduce substantial evidence to prove the existence of the
mingling of rank-and-file and supervisory employees in the mixed membership. Based on the records herein, however, the
membership of the labor union. This was the prevailing rule when petitioner failed in that respect. To recall, it raised the issue of the
the Court promulgated Tagaytay Highlands, declaring therein that mixed membership in its comment on the list of members
mixed membership should have no bearing on the legitimacy of a submitted by NUWHRAIN-HHMSC, and in its protest. In the
registered labor organization, unless the co-mingling was due to comment, it merely identified the positions that were either
misrepresentation, false statement or fraud as provided in Article confidential or managerial, but did not present any supporting
239 of the Labor Code. 40 evidence to prove or explain the identification. In the protest, it
Presently, then, the mixed membership does not result in the only enumerated the positions that were allegedly confidential and
illegitimacy of the registered labor union unless the same was done managerial, and identified two employees that belonged to the
through misrepresentation, false statement or fraud according to rank-and-file, but did not offer any description to show that the
Article 239 of the Labor Code. In Air Philippines Corporation v. positions belonged to different employee groups.
Bureau of Labor Relations, 41 we categorically explained that — Worth reiterating is that the actual functions of an employee, not
Clearly, then, for the purpose of de-certifying a union, it is not his job designation, determined whether the employee occupied a
enough to establish that the rank-and-file union includes ineligible managerial, supervisory or rank-and-file position. 42 As to
employees in its membership. Pursuant to Article 239 (a) and (c) of confidential employees who were excluded from the right to self-
the Labor Code,it must be shown that there was misrepresentation, organization, they must (1) assist or act in a confidential capacity,
false statement or fraud in connection with the adoption or in regard (2) to persons who formulated, determined, and
ratification of the constitution and by-laws or amendments thereto, effectuated management policies in the field of labor relations. 43
the minutes of ratification, or in connection with the election of In that regard, mere allegations sans substance would not be
officers, minutes of the election of officers, the list of voters, or enough, most especially because the constitutional right of workers
failure to submit these documents together with the list of the to self-organization would be compromised.
newly elected-appointed officers and their postal addresses to the At any rate, the members of NUWHRAIN-HHSMC had already
BLR. spoken, and elected it as the bargaining agent. As between the
We note that NUWHRAIN-HHMSC filed its petition for the rigid application of Toyota Motors and Dunlop Slazenger, and the
certification election on October 11, 1995. Conformably with right of the workers to self-organization, we prefer the latter. For
Kawashima, the applicable law was the 1989 Amended Omnibus us, the choice is clear and settled. "What is important is that there
Rules, and the prevailing rule was the pronouncement in Toyota is an unmistakeable intent of the members of [the] union to
Motor and Dunlop Slazenger to the effect that a labor union of exercise their right to organize. We cannot impose rigorous
mixed membership was not possessed with the requisite restraints on such right if we are to give meaning to the protection
personality to file a petition for the certification election. to labor and social justice clauses of the Constitution." 44
Nonetheless, we still rule in favor of NUWHRAIN-HHMSC. We WHEREFORE, the Court DENIES the petition for review on
expound. certiorari; AFFIRMS the decision promulgated on December 13,
In both Toyota Motorand Dunlop Slazenger, the Court was 2005 by the Court of Appeals; and ORDERS the petitioner to pay
convinced that the concerned labor unions were comprised by the costs of suit.
mixed rank-and-file and supervisory employees. In Toyota Motor, SO ORDERED.
the employer submitted the job descriptions of the concerned
EN BANC Former FEBTC employees who opt not to become union members
[G.R. No. 164301. October 11, 2011.] but who qualify for retirement shall receive their retirement
BANK OF THE PHILIPPINE ISLANDS, petitioner, vs. BPI benefits in accordance with law, the applicable retirement plan, or
EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF the CBA, as the case may be. 4
UNIONS IN BPI UNIBANK, respondent. Notwithstanding our affirmation of the applicability of the Union
RESOLUTION Shop Clause to former FEBTC employees, for reasons already
LEONARDO-DE CASTRO, J p: extensively discussed in the August 10, 2010 Decision, even now
In the present incident, petitioner Bank of the Philippine Islands BPI continues to protest the inclusion of said employees in the
(BPI) moves for reconsideration 1 of our Decision dated August 10, Union Shop Clause. cTADCH
2010, holding that former employees of the Far East Bank and Trust In seeking the reversal of our August 10, 2010 Decision, petitioner
Company (FEBTC) "absorbed" by BPI pursuant to the two banks' insists that the parties to the CBA clearly intended to limit the
merger in 2000 were covered by the Union Shop Clause in the then application of the Union Shop Clause only to new employees who
existing collective bargaining agreement (CBA) 2 of BPI with were hired as non-regular employees but later attained regular
respondent BPI Employees Union-Davao Chapter-Federation of status at some point after hiring. FEBTC employees cannot be
Unions in BPI Unibank (the Union). considered new employees as BPI merely stepped into the shoes of
To recall, the Union Shop Clause involved in this long standing FEBTC as an employer purely as a consequence of the merger. 5
controversy provided, thus: Petitioner likewise relies heavily on the dissenting opinions of our
ARTICLE II respected colleagues, Associate Justices Antonio T. Carpio and
xxx xxx xxx Arturo D. Brion. From both dissenting opinions, petitioner derives
Section 2. Union Shop. — New employees falling within the its contention that "the situation of absorbed employees can be
bargaining unit as defined in Article I of this Agreement, who may likened to old employees of BPI, insofar as their full tenure with
hereafter be regularly employed by the Bank shall, within thirty FEBTC was recognized by BPI and their salaries were maintained
(30) days after they become regular employees, join the Union as a and safeguarded from diminution" but such absorbed employees
condition of their continued employment. It is understood that "cannot and should not be treated in exactly the same way as old
membership in good standing in the Union is a condition of their BPI employees for there are substantial differences between them."
continued employment with the Bank. 3 (Emphases supplied.) 6 Although petitioner admits that there are similarities between
The bone of contention between the parties was whether or not the absorbed and new employees, they insist there are marked
"absorbed" FEBTC employees fell within the definition of "new differences between them as well. Thus, adopting Justice Brion's
employees" under the Union Shop Clause, such that they may be stance, petitioner contends that the absorbed FEBTC employees
required to join respondent union and if they fail to do so, the should be considered "a sui generis group of employees whose
Union may request BPI to terminate their employment, as the classification will not be duplicated until BPI has another merger
Union in fact did in the present case. Needless to state, BPI refused where it would be the surviving corporation." 7 Apparently
to accede to the Union's request. Although BPI won the initial battle borrowing from Justice Carpio, petitioner propounds that the Union
at the Voluntary Arbitrator level, BPI's position was rejected by the Shop Clause should be strictly construed since it purportedly
Court of Appeals which ruled that the Voluntary Arbitrator's curtails the right of the absorbed employees to abstain from joining
interpretation of the Union Shop Clause was at war with the spirit labor organizations. 8
and rationale why the Labor Code allows the existence of such Pursuant to our directive, the Union filed its Comment 9 on the
provision. On review with this Court, we upheld the appellate Motion for Reconsideration. In opposition to petitioner's arguments,
court's ruling and disposed of the case as follows: the Union, in turn, adverts to our discussion in the August 10, 2010
WHEREFORE, the petition is hereby DENIED, and the Decision Decision regarding the voluntary nature of the merger between BPI
dated September 30, 2003 of the Court of Appeals is AFFIRMED, and FEBTC, the lack of an express stipulation in the Articles of
subject to the thirty (30) day notice requirement imposed herein. Merger regarding the transfer of employment contracts to the
surviving corporation, and the consensual nature of employment with complete "body and soul" transfer of all that FEBTC embodied
contracts as valid bases for the conclusion that former FEBTC and possessed and where both participating banks were willing
employees should be deemed new employees. 10 The Union (albeit by deed, not by their written agreement) to provide for the
argues that the creation of employment relations between affected human resources by recognizing continuity of employment
former FEBTC employees and BPI (i.e., BPI's selection and — should point this Court to a declaration that in a complete
engagement of former FEBTC employees, its payment of their merger situation where there is total takeover by one corporation
wages, power of dismissal and of control over the employees' over another and there is silence in the merger agreement on what
conduct) occurred after the merger, or to be more precise, after the the fate of the human resource complement shall be, the latter
Securities and Exchange Commission's (SEC) approval of the should not be left in legal limbo and should be properly provided
merger. 11 The Union likewise points out that BPI failed to offer for, by compelling the surviving entity to absorb these employees.
any counterargument to the Court's reasoning that: This is what Section 80 of the Corporation Code commands, as the
The rationale for upholding the validity of union shop clauses in a surviving corporation has the legal obligation to assume all the
CBA, even if they impinge upon the individual employee's right or obligations and liabilities of the merged constituent corporation.
freedom of association, is not to protect the union for the union's Not to be forgotten is that the affected employees managed,
sake. Laws and jurisprudence promote unionism and afford certain operated and worked on the transferred assets and properties as
protections to the certified bargaining agent in a unionized their means of livelihood; they constituted a basic component of
company because a strong and effective union presumably benefits their corporation during its existence. In a merger and consolidation
all employees in the bargaining unit since such a union would be in situation, they cannot be treated without consideration of the
a better position to demand improved benefits and conditions of applicable constitutional declarations and directives, or, worse, be
work from the employer. . . . . simply disregarded. If they are so treated, it is up to this Court to
. . . Nonetheless, settled jurisprudence has already swung the read and interpret the law so that they are treated in accordance
balance in favor of unionism, in recognition that ultimately the with the legal requirements of mergers and consolidation, read in
individual employee will be benefited by that policy. In the light of the social justice, economic and social provisions of our
hierarchy of constitutional values, this Court has repeatedly held Constitution. Hence, there is a need for the surviving corporation to
that the right to abstain from joining a labor organization is take responsibility for the affected employees and to absorb them
subordinate to the policy of encouraging unionism as an instrument into its workforce where no appropriate provision for the merged
of social justice. 12 corporation's human resources component is made in the Merger
While most of the arguments offered by BPI have already been Plan. 13
thoroughly addressed in the August 10, 2010 Decision, we find that By upholding the automatic assumption of the non-surviving
a qualification of our ruling is in order only with respect to the corporation's existing employment contracts by the surviving
interpretation of the provisions of the Articles of Merger and its corporation in a merger, the Court strengthens judicial protection of
implications on the former FEBTC employees' security of tenure. the right to security of tenure of employees affected by a merger
Taking a second look on this point, we have come to agree with and avoids confusion regarding the status of their various benefits
Justice Brion's view that it is more in keeping with the dictates of which were among the chief objections of our dissenting colleagues.
social justice and the State policy of according full protection to However, nothing in this Resolution shall impair the right of an
labor to deem employment contracts as automatically assumed by employer to terminate the employment of the absorbed employees
the surviving corporation in a merger, even in the absence of an for a lawful or authorized cause or the right of such an employee to
express stipulation in the articles of merger or the merger plan. In resign, retire or otherwise sever his employment, whether before or
his dissenting opinion, Justice Brion reasoned that: aDECHI after the merger, subject to existing contractual obligations. In this
To my mind, due consideration of Section 80 of the Corporation manner, Justice Brion's theory of automatic assumption may be
Code, the constitutionally declared policies on work, labor and reconciled with the majority's concerns with the successor
employment, and the specific FEBTC-BPI situation — i.e., a merger
employer's prerogative to choose its employees and the prohibition both continue their respective business operations until the SEC
against involuntary servitude. issues the certificate of merger and in the event no such certificate
Notwithstanding this concession, we find no reason to reverse our is issued, they shall hold each other blameless for the non-
previous pronouncement that the absorbed FEBTC employees are consummation of the merger. 16 We likewise previously noted that
covered by the Union Shop Clause. BPI made its assignments of the former FEBTC employees effective
Even in our August 10, 2010 Decision, we already observed that on April 10, 2000, or after the SEC approved the merger. 17 In
the legal fiction in the law on mergers (that the surviving other words, the obligation of BPI to pay the salaries and benefits
corporation continues the corporate existence of the non-surviving of the former FEBTC employees and its right of discipline and
corporation) is mainly a tool to adjudicate the rights and obligations control over them only arose with the effectivity of the merger.
between and among the merged corporations and the persons that Concomitantly, the obligation of former FEBTC employees to render
deal with them. 14 Such a legal fiction cannot be unduly extended service to BPI and their right to receive benefits from the latter also
to an interpretation of a Union Shop Clause so as to defeat its arose upon the effectivity of the merger. What is material is that all
purpose under labor law. Hence, we stated in the Decision that: of these legal consequences of the merger took place during the life
In any event, it is of no moment that the former FEBTC employees of an existing and valid CBA between BPI and the Union wherein
retained the regular status that they possessed while working for they have mutually consented to include a Union Shop Clause.
their former employer upon their absorption by petitioner. This fact From the plain, ordinary meaning of the terms of the Union Shop
would not remove them from the scope of the phrase "new Clause, it covers employees who (a) enter the employ of BPI during
employees" as contemplated in the Union Shop Clause of the CBA, the term of the CBA; (b) are part of the bargaining unit (defined in
contrary to petitioner's insistence that the term "new employees" the CBA as comprised of BPI's rank and file employees); and (c)
only refers to those who are initially hired as non-regular become regular employees without distinguishing as to the manner
employees for possible regular employment. they acquire their regular status. Consequently, the number of such
The Union Shop Clause in the CBA simply states that "new employees may adversely affect the majority status of the Union
employees" who during the effectivity of the CBA "may be regularly and even its existence itself, as already amply explained in the
employed" by the Bank must join the union within thirty (30) days Decision.
from their regularization. There is nothing in the said clause that Indeed, there are differences between (a) new employees who are
limits its application to only new employees who possess non- hired as probationary or temporary but later regularized, and (b)
regular status, meaning probationary status, at the start of their new employees who, by virtue of a merger, are absorbed from
employment. Petitioner likewise failed to point to any provision in another company as regular and permanent from the beginning of
the CBA expressly excluding from the Union Shop Clause new their employment with the surviving corporation. It bears
employees who are "absorbed" as regular employees from the reiterating here that these differences are too insubstantial to
beginning of their employment. What is indubitable from the Union warrant the exclusion of the absorbed employees from the
Shop Clause is that upon the effectivity of the CBA, petitioner's new application of the Union Shop Clause. In the Decision, we noted
regular employees (regardless of the manner by which they that:
became employees of BPI) are required to join the Union as a Verily, we agree with the Court of Appeals that there are no
condition of their continued employment. 15 cACDaH substantial differences between a newly hired non-regular
Although by virtue of the merger BPI steps into the shoes of FEBTC employee who was regularized weeks or months after his hiring and
as a successor employer as if the former had been the employer of a new employee who was absorbed from another bank as a regular
the latter's employees from the beginning it must be emphasized employee pursuant to a merger, for purposes of applying the Union
that, in reality, the legal consequences of the merger only occur at Shop Clause. Both employees were hired/employed only after the
a specific date, i.e., upon its effectivity which is the date of approval CBA was signed. At the time they are being required to join the
of the merger by the SEC. Thus, we observed in the Decision that Union, they are both already regular rank and file employees of
BPI and FEBTC stipulated in the Articles of Merger that they will BPI. They belong to the same bargaining unit being represented by
the Union. They both enjoy benefits that the Union was able to absorbed into a new company pursuant to a merger, it is but logical
secure for them under the CBA. When they both entered the that their employment may be terminated for any causes provided
employ of BPI, the CBA and the Union Shop Clause therein were for under the law or in jurisprudence without violating their right to
already in effect and neither of them had the opportunity to security of tenure. As Justice Carpio discussed in his dissenting
express their preference for unionism or not. We see no cogent opinion, it is well-settled that termination of employment by virtue
reason why the Union Shop Clause should not be applied equally to of a union security clause embodied in a CBA is recognized in our
these two types of new employees, for they are undeniably jurisdiction. 22 In Del Monte Philippines, Inc. v. Saldivar, 23 we
similarly situated. 18 explained the rationale for this policy in this wise:
Again, it is worthwhile to highlight that a contrary interpretation of Article 279 of the Labor Code ordains that "in cases of regular
the Union Shop Clause would dilute its efficacy and put the certified employment, the employer shall not terminate the services of an
union that is supposedly being protected thereby at the mercy of employee except for a just cause or when authorized by [Title I,
management. For if the former FEBTC employees had no say in the Book Six of the Labor Code]." Admittedly, the enforcement of a
merger of its former employer with another bank, as petitioner BPI closed-shop or union security provision in the CBA as a
repeatedly decries on their behalf, the Union likewise could not ground for termination finds no extension within any of the
prevent BPI from proceeding with the merger which undisputedly provisions under Title I, Book Six of the Labor Code.Yet
affected the number of employees in the bargaining unit that the jurisprudence has consistently recognized, thus: "It is State
Union represents and may negatively impact on the Union's policy to promote unionism to enable workers to negotiate with
majority status. In this instance, we should be guided by the m a n a g e m e n t o n a n e ve n p l ay i n g f i e l d a n d w i t h m o r e
principle that courts must place a practical and realistic construction persuasiveness than if they were to individually and separately
upon a CBA, giving due consideration to the context in which it is bargain with the employer. For this reason, the law has allowed
negotiated and purpose which it is intended to serve. 19 stipulations for 'union shop' and 'closed shop' as means of
We now come to the question: Does our affirmance of our ruling encouraging workers to join and support the union of their choice in
that former FEBTC employees absorbed by BPI are covered by the the protection of their rights and interests vis-a-vis the employer."
Union Shop Clause violate their right to security of tenure which we 24 (Emphasis supplied.)
expressly upheld in this Resolution? We answer in the negative. Although it is accepted that non-compliance with a union security
AaITCS clause is a valid ground for an employee's dismissal, jurisprudence
In Rance v. National Labor Relations Commission, 20 we held that: dictates that such a dismissal must still be done in accordance with
It is the policy of the state to assure the right of workers to due process. This much we decreed in General Milling Corporation
"security of tenure" (Article XIII, Sec. 3 of the New Constitution, v. Casio, 25 to wit:
Section 9, Article II of the 1973 Constitution). The guarantee is an The Court reiterated in Malayang Samahan ng mga Manggagawa sa
act of social justice. When a person has no property, his job may M. Greenfield v. Ramos that:
possibly be his only possession or means of livelihood. Therefore, While respondent company may validly dismiss the employees
he should be protected against any arbitrary deprivation of his job. expelled by the union for disloyalty under the union security clause
Article 280 of the Labor Code has construed security of tenure as of the collective bargaining agreement upon the recommendation
meaning that "the employer shall not terminate the services by the union, this dismissal should not be done hastily and
of an employee except for a just cause or when authorized summarily thereby eroding the employees' right to due process,
by" the Code. . . . (Emphasis supplied.) self-organization and security of tenure. The enforcement of union
We have also previously held that the fundamental guarantee of security clauses is authorized by law provided such enforcement
security of tenure and due process dictates that no worker shall be is not characterized by arbitrariness, and always with due
dismissed except for a just and authorized cause provided by law process. Even on the assumption that the federation had valid
and after due process is observed. 21 Even as we now recognize grounds to expel the union officers, due process requires that these
the right to continuous, unbroken employment of workers who are
union officers be accorded a separate hearing by respondent to join the respondent, said employees shall be accorded full
company. procedural due process before their employment may be
The twin requirements of notice and hearing constitute the terminated.
essential elements of procedural due process. The law requires the SO ORDERED.
employer to furnish the employee sought to be dismissed with two
written notices before termination of employment can be legally
effected: (1) a written notice apprising the employee of the
particular acts or omissions for which his dismissal is sought in
order to afford him an opportunity to be heard and to defend
himself with the assistance of counsel, if he desires, and (2) a
subsequent notice informing the employee of the employer's
decision to dismiss him. This procedure is mandatory and its
absence taints the dismissal with illegality.
Irrefragably, GMC cannot dispense with the requirements of
notice and hearing before dismissing Casio, et al. even when
said dismissal is pursuant to the closed shop provision in the
CBA. The rights of an employee to be informed of the charges
against him and to reasonable opportunity to present his side in a
controversy with either the company or his own union are not
wiped away by a union security clause or a union shop clause in a
collective bargaining agreement. . . . 26 (Emphases supplied.)
EScaIT
In light of the foregoing, we find it appropriate to state that, apart
from the fresh thirty (30)-day period from notice of finality of the
Decision given to the affected FEBTC employees to join the Union
before the latter can request petitioner to terminate the former's
employment, petitioner must still accord said employees the twin
requirements of notice and hearing on the possibility that they may
have other justifications for not joining the Union. Similar to our
August 10, 2010 Decision, we reiterate that our ruling presupposes
there has been no material change in the situation of the parties in
the interim.
WHEREFORE, the Motion for Reconsideration is DENIED. The
Decision dated August 10, 2010 is AFFIRMED, subject to the
qualifications that:
(a) Petitioner is deemed to have assumed the employment
contracts of the Far East Bank and Trust Company (FEBTC)
employees upon effectivity of the merger without break in the
continuity of their employment, even without express
stipulation in the Articles of Merger; and
(b) Aside from the thirty (30) days, counted from notice of finality
of the August 10, 2010 Decision, given to former FEBTC employees
FIRST DIVISION Section 6. The Company, upon written request of the Union, shall
GENERAL MILLING CORPORATION v. ERNESTO CASIO, terminate the services of any employee/worker who fails to fulfill
ROLANDO IGOT, MARIO FAMADOR, NELSON LIM, the conditions set forth in Sections 3 and 4 thereof, subject
FELICISIMO BOOC, PROCOPIO OBREGON, JR., and ANTONIO however, to the provisions of the Labor Laws of the Philippines and
ANINIPOK their Implementing Rules and Regulations. The Union shall absolve
G.R. No. 149552 the Company from any and all liabilities, pecuniary or otherwise,
DECISION and responsibilities to any employee or worker who is dismissed or
LEONARDO-DE CASTRO, J.: terminated in pursuant thereof.[6]
This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court seeking the reversal of the Decision[1] dated March 30,
2001 and Resolution[2] dated July 18, 2001 of the Court of Appeals Casio, et al. were regular employees of GMC with daily earnings
in CA-G.R. SP No. 40280, setting aside the Voluntary Arbitration ranging from P173.75 to P201.50, and length of service varying
Award[3] dated August 16, 1995 of the National Conciliation and from eight to 25 years.[7] Casio was elected IBM-Local 31 President
Mediation Board (NCMB), Cebu City, in VA Case No. AC for a three-year term in June 1991, while his co-respondents were
389-01-01-95. Voluntary Arbitrator Alice K. Canonoy-Morada union shop stewards.
(Canonoy-Morada) dismissed the Complaint filed by respondents
Ernesto Casio, Rolando Igot, Mario Famador, Nelson Lim, Felicisimo In a letter[8] dated February 24, 1992, Rodolfo Gabiana (Gabiana),
Booc, Procopio Obregon, Jr. and Antonio Aninipok (Casio, et al.) the IBM Regional Director for Visayas and Mindanao, furnished
against petitioner General Milling Corporation (GMC) for unfair labor Casio, et al. with copies of the Affidavits of GMC employees Basilio
practice, illegal suspension, illegal dismissal, and payment of moral Inoc and Juan Potot, charging Casio, et al. with acts inimical to the
and exemplary damages. interest of the union. Through the same letter, Gabiana gave Casio,
et al. three days from receipt thereof within which to file their
The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 answers or counter-affidavits. However, Casio, et al. refused to
Chapter (Local 31) was the sole and exclusive bargaining agent of acknowledge receipt of Gabianas letter.
the rank and file employees of GMC in Lapu-Lapu City. On
November 30, 1991, IBM-Local 31, through its officers and board Subsequently, on February 29, 1992, Pino, et al., as officers and
members, namely, respondents Virgilio Pino,[4] Paulino Cabreros, members of the IBM-Local 31, issued a Resolution[9] expelling
Ma. Luna P. Jumaoas, Dominador Booc, Bartolome Auman, Remegio Casio, et al. from the union. Pertinent portions of the Resolution are
Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto Mendoza and reproduced below:
Antonio Panilag (Pino, et al.), entered into a Collective Bargaining
Agreement (CBA) with GMC. The effectivity of the said CBA was Whereas, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr.,
retroactive to August 1, 1991.[5] Antonio Aninipok, Mario Famador, Nelson Lim and Ernesto Casio,
through Ernesto Casio have refused to acknowledge receipt of the
The CBA contained the following union security provisions: letter-complaint dated February 24, 1992, requiring them to file
their answer[s] or counter-affidavits as against the charge of acts
Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers inimical to the interest of the union and that in view of such refusal
employed by the Company with the exception of those who are to acknowledge receipt, a copy of said letter complaint was dropped
specifically excluded by law and by the terms of this Agreement or left in front of E. Casio;
must be members in good standing of the Union within thirty (30)
days upon the signing of this agreement and shall maintain such
membership in good standing thereof as a condition of their
employment or continued employment.
Whereas, the three (3)[-]day period given to file their answer or terminating the employment of Casio, et al. effective April 24, 1992
counter-affidavit have already lapsed prompting the union Board to and placing the latter under preventive suspension for the
investigate the charge ex parte; meantime.

Whereas, after such ex parte investigation the said charge has been
more than adequately substantiated by the affidavits/witnesses and On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed
documentary exhibits presented. a Notice of Strike with the NCMB-Regional Office No. VII (NCMB-
RO). Casio, et al. alleged as bases for the strike the illegal dismissal
NOW, THEREFORE, RESOLVED as it is hereby RESOLVED, that of union officers and members, discrimination, coercion, and union
Ernesto Casio, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr., busting. The NCMB-RO held conciliation proceedings, but no
Antonio Aninipok, Mario Famador and Nelson Lim be expelled as settlement was reached among the parties.[12]
union member[s] of good standing effectively immediately.
Casio, et al. next sought recourse from the National Labor Relations
RESOLVED FURTHER, to furnish copy of this Resolution to the GMC Commission (NLRC) Regional Arbitration Branch VII by filing on
Management for their information and guidance with the August 3, 1992 a Complaint against GMC and Pino, et al. for unfair
recommendation as it is hereby recommended to dismiss the labor practice, particularly, the termination of legitimate union
above-named employees from work. officers, illegal suspension, illegal dismissal, and moral and
exemplary damages. Their Complaint was docketed as NLRC Case
No. RAB-VII-08-0639-92.[13]
Gabiana then wrote a letter[10] dated March 10, 1992, addressed to
Eduardo Cabahug (Cabahug), GMC Vice-President for Engineering Finding that NLRC Case No. RAB-VII-08-0639-92 did not undergo
and Plant Administration, informing the company of the expulsion voluntary arbitration, the Labor Arbiter dismissed the case for lack
of Casio, et al. from the union pursuant to the Resolution dated of jurisdiction, but endorsed the same to the NCMB-RO. Prior to
February 29, 1992 of IBM-Local 31 officers and board members. undergoing voluntary arbitration before the NCMB-RO, however, the
Gabiana likewise requested that Casio, et al. be immediately parties agreed to first submit the case to the grievance machinery
dismissed from their work for the interest of industrial peace in the of IBM-Local 31. On September 7, 1994, Casio, et al. filed their
plant. Complaint with Pino, the Acting President of IBM-Local 31. Pino
acknowledged receipt of the Complaint and assured Casio, et al.
Gabiana followed-up with another letter[11] dated March 19, 1992, that they would be seasonably notified of whatever decision and/or
inquiring from Cabahug why Casio, et al. were still employed with action the Board may have in the instant case.[14] When the IBM-
GMC despite the request of IBM-Local 31 that Casio, et al. be Local 31 Board failed to hold grievance proceedings on the
immediately dismissed from service pursuant to the closed shop Complaint of Casio, et al., NCMB Voluntary Arbitrator Canonoy-
provision in the existing CBA. Gabiana reiterated the demand of Morada assumed jurisdiction over the same. The Complaint was
IBM-Local 31 that GMC dismiss Casio, et al., with the warning that docketed as VA Case No. AC 389-01-01-95.
failure of GMC to do so would constitute gross violation of the
existing CBA and constrain the union to file a case for unfair labor Based on the Position Papers and other documents submitted by
practice against GMC. the parties,[15] Voluntary Arbitrator Canonoy-Morada rendered on
August 16, 1995 a Voluntary Arbitration Award dismissing the
Complaint in VA Case No. AC 389-01-01-95 for lack of merit, but
Pressured by the threatened filing of a suit for unfair labor practice, granting separation pay and attorneys fees to Casio, et al. The
GMC acceded to Gabianas request to terminate the employment of Voluntary Arbitration Award presented the following findings: (1)
Casio, et al. GMC issued a Memorandum dated March 24, 1992 the termination by GMC of the employment of Casio, et al. was in
valid compliance with the closed shop provision in the CBA; (2) Dissatisfied with the Voluntary Arbitration Award, Casio, et al. went
GMC had no competence to determine the good standing of a union to the Court of Appeals by way of a Petition for Certiorari under
member; (3) Casio, et al. waived their right to due process when Rule 65 of the Rules of Court to have said Award set aside.
they refused to receive Gabianas letter dated February 24, 1992,
which required them to submit their answer to the charges against The Court of Appeals granted the writ of certiorari and set aside the
them; (4) the preventive suspension of Casio, et al. by GMC was an Voluntary Arbitration Award. The appellate court ruled that while
act of self-defense; and (5) the IBM-Local 31 Resolution dated the dismissal of Casio, et al., was made by GMC pursuant to a valid
February 29, 1992 expelling Casio, et al. as union members, also closed shop provision under the CBA, the company, however, failed
automatically ousted them as union officers.[16] The dispositive to observe the elementary rules of due process in implementing the
portion of the Voluntary Arbitration Award reads: said dismissal. Consequently, Casio, et al. were entitled to
reinstatement with backwages from the time of their dismissal up
WHEREFORE, above premises considered, this case filed by [Casio, to the time of their reinstatement. Nevertheless, the Court of
et al.] is hereby ordered DISMISSED for lack of merit. Appeals did not hold GMC liable to Casio, et al. for moral and
exemplary damages and attorneys fees, there being no showing
Since the dismissal is not for a cause detrimental to the interest of that their dismissal was attended by bad faith or malice, or that the
the company, respondent General Milling Corporation is, dismissal was effected in a wanton, oppressive, or malevolent
nonetheless, ordered to pay separation pay to all [Casio, et al.] manner, given that GMC merely accommodated the request of IBM-
within seven (7) calendar days upon receipt of this order at the rate Local 31. The appellate court, instead, made Pino, et al. liable to
of one-half month per year of service reckoned from the time of Casio, et al., for moral and exemplary damages and attorneys fees,
their employment until the date of their separation on March 24, since it was on the basis of the imputations and actuations of Pino,
1992, thus: et al. that Casio, et al. were illegally dismissed from employment.
The Court of Appeals thus decreed:
Employee Date Hired Rate/Month Service Total
(1/2 mo/yr WHEREFORE, the assailed award is hereby SET ASIDE, and private
of service) respondent General Milling Corporation is hereby ordered to
reinstate [Casio, et al.] to their former positions without loss of
Casio April 24/74 P2,636.29 x 18 years = P47,453.22 seniority rights, and to pay their full backwages, solidarily with
Igot May 1980 P2,472.75 x 12 years = P29,673.00 [Pino, et al.]. Further, [Pino, et al.] are ordered to indemnify each
Famador Feb. 1977 P2,498.92 x 15 years = P37,483.80 of [Casio, et al.] in the form of moral and exemplary damages in
Lim Aug. 1975 P2,466.21 x 17 years = P41,925.57 the amounts of P50,000.00 and P30,000.00, respectively, and to
Booc Aug. 1978 P2,498.92 x 14 years = P34,984.88 pay attorneys fees.[18]
Obregon May 1984 P2,273.23 x 08 years = P18,185.84
Aninipok Sept. 1967 P2,616.01 x 25 years = P65,400.25
The Motion for Reconsideration of GMC was denied by the Court of
The attorneys fees for [Casio, et al.s] counsel shall be ten percent Appeals in the Resolution dated July 18, 2001.
(10%) of the total amount due them; and shall be shared
proportionately by all of the same [Casio, et al.]. Hence, GMC filed the instant Petition for Review, arguing that:

All other claims are hereby denied.[17] I

THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE


OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF
JURISDICTION WHEN IT SET ASIDE THE AWARD OF THE GMC finally asserts that Pino, et al., the IBP-Local 31 officers and
VOLUNTARY ARBITRATOR, AND IN AWARDING REINSTATEMENT board members who resolved to expel Casio, et al. from the union,
AND FULL BACKWAGES TO [Casio, et al.]. and not GMC, should be held liable for the reinstatement of and
payment of full backwages to Casio, et al. for the company had
II acted in good faith and merely complied with the closed shop
provision in the CBA.
THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE
O F D I S C R E T I O N A M O U N T I N G TO L A C K O R E XC E SS O F On the other hand, Casio, et al. counters that GMC failed to identify
JURISDICTION WHEN IT SAID THAT PETITIONER GMC FAILED TO the specific pieces of evidence supporting the findings of the
ACCORD DUE PROCESS TO [Casio, et al.]. Voluntary Arbitrator. Casio, et al. contends that to accord them due
process, GMC itself, as the employer, should have held proceedings
III distinct and separate from those conducted by IBM-Local 31. GMC
cannot justify its failure to conduct its own inquiry using the
THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE argument that such proceedings would constitute an intrusion by
OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF the company into the internal affairs of the union. The claim of GMC
JURISDICTION WHEN IT DID NOT ABSOLVE PETITIONER GMC OF that it had acted in good faith when it dismissed Casio, et al. from
ANY LIABILITY AND INSTEAD RULED THAT IT WAS SOLIDARILY service in accordance with the closed shop provision of the CBA is
LIABLE WITH THE UNION OFFICERS FOR THE PAYMENT OF FULL inconsistent with the failure of the company to accord the dismissed
BACKWAGES TO [Casio, et al.]. employees their right to due process.

In general, in a petition for review on certiorari as a mode of appeal


At this point, we take note that Pino, et al. did not appeal from the under Rule 45 of the Rules of Court, the petitioner can raise only
decision of the Court of Appeals. questions of law - the Supreme Court is not the proper venue to
consider a factual issue as it is not a trier of facts. A departure
GMC avers that in reviewing and reversing the findings of the from the general rule may be warranted where the findings of fact
Voluntary Arbitrator, the Court of Appeals departed from the of the Court of Appeals are contrary to the findings and conclusions
principle of conclusiveness of the trial judges findings. GMC also of the trial court [or quasi-judicial agency, as the case may be], or
claims that the findings of the Voluntary Arbitrator as to the legality when the same is unsupported by the evidence on record.[20]
of the termination from employment of Casio, et al. are well
supported by evidence. GMC further insists that before IBP-Local 31 Whether Casio, et al. were illegally dismissed without any valid
expelled Casio, et al. from the union and requested GMC to dismiss reason is a question of fact better left to quasi-judicial agencies to
Casio, et al. from service pursuant to the closed shop provision in determine. In this case, the Voluntary Arbitrator was convinced that
the CBA, IBP-Local 31 already accorded Casio, et al. due process, Casio, et al. were legally dismissed; while the Court of Appeals
only that Casio, et al. refused to avail themselves of such believed the opposite, because even though the dismissal of Casio,
opportunity. GMC additionally maintains that Casio, et al. were et al. was made by GMC pursuant to a valid closed shop provision
expelled by IBP-Local 31 for acts inimical to the interest of the in the CBA, the company still failed to observe the elementary rules
union, and GMC had no authority to inquire into or rule on which of due process. The Court is therefore constrained to take a second
employee-member is or is not loyal to the union, this being an look at the evidence on record considering that the factual findings
internal affair of the union. Thus, GMC had to rely on the of the Voluntary Arbitrator and the Court of Appeals are
presumption that Pino, et al. regularly performed their duties and contradictory.
functions as IBP-Local 31 officers and board members, when the
latter investigated and ruled on the charges against Casio, et al.[19]
There are two aspects which characterize the concept of due she is, becomes, and, for the duration of the agreement, remains a
process under the Labor Code: one is substantive whether the member in good standing of a union entirely comprised of or of
termination of employment was based on the provision of the Labor which the employees in interest are a part.[23]
Code or in accordance with the prevailing jurisprudence; the other
is procedural the manner in which the dismissal was effected.[21] Union security clauses are recognized and explicitly allowed under
Article 248(e) of the Labor Code, which provides that:
After a thorough review of the records, the Court agrees with the
Court of Appeals. The dismissal of Casio, et al. was indeed illegal,
having been done without just cause and the observance of Art. 248. Unfair Labor Practices of Employers. x x x
procedural due process.
xxxx
In Alabang Country Club, Inc. v. National Labor Relations
Commission,[22] the Court laid down the grounds for which an (e) To discriminate in regard to wages, hours of work, and other
employee may be validly terminated, thus: terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in this
Under the Labor Code, an employee may be validly terminated on Code or in any other law shall stop the parties from requiring
the following grounds: (1) just causes under Art. 282; (2) membership in a recognized collective bargaining agent as a
authorized causes under Art. 283; (3) termination due to disease condition for employment, except those employees who are already
under Art. 284, and (4) termination by the employee or resignation members of another union at the time of the signing of the
under Art. 285. collective bargaining agreement. (Emphasis supplied.)

Another cause for termination is dismissal from employment due to


the enforcement of the union security clause in the CBA. x x x. It is State policy to promote unionism to enable workers to
(Emphasis ours.) negotiate with management on an even playing field and with more
persuasiveness than if they were to individually and separately
bargain with the employer. For this reason, the law has allowed
Union security is a generic term, which is applied to and stipulations for union shop and closed shop as means of
comprehends closed shop, union shop, maintenance of encouraging workers to join and support the union of their choice in
membership, or any other form of agreement which imposes upon the protection of their rights and interest vis--vis the employer.[24]
employees the obligation to acquire or retain union membership as
a condition affecting employment. There is union shop when all new Moreover, a stipulation in the CBA authorizing the dismissal of
regular employees are required to join the union within a certain employees are of equal import as the statutory provisions on
period as a condition for their continued employment. There is dismissal under the Labor Code, since a CBA is the law between the
maintenance of membership shop when employees, who are union company and the union and compliance therewith is mandated by
members as of the effective date of the agreement, or who the express policy to give protection to labor.[25]
thereafter become members, must maintain union membership as
a condition for continued employment until they are promoted or In terminating the employment of an employee by enforcing the
transferred out of the bargaining unit or the agreement is union security clause, the employer needs only to determine and
terminated. A closed shop, on the other hand, may be defined as prove that: (1) the union security clause is applicable; (2) the
an enterprise in which, by agreement between the employer and union is requesting for the enforcement of the union security
his employees or their representatives, no person may be employed provision in the CBA; and (3) there is sufficient evidence to support
in any or certain agreed departments of the enterprise unless he or the decision of the union to expel the employee from the union.
These requisites constitute just cause for terminating an employee Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers
based on the union security provision of the CBA.[26] employed by the Company with the exception of those who are
specifically excluded by law and by the terms of this Agreement
There is no question that in the present case, the CBA between must be members in good standing of the Union within thirty (30)
GMC and IBM-Local 31 included a maintenance of membership and days upon the signing of this agreement and shall maintain such
closed shop clause as can be gleaned from Sections 3 and 6 of membership in good standing thereof as a condition of their
Article II. IBM-Local 31, by written request, can ask GMC to employment or continued employment.
terminate the employment of the employee/worker who failed to
maintain its good standing as a union member.
Section 6. The Company, upon written request of the Union, shall
It is similarly undisputed that IBM-Local 31, through Gabiana, the terminate the services of any employee/worker who fails to fulfill
IBM Regional Director for Visayas and Mindanao, twice requested the conditions set forth in Sections 3 and 4 thereof, subject
GMC, in the letters dated March 10 and 19, 1992, to terminate the however, to the provisions of the Labor Laws of the Philippines and
employment of Casio, et al. as a necessary consequence of their their Implementing Rules and Regulations. The Union shall absolve
expulsion from the union. the Company from any and all liabilities, pecuniary or otherwise,
and responsibilities to any employee or worker who is dismissed or
It is the third requisite that there is sufficient evidence to support terminated in pursuant thereof.
the decision of IBM-Local 31 to expel Casio, et al. which appears to
be lacking in this case. The provisions of the CBA are clear enough. The termination of
employment on the basis of the closed shop provision of the CBA is
The full text of the individual but identical termination letters,[27] well recognized in law and in jurisprudence.
served by GMC on Casio, et al., is very revealing. They read:
There is no valid ground to refuse to terminate. On the other hand
To: [Employees Name] as pointed out in the unions strongly demanding letter dated March
From: Legal Counsel 19, 1992, the company could be sued for unfair labor
Subject: Dismissal Upon Union Request Thru practice. While we would have wanted not to accommodate
CBA Closed Shop Provision the unions request, we are left with no other option. The
terms of the CBA should be respected. To refuse to enforce the CBA
The company is in receipt of two letters dated March 10, 1992 and would result in the breakdown of industrial peace and the end of
March 19, 1992 respectively from the union at the Mill in Lapulapu harmonious relations between the union and management. The
demanding the termination of your employment pursuant to the company would face the collective anger and enmity of its
closed shop provision of our existing Collective Bargaining employees who are union members.
Agreement. It appears from the attached resolutions that you
have been expelled from union membership and has thus In the light of the unions very insistent demand, verbal and in
ceased to become a member in good standing. The resolutions writing and to avoid the union accusation of coddling you, and
are signed by the same officers who executed and signed our considering the explicitly mandatory language of the closed shop
existing CBA, copies of the letters and resolutions are enclosed provision of the CBA, the company is constrained to terminate your
hereto for your reference. employment, to give you ample time to look and find another
employment, and/or exert efforts to become again a member of
The CBA in Article II provides the following: good standing of your union, effective April 24, 1992.
In the meantime, to prevent serious danger to the life and property the dismissal is not justified and therefore illegal. Thus, petitioners
of the company and of its employees, we are placing you under must not only rely on the weakness of respondents evidence but
preventive suspension beginning today. must stand on the merits of their own defense. A party alleging a
critical fact must support his allegation with substantial evidence for
any decision based on unsubstantiated allegation cannot stand as it
It is apparent from the aforequoted letter that GMC terminated the will offend due process. x x x. (Emphasis supplied.)
employment of Casio, et al. relying upon the Resolution dated
February 29, 1992 of Pino, et al. expelling Casio, et al. from IBM-
Local 31; Gabianas Letters dated March 10 and 19, 1992 The records of this case are absolutely bereft of any supporting
demanding that GMC terminate the employment of Casio, et al. on evidence to substantiate the bare allegation of GMC that Casio, et
the basis of the closed shop clause in the CBA; and the threat of al. were accorded due process by IBM-Local 31. There is nothing on
being sued by IBM-Local 31 for unfair labor practice. The letter record that would indicate that IBM-Local 31 actually notified Casio,
made no mention at all of the evidence supporting the decision of et al. of the charges against them or that they were given the
IBM-Local 31 to expel Casio, et al. from the union. GMC never chance to explain their side. All that was stated in the IBM-Local 31
alleged nor attempted to prove that the company actually looked Resolution dated February 29, 1992, expelling Casio, et al. from the
into the evidence of IBM-Local 31 for expelling Casio, et al. and union, was that a copy of the said letter complaint [dated February
made a determination on the sufficiency thereof. Without such a 24, 1992] was dropped or left in front of E. Casio.[30] It was not
determination, GMC cannot claim that it had terminated the established that said letter-complaint charging Casio, et al. with
employment of Casio, et al. for just cause. acts inimical to the interest of the union was properly served upon
Casio, that Casio willfully refused to accept the said letter-notice, or
The failure of GMC to make a determination of the sufficiency of that Casio had the authority to receive the same letter-notice on
evidence supporting the decision of IBM-Local 31 to expel Casio, et behalf of the other employees similarly accused. Its worthy to note
al. is a direct consequence of the non-observance by GMC of that Casio, et al. were expelled only five days after the issuance of
procedural due process in the dismissal of employees. the letter-complaint against them. The Court cannot find proof on
record when the three-day period, within which Casio, et al. was
As a defense, GMC contends that as an employer, its only duty was supposed to file their answer or counter-affidavits, started to run
to ascertain that IBM-Local 31 accorded Casio, et al. due process; and had expired. The Court is likewise unconvinced that the said
and, it is the finding of the company that IBM-Local 31 did give three-day period was sufficient for Casio, et al. to prepare their
Casio, et al. the opportunity to answer the charges against them, defenses and evidence to refute the serious charges against them.
but they refused to avail themselves of such opportunity.
Contrary to the position of GMC, the acts of Pino, et al. as officers
This argument is without basis. and board members of IBM-Local 31, in expelling Casio, et al. from
the union, do not enjoy the presumption of regularity in the
The Court has stressed time and again that allegations must be performance of official duties, because the presumption applies
proven by sufficient evidence because mere allegation is definitely only to public officers from the highest to the lowest in the service
not evidence.[28] Once more, in Great Southern Maritime Services of the Government, departments, bureaus, offices, and/or its
Corporation. v. Acua,[29] the Court declared: political subdivisions.[31]

Time and again we have ruled that in illegal dismissal cases like the More importantly, in Liberty Cotton Mills Workers Union v. Liberty
present one, the onus of proving that the employee was not Cotton Mills, Inc.,[32] the Court issued the following reminder to
dismissed or if dismissed, that the dismissal was not illegal, rests employers:
on the employer and failure to discharge the same would mean that
The power to dismiss is a normal prerogative of the employer. Irrefragably, GMC cannot dispense with the requirements of notice
However, this is not without limitations. The employer is bound to and hearing before dismissing Casio, et al. even when said
exercise caution in terminating the services of his employees dismissal is pursuant to the closed shop provision in the CBA. The
especially so when it is made upon the request of a labor union rights of an employee to be informed of the charges against him
pursuant to the Collective Bargaining Agreement. x x x. Dismissals and to reasonable opportunity to present his side in a controversy
must not be arbitrary and capricious. Due process must be with either the company or his own union are not wiped away by a
observed in dismissing an employee because it affects not only his union security clause or a union shop clause in a collective
position but also his means of livelihood. Employers should bargaining agreement. An employee is entitled to be protected not
therefore respect and protect the rights of their employees, which only from a company which disregards his rights but also from his
include the right to labor. x x x. own union the leadership of which could yield to the temptation of
swift and arbitrary expulsion from membership and hence dismissal
from his job.[35]
The Court reiterated in Malayang Samahan ng mga Manggagawa sa
M. Greenfield v. Ramos[33] that: In the case at bar, Casio, et al. did not receive any other
communication from GMC, except the written notice of termination
While respondent company may validly dismiss the employees dated March 24, 1992. GMC, by its own admission, did not conduct
expelled by the union for disloyalty under the union security clause a separate and independent investigation to determine the
of the collective bargaining agreement upon the recommendation sufficiency of the evidence supporting the expulsion of Casio, et al.
by the union, this dismissal should not be done hastily and by IBP-Local 31. It straight away acceded to the demand of IBP-
summarily thereby eroding the employees right to due process, Local 31 to dismiss Casio, et al.
self-organization and security of tenure. The enforcement of union
security clauses is authorized by law provided such enforcement The very same circumstances took place in Liberty Cotton Mills,
is not characterized by arbitrariness, and always with due wherein the Court held that the employer-company acted in bad
process. Even on the assumption that the federation had valid faith in dismissing its workers without giving said workers an
grounds to expel the union officers, due process requires that opportunity to present their side in the controversy with their
these union officers be accorded a separate hearing by union, thus:
respondent company. (Emphases supplied.)
While respondent company, under the Maintenance of Membership
provision of the Collective Bargaining Agreement, is bound to
The twin requirements of notice and hearing constitute the dismiss any employee expelled by PAFLU for disloyalty, upon its
essential elements of procedural due process. The law requires the written request, this undertaking should not be done hastily and
employer to furnish the employee sought to be dismissed with two summarily. The company acted in bad faith in dismissing
written notices before termination of employment can be legally petitioner workers without giving them the benefit of a
effected: (1) a written notice apprising the employee of the hearing. It did not even bother to inquire from the workers
particular acts or omissions for which his dismissal is sought in concerned and from PAFLU itself about the cause of the
order to afford him an opportunity to be heard and to defend expulsion of the petitioner workers. Instead, the company
himself with the assistance of counsel, if he desires, and (2) a immediately dismissed the workers on May 30, 1964 after its
subsequent notice informing the employee of the employers receipt of the request of PAFLU on May 29, 1964 in a span of only
decision to dismiss him. This procedure is mandatory and its one day stating that it had no alternative but to comply with its
absence taints the dismissal with illegality.[34] obligation under the Security Agreement in the Collective
Bargaining Agreement, thereby disregarding the right of the
workers to due process, self-organization and security of tenure.[36] computed from the time their actual compensation was withheld
(Emphasis ours.) from them up to the time of their actual reinstatement but if
reinstatement is no longer possible, the backwages shall be
computed from the time of their illegal termination up to the finality
In sum, the Court finds that GMC illegally dismissed Casio, et al. of the decision. Thus, Casio, et al. are entitled to backwages and
because not only did GMC fail to make a determination of the separation pay considering that reinstatement is no longer possible
sufficiency of evidence to support the decision of IBM-Local 31 to because the positions they previously occupied are no longer
expel Casio, et al., but also to accord the expelled union members existing, as declared by GMC.[38]
procedural due process, i.e., notice and hearing, prior to the Casio, et al., having been compelled to litigate in order to seek
termination of their employment redress for their illegal dismissal, are entitled to the award of
attorneys fees equivalent to 10% of the total monetary award.[39]
Consequently, GMC cannot insist that it has no liability for the
payment of backwages and damages to Casio, et al., and that the WHEREFORE, the instant petition is hereby DENIED. The assailed
liability for such payment should fall only upon Pino, et al., as the decision of the Court of Appeals dated March 30, 2001 in CA-G.R.
IBP-Local 31 officers and board members who expelled Casio, et al. SP No. 40280 is AFFIRMED.
GMC completely missed the point that the expulsion of Casio, et al.
by IBP-Local 31 and the termination of employment of the same SO ORDERED.

employees by GMC, although related, are two separate and distinct
acts. Despite a closed shop provision in the CBA and the expulsion
of Casio, et al. from IBP-Local 31, law and jurisprudence imposes
upon GMC the obligation to accord Casio, et al. substantive and
procedural due process before complying with the demand of IBP-
Local 31 to dismiss the expelled union members from service. The
failure of GMC to carry out this obligation makes it liable for illegal
dismissal of Casio, et al.

In Malayang Samahan ng mga Manggagawa sa M. Greenfield,[37]


the Court held that notwithstanding the fact that the dismissal was
at the instance of the federation and that the federation undertook
to hold the company free from any liability resulting from the
dismissal of several employees, the company may still be held
liable if it was remiss in its duty to accord the would-be dismissed
employees their right to be heard on the matter.

An employee who is illegally dismissed is entitled to the twin reliefs


of full backwages and reinstatement. If reinstatement is not viable,
separation pay is awarded to the employee. In awarding separation
pay to an illegally dismissed employee, in lieu of reinstatement, the
amount to be awarded shall be equivalent to one month salary for
every year of service. Under Republic Act No. 6715, employees who
are illegally dismissed are entitled to full backwages, inclusive of
allowances and other benefits or their monetary equivalent,
SECOND DIVISION The CBA contained the following union security provisions:
[G.R. No. 160828. August 9, 2010.] "Article II — Union Security and Check-Off
PICOP RESOURCES, INCORPORATED (PRI), petitioner, vs. Section 6. Maintenance of membership. —
ANACLETO L. TAÑECA, GEREMIAS S. TATO, JAIME N. 6.1 All employees within the appropriate bargaining unit who are
CAMPOS, MARTINIANO A. MAGAYON, JOSEPH B. BALGOA, members of the UNION at the time of the signing of this
MANUEL G. ABUCAY, MOISES M. ALBARAN, MARGARITO G. AGREEMENT shall, as a condition of continued employment by the
ALICANTE, JERRY ROMEO T. AVILA, LORENZO D. CANON, COMPANY, maintain their membership in the UNION in good
RAUL P. DUERO, DANILO Y. ILAN, MANUEL M. MATURAN, JR., standing during the effectivity of this AGREEMENT.
LUISITO R. POPERA, CLEMENTINO C. QUIMAN, ROBERTO Q. 6.2 Any employee who may hereinafter be employed to occupy a
SILOT, CHARLITO D. SINDAY, REMBERT B. SUZON ALLAN J. position covered by the bargaining unit shall be advised by the
TRIMIDAL, and NAMAPRI-SPFL, respondents. COMPANY that they are required to file an application for
DECISION membership with the UNION within thirty (30) days from the date
PERALTA, J p: his appointment shall have been made regular.
This is a Petition for Review on Certiorari under Rule 45 of the Rules 6.3 The COMPANY, upon the written request of the UNION
of Court seeking the reversal of the Decision 1 dated July 25, 2003 and after compliance with the requirements of the New
and Resolution 2 dated October 23, 2003 of the Court of Appeals in Labor Code, shall give notice of termination of services of
CA-G.R. SP No. 71760, setting aside the Resolutions dated October any employee who shall fail to fulfill the condition provided
8, 2001 3 and April 29, 2002 4 of the National Labor Relations in Section 6.1 and 6.2 of this Article, but it assumes no
Commission in NLRC CA No. M-006309-2001 and reinstating the obligation to discharge any employee if it has reasonable grounds
Decision 5 dated March 16, 2001 of the Labor Arbiter. to believe either that membership in the UNION was not available
The facts, as culled from the records, are as follows: to the employee on the same terms and conditions generally
On February 13, 2001, respondents Anacleto Tañeca, Loreto applicable to other members, or that membership was denied or
Uriarte, Joseph Balgoa, Jaime Campos, Geremias Tato, Martiniano terminated for reasons other than voluntary resignation or non-
Magayon, Manuel Abucay and fourteen (14) others filed a payment of regular union dues. Separation under the Section is
Complaint for unfair labor practice, illegal dismissal and money understood to be for cause, consequently, the dismissed employee
claims against petitioner PICOP Resources, Incorporated (PRI), is not entitled to separation benefits provided under the New Labor
Wilfredo Fuentes (in his capacity as PRI's Vice President/Resident Code and in this AGREEMENT." 7
Manager), Atty. Romero Boniel (in his capacity as PRI's Manager of On May 16, 2000, Atty. Proculo P. Fuentes (Atty. Fuentes) sent a
Legal/Labor), Southern Philippines Federation of Labor (SPFL), Atty. letter to the management of PRI demanding the termination of
Wilbur T. Fuentes (in his capacity as Secretary General of SPFL), employees who allegedly campaigned for, supported and signed the
Pascasio Trugillo (in his capacity as Local President of Nagkahiusang Petition for Certification Election of the Federation of Free Workers
Mamumuo sa PICOP Resources, Inc.-SPFL [NAMAPRI-SPFL]) and Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL
Atty. Proculo Fuentes, Jr. 6 (in his capacity as National President of considered said act of campaigning for and signing the petition for
SPFL). certification election of FFW as an act of disloyalty and a valid basis
Respondents were regular rank-and-file employees of PRI and bona for termination for a cause in accordance with its Constitution and
fide members of Nagkahiusang Mamumuo sa PRI Southern By-Laws, and the terms and conditions of the CBA, specifically
Philippines Federation of Labor (NAMAPRI-SPFL), which is the Article II, Sections 6.1 and 6.2 on Union Security Clause.
collective bargaining agent for the rank-and-file employees of In a letter dated May 23, 2000, Mr. Pascasio Trugillo requested the
petitioner PRI. HSCATc management of PRI to investigate those union members who
PRI has a collective bargaining agreement (CBA) with NAMAPRI- signed the Petition for Certification Election of FFW during the
SPFL for a period of five (5) years from May 22, 1995 until May 22, existence of their CBA. NAMAPRI-SPFL, likewise, furnished PRI with
2000.
machine copy of the authorization letters dated March 19, 20 and start of the freedom period, the petition of FFW was only filed with
21, 2000, which contained the names and signatures of employees. the DOLE on May 18, 2000, or 58 days after the start of the
Acting on the May 16 and May 23, 2000 letters of the NAMAPRI- freedom period.
SPFL, Atty. Romero A. Boniel issued a memorandum addressed to Respondents maintained that their acts of signing the authorization
the concerned employees to explain in writing within 72 hours why signifying support to the filing of a Petition for Certification Election
their employment should not be terminated due to acts of disloyalty of FFW was merely prompted by their desire to have a certification
as alleged by their Union. EcHTDI election among the rank-and-file employees of PRI with hopes of a
Within the period from May 26 to June 2, 2000, a number of CBA negotiation in due time; and not to cause the downfall of
employees who were served "explanation memorandum" submitted NAMAPRI-SPFL. ADSTCI
their explanation, while some did not. Furthermore, respondents contended that there was lack of
In a letter dated June 2, 2000, Atty. Boniel endorsed the procedural due process. Both the letter dated May 16, 2000 of Atty.
explanation letters of the employees to Atty. Fuentes for evaluation Fuentes and the follow-up letter dated May 23, 2000 of Trujillo
and final disposition in accordance with the CBA. addressed to PRI did not mention their names. Respondents
After evaluation, in a letter dated July 12, 2000, Atty. Fuentes stressed that NAMAPRI-SPFL merely requested PRI to investigate
advised the management of PRI that the Union found the member's union members who supported the Petition for Certification Election
explanations to be unsatisfactory. He reiterated the demand for of FFW. Respondents claimed that they should have been
termination, but only of 46 member-employees, including summoned individually, confronted with the accusation and
respondents. investigated accordingly and from where the Union may base its
On October 16, 2000, PRI served notices of termination for causes findings of disloyalty and, thereafter, recommend to management
to the 31 out of the 46 employees whom NAMAPRIL-SPFL sought to the termination for causes.
be terminated on the ground of "acts of disloyalty" committed Respondents, likewise, argued that at the time NAMAPRI-SPFL
against it when respondents allegedly supported and signed the demanded their termination, it was no longer the bargaining
Petition for Certification Election of FFW before the "freedom representative of the rank-and-file workers of PRI, because the CBA
period" during the effectivity of the CBA. A Notice dated October had already expired on May 22, 2000. Hence, there could be no
21, 2000 was also served on the Department of Labor and justification in PRI's act of dismissing respondents due to acts of
Employment Office (DOLE), Caraga Region. disloyalty.
Respondents then accused PRI of Unfair Labor Practice punishable Respondents asserted that the act of PRI, Wilfredo Fuentes and
under Article 248 (a), (b), (c), (d) and (e) of the Labor Code,while Atty. Boniel in giving in to the wishes of the Union in discharging
Atty. Fuentes and Wilbur T. Fuentes and Pascasio Trujillo were them on the ground of disloyalty to the Union amounted to
accused of violating Article 248 (a) and (b) of the Labor Code. interference with, restraint or coercion of respondents' exercise of
Respondents alleged that none of them ever withdrew their their right to self-organization. The act indirectly required
membership from NAMAPRI-SPFL or submitted to PRI any union petitioners to support and maintain their membership with
dues and check-off disauthorizations against NAMAPRI-SPFL. They NAMAPRI-SPFL as a condition for their continued employment. The
claimed that they continue to remain on record as bona fide acts of NAMAPRI-SPFL, Atty. Fuentes and Trujillo amounted to
members of NAMAPRI-SPFL. They pointed out that a patent actual restraint and coercion of the petitioners in the exercise of
manifestation of one's disloyalty would have been the explicit their rights to self-organization and constituted acts of unfair labor
resignation or withdrawal of membership from the Union practice.
accompanied by an advice to management to discontinue union In a Decision 8 dated March 16, 2001, the Labor Arbiter declared
dues and check-off deductions. They insisted that mere affixation of the respondents' dismissal to be illegal and ordered PRI to reinstate
signature on such authorization to file a petition for certification respondents to their former or equivalent positions without loss of
election was not per se an act of disloyalty. They claimed that while seniority rights and to jointly and solidarily pay their backwages.
it may be true that they signed the said authorization before the The dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby entered: the legal issues, its error, if any, is not tantamount to abuse of
1. Declaring complainants' dismissal illegal; and discretion falling within the ambit of Rule 65.
2. Ordering respondents Picop Resources Inc. (PRI) and NAMAPRI- Petitioner is mistaken. ESCDHA
SPFL to reinstate complainants to their former or equivalent The power of the Court of Appeals to review NLRC decisions via
positions without loss of seniority rights and to jointly and solidarily Rule 65 or Petition for Certiorari has been settled as early as in our
pay their backwages in the total amount of P420,339.30 as shown decision in St. Martin Funeral Home v. National Labor Relations
in the said Annex "A" plus damages in the amount of P10,000.00 Commission. 11 This Court held that the proper vehicle for such
each, or a total of P210,000.00 and attorney's fees equivalent to review was a Special Civil Action for Certiorari under Rule 65 of the
10% of the total monetary award. Rules of Court, and that this action should be filed in the Court of
SO ORDERED. 9 ESCDHA Appeals in strict observance of the doctrine of the hierarchy of
PRI and NAMAPRI-SPFL appealed to the National Labor Relations courts. 12 Moreover, it is already settled that under Section 9 of
Commission (NLRC), which reversed the decision of the Labor Batas Pambansa Blg. 129, as amended by Republic Act No.
Arbiter; thus, declaring the dismissal of respondents from 7902[10] (An Act Expanding the Jurisdiction of the Court of
employment as legal. Appeals, amending for the purpose of Section Nine of Batas
Respondents filed a motion for reconsideration, but it was denied Pambansa Blg. 129 as amended, known as the Judiciary
on April 29, 2001 for lack of merit. Reorganization Act of 1980), the Court of Appeals — pursuant to
Unsatisfied, respondents filed a petition for certiorari under Rule 65 the exercise of its original jurisdiction over Petitions for Certiorari —
before the Court of Appeals and sought the nullification of the is specifically given the power to pass upon the evidence, if and
Resolution of the NLRC dated October 8, 2001 which reversed the when necessary, to resolve factual issues. 13
Decision dated March 16, 2001 of Labor Arbiter and the Resolution We now come to the main issue of whether there was just cause to
dated April 29, 2002, which denied respondent's motion for terminate the employment of respondents.
reconsideration. PRI argued that the dismissal of the respondents was valid and
On July 25, 2003, the Court of Appeals reversed and set aside the legal. It claimed to have acted in good faith at the instance of the
assailed Resolutions of the NLRC and reinstated the Decision dated incumbent union pursuant to the Union Security Clause of the CBA.
March 16, 2001 of the Labor Arbiter. Citing Article 253 of the Labor Code,14 PRI contends that as parties
Thus, before this Court, PRI, as petitioner, raised the following to the CBA, they are enjoined to keep the status quo and continue
issues: in full force and effect the terms and conditions of the existing CBA
I during the 60-day period and/or until a new agreement is reached
WHETHER AN EXISTING COLLECTIVELY (sic) BARGAINING by the parties.
AGREEMENT (CBA) CAN BE GIVEN ITS FULL FORCE AND EFFECT IN Petitioner's argument is untenable.
ALL ITS TERMS AND CONDITION INCLUDING ITS UNION SECURITY "Union security" is a generic term, which is applied to and
CLAUSE, EVEN BEYOND THE 5-YEAR PERIOD WHEN NO NEW CBA comprehends "closed shop," "union shop," "maintenance of
HAS YET BEEN ENTERED INTO. membership," or any other form of agreement which imposes upon
II employees the obligation to acquire or retain union membership as
WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION a condition affecting employment. There is union shop when all new
AND/OR CONCLUSION OF LAW FALL WITHIN THE AMBIT OF THE regular employees are required to join the union within a certain
EXTRAORDINARY REMEDY OF CERTIORARI UNDER RULE 65, period as a condition for their continued employment. There is
REVISED RULES OF COURT. 10 maintenance of membership shop when employees, who are union
We will first delve on the technical issue raised. members as of the effective date of the agreement, or who
PRI perceived a patent error in the mode of appeal elected by thereafter become members, must maintain union membership as
respondents for the purpose of assailing the decision of the NLRC. a condition for continued employment until they are promoted or
It claimed that assuming that the NLRC erred in its judgment on transferred out of the bargaining unit, or the agreement is
terminated. A closed shop, on the other hand, may be defined as employment of respondents inasmuch as the petition itself was
an enterprise in which, by agreement between the employer and actually filed during the freedom period. Nothing in the records
his employees or their representatives, no person may be employed would show that respondents failed to maintain their membership
in any or certain agreed departments of the enterprise unless he or in good standing in the Union. Respondents did not resign or
she is, becomes, and, for the duration of the agreement, remains a withdraw their membership from the Union to which they belong.
member in good standing of a union entirely comprised of or of Respondents continued to pay their union dues and never joined
which the employees in interest are a part. 15 the FFW.
However, in terminating the employment of an employee by Significantly, petitioner's act of dismissing respondents stemmed
enforcing the union security clause, the employer needs to from the latter's act of signing an authorization letter to file a
determine and prove that: (1) the union security clause is petition for certification election as they signed it outside the
applicable; (2) the union is requesting for the enforcement of the freedom period. However, we are constrained to believe that an
union security provision in the CBA; and (3) there is sufficient "authorization letter to file a petition for certification election" is
evidence to support the decision of the union to expel the employee different from an actual "Petition for Certification Election."
from the union. These requisites constitute just cause for Likewise, as per records, it was clear that the actual Petition for
terminating an employee based on the union security provision of Certification Election of FFW was filed only on May 18, 2000. 17
the CBA. 16 Thus, it was within the ambit of the freedom period which
As to the first requisite, there is no question that the CBA between commenced from March 21, 2000 until May 21, 2000. Strictly
PRI and respondents included a union security clause, specifically, a speaking, what is prohibited is the filing of a petition for
maintenance of membership as stipulated in Sections 6 of Article II, certification election outside the 60-day freedom period. 18 This is
Union Security and Check-Off. Following the same provision, PRI, not the situation in this case. If at all, the signing of the
upon written request from the Union, can indeed terminate the authorization to file a certification election was merely preparatory
employment of the employee who failed to maintain its good to the filing of the petition for certification election, or an exercise
standing as a union member. of respondents' right to self-organization.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) Moreover, PRI anchored their decision to terminate respondents'
occasions demanded from PRI, in their letters dated May 16 and employment on Article 253 of the Labor Code which states that "it
23, 2000, to terminate the employment of respondents due to their shall be the duty of both parties to keep the status quo and to
acts of disloyalty to the Union. continue in full force and effect the terms and conditions of the
However, as to the third requisite, we find that there is no sufficient existing agreement during the 60-day period and/or until a new
evidence to support the decision of PRI to terminate the agreement is reached by the parties." It claimed that they are still
employment of the respondents. bound by the Union Security Clause of the CBA even after the
PRI alleged that respondents were terminated from employment expiration of the CBA; hence, the need to terminate the
based on the alleged acts of disloyalty they committed when they employment of respondents.
signed an authorization for the Federation of Free Workers (FFW) to Petitioner's reliance on Article 253 is misplaced.
file a Petition for Certification Election among all rank-and-file The provision of Article 256 of the Labor Code is particularly
employees of PRI. It contends that the acts of respondents are a enlightening. It reads:
violation of the Union Security Clause, as provided in their Article 256. Representation issue in organized establishments. —
Collective Bargaining Agreement. HSCATc In organized establishments, when a verified petition questioning
We are unconvinced. the majority status of the incumbent bargaining agent is filed
We are in consonance with the Court of Appeals when it held that before the Department of Labor and Employment within the sixty-
the mere signing of the authorization in support of the Petition for day period before the expiration of a collective bargaining
Certification Election of FFW on March 19, 20 and 21, or before the agreement, the Med-Arbiter shall automatically order an election by
"freedom period," is not sufficient ground to terminate the secret ballot when the verified petition is supported by the written
consent of at least twenty-five percent (25%) of all the employees new agreement will not apply. Otherwise, it will create an absurd
in the bargaining unit to ascertain the will of the employees in the situation where the union members will be forced to maintain
appropriate bargaining unit. To have a valid election, at least a membership by virtue of the union security clause existing under
majority of all eligible voters in the unit must have cast their votes. the CBA and, thereafter, support another union when filing a
The labor union receiving the majority of the valid votes cast shall petition for certification election. If we apply it, there will always be
be certified as the exclusive bargaining agent of all the workers in an issue of disloyalty whenever the employees exercise their right
the unit. When an election which provides for three or more choices to self-organization. The holding of a certification election is a
results in no choice receiving a majority of the valid votes cast, a statutory policy that should not be circumvented, 23 or
run-off election shall be conducted between the labor unions compromised.
receiving the two highest number of votes: Provided, That the total Time and again, we have ruled that we adhere to the policy of
number of votes for all contending unions is at least fifty per cent enhancing the welfare of the workers. Their freedom to choose who
(50%) of the number of votes cast. should be their bargaining representative is of paramount
At the expiration of the freedom period, the employer shall continue importance. The fact that there already exists a bargaining
to recognize the majority status of the incumbent bargaining agent representative in the unit concerned is of no moment as long as the
where no petition for certification election is filed. 19 HTCIcE petition for certification election was filed within the freedom
Applying the same provision, it can be said that while it is period. What is imperative is that by such a petition for certification
incumbent for the employer to continue to recognize the majority election the employees are given the opportunity to make known of
status of the incumbent bargaining agent even after the expiration who shall have the right to represent them thereafter. Not only
of the freedom period, they could only do so when no petition for some, but all of them should have the right to do so. What is
certification election was filed. The reason is, with a pending equally important is that everyone be given a democratic space in
petition for certification, any such agreement entered into by the bargaining unit concerned. 24
management with a labor organization is fraught with the risk that We will emphasize anew that the power to dismiss is a normal
such a labor union may not be chosen thereafter as the collective prerogative of the employer. This, however, is not without
bargaining representative. 20 The provision for status quo is limitations. The employer is bound to exercise caution in
conditioned on the fact that no certification election was filed during terminating the services of his employees especially so when it is
the freedom period. Any other view would render nugatory the made upon the request of a labor union pursuant to the Collective
clear statutory policy to favor certification election as the means of Bargaining Agreement. Dismissals must not be arbitrary and
ascertaining the true expression of the will of the workers as to capricious. Due process must be observed in dismissing an
which labor organization would represent them. 21 employee, because it affects not only his position but also his
In the instant case, four (4) petitions were filed as early as May 12, means of livelihood. Employers should, therefore, respect and
2000. In fact, a petition for certification election was already protect the rights of their employees, which include the right to
ordered by the Med-Arbiter of DOLE Caraga Region on August 23, labor. 25 EcHTCD
2000. 22 Therefore, following Article 256, at the expiration of the An employee who is illegally dismissed is entitled to the twin reliefs
freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the of full backwages and reinstatement. If reinstatement is not viable,
incumbent bargaining agent does not hold true when petitions for separation pay is awarded to the employee. In awarding separation
certification election were filed, as in this case. pay to an illegally dismissed employee, in lieu of reinstatement, the
Moreover, the last sentence of Article 253 which provides for amount to be awarded shall be equivalent to one month salary for
automatic renewal pertains only to the economic provisions of the every year of service. Under Republic Act No. 6715, employees who
CBA, and does not include representational aspect of the CBA. An are illegally dismissed are entitled to full backwages, inclusive of
existing CBA cannot constitute a bar to a filing of a petition for allowances and other benefits, or their monetary equivalent,
certification election. When there is a representational issue, the computed from the time their actual compensation was withheld
status quo provision in so far as the need to await the creation of a from them up to the time of their actual reinstatement. But if
reinstatement is no longer possible, the backwages shall be
computed from the time of their illegal termination up to the finality
of the decision. Moreover, respondents, having been compelled to
litigate in order to seek redress for their illegal dismissal, are
entitled to the award of attorney's fees equivalent to 10% of the
total monetary award. 26
WHEREFORE, the petition is DENIED. The Decision dated July 25,
2003 and the Resolution dated October 23, 2003 of the Court of
Appeals in CA-G.R. SP No. 71760, which set aside the Resolutions
dated October 8, 2001 and April 29, 2002 of the National Labor
Relations Commission in NLRC CA No. M-006309-2001, are
AFFIRMED accordingly. Respondents are hereby awarded full
backwages and other allowances, without qualifications and
diminutions, computed from the time they were illegally dismissed
up to the time they are actually reinstated. Let this case be
remanded to the Labor Arbiter for proper computation of the full
backwages due respondents, in accordance with Article 279 of the
Labor Code,as expeditiously as possible.
SO ORDERED.
Carpio, Nachura, Abad and Mendoza, JJ., concur.
||| (PICOP Resources, Inc. v. Tañeca, G.R. No. 160828, [August 9,
2010], 641 PHIL 175-194)

EN BANC the latter to separate Appellee from the service in view of the fact
[G.R. No. L-25246. September 12, 1974.] that he was resigning from the Union as a member. The
BENJAMIN VICTORIANO, plaintiff-appellee, vs. ELIZALDE management of the Company in turn notified Appellee and his
ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC., counsel that unless the Appellee could achieve a satisfactory
defendants, ELIZALDE ROPE WORKERS' UNION, defendant- arrangement with the Union, the Company would be constrained to
appellant. dismiss him from the service. This prompted Appellee to file an
Salonga, Ordoñez, Yap, Sicat & Associates for plaintiff- action for injunction, docketed as Civil Case No. 58894 in the Court
appellee. of First Instance of Manila to enjoin the Company and the Union
Cipriano Cid & Associates for defendant-appellant. from dismissing Appellee. 1 In its answer, the Union invoked the
DECISION "union security clause" of the collective bargaining agreement;
ZALDIVAR, J p: assailed the constitutionality of Republic Act No. 3350; and
Appeal to this Court on purely questions of law from the decision of contended that the Court had no jurisdiction over the case,
the Court of First Instance of Manila in its Civil Case No. 58894. pursuant to Republic Act No. 875, Sections 24 and 9 (d) and (e). 2
The undisputed facts that spawned the instant case follow: Upon the facts agreed upon by the parties during the pre-trial
Benjamin Victoriano (hereinafter referred to as Appellee), a conference, the Court a quo rendered its decision on August 26,
member of the religious sect known as the "Iglesia ni Cristo", had 1965, the dispositive portion of which reads:
been in the employ of the Elizalde Rope Factory, Inc. (hereinafter "IN VIEW OF THE FOREGOING, judgment is rendered enjoining the
referred to as Company) since 1958. As such employee, he was a defendant Elizalde Rope Factory, Inc. from dismissing the plaintiff
member of the Elizalde Rope Workers' Union (hereinafter referred from his present employment and sentencing the defendant Elizalde
to as Union) which had with the Company a collective bargaining Rope Workers' Union to pay the plaintiff P500 for attorney's fees
agreement containing a closed shop provision which reads as and the costs of this action." 3
follows: From this decision, the Union appealed directly to this Court on
"Membership in the Union shall be required as a condition of purely questions of law, assigning the following errors:
employment for all permanent employees workers covered by this "I. That the lower court erred when it did not rule that Republic Act
Agreement." No. 3350 is unconstitutional.
The collective bargaining agreement expired on March 3, 1964 but "II. That the lower court erred when it sentenced appellant herein
was renewed the following day, March 4, 1964. to pay plaintiff the sum of P500 as attorney's fees and the cost
Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to thereof."
its amendment by Republic Act No. 3350, the employer was not In support of the alleged unconstitutionality of Republic Act No.
precluded "from making an agreement with a labor organization to 3350, the Union contented, firstly, that the Act infringes on the
require as a condition of employment membership therein, if such fundamental right to form lawful associations; that "the very
labor organization is the representative of the employees." On June phraseology of said Republic Act 3350, that membership in a labor
18, 1961, however, Republic Act No. 3350 was enacted, introducing organization is banned to all those belonging to such religious sect
an amendment to paragraph (4) subsection (a) of section 4 of prohibiting affiliation with any labor organization" 4 , "prohibits all
Republic Act No. 875, as follows: . . . "but such agreement shall not the members of a given religious sect from joining any labor union
cover members of any religious sects which prohibit affiliation of if such sect prohibits affiliations of their members thereto" 5 ; and,
their members in any such labor organization". consequently, deprives said members of their constitutional right to
Being a member of a religious sect that prohibits the affiliation of form or join lawful associations or organizations guaranteed by the
its members with any labor organization, Appellee presented his Bill of Rights, and thus becomes obnoxious to Article III, Section 1
resignation to appellant Union in 1962, and when no action was (6) of the 1935 Constitution. 6
taken thereon, he reiterated his resignation on September 3, 1974. Secondly, the Union contended that Republic Act No. 3350 is
Thereupon, the Union wrote a formal letter to the Company asking unconstitutional for impairing the obligation of contracts in that,
while the Union is obliged to comply with its collective bargaining Appellee, assailing appellant's arguments, contended that Republic
agreement containing a "closed shop provision," the Act relieves Act No. 3350 does not violate the right to form lawful associations,
the employer from its reciprocal obligation of cooperating in the for the right to join associations includes the right not to join or to
maintenance of union membership as a condition of employment; resign from a labor organization, if one's conscience does not allow
and that said Act, furthermore, impairs the Union's rights as it his membership therein, and the Act has given substance to such
deprives the union of dues from members who, under the Act, are right by prohibiting the compulsion of workers to join labor
relieved from the obligation to continue as such members. 7 organizations; 14 that said Act does not impair the obligation of
Thirdly, the Union contended that Republic Act No. 3350 contracts for said law formed part of, and was incorporated into,
discriminatorily favors those religious sects which ban their the terms of the closed shop agreement; 15 that the Act does not
members from joining labor unions, in violation of Article III, violate the establishment of religion clause or separation of Church
Section 1 (7) of the 1935 Constitution; and while said Act unduly and State, for Congress, in enacting said law, merely
protects certain religious sects, it leaves no rights or protection to accommodated the religious needs of those workers whose religion
labor organizations. 8 prohibits its members from joining labor unions, and balanced the
Fourthly, Republic Act No. 3350, asserted the Union, violates the collective rights of organized labor with the constitutional right of
constitutional provision that "no religious test shall be required for an individual to freely exercise his chosen religion; that the
the exercise of a civil right," in that the laborer's exercise of his civil constitutional right to the free exercise of one's religion has primacy
right to join associations for purposes not contrary to law has to be and preference over union security measures which are merely
determined under the Act by his affiliation with a religious sect; contractual 16 ; that said Act does not violate the constitutional
that conversely, if a worker has to sever his religious connection provision of equal protection, for the classification of workers under
with a sect that prohibits membership in a labor organization in the Act depending on their religious tenets is based on substantial
order to be able to join a labor organization, said Act would violate distinction, is germane to the purpose of the law, and applies to all
religious freedom. 9 the members of a given class; 17 that said Act, finally, does not
Fifthly, the Union contended that Republic Act No. 3350, violates violate the social justice policy of the Constitution, for said Act was
the "equal protection of laws" clause of the Constitution, it being a enacted precisely to equalize employment opportunities for all
discriminatory legislation, inasmuch as by exempting from the citizens in the midst of the diversities of their religious beliefs. 18
operation of closed shop agreement the members of the "Iglesia ni I. Before We proceed to the discussion of the first assigned error, it
Cristo", it has granted said members undue advantages over their is necessary to premise that there are some thoroughly established
fellow workers, for while the Act exempts them from union principles which must be followed in all cases where questions of
obligation and liability, it nevertheless entitles them at the same constitutionality as obtains in the instant case are involved. All
time to the enjoyment of all concessions, benefits and other presumptions are indulged in favor of constitutionality; one who
emoluments that the union might secure from the employer. 10 attacks a statute, alleging unconstitutionality must prove its
Sixthly, the Union contended that Republic Act No. 3350 violates invalidity beyond a reasonable doubt; that a law may work hardship
the constitutional provision regarding the promotion of social does not render it unconstitutional; that if any reasonable basis
justice. 11 may be conceived which supports the statute, it will be upheld, and
Appellant Union, furthermore, asserted that a "closed shop the challenger must negate all possible bases; that the courts are
provision" in a collective bargaining agreement cannot be not concerned with the wisdom, justice, policy, or expediency of a
considered violative of religious freedom, as to call for the statute; and that a liberal interpretation of the constitution in favor
amendment introduced by Republic Act No. 3350; 12 and that of the constitutionality of legislation should be adopted. 19
unless Republic Act No. 3350 is declared unconstitutional, trade 1. Appellant Union's contention that Republic Act No. 3350 prohibits
unionism in this country would be wiped out as employers would and bans the members of such religious sects that forbid affiliation
prefer to hire or employ members of the Iglesia ni Cristo in order to of their members with labor unions from joining labor unions
do away with labor organizations. 13 appears nowhere in the wording of Republic Act No. 3350; neither
can the same be deduced by necessary implication therefrom. It is employees must continue to be members of the union for the
not surprising, therefore, that appellant, having thus misread the duration of the contract in order to keep their jobs. Thus Section 4
Act, committed the error of contending that said Act is obnoxious to (a) (4) of the Industrial Peace Act, before its amendment by
the constitutional provision on freedom of association. Republic Act No. 3350, provides that although it would be an unfair
Both the Constitution and Republic Act No. 875 recognize freedom labor practice for an employer "to discriminate in regard to hire or
of association. Section 1 (6) of Article III of the Constitution of tenure of employment or any term or condition of employment to
1935, as well as Section 7 of Article n of the Constitution of 1973, encourage or discourage membership in any labor organization" the
provide that the right to form associations or societies for purposes employer is, however, not precluded "from making an agreement
not contrary to law shall not be abridged. Section 3 of Republic Act with a labor organization to require as a condition of employment
No. 875 provides that employees shall have the right to self- membership therein, if such labor organization is the representative
organization and to form, join or assist labor organizations of their of the employees". By virtue, therefore, of a closed shop
own choosing for the purpose of collective bargaining and to agreement, before the enactment of Republic Act No. 3350, if any
engage in concerted activities for the purpose of collective person, regardless of his religious beliefs, wishes to be employed or
bargaining and other mutual aid or protection. What the to keep his employment, he must become a member of the
Constitution and the Industrial Peace Act recognize and guarantee collective bargaining union. Hence, the right of said employee not
is the "right" to form or join associations. Notwithstanding the to join the labor union is curtailed and withdrawn.
different theories propounded by the different schools of To that all embracing coverage of the closed shop arrangement,
jurisprudence regarding the nature and contents of a "right", it can Republic Act No. 3350 introduced an exception, when it added to
be safely said that whatever theory one subscribes to, a right Section 4 (a) (4) of the Industrial Peace Act the following proviso:
comprehends at least two broad notions, namely: first, liberty or "but such agreement shall not cover members of any religious sects
freedom, i e., the absence of legal restraint, whereby an employee which prohibit affiliation of their members in any such labor
may act for himself without being prevented by law; and second, organization". Republic Act No. 3350 merely excludes ipso jure
power, whereby an employee may, as he pleases, join or refrain from the application and coverage of the closed shop agreement
from joining an association. It is, therefore, the employee who the employees belonging to any religious sects which prohibit
should decide for himself whether he should join or not an affiliation of their members with any labor organization. What the
association; and should he choose to join, he himself makes up his exception provides, therefore, is that members of said religious
mind as to which association he would join; and even after he has sects cannot be compelled or coerced to join labor unions even
joined, he still retains the liberty and the power to leave and cancel when said unions have closed shop agreements with the
his membership with said organization at any time. 20 It is clear, employers; that in spite of any closed shop agreement, members of
therefore, that the right to join a union includes the right to abstain said religious sects cannot be refused employment or dismissed
from joining any union. 21 Inasmuch as what both the Constitution from their jobs on the sole ground that they are not members of
and the Industrial Peace Act have recognized, and guaranteed to the collective bargaining union. It is clear, therefore, that the
the employee, is the "right" to join associations of his choice, it assailed Act, far from infringing the constitutional provision on
would be absurd to say that the law also imposes, in the same freedom of association, upholds and reinforces it. It does not
breath, upon the employee the duty to join associations. The law prohibit the members of said religious sects from affiliating with
does not enjoin an employee to sign up with any association. labor unions. It still leaves to said members the liberty and the
The right to refrain from joining labor organizations recognized by power to affiliate, or not to affiliate, with labor unions. If,
Section 3 of the Industrial Peace Act is, however, limited. The legal notwithstanding their religious beliefs, the members of said
protection granted to such right to refrain from joining is withdrawn religious sects prefer to sign up with the labor union, they can do
by operation of law, where a labor union and an employer have so. If in deference and fealty to their religious faith, they refuse to
agreed on a closed shop, by virtue of which the employer may sign up, they can do so; the law does not coerce them to join;
employ only members of the collective bargaining union, and the neither does the law prohibit them from joining; and neither may
the employer or labor union compel them to join. Republic Act No. the reservation of essential attributes of sovereign power is also
3350, therefore, does not violate the constitutional provision on read into contracts as a postulate of the legal order. All contracts
freedom of association. made with reference to any matter that is subject to regulation
2. Appellant Union also contends that the Act is unconstitutional for under the police power must be understood as made in reference to
impairing the obligation of its contract, specifically, the "union the possible exercise of that power. 26 Otherwise, important and
security clause" embodied in its Collective Bargaining Agreement valuable reforms may be precluded by the simple device of entering
with the Company, by virtue of which "membership in the union into contracts for the purpose of doing that which otherwise may be
was required as a condition for employment for all permanent prohibited. The policy of protecting contracts against impairment
employees workers". This agreement was already in existence at presupposes the maintenance of a government by virtue of which
the time Republic Act No. 3350 was enacted of June 18, 1961, and contractual relations are worthwhile — a government which retains
it cannot, therefore, be deemed to have been incorporated into the adequate authority to secure the peace and good order of society.
agreement. But by reason of this amendment, Appellee, as well as The contract clause of the Constitution must, therefore, be not only
others similarly situated, could no longer be dismissed from his job in harmony with, but also in subordination to, in appropriate
even if he should cease to be a member, or disaffiliate from the instances, the reserved power of the state to safeguard the vital
Union, and the Company could continue employing him interests of the people. It follows that not all legislations, which
notwithstanding his disaffiliation from the Union. The Act, therefore, have the effect of impairing a contract, are obnoxious to the
introduced a change into the express terms of the union security constitutional prohibition as to impairment, and a statute passed in
clause; the Company was partly absolved by law from the the legitimate exercise of police power, although it incidentally
contractual obligation it had with the Union of employing only Union destroys existing contract rights, must be upheld by the courts.
members in permanent positions. It cannot be denied, therefore, This has special application to contracts regulating relations
that there was indeed an impairment of said union security clause. between capital and labor which are not merely contractual, and
According to Black, any statute which introduces a change into the said labor contracts, for being impressed with public interest, must
express terms of the contract, or its legal construction, or its yield to the common good. 27
validity, or its discharge, or the remedy for its enforcement, impairs In several occasions this Court declared that the prohibition against
the contract. The extent of the change is not material. It is not a impairing the obligations of contracts has no application to statutes
question of degree or manner or cause, but of encroaching in any relating to public subjects within the domain of the general
respect on its obligation or dispensing with any part of its force. legislative powers of the state involving public welfare. 28 Thus,
There is an impairment of the contract if either party is absolved by this Court also held that the Blue Sunday Law was not an
law from its performance. 22 Impairment has also been predicated infringement of the obligation of a contract that required the
on laws which, without destroying contracts, derogate from employer to furnish work on Sundays to his employees, the law
substantial contractual rights. 23 having been enacted to secure the well-being and happiness of the
It should not be overlooked, however, that the prohibition to impair laboring class, and being, furthermore, a legitimate exercise of the
the obligation of contracts is not absolute and unqualified. The police power. 29
prohibition is general, affording a broad outline and requiring In order to determine whether legislation unconstitutionally impairs
construction to fill in the details. The prohibition is not to be read contract obligations, no unchanging yardstick, applicable at all
with literal exactness like a mathematical formula, for it prohibits times and under all circumstances, by which the validity of each
unreasonable impairment only. 24 In spite of the constitutional statute may be measured or determined, has been fashioned, but
prohibition, the State continues to possess authority to safeguard every case must be determined upon its own circumstances.
the vital interests of its people. Legislation appropriate to Legislation impairing the obligation of contracts can be sustained
safeguarding said interests may modify or abrogate contracts when it is enacted for the promotion of the general good of the
already in effect. 25 For not only are existing laws read into people, and when the means adopted to secure that end are
contracts in order to fix the obligations as between the parties, but reasonable. Both the end sought and the means adopted must be
legitimate, i.e., within the scope of the reserved power of the state religious sects from coverage of union security agreements — is
construed in harmony with the constitutional limitation of that reasonable.
power. 30 It may not be amiss to point out here that the free exercise of
What then was the purpose sought to be achieved by Republic Act religious profession or belief is superior to contract rights. In case
No. 3350? Its purpose was to insure freedom of belief and religion, of conflict, the latter must, therefore, yield to the former. The
and to promote the general welfare by preventing discrimination Supreme Court of the United States has also declared on several
against those members of religious sects which prohibit their occasions that the rights in the First Amendment, which include
members from joining labor unions, confirming thereby their freedom of religion, enjoy a preferred position in the constitutional
natural, statutory and constitutional right to work, the fruits of system. 33 Religious freedom, although not unlimited, is a
which work are usually the only means whereby they can maintain fundamental personal right and liberty, 34 and has a preferred
their own life and the life of their dependents. It cannot be gainsaid position in the hierarchy of values. Contractual rights, therefore,
that said purpose is legitimate. must yield to freedom of religion. It is only where unavoidably
The questioned Act also provides protection to members of said necessary to prevent an immediate and grave danger to the
religious sects against two aggregates of group strength from which security and welfare of the community that infringement of
the individual needs protection. The individual employee, at various religious freedom may be justified, and only to the smallest extent
times in his working life, is confronted by two aggregates of power necessary to avoid the danger.
— collective labor, directed by a union, and collective capital, 3. In further support of its contention that Republic Act No. 3350 is
directed by management. The union, an institution developed to unconstitutional, appellant Union averred that said Act
organize labor into a collective force and thus protect the individual discriminates in favor of members of said religious sects in violation
employee from the power of collective capital, is, paradoxically, of Section 1(7) of Article III of the 1935 Constitution, and which is
both the champion of employee rights, and a new source of their now Section 8 of Article 8 of the 1973 Constitution, which provides:
frustration. Moreover, when the Union interacts with management, "No law shall be made respecting an establishment of religion, or
it produces yet a third aggregate of group strength from which the prohibiting the free exercise thereof, and the free exercise and
individual also needs protection — the collective bargaining enjoyment of religious profession and worship, without.
relationship. 31 discrimination and preference, shall forever be allowed. No religious
The aforementioned purpose of the amendatory law is clearly seen test shall be required for the exercise of civil or political rights."
in the Explanatory Note to House Bill No. 5859, which later became The constitutional provision not only prohibits legislation for the
Republic Act No. 3350, as follows: support of any religious tenets or the modes of worship of any sect,
"It would be unthinkable indeed to refuse employing a person who, thus forestalling compulsion by law of the acceptance of any creed
on account of his religious beliefs and convictions, cannot accept or the practice of any form of worship, 35 but also assures the free
membership in a labor organization although he possesses all the exercise of one's chosen form of religion within limits of utmost
qualifications for the job. This is tantamount to punishing such amplitude. It has been said that the religion clauses of the
person for believing in a doctrine he has a right under the law to Constitution are all designed to protect the broadest possible liberty
believe in. The law would not allow discrimination to flourish to the of conscience, to allow each man to believe as his conscience
detriment of those whose religion discards membership in any labor directs, to profess his beliefs, and to live as he believes he ought to
organization, Likewise, the law would not commend the deprivation live, consistent with the liberty of others and with the common
of their right to work and pursue a modest means of livelihood, good. 36 Any legislation whose effect or purpose is to impede the
without in any manner violating their religious faith and/or belief." observance of one or all religions, or to discriminate invidiously
32 between the religions, is invalid, even though the burden may be
It cannot be denied, furthermore, that the means adopted by the characterized as being only indirect. 37 But if the stage regulates
Act to achieve that purpose — exempting the members of said conduct by enacting, within its power, a general law which has for
its purpose and effect to advance the state's secular goals, the
statute is valid despite its indirect burden on religious observance, members of religious sects that prohibit their members from joining
unless the state can accomplish its purpose without imposing such labor unions, the benefit upon the religious sects is merely
burden. 38 incidental and indirect. The "establishment clause" (of religion)
In Aglipay v. Ruiz 39 , this Court had occasion to state that the does not ban regulation on conduct whose reason or effect merely
government should not be precluded from pursuing valid objectives happens to coincide or harmonize with the tenets of some or all
secular ID character even if the incidental result would be favorable religions. 43 The free exercise clause of the Constitution has been
to a religion or sect. It has likewise been held that the statute, in interpreted to require that religious exercise be preferentially aided.
order to withstand the strictures of constitutional prohibition, must 44
have a secular legislative purpose and a primary effect that neither We believe that in enacting Republic Act No. 3350, Congress acted
advances nor inhibits religion. 40 Assessed by these criteria, consistently with the spirit of the constitutional provision. It acted
Republic Act No. 3350 cannot be said to violate the constitutional merely to relieve the exercise of religion, by certain persons, of a
inhibition of the "no-establishment" (of religion) clause of the burden that is imposed by union security agreements. It was
Constitution. Congress itself that imposed that burden when it enacted the
The purpose of Republic Act No. 3350 is secular, worldly, and Industrial Peace Act (Republic Act 875), and, certainly, Congress, if
temporal, not spiritual or religious or holy and eternal. It was it so deems advisable, could take away the same burden. It is
intended to serve the secular purpose of advancing the certain that not every conscience can be accommodated by all the
constitutional right to the free exercise of religion, by averting that laws of the land; but when general laws conflict with scrupples of
certain persons be refused work, or be dismissed from work, or be conscience, exemptions ought to be granted unless some
dispossessed of their right to work and of being impeded to pursue "compelling state interest" intervenes. 45 In the instant case, We
a modest means of livelihood, by reason of union security see no such compelling state interest to withhold exemption.
agreements. To help its citizens to find gainful employment Appellant bewails that while Republic Act No. 3350 protects
whereby they can make a living to support themselves and their members of certain religious sects, it leaves no right to, and is
families is a valid objective of the state. In fact, the state is silent as to the protection of, labor organizations. The purpose of
enjoined, in the 1935 Constitution, to afford protection to labor, and Republic Act No. 3350 was not to grant rights to labor unions. The
regulate the relations between labor and capital and industry. 41 rights of labor unions are amply provided for in Republic Act No.
More so now in the 1973 Constitution where it is mandated that 875 and the new Labor Code. As to the lamented silence of the Act
"the State shall afford protection to labor, promote full employment regarding the rights and protection of labor unions, suffice it to say,
and equality in employment, ensure equal work opportunities first, that the validity of a statute is determined by its provisions,
regardless of sex, race or creed and regulate the relation between not by its silence 46 ; and, second, the fact that the law may work
workers and employers." 42 hardship does not render it unconstitutional. 47
The primary effects of the exemption from closed shop agreements It would not be amiss to state, regarding this matter, that to
in favor of members of religious sects that prohibit their members compel persons to join and remain members of a union to keep
from affiliating with a labor organization, is the protection of said their jobs in violation of their religious scrupples, would hurt, rather
employees against the aggregate force of the collective bargaining than help, labor unions. Congress has seen it fit to exempt religious
agreement, and relieving certain citizens of a burden on their objectors lest their resistance spread to other workers, for religious
religious beliefs; and by eliminating to a certain extent economic objections have contagious potentialities more than political and
insecurity due to unemployment, which is a serious menace to the philosophic objections.
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
promotes the well-being of society. It is our view that the the country, and a fortiori to a labor union - assuming that such
exemption from the effects of closed shop agreement does not unity and loyalty can be attained through coercion — is not a goal
directly advance, or diminish, the interests of any particular that is constitutionally obtainable at the expense of religious liberty.
religion. Although the exemption may benefit those who are 48 A desirable end cannot be promoted by prohibited means.
4. Appellants' fourth contention, that Republic Act No. 3350 violates the same. The equal protection clause does not forbid
the constitutional prohibition against requiring a religious test for discrimination as to things that are different. 51 It does not
the exercise of a civil right or a political right, is not well taken. The prohibit legislation which is limited either in the object to which it is
Act does not require as a qualification, or condition, for joining any directed or by the territory within which it is to operate.
lawful association membership in any particular religion or in any The equal protection of the laws clause of the Constitution allows
religious sect; neither does the Act require affiliation with a classification. Classification in law, as in the other departments of
religious sect that prohibits Its members from joining a labor union knowledge or practice, is the grouping of things in speculation or
as a condition or qualification for withdrawing from a labor union. practice because they agree with one another in certain particulars.
Joining or withdrawing from a labor union requires a positive act. A law is not invalid because of simple inequality. 52 The very idea
Republic Act No. 3350 only exempts members with such religious of classification is that of inequality, so that it goes without saying
affiliation from the coverage of closed shop agreements. So, under that the mere fact of inequality in no manner determines the
this Act, a religious objector is not required to do a positive act — matter of constitutionality. 53 All that is required of a valid
to exercise the right to join or to resign from the union. He is classification is that it be reasonable, which means that the
exempted ipso jure without need of any positive act on his part. A classification should be based on substantial distinctions which
conscientious religious objector need not perform a positive act or make for real differences; that it must be germane to the purpose
exercise the right of resigning from the labor union — he is of the law; that it must not be limited to existing conditions only;
exempted from the coverage of any closed shop agreement that a and that it must apply equally to each member of the class. 54
labor union may have entered into. How then can there be a This Court has held that the standard is satisfied if the
religious test required for the exercise of a right when no right need classification or distinction is based on a reasonable
be exercised? foundation or rational basis and is not palpably arbitrary. 55
We have said that it was within the police power of the State to In the exercise of its power to make classifications for the purpose
enact Republic Act No. 3350, and that its purpose was legal and in of enacting laws over matters within its jurisdiction, the state is
consonance with the Constitution. It is never an illegal evasion of a recognized as enjoying a wide range of discretion. 56 It is not
constitutional provision or prohibition to accomplish a desired necessary that the classification be based on scientific or marked
result, which is lawful in itself, by discovering or following a legal differences of things or in their relation. 57 Neither is it necessary
way to do it. 49 that the classification be made with mathematical nicety. 58 Hence
5. Appellant avers as its fifth ground that Republic Act No. 3350 is a legislative classification may in many cases properly rest on narrow
discriminatory legislation, inasmuch as it grants to the members of distinctions, 59 for the equal protection guaranty does not
certain religious sects undue advantages over other workers, thus preclude the legislature from recognizing degrees of evil or
violating Section 1 of Article III of the 1935 Constitution which harm, and legislation is addressed to evils as they may
forbids the denial to any person of the equal protection of the laws. appear.
50 We believe that Republic Act No. 3350 satisfies the aforementioned
The guaranty of equal protection of the laws is not a guaranty of requirements. The Act classifies employees and workers, as to the
equality in the application of the laws upon all citizens of the state. effect and coverage of union shop security agreements, into those
It is not, therefore, a requirement, in order to avoid the who by reason of their religious beliefs and convictions cannot sign
constitutional prohibition against inequality, that every man, up with a labor union, and those whose religion does not prohibit
woman and child should be affected alike by a statute. Equality of membership in labor unions. The classification rests on real or
operation of statutes does not mean indiscriminate operation on substantial, not merely imaginary or whimsical, distinctions. There
persons merely as such, but on persons according to the is such real distinction in the beliefs, feelings and sentiments of
circumstances surrounding them. It guarantees equality, not employees. Employees do not believe in the same religious faith
identity of rights. The Constitution does not require that things and different religions differ in their dogmas and canons. Religious
which are different in fact be treated in law as though they were beliefs, manifestations and practices, though they are found in all
places, and in all times, take so many varied forms as to be almost employees who are prohibited by their religion from affiliating with
beyond imagination. There are many views that comprise the broad labor unions, their exemption from the coverage of said
spectrum of religious beliefs among the people. There are diverse agreements continues.
manners in which beliefs, equally paramount in the lives of their Finally, the Act applies equally to all members of said religious
possessors, may be articulated. Today the country is far more sects; this is evident from its provision.
heterogenous in religion than before, differences in religion do The fact that the law grants a privilege to members of said religious
exist, and these differences are important and should not be sects cannot by itself render the Act unconstitutional, for as We
ignored. have adverted to, the Act only restores to them their freedom of
Even from the psychological point of view, the classification is association which closed shop agreements have taken away, and
based on real and important differences. Religious beliefs are not puts them in the same plane as the other workers who are not
mere beliefs, mere ideas existing only in the mind, for they carry prohibited by their religion from joining labor unions. The
with them practical consequences and are the motives of certain circumstance, that the other employees, because they are
rules of human conduct and the justification of certain acts. 60 differently situated, are not granted the same privilege, does not
Religious sentiment makes a man view things and events in their render the law unconstitutional, for every classification allowed by
relation to his God. It gives to human life its distinctive-character, the Constitution by its nature involves inequality.
its tone, its happiness, or unhappiness, its enjoyment or The mere fact that the legislative classification may result in actual
irksomeness. Usually, a strong and passionate desire is involved in inequality is not violative of the right to equal protection, for every
a religious belief. To certain persons, no single factor of their classification of persons or things for regulation by law produces
experience is more important to them than their religion, or their inequality in some degree, but the law is not thereby rendered
not having any religion. Because of differences in religious belief invalid. A classification otherwise reasonable does not offend the
and sentiments, a very poor person may consider himself better constitution simply because in practice it results in some inequality.
than the rich, and the man who even lacks the necessities of life 61 Anent this matter, it has been said that whenever it is apparent
may be more cheerful than the one who has all possible luxuries. from the scope of the law that its object is for the benefit of the
Due to their religious beliefs people, like the martyrs, became public and the means by which the benefit is to be obtained are of
resigned to the inevitable and accepted cheerfully even the most public character, the law will be upheld even though incidental
painful and excruciating pains. Because of differences in religious advantage may occur to individuals beyond those enjoyed by the
beliefs, the world has witnessed turmoil, civil strife, persecution, general public. 62
hatred, bloodshed and war, generated to a large extent by 6. Appellant's further contention that Republic Act No. 3350 violates
members of sects who were intolerant of other religious beliefs. The the constitutional provision on social justice is also baseless. Social
classification, introduced by Republic Act No. 3350, therefore, rests justice is intended to promote the welfare of all the people. 63
on substantial distinctions. Republic Act No. 3350 promotes that welfare insofar as it looks
The classification introduced by said Act is also germane to its after the welfare of those who, because of their religious belief,
purpose. The purpose of the law is precisely to avoid those who cannot join labor unions; the Act prevents their being deprived of
cannot, because of their religious belief, join labor unions, from work and of the means of livelihood. In determining whether any
being deprived of their right to work and from being dismissed from particular measure is for public advantage, it is not necessary that
their work because of union shop security agreements. the entire state be directly benefited — it is sufficient that a portion
Republic Act No. 3350, furthermore, is not limited in its application of the state be benefited thereby.
to conditions existing at the time of its enactment. The law does Social justice also means the adoption by the Government of
not provide that it is to be effective for a certain period of time measures calculated to insure economic stability of all component
only. It is intended to apply for all times as long as the conditions to elements of society, through the maintenance of a proper economic
which the law is applicable exist. As long as there are closed shop and social equilibrium in the inter-relations of the members of the
agreements between an employer and a labor union, and there are community. 64 Republic Act No. 3350 insures economic stability to
the members of a religious sect, like the Iglesia ni Cristo, who are is the criterion by which the validity of a statute is to be measured.
also component elements of society, for it insures security in their 71
employment, notwithstanding their failure to join a labor union II. We now pass on the second assignment of error, in support of
having a closed shop agreement with the employer. The Act also which the Union argued that the decision of the trial court ordering
advances the proper economic and social equilibrium between labor the Union to pay P500 for attorney's fees directly contravenes
unions and employees who cannot join labor unions, for it exempts Section 24 of Republic Act No. 875, for the instant action involves
the latter from the compelling necessity of joining labor unions that an industrial dispute wherein the Union was a party, and said Union
have closed shop agreements, and equalizes, in so far as merely acted in the exercise of its rights under the union shop
opportunity to work is concerned, those whose religion prohibits provision of its existing collective bargaining contract with the
membership in labor unions with those whose religion does not Company; that said order also contravenes Article 2208 of the Civil
prohibit said membership. Social justice does not imply social Code; that, furthermore, Appellee was never actually dismissed by
equality, because social inequality will always exist as long as social the defendant Company and did not therefore suffer any damage at
relations depend on personal or subjective proclivities. Social all. 72
justice does not require legal equality because legal equality, being In refuting appellant Union's arguments, Appellee claimed that in
a relative term, is necessarily premised on differentiations based on the instant case there was really no industrial dispute involved in
personal or natural conditions. 65 Social justice guarantees equality the attempt to compel Appellee to maintain its membership in the
of opportunity 66 , and this is precisely what Republic Act No. 3350 union under pain of dismissal, and that the Union, by its act,
proposes to accomplish — it gives laborers, irrespective of their inflicted intentional harm on Appellee; that since Appellee was
religious scrupples, equal opportunity for work. compelled to institute an action to protect his right to work,
7. As its last ground, appellant contends that the amendment appellant could legally be ordered to pay attorney's fees under
introduced by Republic Act No. 3350 is not called for - in other Articles 1704 and 2208 of the Civil Code.73
words, the Act is not proper, necessary or desirable. Anent this The second paragraph of Section 24 of Republic Act No. 875 which
matter, it has been held that a statute which is not necessary is is relied upon by appellant provides that:
not, for that reason, unconstitutional; that in determining the "No suit, action or other proceedings shall be maintainable in any
constitutional validity of legislation, the courts are unconcerned court against a labor organization or any officer or member thereof
with issues as to the necessity for the enactment of the legislation for any act done by or on behalf of such organization in furtherance
in question. 67 Courts do inquire into the wisdom of laws. 68 of an industrial dispute to which it is a party, on the ground only
Moreover, legislatures, being chosen by the people, are presumed that such act induces some other person to break a contract of
to understand and correctly appreciate the needs of the people, and employment or that it is in restraint of trade or interferes with the
it may change the laws accordingly. 69 The fear is entertained by trade, business or employment of some other person or with the
appellant that unless the Act is declared unconstitutional, right of some other person to dispose of his capital or
employers will prefer employing members of religious sects that labor." (Emphasis supplied)
prohibit their members from joining labor unions, and thus be a That there was a labor dispute in the instant case cannot be
fatal blow to unionism. We do not agree. The threat to unionism will 'disputed for appellant sought the discharge of respondent by virtue
depend on the number of employees who are members of the of the closed shop agreement and under Section 2 (j) of Republic
religious sects that control the demands of the labor market. But Act No. 875 a question involving tenure of employment is included
there is really no occasion now to go further and anticipate in the term "labor dispute". 74 The discharge or the act of seeking
problems We cannot judge with the material now before Us. At any it is the labor dispute itself. It being the labor dispute itself, that
rate, the validity of a statute is to be determined from its general very same act of the Union in asking the employer to dismiss
purpose and its efficacy to accomplish the end desired, not from its Appellee cannot be "an act done . . . in furtherance of an industrial
effects on a particular case. 70 The essential basis for the exercise dispute". The mere fact that appellant is a labor union does not
of power, and not a mere incidental result arising from its exertion, necessarily mean that all its acts are in furtherance of an industrial
dispute. 75 Appellant Union, therefore, cannot invoke in its favor any sect, to act in accordance with its creed. Thus is
Section 24 of Republic Act No. 875. This case is not intertwined constitutionally safeguarded, according to Justice Laurel, that
with any unfair labor practice case existing at the time when "profession of faith to an active power that binds and elevates man
Appellee filed his complaint before the lower court. to his Creator . . ." 3 The choice of what a man wishes to believe in
Neither does Article 2208 of the Civil Code, invoked by the Union, is his and his alone. That is a domain left untouched, where
serve as its shield. The article provides that attorney's fees and intrusion is not allowed, a citadel to which the law is denied entry,
expenses of litigation may be awarded "when the defendant's act or whatever be his thoughts or hopes. In that sphere, what he wills
omission has compelled the plaintiff . . . to incur expenses to reigns supreme. The doctrine to which he pays fealty may for some
protect his interest"; and "in any other case where the court deems be unsupported by evidence, devoid of rational foundation. No
it just and equitable that attorney's fees and expenses of litigation matter. There is no requirement as to its conformity to what has
should be recovered". In the instant case, it cannot be gainsaid that found acceptance. It suffices that for him such a concept holds
appellant Union's act in demanding Appellee's dismissal caused undisputed sway. That is a recognition of man's freedom. That for
Appellee to incur expenses to prevent his being dismissed from his him is one of the ways of self-realization. It would be to disregard
job. Costs according to Section 1, Rule 142, of the Rules of Court, the dignity that attaches to every human being to deprive him of
shall be allowed as a matter of course to the prevailing party. such an attribute. The "fixed star on our constitutional
WHEREFORE, the instant appeal is dismissed, and the decision, constellation," to borrow the felicitous phrase of Justice Jackson, is
dated August 26, 1965, of the Court of First Instance of Manila, in that no official, not excluding the highest, has it in his power to
its Civil Case No. 58894, appealed from is affirmed, with costs prescribe what shall be orthodox in matters of conscience — or to
against appellant Union. mundane affairs, for that matter.
It is so ordered. Gerona v. Secretary of Education 4 speaks similarly. In the
Makalintal, C .J ., Castro, Teehankee, Barredo, Makasiar, Antonio, language of its ponente, Justice Montemayor: "The realm of belief
Esguerra, Muñoz Palma and Aquino, JJ ., concur. and creed is infinite and limitless bounded only by one's
Fernandez, J ., did not take part because he was co-author, when imagination and thought. So is the freedom of belief, including
he was a Senator, of Rep. Act No. 3350. religious belief, limitless and without bounds. One may believe in
Separate Opinions most anything, however strange, bizarre and unreasonable the
FERNANDO, J ., concurring: same may appear to others, even heretical when weighed in the
The decision arrived at unanimously by this Court that Republic Act scales of orthodoxy or doctrinal standards." 5 There was this
No. 3350 is free from the constitutional infirmities imputed to it was qualification though: "But between the freedom of belief and the
demonstrated in a manner well-nigh conclusive in the learned, exercise of said belief, there is quite a stretch of road to travel. If
scholarly, and comprehensive opinion so typical of the efforts of the the exercise of said religious belief clashes with the established
ponente, Justice Zaldivar. Like the rest of my brethren, I concur institutions of society and with the law, then the former must yield
fully. Considering moreover, the detailed attention paid to each and and give way to the latter. The Government steps in and either
every objection raised as to its validity and the clarity and restrains said exercise or even prosecutes the one exercising it." 6
persuasiveness with which it was shown to be devoid of support in It was on that basis that the daily compulsory flag ceremony in
authoritative doctrines, it would appear that the last word has been accordance with a statute 7 was found free from the constitutional
written on this particular subject. Nonetheless, I deem it proper to objection on the part of a religious sect, the Jehovah's Witnesses,
submit this brief expression of my views on the transcendent whose members alleged that their participation would be offensive
character of religious freedom 1 and its primacy even as against to their religious beliefs. In a case not dissimilar, West Virginia
the claims of protection to labor, 2 also one of the fundamental State Board of Education v. Barnette, 8 the American Supreme
principles of the Constitution. Court reached a contrary conclusion. Justice Jackson's eloquent
1. Religious freedom is identified with the liberty every individual opinion is, for this writer, highly persuasive. Thus: "The case is
possesses to worship or not a Supreme Being, and if a devotee of made difficult not because the principles of its decision are obscure
but because the flag involved is our own. Nevertheless, we apply 3. There is, however, the question of whether such an exception
the limitations of the Constitution with no fear that freedom to be possesses an implication that lessens the effectiveness of state
intellectually and spiritually diverse or even contrary will efforts to protect labor, likewise, as noted, constitutionally ordained.
disintegrate the social organization. To believe that patriotism will Such a view, on the surface, may not be lacking in plausibility, but
not flourish if patriotic ceremonies are voluntary and spontaneous upon closer analysis, it cannot stand scrutiny. Thought must be
instead of a compulsory routine is to make an unflattering estimate given to the freedom of association, likewise an aspect of
of the appeal of our institutions to free minds. We can have intellectual liberty. For the late Professor Howe, a constitutionalist
intellectual individualism and the rich cultural diversities that we and in his lifetime the biographer of the great Holmes, it even
owe to exceptional minds only at the price of occasional eccentricity partakes of the political theory of pluralistic sovereignty. So great is
and abnormal attitudes. When they are so harmless to others or to the respect for the autonomy accorded voluntary societies. 11 Such
the State as those we deal with here, the price is not too great. But a right implies at the very least that one can determine for himself
freedom to differ is not limited to things that do not matter much. whether or not he should join or refrain from joining a labor
That would be a mere shadow of freedom. The test of its substance organization, an institutional device for promoting the welfare of
is the right to differ as to things that touch the heart of the existing the working man. A closed shop, on the other hand, is inherently
order." 9 coercive. That is why, as is unmistakably reflected in our decisions,
There is moreover this ringing affirmation by Chief Justice Hughes the latest of which is Guijarno v. Court of Industrial Relations, 12 it
of the primacy of religious freedom in the forum of conscience even is far from being a favorite of the law. For a statutory provision
as against the command of the State itself: "Much has been said of then to further curtail its operation, is precisely to follow the
the paramount duty to the state, a duty to be recognized, it is dictates of sound public policy.
urged, even though it conflicts with convictions of duty to God. The exhaustive and well-researched opinion of Justice Zaldivar thus
Undoubtedly that duty to the state exists within the domain of is in the mainstream of constitutional tradition. That, for me, is the
power, for government may enforce obedience to laws regardless of channel to follow.
scruples. When one's belief collides with the power of the state, the ||| (Victoriano v. Elizalde Rope Workers' Union, G.R. No. L-25246,
latter is supreme within its sphere and submission or punishment [September 12, 1974], 158 PHIL 60-99)

follows. But, in the forum of conscience, duty to a moral power
higher than the state has always been maintained. The reservation
of that supreme obligation, as a matter of principle, would
unquestionably be made by many of our conscientious and law-
abiding citizens. The essence of religion is belief in a relation to God
involving duties superior to those arising from any human relation."
10 The American Chief Justice spoke in dissent, it is true, but with
him in agreement were three of the foremost jurists who ever sat in
that Tribunal, Justices Holmes, Brandeis, and Stone.
2. As I view Justice Zaldivar's opinion in that light, my concurrence,
as set forth earlier, is wholehearted and entire. With such a cardinal
postulate as the basis of our polity, it has a message that cannot be
misread. Thus is intoned with a reverberating clang, to paraphrase
Cardozo, a fundamental principle that drowns all weaker sounds.
The labored effort to cast doubt on the validity of the statutory
provision in question is far from persuasive. It is attended by
futility. It is not for this Court, as I conceive of the judicial function,
to restrict the scope of a preferred freedom.
FIRST DIVISION On October 8, 1987, the NEW ULO, composed mostly of workers
G.R. No. 82914 June 20, 1988 belonging to the IGLESIA NI KRISTO sect, registered as a labor
KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local union.
Chapter No. 1027), petitioner, On October 12, 1987, the TUPAS staged a strike. ROBINA obtained
vs. an injunction against the strike, resulting in an agreement to return
THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA, to work and for the parties to negotiate a new CBA.
MEAT AND CANNING DIVISION UNIVERSAL ROBINA The next day, October 13, 1987, NEW ULO, claiming that it has "the
CORPORATION and MEAT AND CANNING DIVISION NEW majority of the daily wage rank and file employees numbering 191,"
EMPLOYEES AND WORKERS UNITED LABOR ORGANIZATION, filed a petition for a certification election at the Bureau of Labor
respondents. Relations (Annex A).
Alar, Comia, Manalo and Associates for petitioner. TUPAS moved to dismiss the petition for being defective in form
Danilo Bolos for respondent Robina Corporation. and that the members of the NEW ULO were mostly members of
RESOLUTION the Iglesia ni Kristo sect which three (3) years previous refused to
affiliate with any labor union. It also accused the company of using
GRIÑO-AQUINO, J.: the NEW ULO to defeat TUPAS' bargaining rights (Annex B).
The petitioner, Kapatiran sa Meat and Canning Division TUPAS Local On November 17, 1987, the Med-Arbiter ordered the holding of a
Chapter No. 1027) hereinafter referred to as "TUPAS," seeks a certification election within 20 days (Annex C).
review of the resolution dated January 27, 1988 (Annex D) of public TUPAS appealed to the Bureau of Labor Relations BLR. In the
respondent Pura Ferrer-Calleja, Director of the Bureau of Labor meantime, it was able to negotiate a new 3-year CBA with ROBINA,
Relations, dismissing its appeal from the Order dated November 17, which was signed on December 3, 1987 and to expire on November
1987 (Annex C) of the Med-Arbiter Rasidali C. Abdullah ordering a 15, 1990.
certification election to be conducted among the regular daily paid On January 27, 1988, respondent BLR Director Calleja dismissed
rank and file employees/workers of Universal Robina Corporation- the appeal (Annex D).
Meat and Canning Division to determine which of the contending TUPAS' motion for reconsideration (Annex E) was denied on March
unions: 17, 1988 (Annex F). On April 30, 1988, it filed this petition alleging
a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. that the public respondent acted in excess of her jurisdiction and
1027 (or "TUPAS" for brevity); with grave abuse of discretion in affirming the Med-Arbiter's order
b) Meat and Canning Division New Employees and Workers United for a certification election.
Labor Organization (or "NEW ULO" for brevity); After deliberating on the petition and the documents annexed
c) No union. thereto, We find no merit in the Petition. The public respondent did
shall be the bargaining unit of the daily wage rank and file not err in dismissing the petitioner's appeal in BLR Case No.
employees in the Meat and Canning Division of the company. A-12-389-87. This Court's decision in Victoriano vs. Elizalde Rope
From 1984 to 1987 TUPAS was the sole and exclusive collective Workers' Union, 59 SCRA 54, upholding the right of members of the
bargaining representative of the workers in the Meat and Canning IGLESIA NI KRISTO sect not to join a labor union for being contrary
Division of the Universal Robina Corporation, with a 3-year to their religious beliefs, does not bar the members of that sect
collective bargaining agreement (CBA) which was to expire on from forming their own union. The public respondent correctly
November 15, 1987. observed that the "recognition of the tenets of the sect ... should
Within the freedom period of 60 days prior to the expiration of its not infringe on the basic right of self-organization granted by the
CBA, TUPAS filed an amended notice of strike on September 28, constitution to workers, regardless of religious affiliation."
1987 as a means of pressuring the company to extend, renew, or The fact that TUPAS was able to negotiate a new CBA with ROBINA
negotiate a new CBA with it. within the 60-day freedom period of the existing CBA, does not
foreclose the right of the rival union, NEW ULO, to challenge TUPAS'
claim to majority status, by filing a timely petition for certification
election on October 13, 1987 before TUPAS' old CBA expired on
November 15, 1987 and before it signed a new CBA with the
company on December 3, 1987. As pointed out by Med-Arbiter
Abdullah, a "certification election is the best forum in ascertaining
the majority status of the contending unions wherein the workers
themselves can freely choose their bargaining representative thru
secret ballot." Since it has not been shown that this order is tainted
with unfairness, this Court will not thwart the holding of a
certification election (Associated Trade Unions [ATU] vs. Noriel, 88
SCRA 96).
WHEREFORE, the petition for certiorari is denied, with costs against
the petitioner.
SO ORDERED.

THIRD DIVISION On September 18, 1990, the Med-Arbiter issued an order in favor of
the private respondent, the dispositive portion of which provides:
G.R. No. 96566 January 6, 1992 WHEREFORE, premises considered, a certification election among
ATLAS LITHOGRAPHIC SERVICES, INC., petitioner, the supervisory employees belonging to the Administrative,
vs. Personnel, Production, Accounting Departments as well as
UNDERSECRETARY BIENVENIDO E. LAGUESMA (Department confidential employees performing supervisory functions of Atlas
of Labor and Employment) and ATLAS LITHOGRAPHIC Lithographic Services, Incorporated is hereby ordered conducted
SERVICES, INC. SUPERVISORY, ADMINISTRATIVE, within 20 days from receipt hereof, subject to usual pre-election
PERSONNEL, PRODUCTION, ACCOUNTING AND conference, with the following choices:
CONFIDENTIAL EMPLOYEES ASSOCIATION-KAISAHAN NG 1. KAMPIL (KATIPUNAN);
MANGGAWANG PILIPINO (KAMPIL-KATIPUNAN), 2. No union.
respondents. SO ORDERED. (Rollo, pp. 39-40)
Romero, Lagman, Valdecantos & Arreza Law Offices for The petitioners, as expected, appealed for the reversal of the above
petitioner. order. The public respondent, however, issued a resolution affirming
Esteban M. Mendoza for private respondent. the Med-Arbiter's order.
The petitioners, in turn, filed a motion for reconsideration but the
GUTIERREZ, JR., J.:p same was denied. Hence, this petition for certiorari.
This is a petition for certiorari under Rule 65 of the Rules of Court The sole issue to be resolved in this case is whether or not, under
seeking the modification of the Order dated 14 December 1990 and Article 245 of the Labor Code, a local union of supervisory
the Resolution dated 21 November 1990 issued by the public employees may be allowed to affiliate with a national federation of
respondents. labor organizations of rank-and-file employees and which national
The antecedent facts of the case as gathered from the records are federation actively represents its affiliates in collective bargaining
as follows: negotiations with the same employer of the supervisors and in the
On July 16, 1990, the supervisory, administrative personnel, implementation of resulting collective bargaining agreements.
production, accounting and confidential employees of the petitioner The petitioner argues that KAMPIL-KATIPUNAN already represents
Atlas Lithographic Services, Inc. (ALSI) affiliated with private its rank-and-file employees and, therefore, to allow the supervisors
respondent Kaisahan ng Manggagawang Pilipino, a national labor of those employees to affiliate with the private respondent is
organization. The local union adopted the name Atlas Lithographic tantamount to allowing the circumvention of the principle of the
Services, Inc. Supervisory, Administrative, Personnel, Production, separation of unions under Article 245 of the Labor Code.
Accounting and Confidential Employees Association or ALSI- It further argues that the intent of the law is to prevent a single
SAPPACEA-KAMPIL in short and which we shall hereafter refer to as labor organization from representing different classes of employees
the "supervisors" union. with conflicting interests.
Shortly thereafter, private respondent Kampil-Katipunan filed on The public respondent, on the other hand, contends that despite
behalf of the "supervisors" union a petition for certification election affiliation with a national federation, the local union does not lose
so that it could be the sole and exclusive bargaining agent of the its personality which is separate, and distinct from the national
supervisory employees. federation. It cites as its legal basis the case of Adamson &
The petitioners opposed the private respondent's petition claiming Adamson, Inc. v. CIR (127 SCRA 268 [1984]).
that under Article 245 of the Labor bode the private respondent It maintains that Rep. Act No. 6715 contemplates the principle laid
cannot represent the supervisory employees for collective down by this Court in the Adamson case interpreting Section 3 of
bargaining purposeless because the private respondent also Rep. Act No. 875 (the Industrial Peace Act) on the right of a
represents the rank-and-file employees' union. supervisor's union to affiliate. The private respondent asserts that
the legislature must have noted the Adamson ruling then prevailing
when it conceived the reinstatement in the present Labor Code of a The rationale for the amendment is the government's recognition of
similar provision on the right of supervisors to organize. the right of supervisors to organize with the qualification that they
Under the Industrial Peace Act of 1953, employees were classified shall not join or assist in the organization of rank-and-file
into three groups, namely: (1) managerial employees; (2) employees. The reason behind the Industrial Peace Act provision on
supervisors; and (3) rank-and file employees. Supervisors, who the same subject matter has been adopted in the present statute.
were considered employees in relation to their employer could join The interests of supervisors on the one hand, and the rank-and-file
a union but not a union of rank-and-file employees. employees on the other, are separate and distinct. The functions of
With the enactment in 1974 of the Labor Code (Pres Decree No. supervisors, being recommendatory in nature, are more identified
442), employees were classified into managerial and rank-and-file with the interests of the employer. The performance of those
employees. Neither the category of supervisors nor their right to functions may, thus, run counter to the interests of the rank-and-
organize under the old statute were recognized. So that, in Bulletin file.
Publishing Corporation v. Sanchez (144 SCRA 628 [1986]), the This intent of the law is made clear in the deliberations of the
Court interpreted the superseding labor law to have removed from legislators on then Senate Bill 530 now enacted as Rep. Act No.
supervisors the right to unionize among themselves. The Court 6715.
ruled: The definition of managerial employees was limited to those having
In the light of the factual background of this case, We are authority to hire and fire while those who only recommend
constrained to hold that the supervisory employees of petitioner effectively the hiring or firing or transfers of personnel would be
firm may not, under the law, form a supervisors union, separate considered as closer to rank-and-file employees. The exclusion,
and distinct from the existing bargaining unit (BEU), composed of therefore, of middle level executives from the category of managers
the rank-and-file employees of the Bulletin Publishing Corporation. brought about a third classification, the supervisory employees.
It is evident that most of the private respondents are considered These supervisory employees are allowed to form their own union
managerial employees. Also, it is distinctly stated in Section 11, but they are not allowed to join the rank-and-file union because of
Rule II, of the Omnibus Rules Implementing the Labor Code, that conflict of interest (Journal of the Senate, First Regular Session,
supervisory unions are presently no longer recognized nor allowed 1987, 1988, Volume 3,
to exist and operate as such. (pp. 633, 634) p. 2245).
In Section 11, Rule II, Book V of the Omnibus Rules implementing In terms of classification, however, while they are more closely
Pres. Decree No. 442, the supervisory unions existing since the identified with the rank-and-file they are still not allowed to join the
effectivity of the New Code in January 1, 1975 ceased to operate as union of rank-and-file employees. To quote the Senate Journal:
such and the members who did not qualify as managerial In reply to Sen. Guingona's query whether "supervisors" are
employees under this definition in Article 212 (k) therein became included in the term "employee", Sen. Herrera stated that while
eligible to form, to join or assist a rank-and-file union. they are considered as rank-and-file employees, they cannot join
A revision of the Labor Code undertaken by the bicameral Congress the union and they would have to form their own supervisors' union
brought about the enactment of Rep. Act No. 6715 in March 1989 pursuant to Rep. Act 875. (supra, p. 2288)
in which employees were reclassified into three groups, namely: (1) The peculiar role of supervisors is such that while they are not
the managerial employees; (2) supervisors; and (3) the rank and managers, when they recommend action implementing
file employees. Under the present law, the category of supervisory management policy or ask for the discipline or dismissal of
employees is once again recognized. Hence, Art. 212 (m) states: subordinates, they identify with the interests of the employer and
(m) . . . Supervisory employees are those who, in the interest of may act contrary to the interests of the rank-and-file.
the employer, effectively recommend such managerial actions if the We agree with the petitioner's contention that a conflict of interest
exercise of such authority is not merely routinary or clerical in may arise in the areas of discipline, collective bargaining and
nature but requires the use of independent judgment. . . . strikes.
Members of the supervisory union might refuse to carry out bargain together with the rank-and-file against the interests of the
disciplinary measures against their co-member rank-and-file employer regarding terms and conditions of work
employees. Second, the national union in the Adamson case did not actively
In the area of bargaining, their interests cannot be considered represent its local chapters. In the present case, the local union is
identical. The needs of one are different from those of the other. actively represented by the national federation. In fact, it was the
Moreover, in the event of a strike, the national federation might national federation, the KAMPIL-KATIPUNAN, which initially filed a
influence the supervisors' union to conduct a sympathy strike on petition for certification in behalf of the respondent union.
the sole basis of affiliation. Thus, if the intent of the law is to avoid a situation where
More important, the factual issues in the Adamson case are supervisors would merge with the rank and-file or where the
different from the present case. First, the rank-and-file employees supervisors' labor organization would represent conflicting
in the Adamson case are not directly under the supervisors who interests, then a local supervisors' union should not be allowed to
comprise the supervisors' union. In the case at bar, the rank-and affiliate with the national federation of union of rank-and-file
file employees are directly under the supervisors organized by one employees where that federation actively participates in union
and the same federation. activity in the company.
The contemplation of the law in Sec. 3 of the Industrial Peace Act is The petitioner further contends that the term labor organization
to prohibit supervisors from joining a labor organization of includes a federation considering that Art. 212 (g) mentions "any
employees under their supervision. Sec. 3 of the Industrial Peace union or association of employees."
Act provides: The respondent, however, argues that the phrase refers to a local
Sec. 3 — Employees' Right to Self Organization. Employees shall union only in which case, the prohibition in Art. 245 is inapplicable
have the right to self-organization and to form, join or assist labor to the case at bar.
organizations of their own choosing for the purpose of collective The prohibition against a supervisors' union joining a local union of
bargaining through representatives of their own choosing and to rank-and-file is replete with jurisprudence. The Court emphasizes
engage in concerted activities for the purpose of collective that the limitation is not confined to a case of supervisors wanting
bargaining and other mutual aid or protection. Individuals to join a rank-and-file local union. The prohibition extends to a
employed as supervisors shall not be eligible for membership in a supervisors' local union applying for membership in a national
labor organization of employees under their supervision but may federation the members of which include local unions of rank-and-
form separate organizations of their own (Emphasis supplied). file employees. The intent of the law is clear especially where, as in
This was not the consideration in the Adamson case because as the case at bar, the supervisors will be co-mingling with those
mentioned earlier, the rank-and-file employees in the Adamson case employees whom they directly supervise in their own bargaining
were not under the supervision of the supervisors involved. unit.
Meanwhile, Article 245 of the Labor Code as amended by Rep. Act Technicalities should not be allowed to stand in the way of equitably
No. 6715 provides: and completely resolving the rights and obligations of the parties.
Art. 245. Ineligibility of managerial employees to join any labor (Rapid Manpower Consultants, Inc. v. NLRC, 190 SCRA 747 [1990])
organization: right of supervisory employees. — Managerial What should be paramount is the intent behind the law, not its
employees are not eligible to join, assist or form any labor literal construction. Where one interpretation would result in
organization. Supervisory employees shall not be eligible for mischievous consequences while another would bring about equity,
membership in a labor organization of the rank-and-file employees justice, and the promotion of labor peace, there can be no doubt as
but may join, assist or form separate labor organizations of their to what interpretation shall prevail.
own. Finally, the respondent contends that the law prohibits the
The Court construes Article 245 to mean that, as in Section 3 of the employer from interfering with the employees' right to self-
Industrial Peace Act, supervisors shall not be given an occasion to organization.
There is no question about this intendment of the law. There is,
however, in the present case, no violation of such a guarantee to
the employee. Supervisors are not prohibited from forming their
own union. What the law prohibits is their membership in a labor
organization of rank-and-file employees (Art. 245, Labor Code) or
their joining a national federation of rank-and-file employees that
includes the very local union which they are not allowed to directly
join.
In a motion dated November 15, 1991 it appears that the petitioner
has knuckled under to the respondents' pressures and agreed to let
the national federation KAMPIL-KATIPUNAN represent its
supervisors in negotiating a collective bargaining agreement.
Against the advise of its own counsel and on the basis of alleged
"industrial peace", the petitioner expressed a loss of interest in
pursuing this action. The petitioner is, of course, free to grant
whatever concessions it wishes to give to its employees unilaterally
or through negotiations but we cannot allow the resulting validation
of an erroneous ruling and policy of the Department of Labor and
Employment (DOLE) to remain on the basis of the petitioner's loss
of interest. The December 14, 1990 order and the November 21,
1990 resolution of DOLE are contrary to law and must be declared
as such.
WHEREFORE, the petition is hereby GRANTED. The private
respondent is disqualified from affiliating with a national federation
of labor organizations which includes the petitioner's rank-and-file
employees.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

[G.R. No. 102084. August 12, 1998] issued an order granting respondent unions petition for certification
DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE election. He said:
OF MEDICINE, petitioner, vs. HON. BIENVENIDO E. . . . . [petitioner] . . . claims that based on the job descriptions
LAGUESMA, Undersecretary of Labor and Employment; which will be presented at the hearing, the covered employees who
ROLANDO S. DE LA CRUZ, Med-Arbiter Regional Office No. are considered managers occupy the positions of purchasing
IV, DE LA SALLE UNIVERSITY MEDICAL CENTER AND officers, personnel officers, property officers, cashiers, heads of
COLLEGE OF MEDICINE SUPERVISORY UNION-FEDERATION various sections and the like.
OF FREE WORKERS, respondents. [Petitioner] also argues that assuming that some of the employees
DECISION concerned are not managerial but mere supervisory employees, the
MENDOZA, J.: Federation of Free Workers (FFW) cannot extend a charter
Petitioner De La Salle University Medical Center and College of certificate to this group of employees without violating the express
Medicine (DLSUMCCM) is a hospital and medical school at provision of Article 245 which provides that supervisory employees
Dasmarias, Cavite. Private respondent Federation of Free shall not be eligible for membership in a labor organization of the
WorkersDe La Salle University Medical Center and College of rank-and-file employees but may join, assist or form separate labor
Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), on the organizations of their own because the FFW had similarly issued a
other hand, is a labor organization composed of the supervisory charter certificate to its rank-and-file employees.
employees of petitioner DLSUMCCM. ....
On April 17, 1991, the Federation of Free Workers (FFW), a national In its position paper, [petitioner] stated that most, if not all, of the
federation of labor unions, issued a certificate to private respondent employees listed in . . . the petition are considered managerial
FFW-DLSUMCCMSUC recognizing it as a local chapter. On the same employees, thereby admitting that it has supervisory employees
day, it filed on behalf of private respondent FFW-DLSUMCCMSUC a who are undoubtedly qualified to join or form a labor organization
petition for certification election among the supervisory employees of their own. The record likewise shows that [petitioner] promised
of petitioner DLSUMCCM. Its petition was opposed by petitioner to present the job descriptions of the concerned employees during
DLSUMCCM on the grounds that several employees who signed the the hearing but failed to do so. Thus, this office has no basis in
petition for certification election were managerial employees and determining at this point in time who among them are considered
that the FFW-DLSUMCCMSUC was composed of both supervisory managerial or supervisory employees. At any rate, there is now no
and rank-and-file employees in the company.[1] question that [petitioner] has in its employ supervisory employees
In its reply dated May 22, 1991, private respondent FFW- who are qualified to join or form a labor union. Consequently, this
DLSUMCCMSUC denied petitioners allegations. It contended that office is left with no alternative but to order the holding of
2. Herein petition seeks for the holding of a certification election certification election pursuant to Article 257 of the Labor Code, as
among the supervisory employees of herein respondent. It does not amended, which mandates the holding of certification election if a
intend to include managerial employees. petition is filed by a legitimate labor organization involving an
.... unorganized establishment, as in the case of herein respondent.
6. It is not true that supervisory employees are joining the rank- As to the allegation of [petitioner] that the act of the supervisory
and-file employees union. While it is true that both regular rank- employees in affiliating with FFW to whom the rank-and-file
and-file employees and supervisory employees of herein employees are also affiliated is violative of Article 245 of the Labor
respondent have affiliated with FFW, yet there are two separate Code, suffice it to state that the two groups are considered
unions organized by FFW. The supervisory employees have a separate bargaining units and local chapters of FFW. They are, for
separate charter certificate issued by FFW.[2] all intents and purposes, separate with each other and their
On July 5, 1991, respondent Rolando S. de la Cruz, med-arbiter of affiliation with FFW would not make them members of the same
the Department of Labor and Employment Regional Office No. IV, labor union. This must be the case because it is settled that the
locals are considered the basic unit or principal with the labor
federation assuming the role of an agent. The mere fact, therefore, THE MEMBERS OF THE SUPERVISORY UNION EMPLOYED IN
that they are represented by or under the same agent is of no PETITIONERS COMPANY DESPITE THE FACT THAT SAID
moment. They are still considered separate with each other.[3] SUPERVISORY UNION WAS AFFILIATED WITH THE FEDERATION OF
On July 30, 1991, petitioner DLSUMCCM appealed to the Secretary FREE WORKERS TO WHICH THE RANK-AND-FILE EMPLOYEES OF
of Labor and Employment, citing substantially the same arguments THE SAME COMPANY ARE LIKEWISE AFFILIATED, CONTRARY TO
it had raised before the med-arbiter. However, its appeal was THE EXPRESS PROVISIONS OF ARTICLE 245 OF THE LABOR CODE,
dismissed. In his resolution, dated August 30, 1991, respondent AS AMENDED.[6]
Undersecretary of Labor and Employment Bienvenido E. Laguesma The contention has no merit.
found the evidence presented by petitioner DLSUMCCM concerning Supervisory employees have the right to self-organization as do
the alleged managerial status of several employees to be other classes of employees save only managerial ones. The
insufficient. He also held that, following the ruling of this Court in Constitution states that the right of the people, including those
Adamson & Adamson, Inc. v. CIR,[4] unions formed independently employed in the public and private sectors, to form unions,
by supervisory and rank-and-file employees of a company may associations or societies for purposes not contrary to law, shall not
legally affiliate with the same national federation. be abridged.[7] As we recently held in UnitedPepsi-Cola Supervisory
Petitioner moved for a reconsideration but its motion was denied. In Union v. Laguesma,[8] the framers of the Constitution intended, by
his order dated September 19, 1991, respondent Laguesma stated: this provision, to restore the right of supervisory employees to self-
We reviewed the records once more, and find that the issues and organization which had been withdrawn from them during the
arguments adduced by movant have been squarely passed upon in period of martial law. Thus:
the Resolution sought to be reconsidered. Accordingly, we find no Commissioner Lerum sought to amend the draft of what was later
legal justification to alter, much less set aside, the aforesaid to become Art. III, 8 of the present Constitution:
resolution. Perforce, the motion for reconsideration must fail. ....
WHEREFORE, the instant motion for reconsideration is hereby MR. LERUM. . . . Also, we have unions of supervisory employees
denied for lack of merit and the resolution of this office dated 30 and of security guards. But what is tragic about this is that after the
August 1991 STANDS. 1973 Constitution was approved and in spite of an express
No further motions of a similar nature shall hereinafter be recognition of the right to organize in P.D. No. 442, known as the
entertained.[5] Labor Code, the right of government workers, supervisory
Hence, this petition for certiorari. employees and security guards to form unions was abolished.
Petitioner DLSUMCCM contends that respondent Laguesma gravely ....
abused his discretion. While it does not anymore insist that several We are afraid that without any corresponding provision covering the
of those who joined the petition for certification election are holding private sector, the security guards, the supervisory employees ...
managerial positions in the company, petitioner nonetheless will still be excluded and that is the purpose of this amendment.
pursues the question whether unions formed independently by ....
supervisory and rank-and-file employees of a company may validly In sum, Lerums proposal to amend Art. III, 8 of the draft
affiliate with the same national federation. With respect to this Constitution by including labor unions in the guarantee of
question, it argues: organizational right should be taken in the context of statements
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. that his aim was the removal of the statutory ban against security
LAGUESMA, UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A guards and supervisory employees joining labor organizations. The
CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF POWER approval by the Constitutional Commission of his proposal can only
ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION mean, therefore, that the Commission intended the absolute right
A M O U N T I N G TO A C T I N G W I T H O U T O R I N E X C E S S O F to organize of government workers, supervisory employees, and
JURISDICTION WHEN HE DENIED THE PETITIONERS APPEAL AND security guards to be constitutionally guaranteed.[9]
ORDERED THE HOLDING OF A CERTIFICATION ELECTION AMONG
Conformably with the constitutional mandate, Art. 245 of the Labor organization guaranteed in the Constitution must be construed
Code now provides for the right of supervisory employees to self- strictly. Workers should be allowed the practice of this freedom to
organization, subject to the limitation that they cannot join an the extent recognized in the fundamental law. As held in Liberty
organization of rank-and-file employees: Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.:[15]
Supervisory employees shall not be eligible for membership in a The locals are separate and distinct units primarily designed to
labor organization of the rank-and-file employees but may join, secure and maintain an equality of bargaining power between the
assist or form separate labor organizations of their own. employer and their employee members in the economic struggle for
The reason for the segregation of supervisory and rank-and-file the fruits of the joint productive effort of labor and capital; and the
employees of a company with respect to the exercise of the right to association of locals into the national unionwas in furtherance of the
self-organization is the difference in their interests. Supervisory same end. These associations are consensual entities capable of
employees are more closely identified with the employer than with entering into such legal relations with their members. The essential
the rank-and-file employees. If supervisory and rank-and-file purpose was the affiliation of the local unions into a common
employees in a company are allowed to form a single union, the enterprise to increase by collective action the common bargaining
conflicting interests of these groups impair their relationship and power in respect of the terms and conditions of labor. Yet the locals
adversely affect discipline, collective bargaining, and strikes.[10] remained the basic units of association, free to serve their own and
These consequences can obtain not only in cases where supervisory the common interest of all, and free also to renounce the affiliation
and rank-and-file employees in the same company belong to a for mutual welfare upon the terms laid down in the agreement
single union but also where unions formed independently by which brought it to existence.[16]
supervisory and rank-andfile employees of a company are allowed The questions in this case, therefore, are whether the rank-and-file
to affiliate with the same national federation. Consequently, this employees of petitioner DLSUMCCM who compose a labor union are
Court has held in Atlas Lithographic Services Inc. v. Laguesma[11] directly under the supervisory employees whose own union is
that - affiliated with the same national federation (Federation of Free
To avoid a situation where supervisors would merge with the rank- Workers) and whether such national federation is actively involved
and-file or where the supervisors labor organization would in union activities in the company so as to make the two unions in
represent conflicting interests, then a local supervisors union should the same company, in reality, just one union.
not be allowed to affiliate with a national federation of unions of Although private respondent FFW-DLSUMCCMSUC and another
rank-and-file employees where that federation actively participates union composed of rank-and-file employees of petitioner
in union activities in the company. DLSUMCCM are indeed affiliated with the same national federation,
As we explained in that case, however, such a situation would the FFW, petitioner DLSUMCCM has not presented any evidence
obtain only where two conditions concur: First, the rank-and-file showing that the rank-and-file employees composing the other
employees are directly under the authority of supervisory union are directly under the authority of the supervisory
employees.[12] Second, the national federation is actively involved employees. As held in Adamson & Adamson, Inc. v. CIR,[17] the fact
in union activities in the company.[13] Indeed, it is the presence of that the two groups of workers are employed by the same company
these two conditions which distinguished Atlas Lithographic and the fact that they are affiliated with a common national
Services, Inc. v. Laguesma from Adamson & Adamson, Inc. v. federation are not sufficient to justify the conclusion that their
CIR[14] where a different conclusion was reached. organizations are actually just one. Their immediate professional
The affiliation of two local unions in a company with the same relationship must be established. To borrow the language of
national federation is not by itself a negation of their independence Adamson & Adamson, Inc. v. CIR:[18]
since in relation to the employer, the local unions are considered as We find without merit the contention of petitioner that if affiliation
the principals, while the federation is deemed to be merely their will be allowed, only one union will in fact represent both
agent. This conclusion is in accord with the policy that any supervisors and rank-and-file employees of the petitioner; that
limitation on the exercise by employees of the right to self- there would be an indirect affiliation of supervisors and rank-andfile
employees with one labor organization; that there would be a
merging of the two bargaining units; and that the respondent union
will lose its independence because it becomes an alter ego of the
federation.[19]
Mention has already been made of the fact that the petition for
certification election in this case was filed by the FFW on behalf of
the local union. This circumstance, while showing active
involvement by the FFW in union activities at the company, is by
itself insufficient to justify a finding of violation of Art. 245 since
there is no proof that the supervisors who compose the local union
have direct authority over the rank-and-file employees composing
the other local union which is also affiliated with the FFW. This fact
differentiates the case from Atlas Lithographic Services, Inc. v.
Laguesma,[20] in which, in addition to the fact that the petition for
certification election had been filed by the national federation, it
was shown that the rank-and-file employees were directly under
the supervisors organized by the same federation.
It follows that respondent labor officials did not gravely abuse their
discretion.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Regalado (Chairman), Melo, and Martinez, JJ., concur.
Puno- no part.

THIRD DIVISION The Supreme Court denied the petition. The inclusion in a union of
[G.R. No. 142000. January 22, 2003.] disqualified employees is not among the grounds for cancellation,
TAGAYTAY HIGHLAND'S INTERNATIONAL GOLF CLUB unless such inclusion is due to misrepresentation, false statement
INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS or fraud under the circumstances enumerated in Sections (a) and
EMPLOYEES UNION-PGTWO, respondent. (c) of Article 239 of the Labor Code. The union, having been validly
Cayetano Sebastian Dado & Cruz for petitioner. issued a certificate of registration, should be considered to have
Romeo C. Lagman for private respondent. already acquired juridical personality which may not be assailed
SYNOPSIS collaterally. As for petitioner's allegation that some of the
The Tagaytay Highlands Employees Union (THEU), a legitimate signatures in the petition for certification election were obtained
labor organization representing majority of the rank-and-file through fraud, false statement and misrepresentation, the proper
employees of petitioner, filed a petition for certification election procedure is for petitioner to file a petition for cancellation of the
before the Department of Labor and Employment (DOLE) certificate of registration, and not to intervene in a petition for
Mediation-Arbitration Unit, Regional Branch No. IV. Petitioner certification election. As for the lack of mutuality of interest,
opposed the petition on the ground that the list of union members petitioner's argument does not lie given its failure to present
submitted by it was defective and fatally flawed as it included the substantial evidence that the assailed employees are actually
names and signatures of supervisors, resigned, terminated and occupying supervisory positions. While petitioner submitted a list of
absent without leave (AWOL) employees, as well as employees of its employees with their corresponding job titles and ranks, there is
The Country Club, Inc., a corporation distinct and separate from nothing mentioned about the supervisors' respective duties, powers
petitioner; and that out of the 192 signatories to the petition, only and prerogatives that would show that they can effectively
71 were actual rank-and-file employees of petitioner. Despite recommend managerial actions which require the use of
petitioner's opposition, the DOLE Med-Arbiter ordered the holding of independent judgment.
a certification election among the rank-and-file employees of SYLLABUS
petitioner. The latter appealed to the Office of the DOLE Secretary 1. LABOR AND SOCIAL LEGISLATION; LABOR ORGANIZATIONS;
which set aside the said Med-Arbiter's Order and accordingly GROUNDS FOR CANCELLATION OF UNION REGISTRATION; THE
dismissed the petition for certification election on the ground that INCLUSION IN A UNION OF DISQUALIFIED EMPLOYEES IS NOT A
there is a "clear absence of community or mutuality of interests," GROUND FOR CANCELLATION UNLESS SUCH INCLUSION IS DUE
finding that the union sought to represent two separate bargaining TO MISREPRESENTATION, FALSE STATEMENT OR FRAUD UNDER
units (supervisory employees and rank-and-file employees) as well THE CIRCUMSTANCES ENUMERATED IN SECTIONS (a) AND (c) OF
as employees of two separate and distinct corporate entities. Upon ARTICLE 239 OF THE LABOR CODE. — After a certificate of
motion for reconsideration by the union, DOLE Undersecretary registration is issued to a union, its legal personality cannot be
Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary, subject to collateral attack. It may be questioned only in an
issued a Resolution setting aside the June 4, 1998 Resolution independent petition for cancellation in accordance with Section 5
dismissing the petition for certification election. Records of the case of Rule V, Book IV of the "Rules to Implement the Labor Code." The
were ordered remanded to the Office of the Med-Arbiter for the grounds for cancellation of union registration are provided for under
conduct of certification election. Petitioner's motion for Article 239 of the Labor Code. The inclusion in a union of
reconsideration having been denied, it filed a petition for certiorari disqualified employees is not among the grounds for cancellation,
before the Supreme Court. The Court, however, referred the unless such inclusion is due to misrepresentation, false statement
petition to the Court of Appeals. The appellate court denied or fraud under the circumstances enumerated in Sections (a) and
petitioner's petition and affirmed the DOLE Resolution. The (c) of Article 139 of above-quoted Article 239 of the Labor Code.
appellate court ruled that petitioner failed to adduce substantial THEU, having been validly issued a certificate of registration, should
evidence to support its allegations. Hence. the present petition for be considered to have already acquired juridical personality which
certiorari. HaTSDA may not be assailed collaterally. As for petitioner's allegation that
some of the signatures in the petition for certification election were THIGCI, filed a petition for certification election before the DOLE
obtained through fraud, false statement and misrepresentation, the Mediation-Arbitration Unit, Regional Branch No. IV.
proper procedure is, as reflected above, for it to file a petition for THIGCI, in its Comment 1 filed on November 27, 1997, opposed
cancellation of the certificate of registration, and not to intervene in THEU's petition for certification election on the ground that the list
a petition for certification election. of union members submitted by it was defective and fatally flawed
2. ID.; ID.; ID.; LACK OF MUTUALITY OF INTEREST ARGUMENT OF as it included the names and signatures of supervisors, resigned,
PETITIONER WILL NOT LIE IN CASE AT BAR; NO SUBSTANTIAL terminated and absent without leave (AWOL) employees, as well as
EVIDENCE THAT THE ASSAILED EMPLOYEES ARE ACTUALLY employees of The Country Club, Inc., a corporation distinct and
OCCUPYING SUPERVISORY POSITIONS. — As for the lack of separate from THIGCI; and that out of the 192 signatories to the
mutuality of interest argument of petitioner, it, at all events, does petition, only 71 were actual rank-and-file employees of THIGCI.
not lie given, as found by the court a quo, its failure to present THIGCI thus submitted a list of the names of its 71 actual rank-
substantial evidence that the assailed employees are actually and-file employees which it annexed 2 to its Comment to the
occupying supervisory positions. While petitioner submitted a list of petition for certification election. And it therein incorporated the
its employees with their corresponding job titles and ranks, there is following tabulation 3 showing the number of signatories to said
nothing mentioned about the supervisors' respective duties, powers petition whose membership in the union was being questioned as
and prerogatives that would show that they can effectively disqualified and the reasons for disqualification:
recommend managerial actions which require the use of # of
independent judgment. As this Court put it in Pepsi-Cola Products Reasons for Disqualification
Philippines, Inc. v. Secretary of Labor: Designation should be Signatures
reconciled with the actual job description of subject employees . . .
The mere fact that an employee is designated manager does not 13
necessarily make him one. Otherwise, there would be an absurd Supervisors of THIGCI
situation where one can be given the title just to be deprived of the 6
right to be a member of a union. In the case of National Steel Resigned employees of THIGCI
Corporation vs. Laguesma (G.R. No. 103743, January 29, 1996), it 2
was stressed that: What is essential is the nature of the employee's AWOL employees of THIGCI
function and not the nomenclature or title given to the job which 53
determines whether the employee has rank-and-file or managerial Rank-and-file employees of The Country Club at
status or whether he is a supervisory employee. TaCIDS
DECISION Tagaytay Highlands, Inc.
CARPIO MORALES, J p: 14
Before this Court on certiorari under Rule 45 is the petition of the Supervisors of The Country Club at Tagaytay
Tagaytay Highlands International Golf Club Incorporated (THIGCI)
assailing the February 15, 2002 decision of the Court of Appeals Highlands, Inc.
denying its petition to annul the Department of Labor and 6
Employment (DOLE) Resolutions of November 12, 1998 and Resigned employees of The Country Club at
December 29, 1998.
On October 16, 1997, the Tagaytay Highlands Employees Union Tagaytay Highlands, Inc.
(THEU) — Philippine Transport and General Workers Organization 3
(PTGWO), Local Chapter No. 776, a legitimate labor organization Terminated employees of The Country Club at
said to represent majority of the rank-and-file employees of
Tagaytay Highlands, Inc.
1 amended, and its Implementing Rules as amended by Department
AWOL employees of The Country Club at Order No. 9, since the respondent's establishment is unorganized,
the holding of a certification election is mandatory for it was clearly
Tagaytay Highlands, Inc. established that petitioner is a legitimate labor organization. Giving
4 due course to this petition is therefore proper and appropriate. 9
Signatures that cannot be deciphered (Italics supplied)
16 Passing on THIGCI's allegation that some of the union members are
Names in list that were erased supervisory, resigned and AWOL employees or employees of a
2 separate and distinct corporation, the Med-Arbiter held that the
Names with first names only same should be properly raised in the exclusion-inclusion
THIGCI also alleged that some of the signatures in the list of union proceedings at the pre-election conference. As for the allegation
members were secured through fraudulent and deceitful means, that some of the signatures were secured through fraudulent and
and submitted copies of the handwritten denial and withdrawal of deceitful means, he held that it should be coursed through an
some of its employees from participating in the petition. 4 independent petition for cancellation of union registration which is
Replying to THIGCI's Comment, THEU asserted that it had complied within the jurisdiction of the DOLE Regional Director. In any event,
with all the requirements for valid affiliation and inclusion in the the Med-Arbiter held that THIGCI failed to submit the job
roster of legitimate labor organizations pursuant to DOLE descriptions of the questioned employees and other supporting
Department Order No. 9, series of 1997, 5 on account of which it documents to bolster its claim that they are disqualified from
was duly granted a Certification of Affiliation by DOLE on October joining THEU.
10, 1997; 6 and that Section 5, Rule V of said Department Order THIGCI appealed to the Office of the DOLE Secretary which, by
provides that the legitimacy of its registration cannot be subject to Resolution of June 4, 1998, set aside the said Med-Arbiter's Order
collateral attack, and for as long as there is no final order of and accordingly dismissed the petition for certification election on
cancellation, it continues to enjoy the rights accorded to a the ground that there is a "clear absence of community or
legitimate organization. mutuality of interests," it finding that THEU sought to represent two
THEU thus concluded in its Reply 7 that under the circumstances, separate bargaining units (supervisory employees and rank-and-file
the Med-Arbiter should, pursuant to Article 257 of the Labor Code employees) as well as employees of two separate and distinct
and Section 11, Rule XI of DOLE Department Order No. 09, corporate entities.
automatically order the conduct of a certification election. Upon Motion for Reconsideration by THEU, DOLE Undersecretary
By Order of January 28, 1998, 8 DOLE Med-Arbiter Anastacio Bactin Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary,
ordered the holding of a certification election among the rank-and- issued DOLE Resolution of November 12, 1998 10 setting aside the
file employees of THIGCI in this wise, quoted verbatim: June 4, 1998 Resolution dismissing the petition for certification
We evaluated carefully this instant petition and we are of the election. In the November 12, 1998 Resolution, Undersecretary
opinion that it is complete in form and substance. In addition Dimapilis-Baldoz held that since THEU is a local chapter, the twenty
thereto, the accompanying documents show that indeed petitioner percent (20%) membership requirement is not necessary for it to
union is a legitimate labor federation and its local/chapter was duly acquire legitimate status, hence, "the alleged retraction and
reported to this Office as one of its affiliate local/chapter. Its due withdrawal of support by 45 of the 70 remaining rank-and-file
reporting through the submission of all the requirements for members . . . cannot negate the legitimacy it has already acquired
registration of a local/chapter is a clear showing that it was already before the petition;" that rather than disregard the legitimate
included in the roster of legitimate labor organizations in this Office status already conferred on THEU by the Bureau of Labor Relations,
pursuant to Department Order No. 9 Series of 1997 with all the the names of alleged disqualified supervisory employees and
legal right and personality to institute this instant petition. Pursuant employees of the Country Club, Inc., a separate and distinct
therefore to the provisions of Article 257 of the Labor Code, as corporation, should simply be removed from the THEU's roster of
membership; and that regarding the participation of alleged THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER
resigned and AWOL employees and those whose signatures are AND CONTAINED IN THE RECORDS OF THE CASE" 18 "
illegible, the issue can be resolved during the inclusion-exclusion The statutory authority for the exclusion of supervisory employees
proceedings at the pre-election stage. in a rank-and-file union, and vice-versa, is Article 245 of the Labor
The records of the case were thus ordered remanded to the Office Code, to wit:
of the Med-Arbiter for the conduct of certification election. Article 245. Ineligibility of managerial employees to join any labor
THIGCI's Motion for Reconsideration of the November 12, 1998 organization; right of supervisory employees. — Managerial
Resolution having been denied by the DOLE Undersecretary by employees are not eligible to join, assist or form any labor
Resolution of December 29, 1998, 11 it filed a petition for certiorari organization. Supervisory employees shall not be eligible for
before this Court which, by Resolution of April 14, 1999, 12 membership in a labor organization of the rank-and-file employees
referred it to the Court of Appeals in line with its pronouncement in but may join, assist or form separate labor organizations of their
National Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, own.
et al., 13 and in strict observance of the hierarchy of courts, as While above-quoted Article 245 expressly prohibits supervisory
emphasized in the case of St. Martin Funeral Home v. National employees from joining a rank-and-file union, it does not provide
Labor Relations Commission. 14 what would be the effect if a rank-and-file union counts supervisory
By Decision of February 15, 2000, 15 the Court of Appeals denied employees among its members, or vice-versa.
THIGCI's Petition for Certiorari and affirmed the DOLE Resolution Citing Toyota 19 which held that "a labor organization composed of
dated November 12, 1998. It held that while a petition for both rank-and-file and supervisory employees is no labor
certification election is an exception to the innocent bystander rule, organization at all," and the subsequent case of Progressive
hence, the employer may pray for the dismissal of such petition on Development Corp. — Pizza Hut v. Ledesma 20 which held that:
the basis of lack of mutuality of interests of the members of the "The Labor Code requires that in organized and unorganized
union as well as lack of employer-employee relationship following establishments, a petition for certification election must be filed by
this Court's ruling in Toyota Motor Philippines Corporation v. Toyota a legitimate labor organization. The acquisition of rights by any
Motor Philippines Corporation Labor Union et al. 16 and Dunlop union or labor organization, particularly the right to file a petition
Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et for certification election, first and foremost, depends on whether or
al., 17 petitioner failed to adduce substantial evidence to support not the labor organization has attained the status of a legitimate
its allegations. labor organization.
Hence, the present petition for certiorari, raising the following In the case before us, the Med-Arbiter summarily disregarded the
"ISSUES/ASSIGNMENT OF ERRORS: petitioner's prayer that the former look into the legitimacy of the
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE respondent Union by a sweeping declaration that the union was in
RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT the possession of a charter certificate so that 'for all intents and
SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULD SIMPLY purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a
BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-FILE legitimacy organization, "' 21 (italics supplied),
MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF petitioner contends that, quoting Toyota, "[i]t becomes
RESPONDENT UNION'S STATUS necessary . . ., anterior to the granting of an order allowing a
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE certification election, to inquire into the composition of any labor
RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE organization whenever the status of the labor organization is
DISQUALIFIED EMPLOYEES' STATUS COULD READILY BE RESOLVED challenged on the basis of Article 245 of the Labor Code." 22
DURING THE INCLUSION AND EXCLUSION PROCEEDINGS Continuing, petitioner argues that without resolving the status of
THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THEU, the DOLE Undersecretary "conveniently deferred the
THAT THE ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN resolution on the serious infirmity in the membership of [THEU] and
BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY
ordered the holding of the certification election" which is frowned Art. 239. Grounds for cancellation of union registration. The
upon as the following ruling of this Court shows: following shall constitute grounds for cancellation of union
We also do not agree with the ruling of the respondent Secretary of registration:
Labor that the infirmity in the membership of the respondent union (a) Misrepresentation, false statement or fraud in connection with
can be remedied in "the pre-election conference thru the exclusion- the adoption or ratification of the constitution and by-laws or
inclusion proceedings wherein those employees who are occupying amendments thereto, the minutes of ratification, and the list of
rank-and-file positions will be excluded from the list of eligible members who took part in the ratification;
voters." Public respondent gravely misappreciated the basic (b) Failure to submit the documents mentioned in the preceding
antipathy between the interest of supervisors and the interest of paragraph within thirty (30) days from adoption or ratification of
rank-and-file employees. Due to the irreconcilability of their interest the constitution and by-laws or amendments thereto;
we held in Toyota Motor Philippines v. Toyota Motors Philippines (c) Misrepresentation, false statements or fraud in connection with
Corporation Labor Union, viz: the election of officers, minutes of the election of officers, the list of
'xxx xxx xxx voters, or failure to subject these documents together with the list
"Clearly, based on this provision Article 245, a labor organization of the newly elected/appointed officers and their postal addresses
composed of both rank-and-file and supervisor employees is no within thirty (30) days from election;
labor organization at all. It cannot, for any guise or purpose, be a (d) Failure to submit the annual financial report to the Bureau
legitimate labor organization. Not being one, an organization which within thirty (30) days after the losing of every fiscal year and
carries a mixture of rank-and-file and supervisory employees misrepresentation, false entries or fraud in the preparation of the
cannot posses any of the rights of a legitimate labor organization, financial report itself;
including the right to file a petition for certification election for the (e) Acting as a labor contractor or engaging in the "cabo" system,
purpose of collective bargaining. It becomes necessary, therefore, or otherwise engaging in any activity prohibited by law;
anterior to the granting of an order allowing a certification election, (f) Entering into collective bargaining agreements which provide
to inquire into the composition of any labor organization whenever terms and conditions of employment below minimum standards
the status of the labor organization is challenged on the basis of established by law;
Article 245 of the Labor Code." (Italics by petitioner) (Dunlop (g) Asking for or accepting attorney's fees or negotiation fees from
Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; employers;
(italics supplied by petitioner.) (h) Other than for mandatory activities under this Code, checking
The petition fails. After a certificate of registration is issued to a off special assessments or any other fees without duly signed
union, its legal personality cannot be subject to collateral attack. It individual written authorizations of the members;
may be questioned only in an independent petition for cancellation (i) Failure to submit list of individual members to the Bureau once a
in accordance with Section 5 of Rule V, Book IV of the "Rules to year or whenever required by the Bureau; and
Implement the Labor Code" (Implementing Rules) which section (j) Failure to comply with the requirements under Articles 237 and
reads: 238, (Italics supplied),
Sec. 5. Effect of registration. The labor organization or workers' while the procedure for cancellation of registration is provided for in
association shall be deemed registered and vested with legal Rule VIII, Book V of the Implementing Rules.
personality on the date of issuance of its certificate of registration. The inclusion in a union of disqualified employees is not among the
Such legal personality cannot thereafter be subject to collateral grounds for cancellation, unless such inclusion is due to
attack, but may be questioned only in an independent petition for misrepresentation, false statement or fraud under the
cancellation in accordance with these Rules. (Italics supplied) circumstances enumerated in Sections (a) and (c) of Article 239 of
The grounds for cancellation of union registration are provided for above-quoted Article 239 of the Labor Code.
under Article 239 of the Labor Code, as follows:
THEU, having been validly issued a certificate of registration, should What is essential is the nature of the employee's function and not
be considered to have already acquired juridical personality which the nomenclature or title given to the job which determines
may not be assailed collaterally. whether the employee has rank-and-file or managerial status or
As for petitioner's allegation that some of the signatures in the whether he is a supervisory employee. (Italics supplied).
petition for certification election were obtained through fraud, false WHEREFORE, the petition is hereby DENIED. Let the records of the
statement and misrepresentation, the proper procedure is, as case be remanded to the office of origin, the Mediation-Arbitration
reflected above, for it to file a petition for cancellation of the Unit, Regional Branch No. IV, for the immediate conduct of a
certificate of registration, and not to intervene in a petition for certification election subject to the usual pre-election conference.
certification election. SO ORDERED.
Regarding the alleged withdrawal of union members from Puno, Panganiban, Sandoval-Gutierrez and Corona, JJ., concur.
participating in the certification election, this Court's following ||| (Tagaytay Highlands International Golf Club Inc. v. Tagaytay
ruling is instructive: Highlands Employees Union-PGTWO, G.R. No. 142000, [January 22,
"'[T]he best forum for determining whether there were indeed 2003], 443 PHIL 841-855)
retractions from some of the laborers is in the certification election
itself wherein the workers can freely express their choice in a secret
ballot. Suffice it to say that the will of the rank-and-file employees
should in every possible instance be determined by secret ballot
rather than by administrative or quasi-judicial inquiry. Such
representation and certification election cases are not to be taken
as contentious litigations for suits but as mere investigations of a
non-adversary, fact-finding character as to which of the competing
unions represents the genuine choice of the workers to be their sole
and exclusive collective bargaining representative with their
employer." 23
As for the lack of mutuality of interest argument of petitioner, it, at
all events, does not lie given, as found by the court a quo, its
failure to present substantial evidence that the assailed employees
are actually occupying supervisory positions.
While petitioner submitted a list of its employees with their
corresponding job titles and ranks, 24 there is nothing mentioned
about the supervisors' respective duties, powers and prerogatives
that would show that they can effectively recommend managerial
actions which require the use of independent judgment. 25
As this Court put it in Pepsi-Cola Products Philippines, Inc. v.
Secretary of Labor: 26
Designation should be reconciled with the actual job description of
subject employees . . . The mere fact that an employee is
designated manager does not necessarily make him one.
Otherwise, there would be an absurd situation where one can be
given the title just to be deprived of the right to be a member of a
union. In the case of National Steel Corporation vs. Laguesma (G.
R. No. 103743, January 29, 1996), it was stressed that: