SAN MIGUEL FOODS INC. v. LAGUESMA G.R. No.

116172
October 10, 1996 HERMOSISIMA, JR., J.
TOPIC IN SYLLABUS: rights of legitimate labor organization
SUMMARY: IBM filed a petition for certification with the Med-Arbiter. SMFI opposed this, saying
that there was a previous application involving the same party, issues, and relief. IBM said that
the previous petition was denied for its failure to comply with the requirements. The present
petition is being filed after compliance with the requirements. The Med-Arbiter and the SOLE
ordered the holding of the certification election. SMFI argued that yes, IBM may have filed the
said requirements but one of the requirements, which is the charter certificate, is invalid
because at the time it was filed, there were two contending sets of officers. The SC ruled that
the IBM is an entity separate and distinct from its members and officers. The charter certificate
was filed in its capacity as a labor organization. The controversy between the factions is of no
matter. As to the rights of a legitimate labor union, the issue in this case is the right to be the
exclusive representative of all the employees in an appropriate collective bargaining unit for
purposes of collective bargaining.

FACTS:

• September 24, 1993 — Labor Federation Ilaw at Buklod ng Manggagawa (IBM) filed a
petition for certification election among the monthly-paid employees of the San Miguel
Foods, Inc.-Cebu B-Meg Feeds Plant (SMFI) before Med-Arbiter Achilles Manit. It
alleged the following:
a) SMFI employs roughly 75 employees, all of who support the present petition
b) There has been no certification election conducted in SMFI to determine its sole
bargaining agent for the past units and the unit is an unorganized one
c) IBM has complied with the mandatory requirements for the creation of its local or
affiliate in SMFI’s establishment
• October 25, 1993 – SMFI filed a Motion to Dismiss on the ground that on the ground that
a similar petition remains pending between the same parties for the same cause of
action before Med-Arbiter Achilles V. Manit. An earlier petition was filed on April 28,
1993, involving the same parties, cause of action, and the prayer of the issuance of an
order to allow the conduct of certification election.
• December 2, 1993—IBM filed an opposition to SMFI’s Motion to Dismiss, saying that the
first petition was denied mainly due to IBM’s failure to comply with certain mandatory
requirements of the law. Hence, another petition for certification election may be refilled
as soon as the requirements are met.
• The Med-Arbiter granted the second petition for certification. This decision was affirmed
by the Secretary of the DOLE. MR was denied by the DOLE. SMFI came to the SC via
Rule 65.

PETITIONER’S ARGUMENT:
(1) the authenticity and due execution of the Charter Certificate submitted by IBM in
favor of its local at SMFI cannot yet be ascertained as it is still now known who is
the legitimate and authorized representative of the IBM Federation who may
validly issue said Charter Certificate; and
(2) a group of workers or a local union shall acquire legal personality only upon the issuance
of a Certificate of Registration by the Bureau of Labor Relations under Article 234 of the
Labor Code, which IBM at SMFI did not possess

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 (3) SMFI is not a legitimate labor organization notwithstanding the fact that it is a local or
chapter of the IBM Federation. This is so because under Article 234 of the Labor Code,
any labor organization shall acquire legal personality upon the issuance of the Certificate
of Registration by the Bureau of Labor Relations.

RESPONDENT’S ARGUMENT:
(1) the mere presence of two contending factions in the IBM does not prevent the issuance of a
valid and authentic charter certificate in favor of IBM at SMFI.

ISSUE: Is IBM a legitimate labor organization? –YES.

HELD:
I. ACQUISITION OF LEGAL PERSONALITY
“ART. 234. Requirements of registration.--Any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted
by law to legitimate labor organizations upon issuance of the certificate of registration based on the
following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes
of the organizational meetings and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it.

OR (FOR LABOR UNIONS PART OF A FEDERATION)

“Sec. 3. Union Affiliation: Direct Membership with National Union. – An affiliate of a labor federation or
national union may be a local or chapter thereof or an independently registered union.
(a) The labor federation or national union concerned shall issue a chapter certificate
indicating the creation or establishment of a local or chapter, copy of which shall be
submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such
charter certificate
(b) An independently registered union shall be considered an affiliate of a labor federation or national
union after submission to the Bureau of the contract or agreement of affiliation within thirty (30)
days after its execution.

(e) The local or chapter of a labor federation or national union shall have and maintain a constitution
and by-laws, set of officers and book of accounts. For reporting purposes, the procedure governing
the reporting of independently registered unions, federations or national unions shall be observed.”

II. RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS

“ART. 242. Rights of legitimate organizations.—A legitimate labor organization shall have the right:
(a) To act as the representative of its members for the purpose of collective bargaining;
(b) To be certiified as the exclusive representative of all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining;
(c) To be furnished by the employer, upon written request, with his annual audited financial statements,
including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the
date of receipt of the request, after the union has been duly recognized by the employer or certified as the
sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60)
calendar days before the expiration of the existing collective bargaining agreement, or during the
collective bargaining negotiation;

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(d) To own property, real or personal, for the use and benefit of the labor organization and its members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the organization and its members, including
cooperative, housing welfare and other projects not contrary to law.

III. APPLICATION TO THE CASE

A close scrutiny of the records shows that at the time of the filing of the subject petition on 24
September 1993 by the petitioner Ilaw at Buklod ng Manggagawa, for and in behalf of its local
affiliate IBM at SMFI-CEBU B-MEG, the latter has been clothed with the status and/or
character of a legitimate labor organization. This is so, because on 19 July 1993, SMFI
submitted to the Bureau of Labor Relations (BLR), this Department, the following documents:
charter certificate, constitution and by-laws, names and addresses of the union officers and a
certification of the union’s secretary on the non-availability of the union’s Books of Accounts.
Said documents (except the charter certificate) are certified under oath and attested to by the
local union’s secretary and President, respectively.”

The resolution of the issue on the two contending factions vying for the presidency of the union
will not in any way affect the validity of the charter certificate issued by the IBM in favor of the
local union. It must be borne in mind that the said charter certificate was issued by the
IBM in its capacity as a labor organization, a juridical entity which has a separate and
distinct legal personality from its members. When as in this case, there is no showing that
the Federation acting as a separate entity is questioning the legality of the issuance of the said
charter certificate, the legality of the issuance of the same in favor of the local union is
presumed. This, notwithstanding the alleged controversy on the leadership of the federation.

III. OTHER ISSUES

1. It has no legal standing in a certification election as it cannot oppose the petition or

appeal the Med-Arbiter’s orders related thereto. An employer that involves itself in a
certification election lends suspicion to the fact that it wants to create a company union.
It is a mere by-stander.
2. The mere presence of two contending factions in the IBM does not prevent the issuance
of a valid and authentic charter certificate in favor of IBM at SMFI.
3. The charter certificate issued by the mother union need not be certified under oath by
the secretary or treasurer and attested to by the local’s president.
4. The claim of SMFI that the IBM labor federation is not a legitimate labor union and
hence, cannot give legal personality to a local chapter was only raised on appeal, and
hence, must not be entertained by the SC.
5. Finally, the certification election sought to be stopped by petitioner is, as of now, fait
accompli. The certification election already took place and Mr. Galvez won the
presidency.

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