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LABOR RELATIONS LAW

WEEK 1
CASE DIGESTS

ABALOS, RANDEL S.
ARCILLA, ARJAN JAY
ALAMODIN, RHEA
LANTAKA, GRACE KATHERINE
NICOLAS, ARTEMIS
MEDINA, ANTHEA NIÑA
SERVIDAD,TALA
VINOYA, FRANZESCA

ATTY. CARLISLE MARIE ANSELYN FABIE


SUNDAY 5:00 – 7:00
1. Associacion de Agricultores vs Talisay-Silay Mining Co. (Central)
G.R. No. L-19937.
February 19, 1979

FACTS:
PLANTERS (Asociacion de Agricultores de Talisay-Silay, Inc. and six sugarcane planters)
and their laborer sought the benefits of the increased sharing participation prescribed by
Republic Act No. 809 (Sugar Act of 1952) for crop year 1952-1953 and for every year
thereafter, predicated on the claim that a majority of the PLANTERS had no milling contracts
with the CENTRAL (Talisay-Silay Milling District); or, in the alternative, in the event that
the court should rule that the sharing proportions prescribed by Republic Act 809 was not
applicable to the district, the increased sharing participation granted by defendant CENTRAL
in contracts entered into with eight planters in 1954 should be declared applicable to them
starting from crop year 1954-1955 and every year thereafter pursuant to the provisions of
milling contracts between PLANTERS and the CENTRAL since the year 1920-1921 wherein
the CENTRAL bound itself to give all planters having contracts with it the highest rate of
participation it would ever give to any planter (a sort of a most-favored planter clause).

After finding the Sugar Act constitutional and applicable to the plaintiffs and without passing
upon plaintiff's alternative cause of action, the trial court granted the main reliefs prayed for
in the complaint and denied all counterclaims of the defendant CENTRAL. The CENTRAL
appealed. It questioned the trial judge's having engaged the services of the PLANTERS'
counsel as his own lawyer; assailed the constitutionality of Republic Act 809; and assigned as
errors the findings that a majority of the PLANTERS had milling contracts with it and that
Republic Act 809 was applicable even to PLANTERS who had milling contracts.

HELD:
The Supreme Court held that it will not invalidate and set aside the trial judge's judgment
despite his having engaged PLANTERS' counsel as his own lawyer, because the records
show that PLANTERS' opponent for not been deprived of a fair and impartial trial. The High
Tribunal upheld the constitutionality of Republic Act 809 on the ground that it was a social
justice and police power measure for the promotion of labor conditions in sugar plantations,
hence, whatever rational degree of constraint it exerts on freedom of contract and existing
contractual obligations is constitutionally permissible. It further found that majority of the
PLANTERS had milling contracts with the CENTRAL, hence the sharing proportions
prescribed in Section 1 of Republic Act 809 was not applicable to them, but ruled that the
higher sharing participation granted by the CENTRAL to eight planters in 1954 was
applicable to plaintiffs PLANTERS pursuant to the most-favored planter clause contained in
milling contracts between Planters and the Central since crop year 1920-1921, and the
reference point in determining the ratio of sharing among the CENTRAL, the PLANTERS
and the latter's laborers is the provision of Section 9 of Republic Act 809 (which allots 60%
of the proceeds of any increase in the participation granted the planters above their present
share), in conjunction with the effect of the most-favored planter clause. Decision modified.
2. PAL v PALEA
G.R. No. L-24626
June 28, 1974

FACTS:
The dismissal of Fidel Gotangco, with the employer, petitioner Philippine Air Lines,
presenting in evidence an exhibit referring to the confiscation of a piece of lead material from
his parson at one of the gates of the PAL Airfield compound and a signed statement by him,
taken at an investigation, wherein he admitted his apprehension by a company security guard
with a lead material he intended to take home for his personal use. Then the order continues:
"On the whole, the evidence of respondent is uncontroverted. And no question, Fidel
Gotango is guilty of breach of trust and violation of the rules and regulations of his employer.
But respondent seeks authority to dismiss him on the basis of such guilt. It is believed,
however, that in this particular case dismissal is too severe a penalty to impose on Fidel
Gotangco for trying to slip out a lead material belonging to respondent. Because: (1) it is his
first time to commit the charge in question for the duration of his 17 years of service with
respondent; (2) the cost of said material, considering its size, is negligible (8" x 10" x 1/2");
(3) respondent did not lose anything after all as the lead material was retrieved in time; (4)
the ignominy and mental torture undergone by Gotangco is practically punishment in itself;
and (5) he has been under preventive suspension to date. For which reason, it would seem
more equitable to retain than dismiss him. Petitioner was therefore ordered "to reinstate Fidel
Gotangco immediately, without backwages." So it decided the matter. There appears to be
nothing unreasonable. An offense was committed. It was not condoned. A penalty was
imposed, but one proportionate to the gravity of the misdeed. Issue: Whether the petitioner’s
contention to dismiss the respondent is tenable.

HELD:
No. So rigid an approach must find its justification in a statute, of which there is none, or in a
pronouncement of this Court that speaks unequivocally. Petitioner is hopeful that Manila
Trading and Supply Company v. Zulueta did so. It is laboring under a misapprehension. A
more careful analysis ought to have made that clear. There is nothing in it that requires the
SC to hold that on the matter of termination of employment, management must have its way
and respondent Court ignored. The SC’s later decisions, especially so those penned by the
same illustrious Justice Laurel, indicate the contrary. The pith of the matter is then simply
this, that when respondent Court after a conscientious appraisal of the facts did reach a
conclusion that was far from arbitrary and was impressed with an element of generosity to
which the law should not be a stranger, there is no valid ground to hold otherwise. Even on
the assumption that it were not thus before, it is so now. There is, as noted, in the Constitution
the guarantee of security of tenure. The appeal must fail then.
3. PLDT v NLRC
G.R. No. 80609
August 23, 1988

FACTS:
Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was
accused by two complainants of having demanded and received from them the total amount
of P3,800.00 in consideration of her promise to facilitate approval of their applications for
telephone installation. 1 Investigated and heard, she was found guilty as charged and
accordingly separated from the service. 2 She went to the Ministry of Labor and Employment
claiming she had been illegally removed. After consideration of the evidence and arguments
of the parties, the company was sustained and the complaint was dismissed for lack of merit.
Both the petitioner and the private respondent appealed to the National Labor Relations
Board, which upheld the said decision in toto and dismissed the appeals. The private
respondent took no further action, thereby impliedly accepting the validity of her dismissal.
The petitioner, however, is now before us to question the affirmance of the above-quoted
award as having been made with grave abuse of discretion.

ISSUE:
Whether or not the award of financial assistance to an employee who had been dismissed for
cause as found by the public respondent is legal.

HELD:
LABOR LAWS; LABOR CODE; DISMISSAL; GRANT OF SEPARATION PAY TO
LAWFULLY DISMISSED EMPLOYEES; BASED ON EQUITY. — The rule embodied in
the Labor Code is that a person dismissed for cause as defined therein is not entitled to
separation pay. The cases above cited constitute the exception, based upon considerations of
equity.

DOCTRINE:
EQUITY DEFINED. — Equity has been defined as justice outside law, being ethical rather
than jural and belonging to the sphere of morals than of law. It is grounded on the precepts of
conscience and not on any sanction of positive law.
The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged. At best it may mitigate the penalty but it certainly will not
condone the offense. Compassion for the poor is an imperative of every humane society but
only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot
be permitted to be refuge of scoundrels any more than can equity be an impediment to the
punishment of the guilty. Those who invoke social justice may do so only if their hands are
clean and their motives blameless and not simply because they happen to be poor. This great
policy of our Constitution is not meant for the protection of those who have proved they are
not worthy of it, like the workers who have tainted the cause of labor with the blemishes of
their own character.
4. B. F. GOODRICH PHILIPPINES,INC. vs. B. F. GOODRICH (MARIKINA
FACTORY)CONFIDENTIAL &SA-LARIED EMPLOYEES UNION-NATU, B. F.
GOODRICH (MAKATI OFFICE)CONFIDENTIAL &SALARIED EMPLOYEES
UNION-NATU, and COURT OF INDUSTIAL RELATIONS

GR Nos. L-34069-70
Date February 28, 1973
Ponente Fernando, J

FACTS:
The Goodrich Unions were seeking to be recognized as the bargaining agent of BF
Goodrich Phils’ employees so that there could negotiations for a collective contract. BF
Goodrich countered this by filing for two petitions for certification election with the CIR.
Strike notices were sent to the company by the union demanding recognition and soon after a
strike was actually held. The company then filed a case of illegal strike and unfair labor
practice against the unions.

ISSUE: Whether or not the determination of an unfair labor practice case, brought against
unions, must precede the holding of a certification election

HELD: No.

-If under the circumstances disclosed, management is allowed to have its way, the result
might be to dilute or fritter away the strength of an organization bent on a more zealous
defense of labor's prerogatives.
-This is not to say that management is to be precluded from filing an unfair labor practice
case. It is merely to stress that such a suit should not be allowed to lend itself as a means,
whether intended or not, to prevent a truly free expression of the will of the labor group as to
the organization that will represent it.
-There is no valid reason then for the postponement sought. This is one instance that calls for
the application of the maxim, lex dilationes semper exhorret. (The law abhors delays.)
-The law clearly contemplates all the employees, not only some of them, to take part in the
certification election. (Some of the employees could possibly lose such status, by virtue of a
pending unfair labor practice case, if such case is to be resolved first before the election.)
-Another reason (re: no point in the postponement of said election) is that even if the
company wins in the pending case, it does not mean that the employees involved
automatically would lose their jobs making them ineligible to participate in the cert. election.
(Ergo the respondent court decided in the negative.)
-Besides, it was said in General Maritime Stevedores' Union v. South Sea Shipping Line: the
question of whether or not a certification election shall be held "may well be left to the sound
discretion of the Court of Industrial Relations, considering the conditions involved in the
case…."

FN 25 under page 542


-As a matter of fact, the only American Supreme Court decision cited in the petition, National
Labor Relations Board v. A.J. Tower Co., likewise, sustains the same principle (under Gen.
Maritime case). It was there held that the discretion of the labor tribunal, in this case, the
National Labor Relations Board of the United States, is not lightly to be interfered with. (The
issue in that case, concerns the procedure used in elections under the National Labor
Relations Act in which employees choose a statutory representative for purposes of collective
bargaining. The propriety of the National Labor Relations Board's refusal to accept an
employers post-election challenge to the eligibility of a voter who participated in a consent
election must be determined. The First Circuit Court of Appeals set aside the Board's order
and so the matter was then taken to the US SC on certiorari.)
-In reversing the Circuit Court of Appeals, Justice Murphy made clear the acceptance of
such a doctrine in the light of the National Labor Relations Act thus: "As we have noted
before, Congress has entrusted the Board with a wide degree of discretion in establishing the
procedure and safeguards necessary to insure the fair and free choice of bargaining
representatives by employees."
-In the United States as in the Philippines, the decision in such matters by the administrative
agency is accorded the utmost respect. CJ Concepcion: “in such proceedings, the
determination of what is an appropriate bargaining unit is "entitled to almost complete
finality."
-The prevailing principle then on questions as to certification, as well as in other labor cases,
is that only where there is a showing of clear abuse of discretion would this Tribunal be
warranted in reversing the actuation of respondent Court. There is no showing of such a
failing in this case.

DISPOSITIVE: The petition for certiorari is dismissed.


5. CALTEX FILIPINO MANAGERS AND SUPERVISORS ASSOCIATION,
vs. COURT OF INDUSTRIAL RELATIONS,CALTEX (PHILIPPINES), INC., W. E.
MENEFEE and B. F. EDWARDS

GR Nos. Nos. L-30632-33


Date April 11, 1972
Ponente Villamor, J

FACTS:

This is an Appeal by the Caltex Filipino Managers and Supervisors’ Association from the
resolution en banc dated May 16, 1969 of the Court of Industrial Relations affirming the
decision dated February 26, 1969 of Associate Judge Emiliano G. Tabigne, Associate Judge
Ansberto P. Paredes. Judge Tabigne’s decision covers two cases, namely, Case No. 1484-
MC(1) in which he declared the strike staged on April 22, 1965 by the Association as illegal
with the consequent forfeiture of the employee status of three employees and Case No. 4344-
ULP filed against Caltex (Philippines), Inc., Ben F. Edwards and W.E. Menefee which Judge
Tabigne dismissed for lack of merit and substantial evidence.

ISSUES:
Whether or not the strike staged by the Association on April 22, 1965 is illegal and, incident
thereto, whether respondent court correctly terminated the employee status of Jose Mapa,
Dominador Mangalino and Herminigildo Mandanas and reprimanded and admonished the
other officers of the Association

HELD:

The Court declares the strike of the Caltex Filipino Managers and Supervisors’ Association
as legal in all respects and, consequently, the forfeiture of the employee status of J. J. Mapa,
Dominador Mangalino and Herminigildo Mandanas is set aside.

From the voluminous evidence presented by the Association, it is clear that the strike of the
Association was declared not lust for the purpose of gaining recognition as concluded by
respondent court, but also for bargaining in bad faith on the part of the Company and by
reason of unfair labor practices committed by its officials. But even if the strike were really
declared for the purpose of recognition, the concerted activities of the officers and members
of the Association in this regard cannot be said to be unlawful nor the purpose thereof be
regarded as trivial.

Besides, one of the important rights recognized by the Magna Charta of Labor is the right to
self- organization and we do not hesitate to say that is the cornerstone of this monumental
piece of labor legislation.
6. Feati University vs. Bautista 18 SCRA 1191

FACTS:
On 1963, The President of the respondent Feati University Faculty Club - PAFLU - here in
after referred as Faculty club, wrote a petition to the President of Feati University informing
her of the organization of the faculty club, composed of teachers and professors, into a
registered labor union. Within the same year, the President of the union sent a demand letter
to containing 26 demands that have connection with the employment of the members of the
faculty club by the university.
The University failed to reply in a given time and the Faculty Club conducted a strike after
the filing of Notice of Strike to the Department of Labor and Employment. Thereafter, the
Professors and Teacher that joined the strike were replaced by the University.
The President of the Philippines certified to the Court of Industrial Relations the dispute
between the management of the University and the Faculty Club pursuant to the provisions of
Section 10 of Republic Act. 875

ISSUES:
1. Whether the CIR had jurisdiction over the case
2. Whether there is an employer and employee relationship between the University and the
Faculty members

HELD:
1. To certify a labor dispute to the CIR is the prerogative of the President under the law, and
this Court will not interfere in, much less curtail, the exercise of that prerogative. The
jurisdiction of the CIR in a certified case is exclusive (Rizal Cement Co., Inc. v. Rizal
Cement Workers Union (FFW), et al., G.R. No. L-12747, July 30, 1960). Once the
jurisdiction is acquired pursuant to the presidential certification, the CIR may exercise its
broad powers as provided in Commonwealth Act 103. All phases of the labor dispute and the
employer-employee relationship may be threshed out before the CIR, and the CIR may issue
such order or orders as may be necessary to make effective the exercise of its jurisdiction.
The parties involved in the case may appeal to the Supreme Court from the order or orders
thus issued by the CIR.
2. The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term employer
include any person acting in the interest of an employer, directly or indirectly, but shall not
include any labor organization (otherwise than when acting as an employer) or any one acting
in the capacity or agent of such labor organization. In this case, the University is operated for
profit hence included in the term of employer. Professors and instructors, who are under
contract to teach particular courses and are paid for their services, are employees under the
Industrial Peace Act. Professors and instructors are not independent contractors. university
controls the work of the members of its faculty; that a university prescribes the courses or
subjects that professors teach, and when and where to teach; that the professors’ work is
characterized by regularity and continuity for a fixed duration; that professors are
compensated for their services by wages and salaries, rather than by profits; that the
professors and/or instructors cannot substitute others to do their work without the consent of
the university; and that the professors can be laid off if their work is found not satisfactory.
All these indicate that the university has control over their work; and professors are,
therefore, employees and not independent contractors.
7. Airline Pilots Association vs CIR 76 SCRA 274
FACTS:
An election of ALPAP officers was held. resulting in the election of Felix C. Gaston as
President by 180 votes. Upon the other hand, on December 23, 1970, about 45 pilots who did
not tender their retirement or resignation the PAL gathered at the house of Atty. Morabe and
elected Ben Hur Gomez as ALPAP President.

The petitioner Air Line Pilots Association of the Philippines (Gaston group) maintains that
the Court of Industrial Relations acted without jurisdiction in passing upon the question of
which, in a certification proceeding, between the set of officers elected by the group of
Philippine Air Lines pilots headed by Captain Felix Gaston, on the one hand, and the set of
officers elected by the group headed by Captain Ben Hur Gomez, on the other, is the duly
elected set of officers of the Air Line Pilots Association of the Philippines, and the question
of which, between the two groups, is entitled to the name, office and funds of the said
Association.

ISSUE:
whether who between the two groups are entitled to the funds of the Union

HELD:
One cannot likewise subcribe to the restrictive interpretation made by the
court below of the term "labor organization," which Section 2(e) of R.A. 875
defines as any union or association of employees which exist, in whole or
in part, for the purpose of the collective bargaining or dealing with
employers concerning terms and conditions of employment." The absence
of the condition which the court below would attach to the statutory
concept of a labor organization, as being limited to the employees of
particular employer, is quite evident from the law. The emphasis of
Industrial Peace Act is clearly on the pourposes for which a union or
association of employees established rather than that membership therein
should be limited only to the employees of a particular employer. Trite to
say, under Section 2(h) of R.A 875 "representative" is define as including "a
legitimate labor organization or any officer or agent of such organization,
whether or not employed by the employer or employeewhom he
represents." It cannot be overemphasized likewise that labor dispute can
exist "regardless of whether the disputants stand in the proximate relation
of employer and employee.
There is, furthermore, nothing in the constitution and by-laws of ALPAP
which indubitably restricts membership therein to PAL pilots alone. 1
Although according to ALPAP (Gomez there has never been an instance
when a non-PAL pilot became a member of ALPAP, the complete lack of
any such precondition for ALPAP membership cannot but be interpreted as
an unmistakable authority for the association to accept pilots into its fold
though they may not be under PAL's employ.
8. Lopez Sugar Corporation vs Secretary of Labor
LOPEZ SUGAR CORPORATION
VS
Sec. of Labor
[NACUSIP and CAILO]
247 SCRA 1
[August 1995]

FACTS:
-The Med-Arbiter, sustained by the Secretary of Labor and Employment, has ruled that Art.
257 is mandatory and give him no other choice than to conduct a certification election upon
the receipt of the corresponding petition.
“Art. 257. Petitions in unorganized establishments. -In any establishment where there is no
certified bargaining agent, a certification election shall automatically be conducted by the
Med-Arbiter upon the filing of a petition by a legitimate labor organization.”
-National Congress of Unions in the Sugar Industry of the Philippines-TUCP (“NACUSIP-
TUCP”) filed with the Department of Labor and Employment (“DOLE”) a petition for direct
certification or for certification election to determine the sole and exclusive collective
bargaining representative of the supervisory employees of herein petitioner, Lopez Sugar
Corporation (“LSC”). NACUSIP-TUCP averred that it was a legitimate national labor
organization; that LSC was employing 55 supervisory employees, the majority of whom were
members of the union; that no other labor organization was claiming membership over the
supervisory employees; that there was no existing collective bargaining agreement covering
said employees; and that there was no legal impediment either to a direct certification of
NACUSIP-TUCP or to the holding of a certification election.
-LSC contended it. NACUSIP-TUCP submitted Charter Certificate No. 003-89, dated 20 July
1989, of the NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter.
-LSC appealed to the DOLE and asseverated that the order was a patent nullity and that the
Med-Arbiter acted with grave abuse of discretion, Sec. of Labor denied it. Petition for
certiorari was filed.

ISSUE:
Whether the certification election should push through
HELD:
No, because the labor organization is not legitimate. It was held in Progressive Development
Corporation vs. Secretary, Department of Labor and Employment:
“But while Article 257 cited by the Solicitor General directs the automatic conduct of a
certification election in an unorganized establishment, it also requires that the petition for
certification election must be filed by a legitimate labor organization. Article 212(h) defines a
legitimate labor organization as ‘any labor organization duly registered with the DOLE and
includes any branch or local thereof.’ Rule 1, Section 1(j), Book V of the Implementing Rules
likewise defines a legitimate labor organization as ‘any labor organization duly registered
with the DOLE and includes any branch, local or affiliate thereof .’ “
Indeed, the law did not reduce the Med-Arbiter to an automaton which can instantly be set to
impulse by the mere filing of a petition for certification election. He is still tasked to
satisfyhimself that all the conditions of the law are met, and amongthe legal requirements is
that the petitioning union must be legitimate labor organization in good standing.
The petition for certification election, in the case at bench, was filed by the NACUSIP-
TUCP, a national labor organization duly registered with the DOLE. The legitimate status of
NACUSIPTUCP might be conceded; being merely, however, an agent for the local
organization (the NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter), the
federation’s bona fide status alone would not suffice. The local chapter, as its principal,
shouldalso be a legitimate labor organization in good standing.
Accordingly, in Progressive Development, we elucidated: “In the case of union affiliation
with a federation, the documentary requirements are found in Rule II, Section 3(e), Book V
of the Implementing Rules, which we again quote as follows:
“‘(c ) The local or chapter of a labor federation or national union shall have and maintain a
constitution and by laws, set of officers and books of accounts. For reporting purposes, the
procedure governing the reporting of independently registered unions, federations or national
unions shall be observed.’ “Since the ‘procedure governing the reporting independently
registered unions’ refers to the certification and attestation requirements contained in Article
235, paragraph 2, it follows that the constitution and by-laws, set of officers and books of
accounts submitted by the local and chapter must likewise comply with these requirements.
The same rationale for requiring the submission of duly subscribed documents upon union
registration exists in the case of union affiliation. Moreover, there is greater reason to exact
compliance with the certification and attestation requirements because, as previously
mentioned, several requirements applicable to independent union registration are no longer
required in the case of the formation a local or chapter. The policy of the law in conferring
greater bargaining power upon labor unions must be balanced with the policy of providing
preventive measures against the commission of fraud.
“A local or chapter therefore becomes a legitimate labor organization only upon submission
of the following to theBLR:
“1) A charter certificate, within 30 days from its issuance by the labor federation or national
union, and
“2) The constitution and by-laws, a statement on the set of officers, and the books of accounts
all of which are certified under oath by the secretary or treasurer, as the case may be, of such
local or chapter, and attested to by its president.
“Absent compliance with these mandatory requirements, the local or chapter does not
become legitimate labor organization.”
The only document extant on record to establish the legitimacy of the NACUSIP-TUCP
Lopez Sugar Central Supervisory Chapter is a charter certificate and nothing else.
9. San Miguel Corp. Employees Union-PTGWO vs. Bersamira
G.R. No. 87700
June 13, 1990
MELENCIO-HERRERA, J.

FACTS:

San Miguel Corporation entered into contracts for merchandising services with Lipercon and
D’Rite companies, both independent contractors duly licensed by the Department of Labor
and Employment (DOLE). San Miguel entered into those contracts to maintain its
competitive position, and in keeping with the imperatives of efficiency, business expansion
and diversity of operation. In said contracts, it was expressly agreed that the workers
employed by the contractors were not to be deemed employees or agents of San Miguel.
Thus, no employer-employee relationship. A Collective Bargaining Agreement (CBA)
executed between the petitioners and San Miguel which specifically provides that
“temporary, probationary, or contract employees and workers are excluded from the
bargaining unit and therefore, outside the scope of this Agreement.”

The Union, petitioner, advised San Miguel that some of the workers of Lipercon and D’Rite
had signed up for union membership and sought regularization. The Union alleged that some
the workers have been continuously working for San Miguel for a period ranging from
6 months to 15 years, and that the nature of their work is neither casual nor seasonal. Strikes
and a series of pickets were held for the reason that the Union failed to receive any
favourable response from San Miguel. Thereafter, San Miguel filed a complaint for
Injunction and Damages before the RTC of Pasig to enjoin the Union to prevent the peaceful
and normal operations of the former. The Union filed a Motion to Dismiss but was
subsequently denied by the RTC reasoning that the absence of employer-employee
relationship negates the existence of labor dispute. Thus, the RTC issued Orders enjoining the
Union from committing acts that disrupt the operations of San Miguel.

ISSUE:

Whether or not there is a labor dispute between San Miguel and the Union.

HELD:
Yes. A “labor dispute” as defined in Article 212 (1) of the Labor Code includes “any
controversy or matter concerning terms and conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms
and conditions of employment, regardless of whether the disputants stand in the proximate
relation of employer and employee.”. What the Union seeks is to regularize the status of
the employees contracted by Liparcon and D’Rite and that they be absorbed into the
working unit of San Miguel. This matter definitely dwells on the working relationship
between the said employees and San Miguel. Terms, tenure and conditions of their
employment and the arrangement of those terms are thus involved bringing the matter
within the purview of a labor dispute. Further, the Union also seeks to represent the
workers, who have signed for union membership, for the purpose of collecting bargaining.
Obvious then is that representation and association, for the purpose of negotiating the
conditions of employment are also involved. In fact, the injunction sought by San Miguel
was precisely also to prevent such representation. Again, the matter of representation falls
squarely within the ambit of a labor dispute. As the case is indisputably linked with a labor
dispute, jurisdiction belongs to labor tribunals.
10. Gold City Integrated Port Service, Inc. vs. National Labor Relations Commission
G.R. No. 103560
July 6, 1995
ROMERO, J.:

FACTS:

Petitioner’s employees stopped working and gathered in a mass action to express their
grievances regarding wages, thirteenth month pay and hazard pay. Said employees were all
members of the Macajalar Labor Union-Federation of Free Workers (MLU-FFW) with whom
petitioner had an existing collective bargaining agreement. Petitioner was engaged in
stevedoring and arrastre services at the port of Cagayan de Oro. The strike paralyzed
operations at said port.
On the same morning, the strikers filed individual notices of strike (“Kaugalingon nga
Declarasyon sa Pag-Welga”) with the then Ministry of Labor and Employment. With the
failure of conciliation conferences between petitioner and the strikers, INPORT filed a
complaint before the Labor Arbiter for Illegal Strike with prayer for a restraining order/
preliminary injunction.
The National Labor Relations Commission issued a temporary restraining order. Thereafter,
majority of the strikers returned to work, leaving herein private respondents who continued
their
protest. The petitioner INPORT, not having interposed any objection, the Labor Arbiter, in
his decision, granted their prayer to be excluded as respondents in the complaint for illegal
strike. Moreover, petitioner’s complaint was directed against the 31 respondents who did not
return to work and continued with the strike. For not having complied with the formal
requirements in Article 264 of the Labor Code, the strike staged by petitioner’s workers on
April 30, 1985 was found by the Labor Arbiter to be illegal. Both petitioner and private
respondents filed motions for reconsideration, which public respondent NLRC treated as
appeals. The NLRC affirmed with
modification the Arbiter’s decision. The appeal of complainant INPORT is Dismissed for
lack of merit. Hence this instant petitions for certiorari.

ISSUE:
Whether or not separation pay and backwages be awarded by public respondent NLRC to
participants of an illegal strike.
HELD:
Applying the law (Article 264 of the Labor Code) which makes a distinction, we differentiate
between the union members and the union officers among private respondents in granting the
reliefs prayed for. Under Article 264 of the Labor Code, a worker merely participating in an
illegal strike may not be terminated from his employment. It is only when he commits illegal
acts during a strike that he may be declared to have lost his employment status. Since there
appears no proof that these union members committed illegal acts during the strike, they
cannot be dismissed. The striking union members are thus entitled to reinstatement, there
being no just cause for their dismissal. However, considering that a decade has already lapsed
from the time the disputed strike occurred, we find that to award separation pay in lieu of
reinstatement would be more practical and appropriate. No backwages will be awarded to
union members as a penalty for their participation in the illegal strike. Their continued
participation in said strike, even after most of their co-workers had returned to work, can
hardly be rewarded by such an award.
Under the law, an employee is entitled to reinstatement and to his full backwages when he is
unjustly dismissed. Reinstatement means restoration to a state or condition from which one
had been removed or separated. Reinstatement and backwages are separate and distinct
reliefs given to an illegally dismissed employee. Separation pay is awarded when
reinstatement is not possible, due, for instance, to strained relations between employer and
employee. It is also given as a form of financial assistance when a worker is dismissed in
cases such as the installation of labor saving devices, redundancy, retrenchment to prevent
losses, closing or cessation of operation of the establishment, or in case the employee was
found to have been suffering from a disease such that his continued employment is prohibited
by law. Separation pay is a statutory right defined as the amount that an employee receives at
the time of his severance from the service and is designed to provide the employee with the
wherewithal during the period that he is
looking for another employment. It is oriented towards the immediate future, the transitional
period the dismissed employee must undergo before locating a replacement job. Hence, an
employee dismissed for causes other than those cited above is not entitled to separation pay.
Well settled is it that separation pay shall be allowed only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on
his moral character. Backwages, on the other hand, is a form of relief that restores the income
that was lost by reason of unlawful dismissal. It is clear from the foregoing summary of legal
provisions and jurisprudence that there must generally be unjust or illegal dismissal from
work, before reinstatement and backwages may be granted. And in cases where reinstatement
is not possible or when dismissal is due to valid causes, separation pay may be granted.

In sum, reinstatement and backwages or, if no longer feasible, separation pay, can only be
granted if sufficient bases exist under the law, particularly after a showing of illegal
dismissal. However, while the union members may thus be entitled under the law to be
reinstated or to receive separation pay, their expulsion from the union in accordance with the
collective bargaining agreement renders the same impossible.
11. RCPI vs. Philippine Communications Electronics & Electricity Workers’ Federation
(FCWF) No. L-37662
August 30, 1974
FERNANDO, J.:

FACTS:
Respondent Philippine Communications Electronics and Electricity Workers’ Federation
resented to the petitioner a set of proposals to be embodied in a collective bargaining
agreement. As the response was negative, the main ground being that there was already an
existing collective labor contract, an impasse resulted. It was sought to be resolved by the
Bureau of Labor Relations of the Department of Labor acting as conciliator. The attempt was
unsuccessful. A strike was declared. The respondent Court took over as there was an element
of an unfair labor practice. A motion filed by respondent labor Union seeking an order of
reinstatement pending the resolution of the case on the merits. It was granted by respondent
Court in a resolution. Apparently, the return-to-work order was not complied with, a writ of
execution was issued by the Clerk of Court of respondent Court requiring the reinstatement of
the strikers without loss of seniority. Various legal moves were further resorted to by
petitioner with the result of further delaying the implementation of the return-to-work order.
The case was thus deemed submitted for resolution. Then came the resolution which is the
basis of the alias writ of execution. Petitioner would urge on respondent Court, the return-to-
work order failed to take into consideration what it was pleased to call the termination of
employment of some of those therein covered. To make a choice between a possible charge
for contempt on the one hand, and arrest and detention on the other, if it would appear that
there was a violation of Presidential Decree No. 21.

ISSUE:
Whether there is a legal complications arising from the enforcement of the writ of execution
when considered in connection with Presidential Decree No. 21.

HELD:
No. Presidential Decree No. 21 is not a valid excuse to the continuous disobedience of the
order of the court calling for the reinstatement of the striking employees. A presidential
decree intended to ameliorate still further the conditions of labor would be subjected to an
interpretation not for its benefit but to enable an employer to continue with a conduct that
cannot be characterized as other than a disdainful indifference to a valid order. If, as seems to
be implied in its petition, it is likewise concerned with the fate of the replacements, there is
nothing to prevent it from continuing their employment. That would be, in a way, to atone for
its intransigence. What is more, it would be to accord genuine respect for the intent to
Presidential Decree No. 21. What cannot be overemphasized is that such a decree is in
consonance with the much more detailed provision contained in the present Constitution
intended to make a reality of governmental efforts to protect labor.
12. KIOK LOY vs. NATIONAL LABOR RELATIONS COMMISSION
G.R. No. L-54334
22 January 1986
Cuevas, J.

FACTS:
The case revolves around a petition for certiorari to annul the Decision of the NLRC which
found Kiok Loy, doing business under the name of Sweden Ice Cream Plant, guilty of unfair
labor practice for unjust refusal to bargain in violation of par. (g) of Art. 2492 of the New
Labor Code and declared the draft proposal of the Union for a collective bargaining
agreement as the governing collective bargaining agreement between the employees and the
management.

In a certification election, the Pambansang Kilusang Paggawa, a legitimate labor


federation, won and was subsequently certified by the Bureau of Labor Relations as the sole
and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant.
With that, the Union furnished 2 copies of its proposed CBA. Eliciting no response to the
aforesaid request, the Union again wrote to the Company, but to no avail. Left with no
alternative in its attempt to bring the Company to the bargaining table, the Union filed a
“Notice of Strike”, with the Bureau of Labor Relations on ground of unresolved economic
issues in collective bargaining.
Conciliation proceedings then followed, but all attempts towards an amicable
settlement failed, prompting the Bureau of Labor Relations to certify the case to the NLRC
for compulsory arbitration pursuant to PD 823. However, due to the parties’ failure to appear,
the hearing was postponed. The Union submitted their position paper but the Company
always asks to postpone the hearings. With that, the Labor Arbiter ruled that the Company
has waived its right to present further evidence and, therefore, considered the case submitted
for resolution.
The NLRC rendered its Decision in favor of the Union, finding the Company guilty of
unfair labor practice and that the draft proposal attached to the Union’s position paper
declared the collective agreement which should govern the relationship between the parties
therein. The Company assailed the aforementioned Decision, but their petition was denied.
Now, the Company alleges that (a) its right to procedural due process has been
violated when it was precluded from presenting further evidence; (b) NLRC’s finding that of
unfair labor practice for refusal to bargain is not supported by law; and (c) the CBA approved
by the NLRC is unreasonable and lacks legal basis.

ISSUE: Whether or not the Company’s contentions are correct.

HELD: NO. The Company’s Decision was dismissed.


The Court confirmed the NLRC Decision finding the Company GUILTY of
unfair labor practice. It has been established that (1) respondent Union was a duly certified
bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the
proposed CBA, to the Company not only once but twice which were left unanswered and
unacted upon; and (3) the Company made no counter proposal. All of which indicate lack of
a sincere desire to negotiate. A Company's refusal to make counter proposal may indicate bad
faith and this is true where the Union's request for a counter proposal is left unanswered.
Even during the period of compulsory arbitration before the NLRC, the Company's approach
and attitude-stalling the negotiation by a series of postponements and non-appearance at the
hearing conducted lead to no other conclusion except that it is unwilling to negotiate. The
Company has not shown good faith or willingness to discuss the claims and demands set
forth by the Union much less justify its opposition thereto. From the over-all conduct of the
Company, there can be no doubt that the Union has a valid cause to complain against its
attitude, the totality of which is indicative of the latter's disregard of, and failure to live up to,
what is enjoined by the Labor Code — to bargain in good faith.

Collective bargaining which is defined as negotiations towards a collective agreement


is one of the democratic frameworks under the New Labor Code, designed to stabilize the
relation between labor and management and to create a climate of sound and stable industrial
peace. It is a mutual responsibility of the employer and the Union and is characterized as a
legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair
labor practice for an employer to refuse "to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement with respect to wages, hours of work,
and all other terms and conditions of employment including proposals for adjusting any
grievance or question arising under such an agreement and executing a contract incorporating
such agreement, if requested by either party.”
While it is a mutual obligation of the parties to bargain, the employer is not under any
legal duty to initiate contract negotiation. The mechanics of collective bargaining is set in
motion only when the following jurisdictional preconditions are present: (1) possession of the
status of majority representation of the employees' representative in accordance with any of
the means of selection or designation provided for by the Labor Code; (2) proof of majority
representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor
Code. All of which preconditions are undisputedly present in the instant case. It is not
obligatory upon either side of a labor controversy to precipitately accept or agree to the
proposals of the other. But an erring party should not be tolerated and allowed with impunity
to resort to schemes feigning negotiations by going through empty gestures.
The jurisprudence laid down by the case of PAFLU vs. Herald Publications states that
"unfair labor practice is committed when it is shown that the respondent employer, after
having been served with a written bargaining proposal by the petitioning Union, did not even
bother to submit an answer or reply to the said proposal.”
13. DAVAO INTEGRATED PORT AND STEVEDORING SERVICES vs. ALFREDO
OLVIDA
G.R. No. 93983
29 June 1992
Griño-Aquino, J

FACTS:
The case revolves around a petition for certiorari impugning the Decision of Olvida, the
Voluntary Arbitrator concerning the interpretation of 2 provisions of the 5-year CBA between
Davao Integrated Port and the Assoc. of Trade Unions. Such provisions are:

1. ARTICLE VIII — SICK, VACATION AND EMERGENCY LEAVES.


Sec. 4 — Emergency Leaves. The Company agrees to grant a maximum or 6 days
Emergency Leave with pay per calendar year to all regular field workers, covered by this
agreement who have rendered at least 6 months of service (including overtime) per calendar
year, are members of the Regular Labor Pool, upon prior approval by the company. Said
Emergency Leave is not cumulative nor commutable."

2. ARTICLE XVII — SPECIAL PROVISIONS.


Sec. 4 — Union Education and Training Fund. The Company agrees to contribute P12,000.00
pesos per year to the Union Education and Training Fund.

The controversy arose when the Company insisted that the provisions are to be
interpreted as:

1. Under Article VIII, Sec. 4 — that before the intermittent field workers who
are members of the Regular Labor Pool can avail of the 6 days Emergency
Leave, the workers must have rendered at least 6 months of service per
calendar year regardless of their employment status (i.e., regular or
probationary). Thus, all regular field workers, who belong to the Regular
Labor Pool must have rendered at least 6 months of service per calendar year
to be entitled to the 6 days Emergency Leave Pay. The Company pointed out
that the phrase "per calendar year" is used twice, the first of which modifies
the word "pay" and the second modifies the phrase "who or rendered at least 6
months of service." The entitlement and enjoyment of the emergency leave
must be strictly availed in the calendar year on which the six months service
was rendered.

2. Under Article XVII, Section 4 — the Company required that the Union should
first prepare and submit a seminar program before it can avail of the Education
and Training Fund of P12,000.00 per annum.

Olvida decided in favor of the Union’s interpretation and said that:

1. The first sentence of Article VIII, Section 4 which read: "The Company agrees
to grant maximum or 6 days Emergency Leave with pay per calendar year to
all regular field workers" — refers to all non-intermittent regular field workers
who reported for work every day and therefore the requirement of 6 months
does not apply; the next sentences which stated the following: "covered by this
agreement who have rendered at least 6 months (including overtime) per
calendar year, are members of the Regular Labor Pool, upon prior approval by
the company." — refers to intermittent workers/members of the Regular Labor
Pool, whose work depends upon the arrival of vessels in the wharf and
therefore must comply with the requirement in the agreement, and so before it
can avail of the 6 days Emergency Leave with pay must first rendered at least
6 months (including overtime) per calendar year. Once the 6 months is
complied, subject workers can avail the benefit anytime an Emergency
occurred and the same condition of 6 months shall no longer apply in the
succeeding calendar years.

2. With respect to Article XVII, Section 4 — Union Education and Training


Fund — since the language of the agreement is clear, the Company shall
comply with its obligation by contributing to the Union Education and
Training Fund the amount of P12,000.00 per year at the beginning of each and
every year and/or P1,000.00 at the end of every month during the lifetime of
the CBA at the option of the Company.
ISSUE: Which of the interpretations are correct?

HELD: The COMPANY’S. The provision of the CBA is clear: (1) the employee must be a
member of the Regular Labor Pool; (2) he is entitled to only 6 days emergency leave with
pay per calendar year; and (3) he must have rendered service for at least 6 months during the
year when he took his emergency leave. The emergency leave may be staggered or it may last
for any number of days as emergencies arise but the employee is entitled only to 6 days of
emergency leave "with pay" per year. Since the emergency leave is allowed to enable the
employee to attend to an emergency in his family or household, it may be taken at any time
during the calendar year but he must render at least 6 months service for that year to be
entitled to collect his wages for the six 6 days of his emergency leave. Since emergencies are
unexpected and unscheduled happenings, it would be absurd to require the employee to
render 6 months service before being entitled to take a six-day emergency leave with pay for
it would mean that no emergency leave can be taken by an employee during the first six
months of a calendar year.
Section 4, Article VIII of the CBA is interpreted to mean that any employee who is a
member of the Regular Labor Pool is entitled to 6 days emergency leave with pay per
calendar year provided he has rendered at least 6 months service during the year when he
took his emergency leave.

With regard to the provision on Union Education and Training Fund in Section 4, the
Company's requirement that the Union submit a seminar program for each calendar year
before it may claim the Company's P12,000 yearly donation to the fund, is not warranted by
the terms of the CBA. The Arbitrator did not abuse his discretion in ruling that the Company
should comply with its obligation to contribute to the Union Education and Training Fund the
amount of P12,000.00 per year by paying said amount to the Union at the beginning of each
and every year, or contributing P1,000.00 at the end of every month during the lifetime or the
CBA, at the option of the Company.
14.SATURNO VICTORIA vs. HON. AMADO INCIONG
G.R. No. L-49046
26 January 1988
Fernan J.

FACTS:
The case revolves around the Petition for Review of the Order of Acting Secretary of Labor
Hon. Amado Inciong, holding that Far East Broadcasting Company need not to obtain a
clearance for the termination of Saturno Victoria’s employment under Art. 257 (b) of the
Labor Code, and that a mere report of such termination was sufficient, under Sec. 11 (f), Rule
XIV of the IRR of said Code.

Victoria was employed by Far Eastern Broadcasting Company as a radio transmitter


operator. Victoria and his co-workers organized the Far East Broadcasting Company
Employees Association. After registering their Association, they demanded recognition by
the company but the latter refused on the ground that being a non-profit, non-stock, non-
commercial and religious corporation, it is not covered by RA 875, or the Industrial Peace
Act.
Several conciliation meetings were held at the DOLE and in those meetings, the
Director of Labor Relations advised the Union that the Company could not be forced to
recognize them or to bargain collectively with them because it is a non-profit, non-
commercial and religious organization. Notwithstanding such advice, the Union led by
Victoria as its president, declared a strike and picketed the company's premises for the
purpose of seeking recognition. As a countermeasure, the company filed a case for damages
with preliminary injunction against the strikers before the then Court of First Instance of
Bulacan docketed as Civil Case No. 750-V. Said court issued an injunction enjoining the
three-day-old strike staged against the company. The complaint was later amended seeking to
declare the strike illegal. As a countermeasure, the company filed a case for damages against
the strikers before CFI Bulacan. Said court issued an injunction enjoining the 3-day-old strike
staged against the company. The complaint was later amended declaring the strike illegal.
Upon the declaration of Martial Law and the subsequent creation of the NLRC, the
NLRC took cognizance of the case and ruled that the striking members of the Union return to
their respective position in the Company and the Company is incorporated to accept back the
returning strikers without loss in rank seniority or status. However, CFI Bulacan later ruled
that (a) the injunction against the strikers are permanent; (b) the Company is a non-profit
organization since it does not declare dividends; and (c) the strike is illegal as it was for the
purpose of compelling the Company to recognize the Union which could not legally be done
because the Company was not covered by RA 875.
Because of the CFI’s Decision, the Company notified Victoria that he is dismissed.
Victoria then filed a case before the NLRC against the Company alleging violation of Art.
267 of the Labor Code which requires clearance from the Secretary of Labor for every
shutdown of business establishments or dismissal of employees. The Labor Arbiter ruled in
favor of Victoria declaring the dismissal to be illegal, ordering reinstatement. On appeal, the
Arbiter's decision was affirmed by the NLRC. But when NLRC’s Decision was appealed to
Inciong, the Secretary of Labor, it was set aside, ruling that what would have been necessary
was a report pursuant to Sec. 11 (f) Rule XIV, Book V of the IRR. Moreover, even if an
application for clearance was filed, the DOLE would have treated the same as a report.
Inciong then ordered that Victoria be granted separation pay equivalent to one-half month
salary for every year of service.
Victoria comes now, alleging that Inciong committed a reversible error in holding that
a mere report of the termination of his services was sufficient.

ISSUES:
1. Whether or not a clearance from the Secretary of Labor is still necessary before
Victoria could be dismissed.
2. Whether or not the CFI Bulacan Decision gave Inciong authority to dismiss Victoria
without any clearance.

HELD:
NO. Art. 267 (b) of the Labor Code states that “no employer that has no CBA may shut
down his establishment or dismiss or terminate the service of regular employees with at least
1 year of service except managerial employees without previous written clearance from the
Secretary of Labor.”
The Court agreed with the Solicitor General’s view, that while there may not have
been strict compliance with Art. 267 there was substantial compliance. The Secretary of
Labor twice manifested his conformity to petitioner's dismissal. The first manifestation of
acquiescence by the Secretary of Labor to the Victoria’s dismissal was his affirmation of the
Labor Arbiter’s Decision. The Arbitrator ordered the reinstatement of the strikers but subject
to the Decision of CFI Bulacan. The Secretary of Labor affirmed the decision of the
Arbitrator. In effect, therefore, the Secretary of Labor issued a carte blanche to the CFI
Bulacan to either dismiss or retain Victoria.
The second manifestation was his decision in NLRC Case wherein he said that
clearance for Victoria’s dismissal was not required, but only a report; that even if an
application for clearance was filed, he would have treated it as a mere report. While this is
not prior clearance in the contemplation of Article 267, it is at least a ratification of Victoria’s
dismissal. In this regard, the mandatory rule on clearance need not be applied.

The strike staged by the Union was a futile move. RA 875 specifically excluded the
Company from its coverage. Even if the parties had gone to court to compel recognition, no
positive relief could have been obtained since the same was not sanctioned by law. Victoria,
as a union leader, must see to it that the policies and activities of the Union in the conduct of
labor relations are within the law and any deviation from the legal boundaries shall be
imputable to the leader. He bears the responsibility of guiding the Union along the path of
law. Victoria should have known and it was his duty to knowledge to the members of the
Union that employees and laborers in non-profit organizations are not covered by the
provisions of RA 875 and the CIR has no jurisdiction to entertain petitions of labor unions or
organizations of said non-profit organizations for certification as the exclusive bargaining
representatives of said employees and laborers.

As a strike is an economic weapon at war with the policy of the Constitution and the
law, a resort thereto by laborers shall be deemed to be a choice of remedy peculiarly their
own and outside of the statute, the strikers must accept the entire risks attendant upon their
choice. If they succeed and the employer succumbs, the law will not stand in their way in the
enjoyment of the lawful fruits of their victory. But if they fail, they cannot thereafter invoke
the protection of the law for the consequences of their conduct unless the right they wished
vindicated is one which the law will protect and enforce.
The Court further agrees with Inciong that what was required in the case of Victoria's
dismissal was only a report as provided under Section 11 [f] of Rule XIV of the Rules and
Regulations implementing the Labor Code which provides that “every employer shall submit
a report to the Regional Office in accordance with the form presented by the Department on
the following instances of termination of employment, suspension, lay-off or shutdown which
may be effected by the employer without prior clearance within five [5] days thereafter.
[f] All other terminations of employment, suspension, lay-offs or shutdowns, not
otherwise specified in this and in the immediately preceding sections.”
15. PHILIPPINE AIRLINES, INC. (PAL) vs. NATIONAL LABOR RELATIONS
COMMISSION (NLRC)
G.R. No. 85985
August 13, 1993
MELO,J.

FACTS:
PAL completely revised its 1966 Code of Discipline. The Code was circulated among the
employees and was immediately implemented and some employees were forthwith subjected
to the disciplinary measures embodied therein.The Philippine Airlines Employees
Association (PALEA) filed a complaint before the National Labor Relations Commission
(NLRC). PALEA contended that PAL by its unilateral implementation of the Code, was
guilty of unfair labor practice, specifically paragraphs E and G of Article 249 and Article 253
of the Labor Code.

PA LEA alleged that copies of the Code had been circulated in limited numbers; that being
penal in nature the Code must conform with the requirements of sufficient publication, and
that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees. It
prayed that implementation of the Code be held in abeyance; that PAL should discuss the
substance of the Code with PALEA; that employees dismissed under the Code be reinstated
and their cases subjected to further hearing; and that PAL be declared guilty of unfair labor
practice and be ordered to pay damages PAL asserted its prerogative as an employer to
prescribe rules and regulations regarding employees' conduct in carrying out their duties and
functions, and alleg ing that by implementing the Code, it had not violated the collective
bargaining agreement (CBA) or any provision of the Labor Code.

Assailing the complaint as unsupported by evidence, PAL maintained that Article 253 of the
Labor Code cited by PALEA referred to the requirements for negotiating a CBA which was
inapplicable as indeed the current CBA had been negotiated.

ISSUE:
Whether management may be compelled to share with the union or its employees its
prerogative of formulating a code of discipline.
HELD:
Petitioner's assertion that it needed the implementation of a new Code of Discipline
considering the nature of its business cannot be overemphasized. In fact, its being a local
monopoly in the business demands the most stringent of measures to attain safe travel for its
patrons. Nonetheless, whatever disciplinary measures are adopted cannot be properly
implemented in the absence of full cooperation of the employees. Such cooperation cannot be
attained if the employees are restive on account, of their being left out in the determination of
cardinal and fundamental matters affecting their employment.

UST vs NLRC: All this points to the conclusion that the exercise of managerial prerogatives
is not unlimited. It is circumscribed by limitations found in law, a collective bargaining
agreement, or the general principles of fair play and justice.
A line must be drawn between management prerogatives regarding business operations per se
and those which affect the rights of the employees. In treating the latter, management should
see to it that its employees are at least properly informed of its decisions or modes action.
PAL asserts that all its employees have been furnished copies of the Code. Public
respondents found to the contrary, which finding, to say the least is entitled to great respect.
The collective bargaining agreement may not be interpreted as cession of employees’ rights
to participate in the deliberation of matters which may affect their rights and the formulation
of policies relative thereto. And one such mater is the formulation of a code of discipline.
Industrial peace cannot be achieved if the employees are denied their just participation in the
discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code
(P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the
State, “(d) To promote the enlightenment of workers concerning their rights and obligations .
. . as employees.” This was, of course, amplified by Republic Act No 6715 when it decreed
the “participation of workers in decision and policy making processes affecting their rights,
duties and welfare.” PAL’s position that it cannot be saddled with the “obligation” of sharing
management prerogatives as during the formulation of the Code, Republic Act No. 6715 had
not yet been enacted (Petitioner’s Memorandum, p. 44; Rollo, p. 212), cannot thus be
sustained. While such “obligation” was not yet founded in law when the Code was
formulated, the attainment of a harmonious labor-management relationship and the then
already existing state policy of enlightening workers concerning their rights as employees
demand no less than the observance of transparency in managerial moves affecting
employees’ rights.
WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No
special pronouncement is made as to costs
16. Metrolab Industries, Inc vs Confesor
G.R. No. 108855
February 28, 1996
Kapunan, J.

FACTS:
Metro Drug Corporation Employees Association-Federation of Free Workers is a labor
organization representing the rank and file employees of petitioner Metrolab Industries, Inc.
(Metrolab/MII) and of Metro Drug, Inc. The CBA expired. The negotiations for the new
CBA ended in deadlock. the Union filed a notice of strike against Metrolab and Metro Drug
Inc. The parties failed to settle their dispute despite the conciliation efforts of the NCMB.

The Secretary of Labor Ruben Torres issued an assumption order. The Union filed a motion
for reconsideration. During this motion, Metrolab laid off 94 rank and file employees. The
Union filed a motion for a cease and desist order to enjoin Metrolab from implementing the
mass layoff, alleging that such act violated the prohibition against committing acts that would
exacerbate the dispute as specifically directed in the assumption order. Metrolab recalled
some of the laid off workers on a temporary basis due to availability of work in the
production lines. Acting Labor Secretary Nieves Confesor issued a resolution declaring the
layoff of Metrolab’s 94 rank and file workers illegal and ordered their reinstatement with full
backwages. Metrolab filed a Partial Motion for Reconsideration. After exhaustive
negotiations, the parties entered into a new CBA. The execution, however, was without
prejudice to the outcome of the issues raised in the reconsideration and clarification motions
submitted for decision to the Secretary of Labor. During the pendency of the motions,
Metrolab laid off 73 of its employees on grounds of redundancy due to lack of work. Labor
Secretary Confesor issued another cease and desist order. An Omnibus Resolution was
thereafter issued denying the motions of Metrolab. The Union filed a motion for execution
which Metrolab opposed.

ISSUES:
1. Whether or not public respondent Labor Secretary committed grave abuse of discretion and
exceeded her jurisdiction in declaring the subject layoffs instituted by Metrolab illegal on
grounds that these unilateral actions aggravated the conflict between Metrolab and the Union
who were, then, locked in a stalemate in CBA negotiations.
2. Whether or not the Public Respondent Secretary of DOLE gravely abused her discretion in
including executive secretaries as part of the bargaining unit of the rank and file employees

HELD:

1. NO, because the Secretary of Labor is expressly given the power under the Labor Code
to assume jurisdiction and resolve labor disputes involving industries indispensable to
national interest. The disputed injunction is subsumed under this special grant of authority.

Art. 263 (g) of the Labor Code specifically provides that:


xxx xxx xxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such assumption or certification shall have the effect
of automatically enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return to work and the
employer shall immediately resume operations and readmit all workers under the same terms
and conditions prevailing before the strike or lockout. The Secretary of Labor and
Employment or the Commission may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such orders as he may issue to enforce
the same.

2. NO, because Article I (b) of the 1988-1990 CBA provides:


b)Close Shop. - All Qualified Employees must join the Association immediately upon
regularization as a condition for continued employment. This provision shall not apply to: (i)
managerial employees who are excluded from the scope of the bargaining unit; (ii) the
auditors and executive secretaries of senior executive officers, such as, the President,
Executive Vice-President, Vice-President for Finance, Head of Legal, Vice-President for
Sales, who are excluded from membership in the Association; and (iii) those employees who
are referred to in Attachment I hereof, subject, however, to the application of the provision of
Article II, par. (b) hereof. Consequently, the above-specified employees are not required to
join the Association as a condition for their continued employment.
On the other hand, Attachment I provides:
Exclusion from the Scope of the Close Shop Provision
The following positions in the Bargaining Unit are not covered by the Close Shop provision
of the CBA (Article I, par. b):
1. Executive Secretaries of Vice-Presidents, or equivalent positions.
2. Executive Secretary of the Personnel Manager, or equivalent positions.
3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.
4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at
Head Office, Accounting Department at Head Office, and Budget Staff, who because of the
nature of their duties and responsibilities need not join the Association as a condition for their
employment.
5. Newly-hired secretaries of Branch Managers and Regional Managers.
Both Metro Drug and Metrolab read the exclusion of managerial employees and executive
secretaries as exclusion from the bargaining unit. They point out that managerial employees
are lumped under one classification with executive secretaries, so that since the former are
excluded from the bargaining unit, so must the latter be likewise excluded.
The exclusion of managerial employees, in accordance with law, must therefore still carry the
qualifying phrase from the bargaining unit in Article I (b)(i) of the 1988-1990 CBA. In the
same manner, the exclusion of executive secretaries should be read together with the
qualifying phrase are excluded from membership in the Association of the same Article and
with the heading of Attachment I. The latter refers to Exclusions from Scope of Close Shop
Provision and provides that [t]he following positions in Bargaining Unit are not covered by
the close shop provision of the CBA.
The basis for the questioned exclusions, it should be noted, is no other than the previous CBA
between Metrolab and the Union. If Metrolab had undergone an organizational restructuring
since then, this is a fact to which we have never been made privy. In any event, had this been
otherwise the result would have been the same. To repeat, we limited the exclusions to
recognize the expanded scope of the right to self-organization as embodied in the
Constitution.

The Court concurs with Metrolab contention that executive secretaries of the General
Manager and the executive secretaries of the Quality Assurance Manager, Product
Development Manager, Finance Director, Management System Manager, Human Resources
Manager, Marketing Director, Engineering Manager, Materials Manager and Production
Manager, who are all members of the company’s Management Committee should not only be
exempted from the closed-shop provision but should be excluded from membership in the
bargaining unit of the rank and file employees as well on grounds that their executive
secretaries are confidential employees, having access to vital labor information.
Confidential employees cannot be classified as rank and file. The nature of employment of
confidential employees is quite distinct from the rank and file, thus, warranting a separate
category. Excluding confidential employees from the rank and file bargaining unit, therefore,
is not tantamount to discrimination.

DISPOSITIVE: Metrolab Industries Inc. partially won. The executive secretaries of


petitioner Metrolabs General Manager and the executive secretaries of the members of its
Management Committee are excluded from the bargaining unit of petitioners rank and file
employees.

DOCTRINE: Although Article 245 of the Labor Code limits the ineligibility to join, form
and assist any labor organization to managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by reason of their positions or nature of
work are required to assist or act in a fiduciary manner to managerial employees and hence,
are likewise privy to sensitive and highly confidential records.
17. SINGER SEWING MACHINE COMPANY vs. HON. FRANKLIN M. DRILON,
MED-ARBITER FELIX B. CHAGUILE, JR., and SINGER MACHINE
COLLECTORS UNION-BAGUIO (SIMACUB)
G.R. No. 91307. January 24, 1991
GUTIERREZ, JR., J.:

FACTS:
Singer Machine Collectors Union-Baguio filed a petition for direct certification as the sole
and exclusive bargaining agent of all collectors of Singer Sewing Machine. The company
opposed the petition mainly because the union members are not employees but independent
contractors as evidenced by the collection agency agreement which they signed.

Med-Arbiter ruled that there exists an employee-employer relationship and granted the
certification election which was affirmed by Sec. Drilon. The company files the present
petition on the determination of the relationship. The union insist that the provisions of the
Collection Agreement belie the company’s position that the union members are independent
contractors.

ISSUE:
Whether or not there exists an employer-employee relationship between the parties.

HELD:
The present case mainly calls for the application of the control test, which if not satisfied,
would lead us to conclude that no employer-employee relationship exists. Hence, if the union
members are not employees, no right to organize for purposes of bargaining, nor to be
certified as such bargaining agent can ever be recognized. The following elements are
generally considered in the determination of the employer-employee relationship; „(1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employees conduct- although the latter is the most
important element”.
The Agreement confirms the status of the collecting agent in this case as an independent
contractor not only because he is explicitly described as such but also because the provisions
permit him to perform collection services for the company without being subject to the
control of the latter except only as to the result of his work. After a careful analysis of the
contents of the agreement, we rule in favor of the petitioner. The requirement that collection
agents utilize only receipt forms and report forms issued by the Company and that reports
shall be submitted at least once a week is not necessarily an indication of control over the
means by which the job of collection is to be performed. The agreement itself specifically
explains that receipt forms shall be used for the purpose of avoiding a co-mingling of
personal funds of the agent with the money collected on behalf of the Company. Likewise,
the use of standard report forms as well as the regular time within which to submit a report of
collection are intended to facilitate order in office procedures. Even if the report requirements
are to be called control measures, any control is only with respect to the end result of the
collection since the requirements regulate the things to be done after the performance of the
collection job or the rendition of the service.
A thorough examination of the facts of the case leads us to the conclusion that the existence
of an employer-employee relationship between the Company and the collection agents cannot
be sustained. The plain language of the agreement reveals that the designation as collection
agent does not create an employment relationship and that the applicant is to be considered at
all times as an independent contractor. This is consistent with the first rule of interpretation
that the literal meaning of the stipulations in the contract controls (Article 1370, Civil Code;
La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations, 123 SCRA
679 [1983]). No such words as „to hire and employ are present.
Moreover, the agreement did not fix an amount for wages nor the required working hours.
Compensation is earned only on the basis of the tangible results produced, i.e., total
collections made (Sarra v. Agarrado, 166 SCRA 625 [1988]). In Investment Planning Corp.
of the Philippines v. Social Security System, 21 SCRA 924 [1967] which involved
commission agents, this Court had the occasion to rule, thus: „We are convinced from the
facts that the work of petitioners agents or registered representatives more nearly
approximates that of an independent contractor than that of an employee. The latter is paid
for the labor he performs, that is, for the acts of which such labor consists; the former is paid
for the result thereof x x x. xxx xxx xxx Even if an agent of petitioner should devote all of his
time and effort trying to sell its investment plans he would not necessarily be entitled to
compensation therefor. His right to compensation depends upon and is measured by the
tangible results he produces.
The Court finds that since private respondents are not employees of the Company, they are
not entitled to the constitutional right to join or form a labor organization for purposes of
collective bargaining. Accordingly, there is no constitutional and legal basis for their union to
be granted their petition for direct certification.
DOCTRINE: Art. 280 of the Labor Code is not the yardstick for determining the existence of
an employment relationship because it merely distinguishes between regular and casual
employees.
18. ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138
others, petitioners, vs. CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of
Labor Relations, Med-Arbiter PATERNO ADAP, and TRI-UNION EMPLOY-EES
UNION, et al.
G.R. No. 84433. June 2, 1992
NARVASA, C.J.

FACTS:
Public Respondent Trajano as OIC of the Bureau of Labor Relations sustained the denial by
the Med Arbiter of the right to vote of one hundred forty-one members of the “Iglesia ni
Kristo” (INK), all employed in the same company, at a certification election at which two
labor organizations were contesting the right to be the exclusive representative of the
employees in the bargaining unit.
The certification election was authorized to be conducted by the Bureau of Labor Relations
among the employees of Tri-Union Industries Corporation. The competing unions were Tri-
Union Employees Union-Organized Labor Association in Line Industries and Agriculture
(TUEU-OLALIA), and Trade Union of the Philippines and Allied Services (TUPAS).
The final tally of the votes showed the following results:
TUPAS 1, TUEU-OLALIA 95, NO UNION 1, SPOILED 1, CHALLENGED 141
The challenged votes were those cast by the 141 INK members. They were segregated and
excluded from the final count in virtue of an agreement between the competing unions,
reached at the pre-election conference, that the INK members should not be allowed to vote
“because they are not members of any union and refused to participate in the previous
certification elections.”
The INK employees promptly filed a petition to cancel the election alleging that it “was not
fair” and the result thereof did “not reflect the true sentiments of the majority of the
employees.” TUEU-OLALIA opposed the petition contending that the petitioners “do not
have legal personality to protest the results of the election,” because “they are not members of
either contending unit, but . . . of the INK” which prohibits its followers, on religious
grounds, from joining or forming any labor organization.

ISSUE: W/N employees who are not part of any union may validly exercise their right to
vote in a certification election

HELD:
INK employees have the right to participate in a certification election and vote for "No
Union."· That the INK employees, as employees in the same bargaining unit in the true sense
of the term, do have the right of self-organization, is also in truth beyond question, as well as
the fact that when they voted that the employees in their bargaining unit should be
represented by "NO UNION," they were simply exercising that right of self- organization,
albeit in its negative aspect. The respondents' argument that the petitioners are disqualified to
vote because they "are not constituted into a duly organized labor union "but members of the
INK which prohibits its followers, on religious grounds, from joining or forming any labor
organization" and "hence, not one of the unions which vied for certification as sole and
exclusive bargaining representative," is specious. Neither law, administrative rule nor
jurisprudence requires that only employees affiliated with any labor organization may take
part in a certification election. On the contrary, the plainly discernible intendment of the law
is to grant the right to vote to all bona fide employees in the bargaining unit, whether they are
members of a labor organization or not,
Failure to take part in previous elections no bar to right to participate in future elections.-
Neither does the contention that petitioners should be denied the right to vote because they
"did not participate in previous certification elections in the company for the reason that their
religious beliefs do not allow them to form, join or assist labor organizations," persuade
acceptance. No law, administrative rule or precedent prescribes forfeiture of the right to vote
by reason of neglect to exercise the right in past certification elections. In denying the
petitioners' right to vote upon these egregiously fallacious grounds, the public respondents
exercised their discretion whimsically, capriciously and oppressively and gravely abused the
same.
Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or
resign from a labor organization, is subsumed in the right to join, affiliate with, or assist any
union, and to maintain membership therein. The right to form or join a labor organization
necessarily includes the right to refuse or refrain from exercising said right. It is self-evident
that just as no one should be denied the exercise of a right granted by law, so also, no one
should be compelled to exercise such a conferred right. The fact that a person has opted to
acquire membership in a labor union does not preclude his subsequently opting to renounce
such membership.
The purpose of a certification election is precisely the ascertainment of the wishes of the
majority of the employees in the appropriate bargaining unit: to be or not to be represented by
a labor organization, and in the affirmative case, by which particular labor organization. If the
results of the election should disclose that the majority of the workers do not wish to be
represented by any union, then their wishes must be respected, and no union may properly be
certified as the exclusive representative of the workers in the bargaining unit in dealing with
the employer regarding wages, hours and other terms and conditions of employment. The
minority employees who wish to have a union represent them in collective bargaining can do
nothing but wait for another suitable occasion to petition for a certification election and hope
that the results will be different. They may not and should not be permitted, however, to
impose their will on the majority· who do not desire to have a union certified as the exclusive
workers' benefit in the bargaining unit upon the plea that they, the minority workers, are
being denied the right of self-organization and collective bargaining. As repeatedly stated, the
right of self- organization embraces not only the right to form, join or assist labor
organizations, but the concomitant, converse right NOT to form, join or assist any labor
union.
19. KNITJOY MANUFACTURING v. PURA FERRER-CALLEJA

 1 December 1987 Decision of respondent Director of the Bureau of Labor Relations


in BLR, which reversed the Order of Med-Arbiter-Designate Rolando S. dela Cruz
dated 4 September 1987 and ordered the holding of a certification election among the
regular rank-and-file monthly-paid employees of (KNITJOY), is assailed by the latter.
 The Med-Arbiter's order dismissed the petition of private respondent Knitjoy Monthly
Employees Union (KMEU) for such certification election and directed the parties "to
work out (sic) towards the formation of a single union in the company."
FACTS:
Petitioner KNITJOY had a collective bargaining agreement (CBA) with the Federation of
Filipino Workers (FFW). The bargaining unit covered only the regular rank-and-file
employees of KNITJOY paid on a daily or piece-rate basis. It did not include regular rank-
and-file office and production employees paid on a monthly basis. The CBA expired on 15
June 1987. Prior to its expiration, the FFW was split into two (2) factions -- the Johnny Tan
and the Aranza mendez factions. The latter eventually became the Confederation of Filipino
Workers (CFW)
Also prior to the expiration of the CBA, the Trade Union of the Philippines and Allied
Services (TUPAS) filed a petition for the holding of a certification election among
KNITJOY's regular rank-and-file employees paid on a daily and piece-rate basis. Excluded
were the regular rank-and-file employees paid on a monthly basis. In the certification election
conducted on 10 June 1987, CFW emerged as the winner; thereafter, negotiations for a new
CBA between CFW and KNITJOY commenced.
On 24 June 1987, during the pendency of the said negotiations, private respondent KMEU
filed a petition for certification election among KNITJOY's regular rank-and-file monthly
paid employees with (DOLE).
The (KMEA-CCLU), another union existing in the said company, and petitioner CFW
intervened therein.
The petition was dismissed in the Order of Med-Arbiter Rolando S. de la Cruz, the premises
considered, Dismissed, but the parties are instructed to work out (sic) towards the formation
of a single union in the company."
KMEU filed a motion to reconsider this order, which was treated as an appeal by the (BLR).
On 1 December 1987, public respondent Pura Ferrer-Calleja, Director of the BLR, handed
down a Decision reversing the order of Med-Arbiter de la Cruz.
"WHEREFORE, premises considered, the Appeal of Knitjoy Monthly Employees is hereby
granted subject to the exclusion of the monthly paid employees who are deemed managerial.
Let, therefore, the certification election proceed without delay, with the following as choices:
1. Knitjoy Monthly Employees Union (KMEU); and
2. No Union.
The company's latest payroll shall be the basis in determining the list of eligible voters.

ISSUES:
1. Whether or not petitioner KNITJOY'S monthly-paid regular rank-and-file employees can
constitute an appropriate bargaining unit separate and distinct from the existing unit
composed of daily or piece-rate paid regular rank-and-file employees, and
2. Whether or not the inclusion in the coverage of the new CBA between KNITJOY and
CFW of the monthly-paid rank-and-file employees bars the holding of a certification election
among the said monthly paid employees.

HELD:
1. The suggested bias of the Labor Code in favor of the one company-one union policy,
anchored on the greater mutual benefits which the parties could derive, especially in the case
of employees whose bargaining strength could undeniably be enhanced by their unity and
solidarity but diminished by their disunity, division and dissension, is not without exceptions.
The present Article 245 of the Labor Code expressly allows supervisory employees who are
not performing managerial functions to join, assist or form their separate union but bars them
from membership in a labor organization of the rank-and-file employees. It reads:
"ART. 245. Ineligibility of managerial employees to join any labor organization; right
of supervisory employees. -- Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own."
This provision obviously allows more than one union in a company.
Even Section 2(c), Rule V, Book V of the Implementing Rules and Regulations of the Labor
Code, which seeks to implement the policy, also recognizes exceptions. It reads:
"SEC. 2. Who may file. -- Any legitimate labor organization or the employer, when requested
to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization shall contain, among others:
xxx
(c) description of the bargaining unit which shall be the employer
unit unless circumstances otherwise require; x x x." (Emphasis supplied)
The usual exception, of course, is where the employer unit has to give way to the other units
like the craft unit, plant unit, or a subdivision thereof; the recognition of these exceptions
takes into account the policy to assure employees of the fullest freedom in exercising their
rights.[12] Otherwise stated, the one company-one union policy must yield to the right of the
employees to form unions or associations for purposes not contrary to law, to self-
organization and to enter into collective bargaining negotiations, among others, which the
Constitution guarantees.[13]
The right to form a union or association or to self-organization comprehends two (2) broad
notions, to wit: (a) the liberty or freedom, i.e., the absence of restraint which guarantees that
the employee may act for himself without being prevented by law, and (b) the power, by
virtue of which an employee may, as he pleases, join or refrain from joining an association.
In the latter case, KNITJOY and CFW are guilty of contumacious conduct. It goes without
saying then that the new CBA cannot validly include in its scope or coverage the monthly-
paid rank-and-file employees of KNITJOY. It does not bar the holding of a certification
election to determine their sole bargaining agent and the negotiation for and the execution of
a subsequent CBA between KNITJOY and the eventual winner in said election. Section 4,
Rule V, Book V of the Rules Implementing the Labor Code expressly provides:
"SEC. 4. Effects of early agreements. -- The representation case shall not, however, be
adversely affected by a collective bargaining agreement registered before or during the last
60 days of a subsisting
agreement orduring the pendency of the representation case." (Emphasis supplied)
The public respondent then committed no abuse of discretion in ordering a certification
election among the monthly-paid rank-and-file employees, except managerial employees, of
KNITJOY. The choice however, should not be, as correctly contended by CFW, limited to
merely (a) KMEU and (b) no union. The records disclose that the intervenors in the petition
for certification are the KMEA-CCLU and CFW. They should be included as among the
choices in the certification election.
WHEREFORE, the instant petitions are DISMISSED.
20.GENERAL RUBBER and
FOOTWEAR CORPORATION, vs.
BUREAU OF LABOR RELATIONS, NATIONAL ASSOCIATION OF
TRADE UNION OF MONTHLY PAID EMPLOYEES-NATU
G.R. No. 74262 October 29, 1987

FACTS:
 Petitioner is a corporation engaged in the business of
manufacturing rubber sandals and oilier rubber products.
 In 1985, the Samahang Manggagawa sa General Rubber
Corporation —was formed by the daily paid — rank and file
employees as their union for collective bargaining, after the
expiration on October 15, 1985 of the CBA previously executed
by petitioner with General Rubber Workers Union
(Independent) on October 15, 1982.
 However the monthly paid employees of the petitioner
corporation, after forming their own collective bargaining unit
the NATU, filed a petition for direct certification with tile BLR
which petition was opposed by herein petitioner.
 the Med-Arbiter issued an Order for the holding of a
certification election after finding that a certification election is
in order in this case and observing that it is the fairest remedy to
determine whether employees of petitioner desire to have a
union or not.
 On appeal, the BLR denied both the appeal and motion for
reconsideration interposed by petitioner and affirmed the ruling
of the Med-Arbiter.
 Petitioner argues that: The order violates the Labor Code
formation of a bargaining unit wherein policy is in favor of a
larger unit and not the creation of smaller units in one
establishment which might lead to formation, thus impractical.
Article 246 of the Labor Code explicitly provides that
managerial employees are ineligible to join or form any labor
organization. Since it has been shown by the petitioners that
30% of the monthly-paid employees are managers or employees
exercising managerial functions, it was grave error for BLR to
allow these monthly paid employees to form a union and/or a
bargaining unit.
 petitioner took upon itself to take care of them and directly gave
them the benefits or privileges without having to bargain for
them or without the aid of the bargaining arm or force of a
union.
ISSUES:

 Whether or not BLR committed serious error of law and grave


abuse of discretion in ordering the creation of a new
bargaining unit at petitioner,
 Whether or not BLR committed serious error of law in
holding that managerial employees or those employees
exercising managerial functions can legally form and join a
labor organization and be members of the new bargaining
unit.
 Whether or not BLR committed grave abuse of discretion in
holding that supervisors, employees performing managerial,
confidential and technical functions and office personnel, who
are negotiated by petitioner to be excluded from the existing
bargaining unit because they are performing vital functions
to management, can form and join a labor organization and
be members of the new bargaining unit.
HELD:

 As defined in
the Labor Code, a "managerial employee is one who is vested
with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees, or to
effectively recommend such managerial actions." Thus,
employees who do not fall within this definition are considered
rank-and-file employees.
has been the policy of the Bureau to encourage the formation of
an employer unit "unless circumstances otherwise require. The
proliferation of unions in an employer unit is discouraged as a
matter of policy unless there are compelling reasons which
would deny a certain class of employees the right to self-
organization for purposes of collective bargaining, This case
does not fall squarely within the exception. It is undisputed that
the monthlies who are rank-and-file have been historically
excluded from the bargaining unit composed of daily-paid
rank-and-filers that is, since 1963 when the existing rank- and-
file union was recognized.
the monthly-paid rank-and-file employees ran form a union of
their own, separate and distinct from the existing rank-and-file
union composed of daily-paid workers. (Rollo, pp. 1920)
Thus, it can be readily seen from the above findings of the Bureau of
labor Relations that the members of private respondent are not
managerial employees as claimed by petitioners but merely considered
as rank-and-file employees who have every right to self-organization or
to be heard through a duly certified collective bargaining union. The
Supervisory power of the members of private respondent union consists
merely in recommending as to what managerial actions to take in
disciplinary cases. These members of private respondent union do not
fit the definition of managerial employees which We laid down in the
case of Bulletin Publishing Corporation v. Sanchez (144 SCRA 628).
These members of private respondent union are therefore not prohibited
from forming their own collective bargaining unit since it has not been
shown by petitioner that "the responsibilities (of these monthly-
paidemployees) inherently require the exercise of discretion and
independent judgment as supervisors" or that "they possess the power
and authority to lay down or exercise management policies." Similarly,
he held in the same case that "Members of supervisory unions who do
not fall within the definition of managerial employees shall become
eligible to loin or assist the rank-and-file labor organization, and if none
exists, to form or assist in the forming of such rank-and-file
organizations.
However, to prevent any difficulty. and to avoid confusion to all
concerned and, more importantly, to fulfill the policy of the New Labor
Code as well as to be consistent with Our ruling in the Bulletin case,
supra, the monthly-paid rank-and-file employees should be allowed to
join the union of the daily-paid-rank-and-file employees of petitioner so
that they can also avail of the CBA benefits or to form their own rank-
and-file union, without prejudice to the certification election that has
been ordered.