Philippine Blooming Mills Employees Organization v.
same reason, PBMEO was warned that those who
Philippines Blooming Mills
[G.R. No. L-31195 June 5, 1973]
TOPIC: Concerted Activities
PONENTE: MAKASIAR
CASE LAW/ DOCTRINE:
Such a concerted action for their mutual help and protection
deserves at least equal protection as the concerted action of
employees in giving publicity to a letter complaint charging
bank president with immorality, nepotism, favoritism an
discrimination in the appointment and promotion of ban
employees. We further ruled in the Republic Savings Bank
case, supra, that for the employees to come within the
protective mantle of Section 3 in relation to Section 4 (a-1) on
Republic Act No. 875, "it is not necessary that union
activity be involved or that collective bargaining be
contemplated," as long as the concerted activity is for
the furtherance of their interests.
Emergency Recit:
PBMEO advised Management that they will conduct a
demonstration in Malacanang to protest the alleged abuses
of Pasig police. The Company recorgnized their inalienable
right to demonstrate but warned them that employees
without LOA who doesn’t show up for work will be dismissed.
Union proceeded with the demonstration. Company filed
ULP. Court granted. MR of PBMEO dismissed. They filed
appeal with SC who took jurisdiction on the case. It held that
the demonstration is not ULP. (see ratio)
FACTS:
 Philippine Blooming Mills Employees Organization
(hereinafter referred to as PBMEO) is a legitimate labor
union composed of the employees of the respondent
Philippine Blooming Mills Co and petitioners are officers
and members of the Union.
 Petitioners claim that on March 1, 1969, they decided to
stage a mass demonstration at Malacañang on March 4,
1969, in protest against alleged abuses of the Pasig
police, to be participated in by the workers in the first
shift (from 6 A.M. to 2 P.M.) as well as those in the
regular second and third shifts (from 7 A.M. to 4 P.M.
and from 8 A.M. to 5 P.M., respectively); and that they
informed the respondent Company of their proposed
demonstration.
 The company asked the union to confirm or deny the
mass demonstration at Malacanang upon learning the
same. PBMEO thru Benjamin Pagcu who acted as
spokesman of the union confirmed the said
demonstration and said that it cannot be cancelled
because it has already been agreed upon in the meeting.
Pagcu explained further that the demonstration has
nothing to do with the Company because the union has
no quarrel or dispute with Management.
 Management assented that the demonstration is an
inalienable right of the union guaranteed by the
Constitution but emphasized that it should not unduly
prejudice the normal operations of the company. For the
Page 1 of 47
without previous LOA approved by the company who
fails to report for work shall be dismissed because such
is violation of the CBA amounting to illegal strike.
 A meeting was held where the company insisted that the
workers for the first and regular shift of March 4, 1969
should be excused from joining the demonstration and
should report for work; and thus utilize the workers in
the 2nd and 3rd shifts in order not to violate the
provisions of the CBA, particularly Article XXIV: NO
LOCKOUT — NO STRIKE'. All those who will not follow
this warning of the Company shall be dismissed.
 The Union did not comply to the request of the company,
thus the company filed a charge against the petitioners
with violation of Section 4(a)-6 in relation to Sections 13
and 14, as well as Section 15, all of Republic Act No. 875,
and of the CBA providing for 'No Strike and No Lockout.'
 Petitioners claim that they did not violate the existing
CBA because they gave the respondent Company prior
notice of the mass demonstration on March 4, 1969; that
the said mass demonstration was a valid exercise of their
constitutional freedom of speech against the alleged
abuses of some Pasig policemen; and that their mass
demonstration was not a declaration of strike because it
was not directed against the respondent firm.
Judge Joaquin Salvador found the petitioner PBMEO guilty
of bargaining in bad faith and ordered the dismissal of the
officers who were directly responsible for the ULP. The
petitioners filed an MR but was dismissed. Petitioners the
filed petition for relief from the order denying their MR due
to excusable negligence and honest mistake. Without waiting
for the resolution of the said petition, petitioners file with the
SC this appeal.
ISSUE(S): WON the demonstration amounts to ULP?
HELD: NO, it is not.
RATIO:
 The respondent Court of Industrial Relations, after
opining that the mass demonstration was not a
declaration of strike, concluded that by their "concerted
act and the occurrence temporary stoppage of work,"
herein petitioners are guilty bargaining in bad faith and
hence violated the collective bargaining agreement with
private respondent Philippine Blooming Mills Co., inc..
Set against and tested by foregoing principles governing
a democratic society, such conclusion cannot be
sustained. The demonstration held petitioners on March
4, 1969 before Malacañang was against alleged abuses of
some Pasig policemen, not against their employer, herein
private respondent firm, said demonstrate was purely
and completely an exercise of their freedom expression in
general and of their right of assembly and petition for
redress of grievances in particular before appropriate
governmental agency, the Chief Executive, again the
police officers of the municipality of Pasig.
 They exercise their civil and political rights for their
mutual aid protection from what they believe were police
excesses. As matter of fact, it was the duty of herein
private respondent firm to protect herein petitioner
 Union and its members from the harassment of local
police officers. It was to the interest herein private
respondent firm to rally to the defense of, and take up
the cudgels for, its employees, so that they can report to
work free from harassment, vexation or peril and as
consequence perform more efficiently their respective
tasks enhance its productivity as well as profits.

 The primacy of human rights — freedom of expression,

of peaceful assembly and of petition for redress of
grievances — over property rights has been sustained.

 The mass demonstration staged by the employees on

March 4, 1969 could not have been legally enjoined by
any court, such an injunction would be trenching upon
the freedom expression of the workers, even if it legally
appears to be illegal picketing or strike. The respondent
Court of Industrial Relations in the case at bar concedes
that the mass demonstration was not a declaration of a
strike "as the same not rooted in any industrial dispute
although there is concerted act and the occurrence of a
temporary stoppage work.”

 Management has shown not only lack of good-will or good

intention, but a complete lack of sympathetic
understanding of the plight of its laborers who claim that
they are being subjected to indignities by the local police,
It was more expedient for the firm to conserve its income
or profits than to assist its employees in their fight for
their freedoms and security against alleged petty
tyrannies of local police officers. This is sheer
opportunism. Such opportunism and expediency resorted
to by the respondent company assaulted the immunities
and welfare of its employees. It was pure and implement
selfishness, if not greed.

DISSENTING/CONCURRING OPINION(S):

Barredo- Dissent:

Wala about topic- basically its about jurisdiction. That the

judgment of the industrial court sought to be reviewed in the
present case has already become final and executory, nay, not
without the fault of the petitioners, hence, no matter how
erroneous from the constitutional viewpoint it may be, it is
already beyond recall, I vote to dismiss this case.

Page 2 of 47
09. Philippine Airlines Inc. (PAL) vs. National Labor
Relations Commission, Labor Arbiter Isabel P.
Ortiguerra and Philippine Airlines Employees
Association (PALEA)
G.R. No. 85985 August 13, 1993
TOPIC: Management prerogatives PONENTE: MELO, J
CASE LAW/ DOCTRINE:
The court explained that 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.
FACTS:
 On March 15, 1985 Petitioner. PAL revised its 1966
code of discipline!! The code was immediately
implemented, and some employees were forthwith
subjected to the disciplinary measures embodied
therein.
 On August 20, 1985, the Respondent, PALEA filed a
complaint before the NLRC for unfair labor practice
with the following remarks:
o “ULP with arbitrary implementation of
PAL’s Code of Discipline without notice and
prior discussion with Union by
Management”.
 PALEA contended in its position paper that PAL
was guilty of unfair labor practice by its unilateral
implementation of the Code, particularly
paragraphs E and G of Article 249 and Article 253 of
the Labor Code. (Case didn’t show the contents of
Art. 249 and 253)
 PALEA alleges that: 1.) copies of the Code had been
circulated in limited numbers; 2.) that being penal
in nature the Code must conform with the
requirements of sufficient publication and; 3.) 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 ON THE OTHER HAND filed a Motion to
Dismiss, asserting its prerogative as an employer to
prescribe rules and regulations regarding
employees’ conduct in carrying out their duties and
functions, and alleging that by implementing the
Code, it had not violated the collective bargaining
agreement (CBA) or any provision of the Labor Code.
Page 3 of 47
 Labor Arbiter Isabel P. Ortiguerra called the
parties to a conference but no show, so it was
considered as a waiver of the parties’ right to present
evidence, the labor arbiter considered the case
submitted for decision.
 On November 7, 1986, a decision was rendered and
PAL won. The court found that in adopting the Code
no unfair labor practice had been committed. BUT,
the arbiter said that PAL was “not totally fault
free” considering that while the issuance of
rules and regulations governing the conduct of
employees is a “legitimate management
prerogative” such rules and regulations must
meet the test of “reasonableness, propriety
and fairness.”
 PAL appealed to the NLRC. On August 19, 1988, the
NLRC through Commissioner Encarnacion, with
Presiding Commissioner Bonto-Perez and
Commissioner Maglaya concurring, found no
evidence of unfair labor practice committed by PAL
and affirmed the dismissal of PALEA’s charge.
PAL then filed the instant petition for certiorari charging
public respondents with grave abuse of discretion
ISSUE(S): WON the formulation of a Code of Discipline falls
purely under management prerogatives.
HELD: No.
RATIO:
 It was only on March 2, 1989 (Four years after the
petition), with the approval of Republic Act No. 6715
amending Article 211 of the Labor Code, that the law
explicitly considered it a State policy:
o “(t)o ensure the participation of
workers in decision and policy-making
processes affecting the rights, duties
and welfare.”
 HOWEVER, even in the absence of said clear
provision of law, the exercise of management
prerogatives was never considered boundless.
o San Miguel Brewery vs. Ople: So long as a
company’s management prerogatives are
exercised in good faith for the advancement
of the employer’s interest and not for the
purpose of defeating or circumventing the
rights of the employees under special laws
or under valid agreements, this Court will
uphold them.
o 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.
 The court explained that 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.

 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.

 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 RA 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 RA 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.

Page 4 of 47
196 University of Immaculate Concepcion v Secretary
of Labor
[G.R. No. 151379 | 14 January 2005]
TOPIC: Rationale of Compulsory Arbitration
PONENTE: J. Azcuna
CASE LAW/ DOCTRINE:
While the Court recognizes the exercise of management
prerogatives and often declines to interfere with the legitimate
business decisions of the employer, this privilege is not
absolute but subject to exceptions, such as when the Secretary
of Labor assumes jurisdiction over labor disputes involving
industries indispensable to the national interest.
One of the substantive evils which Article 263(g) of the Labor
Code seeks to curb is the exacerbation of a labor dispute to the
further detriment of the national interest. Any act committed
during the pendency of the dispute that tends to give rise to
further contentious issues or increase the tensions between the
parties should be considered an act of exacerbation and
should not be allowed
EMERGENCY RECIT
During the CBA negotiations between University and Union,
the VA ordered the exclusion of some employees from the
bargaining unit. This led to the first strike by Union.
Afterwards, Secretary of Labor assumed jurisdiction and
ordered to maintain status quo. University then informed
affected employees to choose whether to stay as their
employees or leave the union. Employees chose to remain as
both, hence, they were terminated. Because of this, they went
on strike to which the Secretary of Labor affirmed its former
order that University should reinstate the employees until
the dispute has been resolved. In another order, it ordered
payroll reinstatement instead of actual reinstatement due to
the current conditions between the parties. Hence,
University went to the SC. SC ruled in favor of Secretary of
Labor saying that it acted properly because it sought to
prevent exacerbation since if it intensifies, it will become
detrimental to the national interest.
FACTS:
 Petitioner University and Respondent Union
entered into CBA negotiations. The latter gave a
proposal to the University. However, one item was
left unresolved and this was the inclusion or
exclusion of some positions in the scope of the
bargaining unit.
 This matter was submitted for voluntary arbitration
which later rendered a decision excluding the
secretaries, registrars, certain accounting personnel
and guidance counselors from the coverage of the
bargaining unit.
 Union moved to reconsider the VA Decision. Pending
its resolution, Union filed a notice of strike on the
ground of bargaining deadlock and ULP.
Page 5 of 47
 During the 30 day cooling off period, two union
members were dismissed by petitioner. Hence, the
Union later on went on strike.
 Respondent Secretary of Labor assumed jurisdiction
over the labor dispute. It also ordered that all
workers be directed to return to work and for the
employer to accept them.
 Going back to the MR filed by Union, it was denied
by the VA.
 Because of the denial of their MR, the University
gave the affected employees two choices: 1) to resign
from the Union and remain employed as confidential
employees OR 2) resign from their confidential
employees and remain members of the Union.
 These employees remain steadfast that they can
remain both confidential employees and members of
the Union. Hence, the University terminated their
employment.
 Union now filed another notice of strike involving
the termination of the employees. They allege that
such termination was in violation of the Secretary of
Labor’s previous order.
 Secretary of Labor reaffirmed its order and directed
University to reinstate the employees.
 The University filed a MR. In the Order, then Acting
Secretary Brilliantes denied the MR, but modified
the two previous Orders by adding:
Anent the Union’s Motion, we find that superseding
circumstances would not warrant the physical reinstatement
of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll
reinstatement until the validity of their termination is finally
resolved.
 University filed a petition for certiorari in the CA
which was later denied and affirming the orders of
the Secretary of Labor.
Hence, this petition.
ISSUE(S): W/N the Secretary of Labor, after assuming
jurisdiction over a labor dispute involving an employer and
the certified bargaining agent of a group of employees in the
workplace, may legally order said employer to reinstate
employees terminated by the employer even if those
terminated employees are not part of the bargaining unit
HELD: Yes. Affirmed.
RATIO:
University contends that the Secretary cannot take
cognizance of an issue involving employees who are not part
of the bargaining unit. It insists that since the individual
respondents had already been excluded from the bargaining
unit by a final and executory order by the panel of voluntary
arbitrators, then they cannot be covered by the Secretary’s
assumption order.
The Court finds no merit in the University’s
contention. In Metrolab Industries v. Roldan-Confessor, the
Court declared that it recognizes the exercise of management
prerogatives and it often declines to interfere with the
legitimate business decisions of the employer.
In ordering payroll reinstatement in lieu of actual
reinstatement, then Acting Secretary of Labor Jose S.
Brillantes said:

However, as expressed in PAL v. NLRC, this privilege is not
absolute, but subject to exceptions. One of these exceptions is
when the Secretary of Labor assumes jurisdiction over labor
disputes involving industries indispensable to the
national interest under Article 263(g) of the Labor Code.
Anent the Unions Motion, we find that superseding
circumstances would not warrant the physical reinstatement
of the twelve (12) terminated employees. Hence, they are
hereby ordered placed under payroll reinstatement until the
validity of their termination is finally resolved.

This provision states:
(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. x x x
When the Secretary of Labor ordered the University to
suspend the effect of the termination of the individual
respondents, the Secretary did not exceed her jurisdiction,
nor did the Secretary gravely abuse the same. It must be
pointed out that one of the substantive evils which Article
263(g) of the Labor Code seeks to curb is the exacerbation of
a labor dispute to the further detriment of the national
interest.
As an exception to the rule, payroll reinstatement must rest
on special circumstances that render actual reinstatement
impracticable or otherwise not conducive to attaining the
purposes of the law.
The superseding circumstances mentioned by the Acting
Secretary of Labor no doubt refer to the final decision of the
panel of arbitrators as to the confidential nature of the
positions of the twelve private respondents, thereby
rendering their actual and physical reinstatement
impracticable and more likely to exacerbate the situation.
The payroll reinstatement in lieu of actual reinstatement
ordered in these cases, therefore, appears justified as an
exception to the rule until the validity of their termination is
finally resolved. This Court sees no grave abuse of discretion
on the part of the Acting Secretary of Labor in ordering the
same. Furthermore, the issue has not been raised by any
party in this case.

It is clear that the act of the University of dismissing the

individual respondents from their employment became the
impetus for the Union to declare a second notice of strike. It
is not a question anymore of whether or not the terminated
employees, the individual respondents herein, are part of the
bargaining unit. Any act committed during the pendency of
the dispute that tends to give rise to further contentious
issues or increase the tensions between the parties should be
considered an act of exacerbation and should not be allowed.

With respect to their payroll reinstatement in lieu of

actual reinstatement

[OPTIONAL; BUT EQUALLY RELEVANT]

With respect to the Secretary’s Order allowing payroll

reinstatement instead of actual reinstatement for the
individual respondents herein, an amendment to the
previous Orders issued by her office, the same is usually not
allowed. Article 263(g) of the Labor Code aforementioned
states that all workers must immediately return to work and
all employers must readmit all of them under the same terms
and conditions prevailing before the strike or lockout. The
phrase under the same terms and conditions makes it clear
that the norm is actual reinstatement. This is consistent with
the idea that any work stoppage or slowdown in that
particular industry can be detrimental to the national
interest.

Page 6 of 47
203 Manila Diamond Hotel Employees Union v CA
[G.R. No. 140518. December 16, 2004
TOPIC: SOLE’s assumption/certification order is plenary
CASE LAW/ DOCTRINE:
Article 263, paragraph (g) of the Labor Code, which allows
the Secretary of Labor to assume jurisdiction over a labor
dispute involving an industry indispensable to the national
interest, provides an exception:
(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. x x x
This provision is viewed as an exercise of the police power of
the State. A prolonged strike or lockout can be inimical to the
national economy and, therefore, the situation is imbued with
public necessity and involves the right of the State and the
public to self-protection
Emergency Recit:
Union filed for a certification election but was dismissed by
the DOLE. It sent a letter to the Hotel anyway informing the
same of its desire to negotiate CBA. Hotel replied stating it
cant negotiate CBA with the Union as its petition for
certification was dismissed. Union claims they only want to
bargain for their members and not all R&F. Hotel still
refused, Union filed a notice to strike. NCMB summoned
parties for a dialogue. Union still staged a strike. Labor Sec
ordered them reinstated, Hotel refused and dismissed some
employees. Union claims illegal dismissal. On petition for
certiorari CA ordered reinstatement in payroll only. SC held
that CA erred in ordering reinstatement in payroll only (see
ratio)
FACTS:
 On November 11, 1996, the Union filed a petition for a
certification election so that it may be declared the
exclusive bargaining representative of the Hotels
employees for the purpose of collective bargaining.
 On January 15, 1997 - The petition was dismissed by the
Department of Labor and Employment (DOLE)
 August 25, 1997 - Union sent a letter to the Hotel
informing it of its desire to negotiate for a collective
bargaining agreement.
 Sept 11, 1997 – the gotel repolled through Mary Ann
Mangalindan (Human Resources Manager) it stated that
the Hotel cannot recognize it as the employees
Page 7 of 47
bargaining agent since its petition for certification
election had been earlier dismissed by the DOLE.
 On the same day, the Union sent a letter to the hotel that
they did not give a notice to bargain but merely asking
the Hotel to engage in collective bargaining negotiations
for its members only and not for all the rank and file
employees of the company.
 The Union announced a strike both about a week later.
A notice of strike was thereafter filed with NCMB or the
Hotel’s alleged refusal to bargain. NCMB summoned
parties for a dialogue. Despite this the Union still staged
a strike.
 The hotel claims the strike was illegal and it had to
dismiss some of the employees who participated in the
same. The Union claims illegal dismissal.
 In the meantime, the SOLE assumed jurisdiction over
the labor dispute certifying the dispute for compulsory
arbitration and ordered the workers to return to work
within 24hrs.
 Upon receipt of the order, the employees went to work
but was refused by the Hotel and instead filed an MR.
The Acting Secretary of labor modified decision and
ordered employees to be reinstated only in payroll.
The union filed for MR but was denied. It filed with the SC
petition for certiorari which was referred to the CA which
affirmed the order for payroll reinstatement. Thus this
appeal.
ISSUE(S): WON the CA erred in ordering the reinstatement
in payroll only?
RATIO:
 The CA erred in basing its decision on the ruling in UST
v. NLRC where the Secretary assumed jurisdiction over
the labor dispute between striking teachers and the
university. He ordered the striking teachers to return to
work and the university to accept them under the same
terms and conditions. However, in a subsequent order,
the NLRC provided payroll reinstatement for the
striking teachers as an alternative remedy to actual
reinstatement.
 In the present case, there is no showing that the facts
called for payroll reinstatement as an alternative
remedy. A strained relationship between the striking
employees and management is no reason for payroll
reinstatement in lieu of actual reinstatement. Petitioner
correctly points out that labor disputes naturally involve
strained relations between labor and management, and
that in most strikes, the relations between the strikers
and the non-strikers will similarly be tense. Bitter labor
disputes always leave an aftermath of strong emotions
and unpleasant situations. Nevertheless, the
government must still perform its function and apply the
law, especially if, as in this case, national interest is
involved.
 Under Article 263(g), all workers must immediately
return to work and all employers must readmit all of
them under the same terms and conditions prevailing
 before the strike or lockout. This Court must point out
that the law uses the precise phrase of under the same
terms and conditions, revealing that it contemplates only
actual reinstatement. This is in keeping with the
rationale that any work stoppage or slowdown in that
particular industry can be inimical to the national
economy. It is clear that Article 263(g) was not written to
protect labor from the excesses of management, nor was
it written to ease management from expenses, which it
normally incurs during a work stoppage or slowdown. It
was an error on the part of the Court of Appeals to view
the assumption order of the Secretary as a measure to
protect the striking workers from any retaliatory action
from the Hotel. This Court reiterates that this law was
written as a means to be used by the State to protect
itself from an emergency or crisis. It is not for labor, nor
is it for management.

 Payroll reinstatement in lieu of actual reinstatement is

a departure from the rule in these cases and there must
be showing of special circumstances rendering actual
reinstatement impracticable, as in the UST case
aforementioned, or otherwise not conducive to attaining
the purpose of the law in providing for assumption of
jurisdiction by the Secretary of Labor and Employment
in a labor dispute that affects the national interest. None
appears to have been established in this case. Even in
the exercise of his discretion under Article 236(g), the
Secretary must always keep in mind the purpose of the
law.

Page 8 of 47
G.R. No. L-49046 January 26, 1988
SATURNO A. VICTORIA, petitioner, vs. HON. AMADO G.
INCIONG, DEPUTY MINISTER, and FAR EAST
BROADCASTING COMPANY, INC.,respondents.
Facts:
Victoria was employed in March 1956 by Far East
Broadcasting Company as a radio transmitter operator.
Sometime in July 1971, he and his co-workers organized
the Far East Broadcasting FEBC Employees Association.
After registering their association with the then
Department of Labor, they demanded recognition of said
association 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, otherwise known as the Industrial Peace Act,
the labor law enforced at that time.
Several conciliation meetings were held at the
Department of Labor and in those meetings, the Director
of Labor Relations Edmundo Cabal advised the union
members 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
members led by Saturno Victoria as its president,
declared a strike and picketed the company's premises
in September 1972 for the purpose of seeking
recognition of the labor union.
As a countermeasure, the company filed a case for
damages with preliminary injunction against the strikers
before the CFI. 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.
Upon the declaration of martial law on September 21,
1972 and the promulgation of PD 21 creating the NLRC,
the ad hoc NLRC took cognizance of the strike, both
cases for reinstatement due to the company's refusal to
accept the union's offer to return to work during the
pendency of the case in the CFI.
In December 1972, Arbitrator Aguas rendered a joint
decision in the two cases holding for the union without
prejudice to whatever decision the CFI may promulgate.
Page 9 of 47
The decision of the arbitrator was successively appealed
to the ad hoc NLRC, the Secretary of Labor and the
Office of the President, and was affirmed in all instances.
In April 1975, the CFI rendered judgment declaring the
strike illegal inasmuch as it was for the purpose of
compelling the company to recognize their labor union
which could not be legally done because the plaintiffs
were not covered by Republic Act 875
By virtue of the above decision, the company notified
Saturno Victoria that he is dismissed effective April 26,
1975. Thereupon, he filed a case before the NLRC,
Regional Branch IV against the company alleging
violation of article 267 LC which requires clearance from
the Secretary of Labor for every shutdown of business
establishments or dismissal of employees. Labor Arbiter
Lorenzo rendered a decision in petitioner's favor
declaring the dismissal to be illegal, thereby ordering
reinstatement with full backwages. On appeal, the
arbiter's decision was affirmed by the NLRC. But when
the commission's decision was in turn appealed to the
Secretary of Labor, it was set aside.
It held that since the strike was declared illegal,
respondent acted in good faith when it dispensed with
the services of complainant. But clearance was not
necessary for a mere report of the termination of
services was sufficient. For failure of respondent to file
the necessary report and based on equitable
considerations, complainant should be granted
separation pay equivalent to one-half month salary for
every year of service.
Issue: W/N a clearance from the Secretary of Labor is still
necessary before the petitioner could be dismissed.
Held: No
Ratio:
The substantive law on the matter enforced during the
time of petitioner's dismissal was Article 267 LC. Article
267 reads:
No employer that has no collective bargaining
agreement may shut down his establishment or
dismiss or terminate the service of regular
employees with at least one [1] year of service
except managerial employees as defined in this
book without previous written clearance from the
Secretary of Labor.
Petitioner maintains that the abovecited provision is
very clear. It does not make any distinction as to the
ground for dismissal. Whether or not the dismissal
sought by the employer company is for cause, it is
imperative that the company must apply for a clearance
from the Secretary of Labor.
In a recent case penned by Justice Abraham F. Sarmiento
promulgated in June 1987, we had occasion to rule that
the purpose in requiring a prior clearance from the
Secretary of Labor in cases of shutdown or dismissal of
employees, is to afford the Secretary ample opportunity
to examine and determine the reasonableness of the
request.
Technically speaking, no clearance was obtained by
private respondent from the then Secretary of Labor, the
last step towards full compliance with the requirements
of law on the matter of dismissal of employees.
However, the rationale behind the clearance
requirement was fully met. The Secretary of Labor was
apprised of private respondent's intention to terminate
the services of petitioner. This in effect is an application
for clearance to dismiss petitioner from employment.
The affirmance of the restrictive condition in the
dispositive portion of the labor arbiter's decision by the
Secretary of Labor and the Office of the President of the
Philippines, signifies a grant of authority to dismiss
petitioner in case the strike is declared illegal by the CFI.
Consequently and as correctly stated by the Solicitor
General, private respondent acted in good faith when it
terminated the employment of petitioner upon a
declaration of illegality of the strike by the CFI.
Moreover, the then Secretary of Labor manifested his
conformity to the dismissal, not once, but twice. In this
regard, the mandatory rule on clearance need not be
applied.
deviation from the legal boundaries shall be imputable
to the leader.
Petitioner should have known and it was his duty to
impart this imputed knowledge to the members of the
union that employees and laborers in non- profit
organizations are not covered by the provisions of the
Industrial Peace Act and the Court of Industrial Relations
[in the case at bar, the Court of First Instance] 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.
We further agree with the Acting Secretary of Labor that
what was required in the case of petitioner'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:
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:
xxx xxx xxx
[f] All other terminations of employment,
suspension, lay-offs or shutdowns, not otherwise
specified in this and in the immediately preceding
sections.

The strike staged by the union in 1972 was a futile move.

The law then enforced, Republic Act 875 specifically
excluded respondent 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. Because of this, there was no
necessity on the part of private respondent to show
specific acts of petitioner during the strike to justify his
dismissal.

This is a matter of responsibility and of answerability.

Petitioner 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 precepts of law and any
Page 10 of 47
SECOND DIVISION
[G.R. No. 181531. July 31, 2009.]
NATIONAL UNION OF WORKERS IN HOTELS,
RESTAURANTS AND ALLIED INDUSTRIES-MANILA
PAVILION HOTEL CHAPTER, petitioner, vs.
SECRETARY OF LABOR AND EMPLOYMENT,
BUREAU OF LABOR RELATIONS, HOLIDAY INN
MANILA PAVILION HOTEL LABOR UNION AND
ACESITE PHILIPPINES HOTEL CORPORATION,
respondents.
DECISION
CARPIO MORALES, J p:
National Union of Workers in Hotels, Restaurants and Allied
Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-
MPHC), herein petitioner, seeks the reversal of the Court of
Appeals' November 8, 2007 Decision 1 and of the Secretary of
Labor and Employment's January 25, 2008 Resolution 2 in
OS-A-9-52-05 which affirmed the Med-Arbiter's Resolutions
dated January 22, 2007 3 and March 22, 2007. 4 aHTcDA
A certification election was conducted on June 16, 2006
among the rank-and-file employees of respondent Holiday
Inn Manila Pavilion Hotel (the Hotel) with the following
results:
EMPLOYEES IN VOTERS' LIST = 353
TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22
In view of the significant number of segregated votes,
contending unions, petitioner, NUHWHRAIN-MPHC, and
respondent Holiday Inn Manila Pavilion Hotel Labor Union
(HIMPHLU), referred the case back to Med-Arbiter Ma.
Simonette Calabocal to decide which among those votes
would be opened and tallied. Eleven (11) votes were initially
segregated because they were cast by dismissed employees,
albeit the legality of their dismissal was still pending before
the Court of Appeals. Six other votes were segregated because
the employees who cast them were already occupying
supervisory positions at the time of the election. Still five
other votes were segregated on the ground that they were
cast by probationary employees and, pursuant to the existing
Collective Bargaining Agreement (CBA), such employees
cannot vote. It bears noting early on, however, that the vote
of one Jose Gatbonton (Gatbonton), a probationary employee,
was counted.
By Order of August 22, 2006, Med-Arbiter Calabocal ruled for
the opening of 17 out of the 22 segregated votes, specially
those cast by the 11 dismissed employees and those cast by
the six supposedly supervisory employees of the Hotel.
Page 11 of 47
Petitioner, which garnered 151 votes, appealed to the
Secretary of Labor and Employment (SOLE), arguing that
the votes of the probationary employees should have been
opened considering that probationary employee Gatbonton's
vote was tallied. And petitioner averred that respondent
HIMPHLU, which garnered 169 votes, should not be
immediately certified as the bargaining agent, as the opening
of the 17 segregated ballots would push the number of valid
votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes
which HIMPHLU garnered would be one vote short of the
majority which would then become 169. AEDHST
By the assailed Resolution of January 22, 2007, the Secretary
of Labor and Employment (SOLE), through then Acting
Secretary Luzviminda Padilla, affirmed the Med-Arbiter's
Order. It held that pursuant to Section 5, Rule IX of the
Omnibus Rules Implementing the Labor Code on exclusion
and inclusion of voters in a certification election, the
probationary employees cannot vote, as at the time the Med-
Arbiter issued on August 9, 2005 the Order granting the
petition for the conduct of the certification election, the six
probationary employees were not yet hired, hence, they could
not vote.
The SOLE further held that, with respect to the votes cast by
the 11 dismissed employees, they could be considered since
their dismissal was still pending appeal.
As to the votes cast by the six alleged supervisory employees,
the SOLE held that their votes should be counted since their
promotion took effect months after the issuance of the above-
said August 9, 2005 Order of the Med-Arbiter, hence, they
were still considered as rank-and-file.
Respecting Gatbonton's vote, the SOLE ruled that the same
could be the basis to include the votes of the other
probationary employees, as the records show that during the
pre-election conferences, there was no disagreement as to his
inclusion in the voters' list, and neither was it timely
challenged when he voted on election day, hence, the Election
Officer could not then segregate his vote.
The SOLE further ruled that even if the 17 votes of the
dismissed and supervisory employees were to be counted and
presumed to be in favor of petitioner, still, the same would
not suffice to overturn the 169 votes garnered by HIMPHLU.
IaEASH
In fine, the SOLE concluded that the certification of
HIMPHLU as the exclusive bargaining agent was proper.
Petitioner's motion for reconsideration having been denied by
the SOLE by Resolution of March 22, 2007, it appealed to the
Court of Appeals.
By the assailed Decision promulgated on November 8, 2007,
the appellate court affirmed the ruling of the SOLE. It held
that, contrary to petitioner's assertion, the ruling in Airtime
Specialist, Inc. v. Ferrer Calleja 5 stating that in a
certification election, all rank-and-file employees in the
appropriate bargaining unit, whether probationary or
permanent, are entitled to vote, is inapplicable to the case at
bar. For, the appellate court continued, the six probationary
employees were not yet employed by the Hotel at the time the
August 9, 2005 Order granting the certification election was
issued. It thus held that Airtime Specialist applies only to
situations wherein the probationary employees were already
employed as of the date of filing of the petition for
certification election.
Respecting Gatbonton's vote, the appellate court upheld the
SOLE's finding that since it was not properly challenged, its
inclusion could no longer be questioned, nor could it be made
the basis to include the votes of the six probationary
employees.
The appellate court brushed aside petitioner's contention
that the opening of the 17 segregated votes would materially
affect the results of the election as there would be the
likelihood of a run-off election in the event none of the
contending unions receive a majority of the valid votes cast.
It held that the "majority" contemplated in deciding which of
the unions in a certification election is the winner refers to
the majority of valid votes cast, not the simple majority of
votes cast, hence, the SOLE was correct in ruling that even if
the 17 votes were in favor of petitioner, it would still be
insufficient to overturn the results of the certification
election. ISaCTE
Petitioner's motion for reconsideration having been denied by
Resolution of January 25, 2008, the present recourse was
filed.
Petitioner's contentions may be summarized as follows:
1. Inclusion of Jose Gatbonton's vote but excluding the vote
of the six other probationary employees violated the principle
of equal protection and is not in accord with the ruling in
Airtime Specialists, Inc. v. Ferrer-Calleja;
2. The time of reckoning for purposes of determining when
the probationary employees can be allowed to vote is not
August 9, 2005 — the date of issuance by Med-Arbiter
Calabocal of the Order granting the conduct of certification
elections, but March 10, 2006 — the date the SOLE Order
affirmed the Med-Arbiter's Order. cHaCAS
3. Even if the votes of the six probationary employees were
included, still, HIMPHLU could not be considered as having
obtained a majority of the valid votes cast as the opening of
the 17 ballots would increase the number of valid votes from
321 to 338, hence, for HIMPHLU to be certified as the
exclusive bargaining agent, it should have garnered at least
170, not 169, votes.
Petitioner justifies its not challenging Gatbonton's vote
because it was precisely its position that probationary
employees should be allowed to vote. It thus avers that justice
and equity dictate that since Gatbonton's vote was counted,
then the votes of the 6 other probationary employees should
likewise be included in the tally.
Petitioner goes on to posit that the word "order" in Section 5,
Rule 9 of Department Order No. 40-03 reading "[A]ll
employees who are members of the appropriate bargaining
unit sought to be represented by the petitioner at the time of
the issuance of the order granting the conduct of certification
election shall be allowed to vote" refers to an order which has
already become final and executory, in this case the March
10, 2002 Order of the SOLE. SCIAaT
Petitioner thus concludes that if March 10, 2006 is the
reckoning date for the determination of the eligibility of
workers, then all the segregated votes cast by the
Page 12 of 47
probationary employees should be opened and counted, they
having already been working at the Hotel on such date.
Respecting the certification of HIMPHLU as the exclusive
bargaining agent, petitioner argues that the same was not
proper for if the 17 votes would be counted as valid, then the
total number of votes cast would have been 338, not 321,
hence, the majority would be 170; as such, the votes garnered
by HIMPHLU is one vote short of the majority for it to be
certified as the exclusive bargaining agent. IHCacT
The relevant issues for resolution then are first, whether
employees on probationary status at the time of the
certification elections should be allowed to vote, and second,
whether HIMPHLU was able to obtain the required majority
for it to be certified as the exclusive bargaining agent.
On the first issue, the Court rules in the affirmative.
The inclusion of Gatbonton's vote was proper not because it
was not questioned but because probationary employees have
the right to vote in a certification election. The votes of the
six other probationary employees should thus also have been
counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds:
In a certification election, all rank and file employees in
the appropriate bargaining unit, whether
probationary or permanent are entitled to vote. This
principle is clearly stated in Art. 255 of the Labor Code which
states that the "labor organization designated or selected by
the majority of the employees in an appropriate bargaining
unit shall be the exclusive representative of the employees in
such unit for purposes of collective bargaining". Collective
bargaining covers all aspects of the employment relation and
the resultant CBA negotiated by the certified union binds all
employees in the bargaining unit. Hence, all rank and file
employees, probationary or permanent, have a substantial
interest in the selection of the bargaining representative.
The Code makes no distinction as to their employment
status as basis for eligibility in supporting the petition
for certification election. The law refers to "all" the
employees in the bargaining unit. All they need to be
eligible to support the petition is to belong to the
"bargaining unit". (Emphasis supplied)
Rule II, Sec. 2 of Department Order No. 40-03, series of 2003,
which amended Rule XI of the Omnibus Rules Implementing
the Labor Code, provides:
Rule II
Section 2. Who may join labor unions and workers'
associations. — All persons employed in commercial,
industrial and agricultural enterprises, including employees
of government-owned or controlled corporations without
original charters established under the Corporation Code, as
well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not,
shall have the right to self-organization and to form, join or
assist labor unions for purposes of collective bargaining:
provided, however, that supervisory employees shall not be
eligible for membership in a labor union of the rank-and-file
employees but may form, join or assist separate labor unions
of their own. Managerial employees shall not be eligible to
form, join or assist any labor unions for purposes of collective
bargaining. Alien employees with valid working permits
issued by the Department may exercise the right to self-
organization and join or assist labor unions for purposes of
collective bargaining if they are nationals of a country which
grants the same or similar rights to Filipino workers, as
certified by the Department of Foreign Affairs.
For purposes of this section, any employee, whether
employed for a definite period or not, shall beginning
on the first day of his/her service, be eligible for
membership in any labor organization.
All other workers, including ambulant, intermittent and
other workers, the self-employed, rural workers and those
without any definite employers may form labor organizations
for their mutual aid and protection and other legitimate
purposes except collective bargaining. (Emphasis supplied)
The provision in the CBA disqualifying probationary
employees from voting cannot override the Constitutionally-
protected right of workers to self-organization, as well as the
provisions of the Labor Code and its Implementing Rules on
certification elections and jurisprudence thereon.
A law is read into, and forms part of, a contract. Provisions in
a contract are valid only if they are not contrary to law,
morals, good customs, public order or public policy. 6
Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the
appellate court rely to support their position that
probationary employees hired after the issuance of the Order
granting the petition for the conduct of certification election
must be excluded, should not be read in isolation and must
be harmonized with the other provisions of D.O. Rule XI, Sec.
5 of D.O. 40-03, viz.:
Rule XI
xxx xxx xxx
Section 5. Qualification of voters; inclusion-exclusion. — All
employees who are members of the appropriate
bargaining unit sought to be represented by the
petitioner at the time of the issuance of the order
granting the conduct of a certification election shall
be eligible to vote. An employee who has been dismissed
from work but has contested the legality of the dismissal in a
forum of appropriate jurisdiction at the time of the issuance
of the order for the conduct of a certification election shall be
considered a qualified voter, unless his/her dismissal was
declared valid in a final judgment at the time of the conduct
of the certification election. (Emphasis supplied)
xxx xxx xxx
Section 13. Order/Decision on the petition. — Within ten (10)
days from the date of the last hearing, the Med-Arbiter shall
issue a formal order granting the petition or a decision
denying the same. In organized establishments, however, no
order or decision shall be issued by the Med-Arbiter during
the freedom period. CHTAIc
The order granting the conduct of a certification
election shall state the following:
(a) the name of the employer or establishment;
(b) the description of the bargaining unit;
Page 13 of 47
(c) a statement that none of the grounds for dismissal
enumerated in the succeeding paragraph exists;
(d) the names of contending labor unions which shall appear
as follows: petitioner union/s in the order in which their
petitions were filed, forced intervenor, and no union; and
(e) a directive upon the employer and the contending
union(s) to submit within ten (10) days from receipt of
the order, the certified list of employees in the
bargaining unit, or where necessary, the payrolls covering
the members of the bargaining unit for the last three (3)
months prior to the issuance of the order. (Emphasis
supplied) TcHCDE
xxx xxx xxx
Section 21. Decision of the Secretary. — The Secretary shall
have fifteen (15) days from receipt of the entire records of the
petition within which to decide the appeal. The filing of the
memorandum of appeal from the order or decision of
the Med-Arbiter stays the holding of any certification
election.
The decision of the Secretary shall become final and
executory after ten (10) days from receipt thereof by
the parties. No motion for reconsideration of the decision
shall be entertained. (Emphasis supplied)
In light of the immediately-quoted provisions, and
prescinding from the principle that all employees are, from
the first day of their employment, eligible for membership in
a labor organization, it is evident that the period of reckoning
in determining who shall be included in the list of eligible
voters is, in cases where a timely appeal has been filed from
the Order of the Med-Arbiter, the date when the Order of
the Secretary of Labor and Employment, whether
affirming or denying the appeal, becomes final and
executory. aETAHD
The filing of an appeal to the SOLE from the Med-Arbiter's
Order stays its execution, in accordance with Sec. 21, and
rationally, the Med-Arbiter cannot direct the employer to
furnish him/her with the list of eligible voters pending the
resolution of the appeal.
During the pendency of the appeal, the employer may hire
additional employees. To exclude the employees hired after
the issuance of the Med-Arbiter's Order but before the appeal
has been resolved would violate the guarantee that every
employee has the right to be part of a labor organization from
the first day of their service.
In the present case, records show that the probationary
employees, including Gatbonton, were included in the list of
employees in the bargaining unit submitted by the Hotel on
May 25, 2006 in compliance with the directive of the Med-
Arbiter after the appeal and subsequent motion for
reconsideration have been denied by the SOLE, rendering the
Med-Arbiter's August 22, 2005 Order final and executory 10
days after the March 22, 2007 Resolution (denying the motion
for reconsideration of the January 22 Order denying the
appeal), and rightly so. Because, for purposes of self-
organization, those employees are, in light of the discussion
above, deemed eligible to vote. HScDIC
A certification election is the process of determining the sole
and exclusive bargaining agent of the employees in an
appropriate bargaining unit for purposes of collective
bargaining. Collective bargaining, refers to the negotiated
contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit. 7
The significance of an employee's right to vote in a
certification election cannot thus be overemphasized. For he
has considerable interest in the determination of who shall
represent him in negotiating the terms and conditions of his
employment.
Even if the Implementing Rules gives the SOLE 20 days to
decide the appeal from the Order of the Med-Arbiter,
experience shows that it sometimes takes months to be
resolved. To rule then that only those employees hired as of
the date of the issuance of the Med-Arbiter's Order are
qualified to vote would effectively disenfranchise employees
hired during the pendency of the appeal. More importantly,
reckoning the date of the issuance of the Med-Arbiter's Order
as the cut-off date would render inutile the remedy of appeal
to the SOLE. cAEDTa
But while the Court rules that the votes of all the
probationary employees should be included, under the
particular circumstances of this case and the period of time
which it took for the appeal to be decided, the votes of the six
supervisory employees must be excluded because at the time
the certification elections was conducted, they had ceased to
be part of the rank and file, their promotion having taken
effect two months before the election.
As to whether HIMPHLU should be certified as the exclusive
bargaining agent, the Court rules in the negative. It is well-
settled that under the so-called "double majority rule", for
there to be a valid certification election, majority of
the bargaining unit must have voted AND the winning
union must have garnered majority of the valid votes
cast.
Prescinding from the Court's ruling that all the probationary
employees' votes should be deemed valid votes while that of
the supervisory employees should be excluded, it follows that
the number of valid votes cast would increase — from 321 to
337. Under Art. 256 of the Labor Code, the union obtaining
the majority of the valid votes cast by the eligible voters shall
be certified as the sole and exclusive bargaining agent of all
the workers in the appropriate bargaining unit. This majority
is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes.
Clearly, HIMPHLU was not able to obtain a majority vote.
The position of both the SOLE and the appellate court that
the opening of the 17 segregated ballots will not materially
affect the outcome of the certification election as for, so they
contend, even if such member were all in favor of petitioner,
still, HIMPHLU would win, is thus untenable.
It bears reiteration that the true importance of ascertaining
the number of valid votes cast is for it to serve as basis for
computing the required majority, and not just to determine
which union won the elections. The opening of the segregated
but valid votes has thus become material. To be sure, the
conduct of a certification election has a two-fold
Page 14 of 47
objective: to determine the appropriate bargaining
unit and to ascertain the majority representation of
the bargaining representative, if the employees desire
to be represented at all by anyone. It is not simply the
determination of who between two or more contending unions
won, but whether it effectively ascertains the will of the
members of the bargaining unit as to whether they want to
be represented and which union they want to represent them.
Having declared that no choice in the certification election
conducted obtained the required majority, it follows that a
run-off election must be held to determine which between
HIMPHLU and petitioner should represent the rank-and-file
employees.
A run-off election refers to an election between the labor
unions receiving the two (2) highest number of votes in a
certification or consent election with three (3) or more
choices, where such a certified or consent election results in
none of the three (3) or more choices receiving the majority of
the valid votes cast; provided that the total number of votes
for all contending unions is at least fifty percent (50%) of the
number of votes cast. 8 With 346 votes cast, 337 of which are
now deemed valid and HIMPHLU having only garnered 169
and petitioner having obtained 151 and the choice "NO
UNION" receiving 1 vote, then the holding of a run-off
election between HIMPHLU and petitioner is in order.
WHEREFORE, the petition is GRANTED. The Decision
dated November 8, 2007 and Resolution dated January 25,
2008 of the Court of Appeals affirming the Resolutions dated
January 22, 2007 and March 22, 2007, respectively, of the
Secretary of Labor and Employment in OS-A-9-52-05 are
ANNULLED and SET ASIDE.
The Department of Labor and Employment-Bureau of Labor
Relations is DIRECTED to cause the holding of a run-off
election between petitioner, National Union of Workers in
Hotels, Restaurants and Allied Industries-Manila Pavilion
Hotel Chapter (NUWHRAIN-MPC), and respondent Holiday
Inn Manila Pavilion Hotel Labor Union (HIMPHLU).
SO ORDERED.
||| (NUWHRAIN-Manila Pavilion Hotel Chapter v.
Secretary of Labor and Employment, G.R. No. 181531, [July
31, 2009], 612 PHIL 291-306)
SECOND DIVISION
[G.R. No. 211145. October 14, 2015.]
SAMAHAN NG MANGGAGAWA SA HANJIN
SHIPYARD rep. by its President, ALFIE ALIPIO,
petitioner, vs. BUREAU OF LABOR RELATIONS,
HANJIN HEAVY INDUSTRIES AND CONSTRUCTION
CO., LTD. (HHIC-PHIL.), respondents.
DECISION
MENDOZA, J p:
The right to self-organization is not limited to unionism.
Workers may also form or join an association for mutual aid
and protection and for other legitimate purposes. TAIaHE
This is a petition for review on certiorari seeking to reverse
and set aside the July 4, 2013 Decision 1 and the January 28,
2014 Resolution 2 of the Court of Appeals (CA) in CA-G.R. SP
No. 123397, which reversed the November 28, 2011
Resolution 3 of the Bureau of Labor Relations (BLR) and
reinstated the April 20, 2010 Decision 4 of the Department of
Labor and Employment (DOLE) Regional Director,
cancelling the registration of Samahan ng Manggagawa sa
Hanjin Shipyard (Samahan) as a worker's association under
Article 243 (now Article 249) of the Labor Code.
The Facts
On February 16, 2010, Samahan, through its authorized
representative, Alfie F. Alipio, filed an application for
registration 5 of its name "Samahan ng mga Manggagawa sa
Hanjin Shipyard" with the DOLE. Attached to the
application were the list of names of the association's officers
and members, signatures of the attendees of the February 7,
2010 meeting, copies of their Constitution and By-laws. The
application stated that the association had a total of 120
members.
On February 26, 2010, the DOLE Regional Office No. 3, City
of San Fernando, Pampanga (DOLE-Pampanga), issued the
corresponding certificate of registration 6 in favor of
Samahan.
On March 15, 2010, respondent Hanjin Heavy Industries and
Construction Co., Ltd. Philippines (Hanjin), with offices at
Greenbeach 1, Renondo Peninsula, Sitio Agustin, Barangay
Cawag, Subic Bay Freeport Zone, filed a petition 7 with
DOLE-Pampanga praying for the cancellation of registration
of Samahan's association on the ground that its members did
not fall under any of the types of workers enumerated in the
second sentence of Article 243 (now 249). cDHAES
Hanjin opined that only ambulant, intermittent, itinerant,
rural workers, self-employed, and those without definite
employers may form a workers' association. It further posited
that one third (1/3) of the members of the association had
definite employers and the continued existence and
registration of the association would prejudice the company's
goodwill.
On March 18, 2010, Hanjin filed a supplemental petition, 8
adding the alternative ground that Samahan committed a
misrepresentation in connection with the list of members
and/or voters who took part in the ratification of their
constitution and by-laws in its application for registration.
Page 15 of 47
Hanjin claimed that Samahan made it appear that its
members were all qualified to become members of the
workers' association.
On March 26, 2010, DOLE-Pampanga called for a conference,
wherein Samahan requested for a 10-day period to file a
responsive pleading. No pleading, however, was submitted.
Instead, Samahan filed a motion to dismiss on April 14, 2010.
9
The Ruling of the DOLE Regional Director
On April 20, 2010, DOLE Regional Director Ernesto Bihis
ruled in favor of Hanjin. He found that the preamble, as
stated in the Constitution and By-Laws of Samahan, was an
admission on its part that all of its members were employees
of Hanjin, to wit:
KAMI, ang mga Manggagawa sa HANJIN Shipyard
(SAMAHAN) ay naglalayong na isulong ang pagpapabuti ng
kondisyon sa paggawa at katiyakan sa hanapbuhay sa
pamamagitan ng patuloy na pagpapaunlad ng kasanayan ng
para sa mga kasapi nito. Naniniwala na sa pamamagitan ng
aming mga angking lakas, kaalaman at kasanayan ay aming
maitataguyod at makapag-aambag sa kaunlaran ng isang
lipunan. Na mararating at makakamit ang antas ng
pagkilala, pagdakila at pagpapahalaga sa mga tulad naming
mga manggagawa.
xxx xxx xxx 10
The same claim was made by Samahan in its motion to
dismiss, but it failed to adduce evidence that the remaining
63 members were also employees of Hanjin. Its admission
bolstered Hanjin's claim that Samahan committed
misrepresentation in its application for registration as it
made an express representation that all of its members were
employees of the former. Having a definite employer, these
57 members should have formed a labor union for collective
bargaining. 11 The dispositive portion of the decision of the
Dole Regional Director, reads: ASEcHI
WHEREFORE, premises considered, the petition is hereby
GRANTED. Consequently, the Certificate of Registration as
Legitimate Workers Association (LWA) issued to the
SAMAHAN NG MGA MANGGAGAWA SA HANJIN
SHIPYARD (SAMAHAN) with Registration Numbers
RO300-1002-WA-009 dated February 26, 2010 is hereby
CANCELLED, and said association is dropped from the
roster of labor organizations of this Office.
SO DECIDED. 12
The Ruling of the Bureau of Labor Relations
Aggrieved, Samahan filed an appeal 13 before the BLR,
arguing that Hanjin had no right to petition for the
cancellation of its registration. Samahan pointed out that the
words "Hanjin Shipyard," as used in its application for
registration, referred to a workplace and not as employer or
company. It explained that when a shipyard was put up in
Subic, Zambales, it became known as Hanjin Shipyard.
Further, the remaining 63 members signed the Sama-
Samang Pagpapatunay which stated that they were either
working or had worked at Hanjin. Thus, the alleged
misrepresentation committed by Samahan had no leg to
stand on. 14
In its Comment to the Appeal, 15 Hanjin averred that it was
a party-in-interest. It reiterated that Samahan committed
misrepresentation in its application for registration before
DOLE Pampanga. While Samahan insisted that the
remaining 63 members were either working, or had at least
worked in Hanjin, only 10 attested to such fact, thus, leaving
its 53 members without any workplace to claim.
On September 6, 2010, the BLR granted Samahan's appeal
and reversed the ruling of the Regional Director. It stated
that the law clearly afforded the right to self-organization to
all workers including those without definite employers. 16 As
an expression of the right to self-organization, industrial,
commercial and self-employed workers could form a workers'
association if they so desired but subject to the limitation that
it was only for mutual aid and protection. 17 Nowhere could
it be found that to form a workers' association was prohibited
or that the exercise of a workers' right to self-organization
was limited to collective bargaining. 18 ITAaHc
In its March 21, 2012 Resolution, 26 the CA dismissed the
petition because of Samahan's failure to file a motion for
reconsideration of the assailed November 28, 2011
Resolution.
On April 17, 2012, Samahan filed its motion for
reconsideration 27 and on July 18, 2012, Hanjin filed its
comment 28 to oppose the same. On October 22, 2012, the CA
issued a resolution granting Samahan's motion for
reconsideration and reinstating the petition. Hanjin was
directed to file a comment five (5) days from receipt of notice.
29
On December 12, 2012, Hanjin filed its comment on the
petition, 30 arguing that to require Samahan to change its
name was not tantamount to interfering with the workers'
right to self-organization. 31 Thus, it prayed, among others,
for the dismissal of the petition for Samahan's failure to file
the required motion for reconsideration. 32

The BLR was of the opinion that there was no
misrepresentation on the part of Samahan. The phrase,
"KAMI, ang mga Manggagawa sa Hanjin Shipyard," if
translated, would be: "We, the workers at Hanjin Shipyard."
The use of the preposition "at" instead of "of" would indicate
that "Hanjin Shipyard" was intended to describe a place. 19
Should Hanjin feel that the use of its name had affected the
goodwill of the company, the remedy was not to seek the
cancellation of the association's registration. At most, the use
by Samahan of the name "Hanjin Shipyard" would only
warrant a change in the name of the association. 20 Thus, the
dispositive portion of the BLR decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Order
of DOLE Region III Director Ernesto C. Bihis dated 20 April
2010 is REVERSED and SET ASIDE.
Accordingly, Samahan ng mga Manggagawa sa Hanjin
Shipyard shall remain in the roster of legitimate workers'
association. 21
On October 14, 2010, Hanjin filed its motion
reconsideration. 22
In its Resolution, 23 dated November 28, 2011, the BLR
affirmed its September 6, 2010 Decision, but directed
Samahan to remove the words "Hanjin Shipyard" from its
name. The BLR explained that the Labor Code had no
provision on the use of trade or business name in the naming
of a worker's association, such matters being governed by the
Corporation Code. According to the BLR, the most equitable
relief that would strike a balance between the contending
interests of Samahan and Hanjin was to direct Samahan to
drop the name "Hanjin Shipyard" without delisting it from
the roster of legitimate labor organizations. The fallo reads:
WHEREFORE, premises considered, our Decision dated 6
September 2010 is hereby AFFIRMED with a DIRECTIVE
for SAMAHAN to remove "HANJIN SHIPYARD" from its
name.
SO RESOLVED. 24
Unsatisfied, Samahan filed a petition for certiorari 25 under
Rule 65 before the CA, docketed as CA-G.R. SP No. 123397.
CHTAIc
On January 17, 2013, Samahan filed its reply. 33
On March 22, 2013, Hanjin filed its memorandum. 34
The Ruling of the Court of Appeals
On July 4, 2013, the CA rendered its decision, holding that
the registration of Samahan as a legitimate workers'
association was contrary to the provisions of Article 243 of
the Labor Code. 35 It stressed that only 57 out of the 120
members were actually working in Hanjin while the phrase
in the preamble of Samahan's Constitution and By-laws,
"KAMI, ang mga Manggagawa sa Hanjin Shipyard," created
an impression that all its members were employees of HHIC.
Such unqualified manifestation which was used in its
application for registration, was a clear proof of
misrepresentation which warranted the cancellation of
Samahan's registration. EATCcI
It also stated that the members of Samahan could not
register it as a legitimate worker's association because the
place where Hanjin's industry was located was not a rural
for
area. Neither was there any evidence to show that the
members of the association were ambulant, intermittent or
itinerant workers. 36
At any rate, the CA was of the view that dropping the words
"Hanjin Shipyard" from the association name would not
prejudice or impair its right to self-organization because it
could adopt other appropriate names. The dispositive portion
reads:
WHEREFORE, the petition is DISMISSED and the BLR's
directive, ordering that the words "Hanjin Shipyard" be
removed from petitioner association's name, is AFFIRMED.
The Decision dated April 20, 2010 of the DOLE Regional
Director in Case No. RO300-1003-CP-001, which ordered the
cancellation of petitioner association's registration is
REINSTATED.
SO ORDERED. 37
Hence, this petition, raising the following:
ISSUES
I. THE COURT OF APPEALS SERIOUSLY ERRED IN
FINDING THAT SAMAHAN CANNOT FORM A
Page 16 of 47
WORKERS' ASSOCIATION OF EMPLOYEES IN
HANJIN AND INSTEAD SHOULD HAVE FORMED A
UNION, HENCE THEIR REGISTRATION AS A
WORKERS' ASSOCIATION SHOULD BE
CANCELLED.
II. THE COURT OF APPEALS SERIOUSLY ERRED IN
ORDERING THE REMOVAL/DELETION OF THE
WORD "HANJIN" IN THE NAME OF THE UNION BY
REASON OF THE COMPANY'S PROPERTY RIGHT
OVER THE COMPANY NAME "HANJIN." 38
Samahan argues that the right to form a workers' association
is not exclusive to intermittent, ambulant and itinerant
workers. While the Labor Code allows the workers "to form,
join or assist labor organizations of their own choosing" for
the purpose of collective bargaining, it does not prohibit them
from forming a labor organization simply for purposes of
mutual aid and protection. All members of Samahan have one
common place of work, Hanjin Shipyard. Thus, there is no
reason why they cannot use "Hanjin Shipyard" in their name.
39 DHITCc
Hanjin counters that Samahan failed to adduce sufficient
basis that all its members were employees of Hanjin or its
legitimate contractors, and that the use of the name "Hanjin
Shipyard" would create an impression that all its members
were employees of HHIC. 40
Samahan reiterates its stand that workers with a definite
employer can organize any association for purposes of mutual
aid and protection. Inherent in the workers' right to self-
organization is its right to name its own organization.
Samahan referred "Hanjin Shipyard" as their common place
of work. Therefore, they may adopt the same in their
association's name. 41
The Court's Ruling
The petition is partly meritorious.
Right to self-organization includes
right to form a union, workers ' with the employer concerning terms and conditions of
association and labor management
councils
More often than not, the right to self-organization connotes
unionism. Workers, however, can also form and join a
workers' association as well as labor-management councils
(LMC). Expressed in the highest law of the land is the right
of all workers to self-organization. Section 3, Article XIII of
the 1987 Constitution states:
Section 3. The State shall afford full protection to labor,
local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities
for all. It shall guarantee the rights of all workers to
self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike
in accordance with law. . . . cEaSHC
[Emphasis Supplied]
And Section 8, Article III of the 1987 Constitution also states:
Section 8. The right of the people, including those employed
in the public and private sectors, to form unions, associations,
Page 17 of 47
or societies for purposes not contrary to law shall not be
abridged.
In relation thereto, Article 3 of the Labor Code provides:
Article 3. Declaration of basic policy. The State shall afford
protection to labor, promote full employment, ensure equal
work opportunities regardless of sex, race or creed and
regulate the relations between workers and employers. The
State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure,
and just and humane conditions of work.
[Emphasis Supplied]
As Article 246 (now 252) of the Labor Code provides, the right
to self-organization includes the right to form, join or assist
labor organizations for the purpose of collective bargaining
through representatives of their own choosing and to engage
in lawful concerted activities for the same purpose for their
mutual aid and protection. This is in line with the policy of
the State to foster the free and voluntary organization of a
strong and united labor movement as well as to make sure
that workers participate in policy and decision-making
processes affecting their rights, duties and welfare. 42
The right to form a union or association or to self-
organization comprehends two notions, to wit: (a) the liberty
or freedom, that is, 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. 43
In view of the revered right of every worker to self-
organization, the law expressly allows and even encourages
the formation of labor organizations. A labor organization is
defined as "any union or association of employees which
exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms
and conditions of employment." 44 A labor organization has
two broad rights: (1) to bargain collectively and (2) to deal
employment. To bargain collectively is a right given to a
union once it registers itself with the DOLE. Dealing with the
employer, on the other hand, is a generic description of
interaction between employer and employees concerning
grievances, wages, work hours and other terms and
conditions of employment, even if the employees' group is not
registered with the DOLE. 45 CTIEac
A union refers to any labor organization in the private sector
organized for collective bargaining and for other legitimate
purpose, 46 while a workers' association is an organization of
workers formed for the mutual aid and protection of its
members or for any legitimate purpose other than collective
bargaining. 47
Many associations or groups of employees, or even
combinations of only several persons, may qualify as a labor
organization yet fall short of constituting a labor union. While
every labor union is a labor organization, not every labor
organization is a labor union. The difference is one of
organization, composition and operation. 48
Collective bargaining is just one of the forms of employee
participation. Despite so much interest in and the promotion
of collective bargaining, it is incorrect to say that it is the
device and no other, which secures industrial democracy. It
is equally misleading to say that collective bargaining is the
end-goal of employee representation. Rather, the real aim is
employee participation in whatever form it may appear,
bargaining or no bargaining, union or no union. 49 Any labor
organization which may or may not be a union may deal with
the employer. This explains why a workers' association or
organization does not always have to be a labor union and
why employer-employee collective interactions are not
always collective bargaining. 50
To further strengthen employee participation, Article 255
(now 261) 51 of the Labor Code mandates that workers shall
have the right to participate in policy and decision-making
processes of the establishment where they are employed
insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and
employers may form LMCs.
A cursory reading of the law demonstrates that a common
element between unionism and the formation of LMCs is the
existence of an employer-employee relationship. Where
neither party is an employer nor an employee of the other, no
duty to bargain collectively would exist. 52 In the same
manner, expressed in Article 255 (now 261) is the
requirement that such workers be employed in the
establishment before they can participate in policy and
decision making processes.
In contrast, the existence of employer-employee relationship
is not mandatory in the formation of workers' association.
What the law simply requires is that the members of the
workers' association, at the very least, share the same
interest. The very definition of a workers' association speaks
of "mutual aid and protection."
Right to choose whether to form or
join a union or workers' association
belongs to workers themselves SaCIDT
In the case at bench, the Court cannot sanction the opinion of
the CA that Samahan should have formed a union for
purposes of collective bargaining instead of a workers'
association because the choice belonged to it. The right to
form or join a labor organization necessarily includes the
right to refuse or refrain from exercising the 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. 53 Also inherent in the
right to self-organization is the right to choose whether to
form a union for purposes of collective bargaining or a
workers' association for purposes of providing mutual aid and
protection.
The right to self-organization, however, is subject to certain
limitations as provided by law. For instance, the Labor Code
specifically disallows managerial employees from joining,
assisting or forming any labor union. Meanwhile, supervisory
employees, while eligible for membership in labor
organizations, are proscribed from joining the collective
bargaining unit of the rank and file employees. 54 Even
government employees have the right to self-organization. It
is not, however, regarded as existing or available for purposes
of collective bargaining, but simply for the furtherance and
protection of their interests. 55
Page 18 of 47
Hanjin posits that the members of Samahan have definite
employers, hence, they should have formed a union instead
of a workers' association. The Court disagrees. There is no
provision in the Labor Code that states that employees with
definite employers may form, join or assist unions only.
The Court cannot subscribe either to Hanjin's position that
Samahan's members cannot form the association because
they are not covered by the second sentence of Article 243
(now 249), to wit: cHECAS
Article 243. Coverage and employees' right to self-
organization. All persons employed in commercial, industrial
and agricultural enterprises and in religious, charitable,
medical, or educational institutions, whether operating for
profit or not, shall have the right to self-organization and to
form, join, or assist labor organizations of their own choosing
for purposes of collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed
people, rural workers and those without any definite
employers may form labor organizations for their
mutual aid and protection. (As amended by Batas
Pambansa Bilang 70, May 1, 1980)
[Emphasis Supplied]
Further, Article 243 should be read together with Rule 2 of
Department Order (D.O.) No. 40-03, Series of 2003, which
provides:
RULE II
COVERAGE OF THE RIGHT TO SELF-
ORGANIZATION
Section 1. Policy. — It is the policy of the State to promote
the free and responsible exercise of the right to self-
organization through the establishment of a simplified
mechanism for the speedy registration of labor unions and
workers associations, determination of representation status
and resolution of inter/intra-union and other related labor
relations disputes. Only legitimate or registered labor unions
shall have the right to represent their members for collective
bargaining and other purposes. Workers' associations shall
have the right to represent their members for purposes other
than collective bargaining.
Section 2. Who may join labor unions and workers'
associations. — All persons employed in commercial,
industrial and agricultural enterprises, including employees
of government owned or controlled corporations without
original charters established under the Corporation Code, as
well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not,
shall have the right to self-organization and to form, join or
assist labor unions for purposes of collective bargaining:
provided, however, that supervisory employees shall not be
eligible for membership in a labor union of the rank-and-file
employees but may form, join or assist separate labor unions
of their own. Managerial employees shall not be eligible to
form, join or assist any labor unions for purposes of collective
bargaining. Alien employees with valid working permits
issued by the Department may exercise the right to self-
organization and join or assist labor unions for purposes of
collective bargaining if they are nationals of a country which
grants the same or similar rights to Filipino workers, as
certified by the Department of Foreign Affairs. AHDacC
For purposes of this section, any employee, whether
employed for a definite period or not, shall beginning on the
first day of his/her service, be eligible for membership in any
labor organization.
All other workers, including ambulant, intermittent and
other workers, the self-employed, rural workers and those
without any definite employers may form labor organizations
for their mutual aid and protection and other legitimate
purposes except collective bargaining.
[Emphases Supplied]
Clearly, there is nothing in the foregoing implementing rules
which provides that workers, with definite employers, cannot
form or join a workers' association for mutual aid and
protection. Section 2 thereof even broadens the coverage of
workers who can form or join a workers' association. Thus,
the Court agrees with Samahan's argument that the right to
form a workers' association is not exclusive to ambulant,
intermittent and itinerant workers. The option to form or join
a union or a workers' association lies with the workers
themselves, and whether they have definite employers or not.
No misrepresentation on the part
of Samahan to warrant cancellation
of registration
In this case, Samahan's registration was cancelled not
because its members were prohibited from forming a workers'
association but because they allegedly committed
misrepresentation for using the phrase, "KAMI, ang mga
Manggagawa sa HANJIN Shipyard."
Misrepresentation, as a ground for the cancellation of
registration of a labor organization, is committed "in
connection with the adoption, or ratification of the
constitution and by-laws or amendments thereto, the
minutes of ratification, the list of members who took part in
the ratification of the constitution and by-laws or
amendments thereto, and those in connection with the
election of officers, minutes of the election of officers, and the
list of voters, . . . ." 56
In Takata Corporation v. Bureau of Relations, 57 the DOLE
Regional Director granted the petition for the cancellation of
certificate of registration of Samahang Lakas Manggagawa
sa Takata (Salamat) after finding that the employees who
attended the organizational meeting fell short of the 20%
union registration requirement. The BLR, however, reversed
the ruling of the DOLE Regional Director, stating that
petitioner Takata Corporation (Takata) failed to prove
deliberate and malicious misrepresentation on the part of
respondent Salamat. Although Takata claimed that in the
list of members, there was an employee whose name
appeared twice and another was merely a project employee,
such facts were not considered misrepresentations in the
absence of showing that the respondent deliberately did so
for the purpose of increasing their union membership. The
Court ruled in favor of Salamat. IDSEAH
In S.S. Ventures International v. S.S. Ventures Labor Union,
58 the petition for cancellation of certificate of registration
was denied. The Court wrote:
If the union's application is infected by falsification
and like serious irregularities, especially those appearing
Page 19 of 47
on the face of the application and its attachments, a union
should be denied recognition as a legitimate labor
organization. Prescinding from these considerations, the
issuance to the Union of Certificate of Registration No.
RO300-00-02-UR-0003 necessarily implies that its
application for registration and the supporting documents
thereof are prima facie free from any vitiating irregularities.
Another factor which militates against the veracity of the
allegations in the Sinumpaang Petisyon is the lack of
particularities on how, when and where respondent
union perpetrated the alleged fraud on each member.
Such details are crucial for in the proceedings for
cancellation of union registration on the ground of
fraud or misrepresentation, what needs to be established
is that the specific act or omission of the union deprived the
complaining employees-members of their right to choose.
[Emphases Supplied]
Based on the foregoing, the Court concludes that
misrepresentation, to be a ground for the cancellation of the
certificate of registration, must be done maliciously and
deliberately. Further, the mistakes appearing in the
application or attachments must be grave or refer to
significant matters. The details as to how the alleged fraud
was committed must also be indubitably shown.
The records of this case reveal no deliberate or malicious
intent to commit misrepresentation on the part of Samahan.
The use of such words "KAMI, ang mga Manggagawa sa
HANJIN Shipyard" in the preamble of the constitution and
by-laws did not constitute misrepresentation so as to warrant
the cancellation of Samahan's certificate of registration.
Hanjin failed to indicate how this phrase constitutes a
malicious and deliberate misrepresentation. Neither was
there any showing that the alleged misrepresentation was
serious in character. Misrepresentation is a devious charge
that cannot simply be entertained by mere surmises and
conjectures.
Even granting arguendo that Samahan's members
misrepresented themselves as employees or workers of
Hanjin, said misrepresentation does not relate to the
adoption or ratification of its constitution and by-laws or to
the election of its officers. aCIHcD
Removal of the word "Hanjin Shipyard"
from the association's name, however,
does not infringe on Samahan's right to
self-organization
Nevertheless, the Court agrees with the BLR that "Hanjin
Shipyard" must be removed in the name of the association. A
legitimate workers' association refers to an association of
workers organized for mutual aid and protection of its
members or for any legitimate purpose other than collective
bargaining registered with the DOLE. 59 Having been
granted a certificate of registration, Samahan's association is
now recognized by law as a legitimate workers' association.
According to Samahan, inherent in the workers' right to self-
organization is its right to name its own organization. It
seems to equate the dropping of words "Hanjin Shipyard"
from its name as a restraint in its exercise of the right to self-
organization. Hanjin, on the other hand, invokes that "Hanjin
Shipyard" is a registered trade name and, thus, it is within
their right to prohibit its use.

As there is no provision under our labor laws which speak of

the use of name by a workers' association, the Court refers to
the Corporation Code, which governs the names of juridical
persons. Section 18 thereof provides:

No corporate name may be allowed by the Securities and

Exchange Commission if the proposed name is identical or
deceptively or confusingly similar to that of any existing
corporation or to any other name already protected by law or
is patently deceptive, confusing or contrary to existing laws.
When a change in the corporate name is approved, the
Commission shall issue an amended certificate of
incorporation under the amended name. ScHADI

[Emphases Supplied]

The policy underlying the prohibition in Section 18 against

the registration of a corporate name which is "identical or
deceptively or confusingly similar" to that of any existing
corporation or which is "patently deceptive" or "patently
confusing" or "contrary to existing laws," is the avoidance of
fraud upon the public which would have occasion to deal with
the entity concerned, the evasion of legal obligations and
duties, and the reduction of difficulties of administration and
supervision over corporations. 60

For the same reason, it would be misleading for the members

of Samahan to use "Hanjin Shipyard" in its name as it could
give the wrong impression that all of its members are
employed by Hanjin.

Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003

explicitly states:

The change of name of a labor organization shall not affect its

legal personality. All the rights and obligations of a labor
organization under its old name shall continue to be exercised
by the labor organization under its new name.

Thus, in the directive of the BLR removing the words "Hanjin

Shipyard," no abridgement of Samahan's right to self-
organization was committed.

WHEREFORE, the petition is PARTIALLY GRANTED.

The July 4, 2013 Decision and the January 28, 2014
Resolution of the Court of Appeals are hereby REVERSED
and SET ASIDE. The September 6, 2010 Resolution of the
Bureau of Labor Relations, as modified by its November 28,
2011 Resolution, is REINSTATED. aICcHA

SO ORDERED.

||| (Samahan ng Manggagawa sa Hanjin Shipyard v.

Bureau of Labor Relations, G.R. No. 211145, [October 14,
2015])

Page 20 of 47
San Miguel Corp. Employees Union v. SM Packing
G.R. No. 171153
TOPIC: Union Registration, Requirements
PONENTE: September 12, 2007
CASE LAW/ DOCTRINE:
Whereas an applicant for registration of an independent
union is mandated to submit, among other things, the
number of employees and names of all its members
comprising at least 20% of the employees in the
bargaining unit where it seeks to operate, as provided
under Article 234 of the Labor Code and Section 2 of Rule III,
Book V of the Implementing Rules, the same is no longer
required of a branch, local or chapter.
The power granted to labor organizations to directly
create a chapter or local through chartering is given
to a federation or national union. A trade union center
is without authority to charter directly.
Emergency Recit: SM Packing applied for certification
election. Petitioners questioned its status for not
complying with the 20% membership requirement,
among others. SC held that a local branch or chapter
is not required to comply with 20% membership.
But…although PDMP as a trade union center is a
legitimate labor organization, it has no power to
directly create a local or chapter.
FACTS:
1. Petitioner is the incumbent bargaining agent for the
bargaining unit comprised of the regular monthly-paid rank
and file employees of the three divisions of San Miguel
Corporation (SMC)
 San Miguel Corporate Staff Unit (SMCSU),
 San Miguel Brewing Philippines (SMBP), and the
 San Miguel Packaging Products (SMPP), in all
offices and plants of SMC, including the Metal
Closure and Lithography Plant in Laguna.
 It had been the certified bargaining agent for 20
years from 1987 to 1997
2. Respondent is registered as a chapter of Pambansang Diwa
ng Manggagawang Pilipino (PDMP).
 PDMP issued Charter Certificate No. 112 to
respondent
 In compliance with registration
requirements, respondent submitted the requisite
documents to the BLR for the purpose of acquiring
legal personality and was issued Certificate of
Creation of Local or Chapter PDMP-01
 Thereafter, it filed with the Med-Arbiter of the
DOLE-NCR, three separate petitions for
certification election to represent SMPP, SMCSU,
and SMBP.
Page 21 of 47
 All three petitions were dismissed, on the ground
that the separate petitions fragmented a single
bargaining unit.
3. On 17 August 1999, petitioner filed with the DOLE-NCR a
petition seeking the cancellation of respondent’s registration
and its dropping from the rolls of legitimate labor
organizations.
 Accused respondent of committing fraud and
falsification, and non-compliance with registration
requirements in obtaining its certificate of
registration.
 It raised allegations that respondent violated
Articles 239(a), (b) and (c)and 234(c) of the Labor
Code.
 Moreover, petitioner claimed that PDMP is not a
legitimate labor organization, but a trade union
center, hence, it cannot directly create a local or
chapter.
4. DOLE-NCR Regional Dir: dismissed fraud and
misrepresentation; allowed to directly create a local or
chapter. However, he found that respondent did not comply
with the 20% membership requirement and, thus, ordered
the cancellation of its certificate of registration and removal
from the rolls of legitimate labor organizations
5. Appeal to BLR: reversed, according to DO no.9, a chartered
local union is not required to comply with 20% membership
requirement.
6. CA: affirmed BLR
7. Certiorari: Petitioner insists the 20% requirement for
registration of respondent must be based not on the number
of employees of a single division, but in all three divisions of
the company and that failed to meet requirement since it
based its membership on the number of employees of a single
division only, namely, the SMPP.
ISSUE(S): W/N Respondent is required to submit the
number of employees and names of all its members
comprising at least 20% of the employees in the bargaining
unit where it seeks to operate?
HELD: No! But…see below.
RATIO:
A legitimate labor organization is defined as any labor
organization duly registered with the Department of Labor
and Employment, and includes any branch or local thereof.
 The mandate of the Labor Code is to ensure strict
compliance with the requirements on registration
because a legitimate labor organization is entitled to
specific rights under the Labor Code, and are
involved in activities directly affecting matters of
public interest.
 Registration requirements are intended to afford a
measure of protection to unsuspecting employees
who may be lured into joining unscrupulous or fly-
by-night unions whose sole purpose is to control
 union funds or use the labor organization for
illegitimate ends.
 Legitimate labor organizations have exclusive rights
under the law which cannot be exercised by non-
legitimate unions, one of which is the right to be
certified as the exclusive representative of all the
employees in an appropriate collective bargaining
unit for purposes of collective bargaining.
 The acquisition of rights by any union or labor
organization, particularly the right to file a petition
for certification election, first and foremost, depends
on whether or not the labor organization has
attained the status of a legitimate labor
organization.
A perusal of the records reveals that respondent is registered
with the BLR as a local or chapter of PDMP and was issued
Charter Certificate No. 112 on 15 June 1999. Hence,
respondent was directly chartered by PDMP.
The procedure for registration of a local or chapter of
a labor organization is provided in Book V of the
Implementing Rules of the Labor Code, as amended by
Department Order No. 9 which took effect on 21 June
1997, and again by Department Order No. 40 dated 17
February 2003.
 The Implementing Rules as amended by D.O. No. 9
should govern the resolution of the petition at bar
since respondents petition for certification election
was filed with the BLR in 1999; and that of
petitioner on 17 August 1999.
The applicable Implementing Rules enunciates a two-fold
procedure for the creation of a chapter or a local.
 The first involves the affiliation of an independent
union with a federation or national union or industry
union.
 The second, finding application in the instant
petition, involves the direct creation of a local or a
chapter through the process of chartering
A duly registered federation or national union may directly
create a local or chapter by submitting to the DOLE Regional
Office or to the BLR two copies of the following:
(a) A charter certificate issued by the federation or
national union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapters officers, their
addresses, and the principal office of the local/chapter; and
(c) The local/chapters constitution and by-laws; Provided,
That where the local/chapters constitution and by-laws is the
same as that of the federation or national union, this fact
shall be indicated accordingly.
All the foregoing supporting requirements shall be certified
under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President.
The Implementing Rules stipulate that a local or chapter may
be directly created by a federation or national union.
Page 22 of 47
Article 234 of the Labor Code provides that an independent
labor organization acquires legitimacy only upon its
registration with the BLR:
Any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate
of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal
address of the labor organization, the minutes of the
organizational meetings and the list of the workers who
participated in such meetings;
(c) The names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit
where it seeks to operate;
(d) If the applicant union has been in existence for one or
more years, copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of
the applicant union, minutes of its adoption or ratification,
and the list of the members who participated in it.
It is emphasized that the foregoing pertains to the
registration of an independent labor organization,
association or group of unions or workers. However,
the creation of a branch, local or chapter is treated
differently.
Progressive Development Corporation v. Secretary,
Department of Labor and Employment declared that when an
unregistered union becomes a branch, local or chapter, some
of the aforementioned requirements for registration are no
longer necessary or compulsory. Whereas an applicant for
registration of an independent union is mandated to submit,
among other things, the number of employees and names of
all its members comprising at least 20% of the employees
in the bargaining unit where it seeks to operate, as
provided under Article 234 of the Labor Code and Section 2
of Rule III, Book V of the Implementing Rules, the same is
no longer required of a branch, local or chapter.
Until the certificate of registration of PDMP is cancelled, its
legal personality as a legitimate labor organization
subsists. Once a union acquires legitimate status as a labor
organization, it continues to be recognized as such until its
certificate of registration is cancelled or revoked in an
independent action for cancellation. It bears to emphasize
that what is being directly challenged is the personality of
respondent as a legitimate labor organization and not that of
PDMP. This being a collateral attack, this Court is without
jurisdiction to entertain questions indirectly impugning the
legitimacy of PDMP.
This Court reverses the finding of the appellate court and
BLR on this ground, and rules that PDMP cannot directly
create a local or chapter.
 There is no legal justification to support the
conclusion that a trade union center is allowed to
directly create a local or chapter through chartering.
  Department Order No. 9 mentions two labor
organizations either of which is allowed to directly
create a local or chapter through chartering a duly
registered federation or a national union.
Department Order No. 9 defines a "chartered local"
as a labor organization in the private sector
operating at the enterprise level that acquired legal
personality through a charter certificate, issued by a
duly registered federation or national union and
reported to the Regional Office in accordance with
Rule III, Section 2-E of these Rules.

 Evidently, while a national union or federation is a

labor organization with at least ten locals or
chapters or affiliates, each of which must be a duly
certified or recognized collective bargaining agent; a
trade union center, on the other hand, is composed
of a group of registered national unions or
federations

 Article 234 now includes the term trade union

center, but interestingly, the provision
indicating the procedure for chartering or
creating a local or chapter, namely Article 234-
A, still makes no mention of a trade union
center.

 Also worth emphasizing is that even in the most

recent amendment of the implementing rules, there
was no mention of a trade union center as being
among the labor organizations allowed to charter.

 Therefore, since under the pertinent status and

applicable implementing rules, the power granted
to labor organizations to directly create a
chapter or local through chartering is given to
a federation or national union, then a trade
union center is without authority to charter
directly.

In sum, although PDMP as a trade union center is a

legitimate labor organization, it has no power to directly
create a local or chapter. Thus, SMPPEU-PDMP cannot be
created under the more lenient requirements for chartering,
but must have complied with the more stringent rules for
creation and registration of an independent union, including
the 20% membership requirement.

WHEREFORE, the instant Petition is GRANTED. The

Decision of the Court of Appeals is REVERSED and SET
ASIDE. The Certificate of Registration of San Miguel
Packaging Products Employees UnionPambansang Diwa ng
Manggagawang Pilipino is ORDERED CANCELLED, and
SMPPEU-PDMP DROPPED from the rolls of legitimate
labor organizations.

Page 23 of 47
SECOND DIVISION According to the company, the employees involved formed the
PIGLAS union to circumvent the Court of Appeals' injunction
[G.R. No. 177024. October 30, 2009.] against the holding of the certification election sought by the
former union. Despite the company's opposition, however, the
THE HERITAGE HOTEL MANILA (OWNED AND
Med-Arbiter granted the petition for certification election. 13
OPERATED BY GRAND PLAZA HOTEL
CORPORATION), petitioner, vs. PINAG-ISANG GALING On December 6, 2004 petitioner company filed a petition to
AT LAKAS NG MGA MANGGAGAWA SA HERITAGE cancel the union registration of respondent PIGLAS union.
MANILA (PIGLAS-HERITAGE), respondent. 14 The company claimed that the documents submitted with
the union's application for registration bore the following
DECISION
false information:
ABAD, J p:
(a) The List of Members showed that the PIGLAS union had
This case is about a company's objections to the registration 100 union members, 15
of its rank and file union for non-compliance with the
(b) The Organizational Minutes said that 90 employees
requirements of its registration.
attended the meeting on December 10, 2003; 16
The Facts and the Case
(c) The Attendance Sheet of the meeting of December 10,
Sometime in 2000, certain rank and file employees of 2003 bore the signature of 127 members who ratified the
petitioner Heritage Hotel Manila (petitioner company) union's Constitution and By-Laws; 17 and
formed the "Heritage Hotel Employees Union" (the HHE
(d) The Signature Sheet bore 128 signatures of those who
union). The Department of Labor and Employment-National
attended that meeting. 18
Capital Region (DOLE-NCR) later issued a certificate of
registration 1 to this union. Petitioner company alleged that the misrepresentation was
evidenced by the discrepancy in the number of union
Subsequently, the HHE union filed a petition for certification
members appearing in the application and the list as well as
election 2 that petitioner company opposed. The company
in the number of signatories to the attendance and signature
alleged that the HHE union misrepresented itself to be an
sheets. The minutes reported that only 90 employees
independent union, when it was, in truth, a local chapter of
attended the meeting. The company further alleged that 33
the National Union of Workers in Hotel and Restaurant and
members of respondent PIGLAS union were members of the
Allied Industries (NUWHRAIN). The company claimed that
defunct HHE union. This, according to the company, violated
the HHE union intentionally omitted disclosure of its
the policy against dual unionism and showed that the new
affiliation with NUWHRAIN because the company's
union was merely an alter ego of the old.
supervisors union was already affiliated with it. 3 Thus, the
company also filed a petition for the cancellation of the HHE On February 22, 2005 the DOLE-NCR denied the company's
union's registration certificate. 4 petition to cancel respondent PIGLAS union's registration for
the reason that the discrepancies in the number of members
Meanwhile, the Med-Arbiter granted the HHE union's
stated in the application's supporting documents were not
petition for certification election. 5 Petitioner company
material and did not constitute misrepresentation. As for the
appealed the decision to the Secretary of Labor but the latter
charge of dual unionism, the same is not a ground for
denied the appeal. 6 The Secretary also denied petitioner's
canceling registration. It merely exposed a union member to
motion for reconsideration, prompting the company to file a
a possible charge of disloyalty, an internal matter. Here, the
petition for certiorari 7 with the Court of Appeals.
members of the former union simply exercised their right to
On October 12, 2001 the Court of Appeals issued a writ of self-organization and to the freedom of association when they
injunction against the holding of the HHE union's subsequently joined the PIGLAS union. 19
certification election, effective until the petition for
On appeal, the Bureau of Labor Relation (BLR) affirmed the
cancellation of that union's registration shall have been
ruling of the DOLE-NCR. It reasoned that respondent
resolved with finality. 8 The decision of the Court of Appeals
PIGLAS union's organization meeting lasted for 12 hours. It
became final when the HHE union withdrew the petition for
was possible for the number of attendees to have increased
review that it filed with this Court. 9 CacTSI
from 90 to 128 as the meeting progressed. Besides, with a
On December 10, 2003 certain rank and file employees of total of 250 employees in the bargaining unit, the union
petitioner company held a meeting and formed another needed only 50 members to comply with the 20 percent
union, the respondent Pinag-Isang Galing at Lakas ng mga membership requirement. Thus, the union could not be
Manggagawa sa Heritage Manila (the PIGLAS union). This accused of misrepresentation since it did not pad its
union applied for registration with the DOLE-NCR 10 and membership to secure registration. SCIcTD
got its registration certificate on February 9, 2004. Two
As for the issue of dual unionism, it has become moot and
months later, the members of the first union, the HHE union,
academic, said the BLR, because of the dissolution of the old
adopted a resolution for its dissolution. The HHE union then
union and the cancellation of its certificate of registration. 20
filed a petition for cancellation of its union registration. 11
Petitioner company filed a petition for certiorari with the
On September 4, 2004 respondent PIGLAS union filed a
Court of Appeals, 21 assailing the order of the BLR. But the
petition for certification election 12 that petitioner company
latter court dismissed the petition, not being accompanied by
also opposed, alleging that the new union's officers and
material documents and portions of the record. 22 The
members were also those who comprised the old union.
Page 24 of 47
company filed a motion for reconsideration, attaching parts
of the record that were deemed indispensable but the court
denied it for lack of merit. 23 Hence, the company filed this
petition for review under Rule 45.
Issues Presented
The petition presents the following issues:
1. Whether or not the Court of Appeals erred in dismissing
the petition for certiorari before it for failure of petitioner
company to attach certain material portions of the record;
2. Whether or not the union made fatal misrepresentation in
its application for union registration; and
3. Whether or not "dual unionism" is a ground for canceling a
union's registration.
The Rulings of the Court
First. While the Court of Appeals correctly dismissed the
company's petition initially for failure to attach material
portions of the record, the court should have bended back a
little when petitioner company subsequently attached those
missing materials to its motion for reconsideration. As a
general rule, petitions for certiorari that lack copies of
essential pleadings and portions of the record may be
dismissed but this rule has not been regarded as absolute.
The omission may be cured. 24
The Court of Appeals has three courses of action when the
annexes to the petition are insufficient. It may dismiss the
petition, 25 require the submission of the relevant
documents, or order the filing of an amended petition with
the required pleadings or documents. A petition lacking in
essential pleadings or portions of the record may still be given
due course, or reinstated if earlier dismissed, upon
subsequent submission of the necessary documents or to
serve the higher interest of justice. 26
Second. Since a remand of the case to the Court of Appeals
for a determination of the substantive issues will only result
in more delays and since these issues have been amply
argued by the opposing sides in the various pleadings and
documents they submitted to this Court, the case may now be
resolved on the merits.
Did respondent PIGLAS union commit fraud and
misrepresentation in its application for union registration?
We agree with the DOLE-NCR and the BLR that it did not.
Except for the evident discrepancies as to the number of
union members involved as these appeared on the documents
that supported the union's application for registration,
petitioner company has no other evidence of the alleged
misrepresentation. But those discrepancies alone cannot be
taken as an indication that respondent misrepresented the
information contained in these documents.
The charge that a labor organization committed fraud and
misrepresentation in securing its registration is a serious
charge and deserves close scrutiny. It is serious because once
such charge is proved, the labor union acquires none of the
rights accorded to registered organizations. Consequently,
charges of this nature should be clearly established by
evidence and the surrounding circumstances. 27
Page 25 of 47
Here, the discrepancies in the number of union members or
employees stated in the various supporting documents that
respondent PIGLAS union submitted to labor authorities can
be explained. While it appears in the minutes of the
December 10, 2003 organizational meeting that only 90
employees responded to the roll call at the beginning, it
cannot be assumed that such number could not grow to 128
as reflected on the signature sheet for attendance. The
meeting lasted 12 hours from 11:00 a.m. to 11:00 p.m. There
is no evidence that the meeting hall was locked up to exclude
late attendees.
There is also nothing essentially mysterious or irregular
about the fact that only 127 members ratified the union's
constitution and by-laws when 128 signed the attendance
sheet. It cannot be assumed that all those who attended
approved of the constitution and by-laws. Any member had
the right to hold out and refrain from ratifying those
documents or to simply ignore the process.
At any rate, the Labor Code 28 and its implementing rules 29
do not require that the number of members appearing on the
documents in question should completely dovetail. For as
long as the documents and signatures are shown to be
genuine and regular and the constitution and by-laws
democratically ratified, the union is deemed to have complied
with registration requirements.
Petitioner company claims that respondent PIGLAS union
was required to submit the names of all its members
comprising at least 20 percent of the employees in the
bargaining unit. Yet the list it submitted named only 100
members notwithstanding that the signature and attendance
sheets reflected a membership of 127 or 128 employees. This
omission, said the company, amounted to material
misrepresentation that warranted the cancellation of the
union's registration.
But, as the labor authorities held, this discrepancy is
immaterial. A comparison of the documents shows that,
except for six members, the names found in the subject list
are also in the attendance and signature sheets. Notably, the
bargaining unit that respondent PIGLAS union sought to
represent consisted of 250 employees. Only 20 percent of this
number or 50 employees were required to unionize. Here, the
union more than complied with such requirement.
Labor laws are liberally construed in favor of labor especially
if doing so would affirm its constitutionally guaranteed right
to self-organization. 30 Here, the PIGLAS union's supporting
documents reveal the unmistakable yearning of petitioner
company's rank and file employees to organize. This yearning
should not be frustrated by inconsequential technicalities.
Third. The fact that some of respondent PIGLAS union's
members were also members of the old rank and file union,
the HHE union, is not a ground for canceling the new union's
registration. The right of any person to join an organization
also includes the right to leave that organization and join
another one. Besides, HHE union is dead. It had ceased to
exist and its certificate of registration had already been
cancelled. Thus, petitioner's arguments on this point may
also be now regarded as moot and academic.
WHEREFORE, the Court DENIES the petition and
AFFIRMS the decision of the Bureau of Labor Relations in
BLR-A-26-3-05 dated May 26, 2006.

SO ORDERED. DIETcC

||| (The Heritage Hotel Manila v. Pinag-isang Galing at

Lakas ng mga Manggagawa sa Heritage Manila, G.R. No.
177024, [October 30, 2009], 619 PHIL 787-797)

Page 26 of 47
THIRD DIVISION
[G.R. No. 178989. March 18, 2010.]
EAGLE RIDGE GOLF & COUNTRY CLUB, petitioner, vs.
COURT OF APPEALS and EAGLE RIDGE
EMPLOYEES UNION (EREU), respondents.
DECISION
VELASCO, JR., J p:
In this petition for certiorari under Rule 65, Eagle Ridge Golf
& Country Club (Eagle Ridge) assails and seeks to nullify the
Resolutions of the Court of Appeals (CA) dated April 27, 2007
1 and June 6, 2007, 2 issued in CA-G.R. SP No. 98624,
denying a similar recourse petitioner earlier interposed to set
aside the December 21, 2006 Decision 3 of the Bureau of
Labor Relations (BLR), as reiterated in a Resolution 4 of
March 7, 2007.
Petitioner Eagle Ridge is a corporation engaged in the
business of maintaining golf courses. It had, at the end of CY
2005, around 112 rank-and-file employees. The instant case
is an off-shot of the desire of a number of these employees to
organize themselves as a legitimate labor union and their
employer's opposition to their aspiration.
The Facts
On December 6, 2005, at least 20% of Eagle Ridge's rank-and-
file employees — the percentage threshold required under
Article 234 (c) of the Labor Code for union registration — had
a meeting where they organized themselves into an
independent labor union, named "Eagle Ridge Employees
Union" (EREU or Union), 5 elected a set of officers, 6 and
ratified 7 their constitution and by-laws. 8
On December 19, 2005, EREU formally applied for
registration 9 and filed BLR Reg. Form No. I-LO, s. 1998 10
before the Department of Labor and Employment (DOLE)
Regional Office IV (RO IV). In time, DOLE RO IV granted the
application and issued EREU Registration Certificate (Reg.
Cert.) No. RO400-200512-UR-003.
The EREU then filed a petition for certification election in
Eagle Ridge Golf & Country Club, docketed as Case No.
RO400-0601-RU-002. Eagle Ridge opposed this petition, 11
followed by its filing of a petition for the cancellation 12 of
Reg. Cert. No. RO400-200512-UR-003. Docketed as RO400-
0602-AU-003, Eagle Ridge's petition ascribed
misrepresentation, false statement, or fraud to EREU in
connection with the adoption of its constitution and by-laws,
the numerical composition of the Union, and the election of
its officers.
Going into specifics, Eagle Ridge alleged that the EREU
declared in its application for registration having 30
members, when the minutes of its December 6, 2005
organizational meeting showed it only had 26 members. The
misrepresentation was exacerbated by the discrepancy
between the certification issued by the Union secretary and
president that 25 members actually ratified the constitution
and by-laws on December 6, 2005 and the fact that 26
members affixed their signatures on the documents, making
one signature a forgery. TDcAaH
Page 27 of 47
Finally, Eagle Ridge contended that five employees who
attended the organizational meeting had manifested the
desire to withdraw from the union. The five executed
individual affidavits or Sinumpaang Salaysay 13 on
February 15, 2006, attesting that they arrived late at said
meeting which they claimed to be drinking spree; that they
did not know that the documents they signed on that occasion
pertained to the organization of a union; and that they now
wanted to be excluded from the Union. The withdrawal of the
five, Eagle Ridge maintained, effectively reduced the union
membership to 20 or 21, either of which is below the
mandatory minimum 20% membership requirement under
Art. 234 (c) of the Labor Code.Reckoned from 112 rank-and-
file employees of Eagle Ridge, the required number would be
22 or 23 employees.
As a counterpoint, EREU, in its Comment, 14 argued in gist:
1) the petition for cancellation was procedurally deficient as
it does not contain a certification against forum shopping and
that the same was verified by one not duly authorized by
Eagle Ridge's board;
2) the alleged discrepancies are not real for before filing of its
application on December 19, 2005, four additional employees
joined the union on December 8, 2005, thus raising the union
membership to 30 members as of December 19, 2005;
3) the understatement by one member who ratified the
constitution and by-laws was a typographical error, which
does not make it either grave or malicious warranting the
cancellation of the union's registration;
4) the retraction of 5 union members should not be given any
credence for the reasons that: (a) the sworn statements of the
five retracting union members sans other affirmative
evidence presented hardly qualify as clear and credible
evidence considering the joint affidavits of the other members
attesting to the orderly conduct of the organizational
meeting; (b) the retracting members did not deny signing the
union documents; (c) following, Belyca Corporation v. Ferrer-
Calleja 15 and Oriental Tin Can Labor Union v. Secretary of
Labor and Employment, 16 it can be presumed that "duress,
coercion or valuable consideration" was brought to bear on
the retracting members; and (d) citing La Suerte Cigar and
Cigarette Factory v. Director of Bureau of Labor Relations, 17
Belyca Corporation and Oriental Tin Can Labor Union,
where the Court ruled that "once the required percentage
requirement has been reached, the employees' withdrawal
from union membership taking place after the filing of the
petition for certification election will not affect the petition,"
it asserted the applicability of said ruling as the petition for
certification election was filed on January 10, 2006 or long
before February 15, 2006 when the affidavits of retraction
were executed by the five union members, thus contending
that the retractions do not affect nor be deemed compelling
enough to cancel its certificate of registration.
The Union presented the duly accomplished union
membership forms 18 dated December 8, 2005 of four
additional members. And to rebut the allegations in the
affidavits of retraction of the five union members, it
presented the Sama-Samang Sinumpaang Salaysay 19
dated March 20, 2006 of eight union members; another
Sama-Samang Sinumpaang Salaysay, 20 also bearing date
March 20, 2006, of four other union members; and the Sworn
Statement 21 dated March 16, 2006 of the Union's legal
counsel, Atty. Domingo T. Añonuevo. These affidavits
attested to the orderly and proper proceedings of the
organizational meeting on December 6, 2005.
In its Reply, 22 Eagle Ridge reiterated the grounds it raised
in its petition for cancellation and asserted further that the
four additional members were fraudulently admitted into the
Union. As Eagle Ridge claimed, the applications of the four
neither complied with the requirements under Section 2, Art.
IV of the union's constitution and by-laws nor were they
shown to have been duly received, issued receipts for
admission fees, processed with recommendation for approval,
and approved by the union president.
Moreover, Eagle Ridge presented another Sinumpaang
Salaysay 23 of retraction dated March 15, 2006 of another
union member. The membership of EREU had thus been
further reduced to only 19 or 20. This same member was
listed in the first Sama-Samang Sinumpaang Salaysay 24
presented by the Union but did not sign it.
The Ruling of the DOLE Regional Director
After due proceedings, the DOLE Regional Director, Region
IV-A, focusing on the question of misrepresentation, issued
on April 28, 2006 an Order 25 finding for Eagle Ridge, its
petition to cancel Reg. Cert. No. RO400-200512-UR-003 being
granted and EREU being delisted from the roster of
legitimate labor organizations.
Aggrieved, the Union appealed to the BLR, the recourse
docketed as BLR A-C-30-5-31-06 (Case No. RO400-0602-AU-
003).
The Ruling of the BLR
Initially, the BLR, then headed by an Officer-in-Charge
(OIC), affirmed 26 the appealed order of the DOLE Regional
Director.
Undeterred by successive set backs, EREU interposed a
motion for reconsideration, contending that:
1) Contrary to the ruling of the BLR OIC Director, a
certificate of non-forum shopping is mandatory requirement,
under Department Order No. (DO) 40-03 and the Rules of
Court, non-compliance with which is a ground to dismiss a
petition for cancellation of a certificate of registration;
SaDICE
2) It was erroneous for both the Regional Director and the
BLR OIC Director to give credence to the retraction
statements of union members which were not presented for
reaffirmation during any of the hearings of the case, contrary
to the requirement for the admission of such evidence under
Sec. 11, Rule XI of DO 40-03.
In a Decision dated December 21, 2006, the BLR, now headed
by Director Rebecca C. Chato, set aside the July 28, 2006
order of the BLR OIC Director, disposing as follows:
WHEREFORE, the motion for reconsideration is hereby
GRANTED and our Resolution dated 28 July 2006 is hereby
VACATED. Accordingly, the Eagle Ridge Employees Union
(EREU) shall remain in the roster of legitimate
organizations.
Page 28 of 47
In finding for the Union, the BLR Director eschewed
procedural technicalities. Nonetheless, she found as without
basis allegations of misrepresentation or fraud as ground for
cancellation of EREU's registration.
In turn aggrieved, Eagle Ridge sought but was denied
reconsideration per the BLR's Resolution dated March 7,
2007.
Eagle Ridge thereupon went to the CA on a petition for
certiorari.
The Ruling of the CA
On April 27, 2007, the appellate court, in a terse two-page
Resolution, 27 dismissed Eagle Ridge's petition for being
deficient, as:
1. the questioned [BLR] Decision dated December 21, 2006
and the Resolution dated March 7, 2007 Resolution
[appended to the petition] are mere machine copies; and
2. the verification and certification of non-forum shopping
was subscribed to by Luna C. Piezas on her representation as
the legal counsel of the petitioner, but sans [the requisite]
Secretary's Certificate or Board Resolution authorizing her to
execute and sign the same.
The CA later denied, in its second assailed resolution, Eagle
Ridge's motion for reconsideration, albeit the latter had
submitted a certificate to show that its legal counsel has been
authorized, per a board resolution, to represent the
corporation.
The Issues
Eagle Ridge is now before us via this petition for certiorari on
the submissions that:
I.
[THE CA] COMMITTED SERIOUS ERROR AND GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN DISMISSING THE
COMPANY'S PETITION FOR CERTIORARI AND
DENYING ITS MOTION FOR RECONSIDERATION
CONSIDERING THAT THE COMPANY'S PREVIOUS
COUNSEL WAS AUTHORIZED TO REPRESENT THE
COMPANY IN THE PETITION FOR CERTIORARI FILED
BEFORE THE [CA];
II.
IN ORDER NOT TO FURTHER PREJUDICE THE
COMPANY, IT IS RESPECTFULLY SUBMITTED THAT
THIS HONORABLE COURT COULD TAKE COGNIZANCE
OF THE MERITS OF THIS CASE AND RESOLVE THAT
BASED ON THE EVIDENCE ON RECORD, THERE WAS
FRAUD, MISREPRESENTATION AND/OR FALSE
STATEMENT WHICH WARRANT THE CANCELLATION
OF CERTIFICATE OF REGISTRATION OF EREU. 28
The Court's Ruling
We dismiss the petition.
Procedural Issue: Lack of Authority
Certiorari is an extraordinary, prerogative remedy and is
never issued as a matter of right. 29 Accordingly, the party
who seeks to avail of it must strictly observe the rules laid
down by law. 30 TcCEDS
Petitions for certiorari under Rule 65 of the Rules of Court
require a "sworn certification of non-forum shopping as
provided in the third paragraph of Section 3, Rule 46." 31 Sec.
3, paragraphs 4 and 6 of Rule 46 pertinently provides:
SEC. 3. Contents and filing of petition; effect of non-
compliance with requirements. — . . .
xxx xxx xxx
xxx xxx xxx
The petitioner shall also submit together with the petition
a sworn certification that he has not theretofore
commenced any action involving the same issues in the
Supreme Court, the Court of Appeals . . ., or any other
tribunal or agency; if there is such other action or proceeding,
he must state the status of the same . . . .
xxx xxx xxx
The failure of the petitioner to comply with any of the
foregoing requirements shall be sufficient ground for
the dismissal of the petition. (Emphasis supplied.)
Evidently, the Rules requires the petitioner, not his counsel,
to sign under oath the requisite certification against non-
forum shopping. Such certification is a peculiar personal
representation on the part of the principal party, an
assurance to the court that there are no other pending cases
involving basically the same parties, issues, and cause of
action. 32
In the instant case, the sworn verification and certification of
non-forum shopping in the petition for certiorari of Eagle
Ridge filed before the CA carried the signature of its counsel
without the requisite authority.
Eagle Ridge tried to address its faux pas by submitting its
board secretary's Certificate 33 dated May 15, 2007, attesting
to the issuance on May 10, 2007 of Board Resolution No.
ERGCCI 07/III-01 that authorized its counsel of record, Atty.
Luna C. Piezas, to represent it before the appellate court.
The CA, however, rejected Eagle Ridge's virtual plea for the
relaxation of the rules on the signing of the verification and
certification against forum shopping, observing that the
board resolution adverted to was approved after Atty. Piezas
has signed and filed for Eagle Ridge the petition for certiorari.
The appellate court's assailed action is in no way tainted with
grave abuse of discretion, as Eagle Ridge would have this
Court believed. Indeed, a certification of non-forum shopping
signed by counsel without the proper authorization is
defective and constitutes a valid cause for dismissal of the
petition. 34
The submission of the board secretary's certificate through a
motion for reconsideration of the CA's decision dismissing the
petition for certiorari may be considered a substantial
compliance with the Rules of Court. 35 Yet, this rule
presupposes that the authorizing board resolution, the
approval of which is certified to by the secretary's
Page 29 of 47
certification, was passed within the reglementary period for
filing the petition. This particular situation does not,
however, obtain under the premises. The records yield the
following material dates and incidents: Eagle Ridge received
the May 7, 2007 resolution of the BLR Director on March 9,
2007, thus giving it 60 days or up to May 8, 2007 to file a
petition for certiorari, as it in fact filed its petition on April
18, 2007 before the CA. The authorization for its counsel,
however, was only issued in a meeting of its board on May 10,
2007 or a couple of days beyond the 60-day reglementary
period referred to in filing a certiorari action. Thus, there was
no substantial compliance with the Rules.
As with most rules of procedure, however, exceptions are
invariably recognized and the relaxation of procedural rules
on review has been effected to obviate jeopardizing
substantial justice. 36 This liberality stresses the importance
of review in our judicial grievance structure to accord every
party litigant the amplest opportunity for the proper and just
disposition of his cause, freed from the constraints of
technicalities. 37 But concomitant to a liberal interpretation
of the rules of procedure should be an effort on the part of the
party invoking liberality to adequately explain his failure to
abide by the rules. 38
To us, Eagle Ridge has not satisfactorily explained its failure
to comply. It may be true, as Eagle Ridge urges, that its
counsel's authority to represent the corporation was never
questioned before the DOLE regional office and agency. But
EREU's misstep could hardly lend Eagle Ridge comfort. And
obviously, Eagle Ridge and its counsel erred in equating the
latter's representation as legal counsel with the authority to
sign the verification and the certificate of non-forum
shopping in the former's behalf. We note that the authority
to represent a client before a court or quasi-judicial agency
does not require an authorizing board resolution, as the
counsel-client relationship is presumed by the counsel's
representation by the filing of a pleading on behalf of the
client. In filing a pleading, the counsel affixes his signature
on it, but it is the client who must sign the verification and
the certification against forum shopping, save when a board
resolution authorizes the former to sign so.
It is entirely a different matter for the counsel to sign the
verification and the certificate of non-forum shopping. The
attestation or certification in either verification or
certification of non-forum shopping requires the act of the
principal party. As earlier indicated, Sec. 3 of Rule 46 exacts
this requirement; so does the first paragraph of Sec. 5 of Rule
7 pertinently reading:
SEC. 5. Certification against forum shopping. — The
plaintiff or principal party shall certify under oath in the
complaint or other initiatory pleading asserting a claim for
relief, or in a sworn certification annexed thereto and
simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any claim
involving the same issues in any court, tribunal or quasi-
judicial agency and, to the best of his knowledge, no such
other action or claim is pending therein; (b) if there is such
other pending action or claim, a complete statement of the
present status thereof; and (c) if he should thereafter learn
that the same or similar action or claim has been filed or is
pending, he shall report that fact within five (5) days
therefrom to the court wherein his aforesaid complaint or
initiatory pleading has been filed. (Emphasis added.)
It is, thus, clear that the counsel is not the proper person to
sign the certification against forum shopping. If, for any
reason, the principal party cannot sign the petition, the one
signing on his behalf must have been duly authorized. 39
SHADEC
In addition, Eagle Ridge maintains that the submitted board
resolution, albeit passed after the filing of the petition was
filed, should be treated as a ratificatory medium of the
counsel's act of signing the sworn certification of non-forum
shopping.
We are not inclined to grant the desired liberality owing to
Eagle Ridge's failure to sufficiently explain its failure to
follow the clear rules.
If for the foregoing considerations alone, the Court could very
well dismiss the instant petition. Nevertheless, the Court will
explore the merits of the instant case to obviate the inequity
that might result from the outright denial of the petition.
Substantive Issue: No Fraud in the Application
Eagle Ridge cites the grounds provided under Art. 239 (a) and
(c) of the Labor Code for its petition for cancellation of the
EREU's registration. On the other hand, the Union asserts
bona fide compliance with the registration requirements
under Art. 234 of the Code, explaining the seeming
discrepancies between the number of employees who
participated in the organizational meeting and the total
number of union members at the time it filed its registration,
as well as the typographical error in its certification which
understated by one the number of union members who
ratified the union's constitution and by-laws.
Before their amendment by Republic Act No. 9481 40 on June
15, 2007, the then governing Art. 234 (on the requirements of
registration of a labor union) and Art. 239 (on the grounds for
cancellation of union registration) of the Labor Code
respectively provided as follows:
ART. 234. REQUIREMENTS OF REGISTRATION. — Any
applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate
of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal
address of the labor organization, the minutes of the
organizational meetings and the list of workers who
participated in such meetings;
(c) The names of all its members comprising at least
twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate;
xxx xxx xxx
(e) Four copies (4) of the constitution and by-laws of the
applicant union, minutes of its adoption or ratification
and the list of the members who participated in it. 41
xxx xxx xxx
Page 30 of 47
ART. 239. GROUNDS FOR CANCELLATION OF UNION
REGISTRATION. — The following shall constitute grounds
for cancellation of union registration:
(a) Misrepresentation, false statements or fraud in
connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the
minutes of ratification, and the list of members who
took part in the ratification;
xxx xxx xxx
(c) Misrepresentation, false statements or fraud in
connection with the election of officers, minutes of the
election of officers, the list of voters, or failure to submit
these documents together with the list of the newly
elected/appointed officers and their postal addresses within
thirty (30) days from election. 42 (Emphasis supplied.)
A scrutiny of the records fails to show any misrepresentation,
false statement, or fraud committed by EREU to merit
cancellation of its registration.
First. The Union submitted the required documents
attesting to the facts of the organizational meeting on
December 6, 2005, the election of its officers, and the adoption
of the Union's constitution and by-laws. It submitted before
the DOLE Regional Office with its Application for
Registration and the duly filled out BLR Reg. Form No. I-LO,
s. 1998, the following documents, to wit:
(a) the minutes of its organizational meeting 43 held on
December 6, 2005 showing 26 founding members who elected
its union officers by secret ballot;
(b) the list of rank-and-file employees 44 of Eagle Ridge who
attended the organizational meeting and the election of
officers with their individual signatures;
(c) the list of rank-and-file employees 45 who ratified the
union's constitution and by-laws showing the very same list
as those who attended the organizational meeting and the
election of officers with their individual signatures except the
addition of four employees without their signatures, i.e.,
Cherry Labajo, Grace Pollo, Annalyn Poniente and Rowel
Dolendo;
(d) the union's constitution and by-laws 46 as approved on
December 6, 2005;
(e) the list of officers 47 and their addresses;
(f) the list of union members 48 showing a total of 30
members; and
(g) the Sworn Statement 49 of the union's elected president
and secretary. All the foregoing documents except the sworn
statement of the president and the secretary were
accompanied by Certifications 50 by the union secretary duly
attested to by the union president.
Second. The members of the EREU totaled 30 employees
when it applied on December 19, 2005 for registration. The
Union thereby complied with the mandatory minimum 20%
membership requirement under Art. 234 (c). Of note is the
undisputed number of 112 rank-and-file employees in Eagle
Ridge, as shown in the Sworn Statement of the Union
president and secretary and confirmed by Eagle Ridge in its
petition for cancellation.
Third. The Union has sufficiently explained the discrepancy
between the number of those who attended the
organizational meeting showing 26 employees and the list of
union members showing 30. The difference is due to the
additional four members admitted two days after the
organizational meeting as attested to by their duly
accomplished Union Membership forms. Consequently, the
total number of union members, as of December 8, 2005, was
30, which was truthfully indicated in its application for
registration on December 19, 2005.
As aptly found by the BLR Director, the Union already had
30 members when it applied for registration, for the
admission of new members is neither prohibited by law nor
was it concealed in its application for registration. Eagle
Ridge's contention is flawed when it equated the
requirements under Art. 234 (b) and (c) of the Labor
Code.Par. (b) clearly required the submission of the minutes
of the organizational meetings and the list of workers who
participated in the meetings, while par. (c) merely required
the list of names of all the union members comprising at least
20% of the bargaining unit. The fact that EREU had 30
members when it applied for registration on December 19,
2005 while only 26 actually participated in the organizational
meeting is borne by the records. CIcTAE
Fourth. In its futile attempt to clutch at straws, Eagle Ridge
assails the inclusion of the additional four members allegedly
for not complying with what it termed as "the sine qua non
requirements" for union member applications under the
Union's constitution and by-laws, specifically Sec. 2 of Art.
IV. We are not persuaded. Any seeming infirmity in the
application and admission of union membership, most
especially in cases of independent labor unions, must be
viewed in favor of valid membership.
The right of employees to self-organization and membership
in a union must not be trammeled by undue difficulties. In
this case, when the Union said that the four employee-
applicants had been admitted as union members, it is enough
to establish the fact of admission of the four that they had
duly signified such desire by accomplishing the membership
form. The fact, as pointed out by Eagle Ridge, that the Union,
owing to its scant membership, had not yet fully organized its
different committees evidently shows the direct and valid
acceptance of the four employee applicants rather than deter
their admission — as erroneously asserted by Eagle Ridge.
Fifth. The difference between the number of 26 members,
who ratified the Union's constitution and by-laws, and the 25
members shown in the certification of the Union secretary as
having ratified it, is, as shown by the factual antecedents, a
typographical error. It was an insignificant mistake
committed without malice or prevarication. The list of those
who attended the organizational meeting shows 26 members,
as evidenced by the signatures beside their handwritten
names. Thus, the certification's understatement by one
member, while not factual, was clearly an error, but neither
a misleading one nor a misrepresentation of what had
actually happened.
Sixth. In the more meaty issue of the affidavits of retraction
executed by six union members, we hold that the probative
Page 31 of 47
value of these affidavits cannot overcome those of the
supporting affidavits of 12 union members and their counsel
as to the proceedings and the conduct of the organizational
meeting on December 6, 2005. The DOLE Regional Director
and the BLR OIC Director obviously erred in giving credence
to the affidavits of retraction, but not according the same
treatment to the supporting affidavits.
The six affiants of the affidavits of retraction were not
presented in a hearing before the Hearing Officer (DOLE
Regional Director), as required under the Rules
Implementing Book V of the Labor Code covering Labor
Relations. Said Rules is embodied in Department Order No.
(DO) 40-03 which was issued on February 17, 2003 and took
effect on March 15, 2003 to replace DO 9 of 1997. Sec. 11,
Rule XI of DO 40-03 specifically requires:
Section 11. Affirmation of testimonial evidence. — Any
affidavit submitted by a party to prove his/her claims or
defenses shall be re-affirmed by the presentation of the
affiant before the Med-Arbiter or Hearing Officer, as the
case may be. Any affidavit submitted without the re-
affirmation of the affiant during a scheduled hearing
shall not be admitted in evidence, except when the party
against whom the affidavit is being offered admits all
allegations therein and waives the examination of the affiant.
It is settled that affidavits partake the nature of hearsay
evidence, since they are not generally prepared by the affiant
but by another who uses his own language in writing the
affiant's statement, which may thus be either omitted or
misunderstood by the one writing them. 51 The above rule
affirms the general requirement in adversarial proceedings
for the examination of the affiant by the party against whom
the affidavit is offered. In the instant case, it is required for
affiants to re-affirm the contents of their affidavits during the
hearing of the instant case for them to be examined by the
opposing party, i.e., the Union.
For their non-presentation and consonant to the above-
quoted rule, the six affidavits of retraction are inadmissible
as evidence against the Union in the instant case. Moreover,
the affidavit and joint-affidavits presented by the Union
before the DOLE Regional Director were duly re-affirmed in
the hearing of March 20, 2006 by the affiants. Thus, a
reversible error was committed by the DOLE Regional
Director and the BLR OIC Director in giving credence to the
inadmissible affidavits of retraction presented by Eagle
Ridge while not giving credence to the duly re-affirmed
affidavits presented by the Union.
Evidently, the allegations in the six affidavits of retraction
have no probative value and at the very least cannot
outweigh the rebutting attestations of the duly re-affirmed
affidavits presented by the Union.
Seventh. The fact that six union members, indeed, expressed
the desire to withdraw their membership through their
affidavits of retraction will not cause the cancellation of
registration on the ground of violation of Art. 234 (c) of the
Labor Code requiring the mandatory minimum 20%
membership of rank-and-file employees in the employees'
union.
The six retracting union members clearly severed and
withdrew their union membership. The query is whether
such separation from the Union can detrimentally affect the
registration of the Union.
We answer in the negative.
Twenty percent (20%) of 112 rank-and-file employees in
Eagle Ridge would require a union membership of at least 22
employees (112 x 205 = 22.4). When the EREU filed its
application for registration on December 19, 2005, there were
clearly 30 union members. Thus, when the certificate of
registration was granted, there is no dispute that the Union
complied with the mandatory 20% membership requirement.
SDEHIa
Besides, it cannot be argued that the six affidavits of
retraction retroact to the time of the application of
registration or even way back to the organizational meeting.
Prior to their withdrawal, the six employees in question were
bona fide union members. More so, they never disputed
affixing their signatures beside their handwritten names
during the organizational meetings. While they alleged that
they did not know what they were signing, it bears stressing
that their affidavits of retraction were not re-affirmed during
the hearings of the instant case rendering them of little, if
any, evidentiary value.
With the withdrawal of six union members, there is still
compliance with the mandatory membership requirement
under Art. 234 (c), for the remaining 24 union members
constitute more than the 20% membership requirement of 22
employees.
Eagle Ridge further argues that the list of union members
includes a supervisory employee. This is a factual issue which
had not been raised at the first instance before the DOLE
Regional Director and cannot be appreciated in this
proceeding. To be sure, Eagle Ridge knows well who among
its personnel belongs or does not belong to the supervisory
group. Obviously, its attempt to raise the issue referred to is
no more than an afterthought and ought to be rejected.
Eighth. Finally, it may not be amiss to note, given the factual
antecedents of the instant case, that Eagle Ridge has
apparently resorted to filing the instant case for cancellation
of the Union's certificate of registration to bar the holding of
a certification election. This can be gleaned from the fact that
the grounds it raised in its opposition to the petition for
certification election are basically the same grounds it
resorted to in the instant case for cancellation of EREU's
certificate of registration. This amounts to a clear
circumvention of the law and cannot be countenanced.
For clarity, we reiterate the following undisputed antecedent
facts:
(1) On December 6, 2005, the Union was organized, with 26
employees of Eagle Ridge attending;
(2) On December 19, 2005, the Union filed its formal
application for registration indicating a total of 30 union
members with the inclusion of four additional members on
December 8, 2005 (Reg. Cert. No. RO400-200512-UR-003 was
eventually issued by the DOLE RO IV-A);
(3) On January 10, 2006, the Union filed before the DOLE RO
IV-A its petition for certification election in Eagle Ridge;
Page 32 of 47
(4) On February 13, 2006, Eagle Ridge filed its Position Paper
opposing the petition for certification election on essentially
the same grounds it raised in the instant case; and
(5) On February 24, 2006, Eagle Ridge filed the instant case
for cancellation of the Union's certificate of registration on
essentially the same grounds it raised in its opposition to the
Union's petition for certification election.
Evidently, as the Union persuasively argues, the withdrawal
of six member-employees from the Union will affect neither
the Union's registration nor its petition for certification
election, as their affidavits of retraction were executed after
the Union's petition for certification election had been filed.
The initial five affidavits of retraction were executed on
February 15, 2006; the sixth, on March 15, 2006.
Indisputably, all six were executed way after the filing of the
petition for certification election on January 10, 2006.
In Eastland Manufacturing Company, Inc. v. Noriel, 52 the
Court emphasized, and reiterated its earlier rulings, 53 that
"even if there were less than 30% [the required percentage of
minimum membership then] of the employees asking for a
certification election, that of itself would not be a bar to
respondent Director ordering such an election provided, of
course, there is no grave abuse of discretion." 54 Citing
Philippine Association of Free Labor Unions v. Bureau of
Labor Relations, 55 the Court emphasized that a certification
election is the most appropriate procedure for the desired
goal of ascertaining which of the competing organizations
should represent the employees for the purpose of collective
bargaining. 56
Indeed, where the company seeks the cancellation of a
union's registration during the pendency of a petition for
certification election, the same grounds invoked to cancel
should not be used to bar the certification election. A
certification election is the most expeditious and fairest mode
of ascertaining the will of a collective bargaining unit as to its
choice of its exclusive representative. 57 It is the fairest and
most effective way of determining which labor organization
can truly represent the working force. It is a fundamental
postulate that the will of the majority, if given expression in
an honest election with freedom on the part of the voters to
make their choice, is controlling. 58 ACHEaI
The Court ends this disposition by reproducing the following
apt excepts n from its holding in S.S. Ventures International,
Inc. v. S.S. Ventures Labor Union (SSVLU) on the effect of
the withdrawal from union membership right before or after
the filing of a petition for certification election:
We are not persuaded. As aptly noted by both the BLR and
CA, these mostly undated written statements submitted by
Ventures on March 20, 2001, or seven months after it filed its
petition for cancellation of registration, partake of the nature
of withdrawal of union membership executed after the
Union's filing of a petition for certification election on March
21, 2000. We have in precedent cases said that the
employees' withdrawal from a labor union made
before the filing of the petition for certification
election is presumed voluntary, while withdrawal
after the filing of such petition is considered to be
involuntary and does not affect the same. Now then, if a
withdrawal from union membership done after a
petition for certification election has been filed does
not vitiate such petition, is it not but logical to assume
that such withdrawal cannot work to nullify the
registration of the union? Upon this light, the Court is
inclined to agree with the CA that the BLR did not abuse its
discretion nor gravely err when it concluded that the
affidavits of retraction of the 82 members had no evidentiary
weight. 59 (Emphasis supplied.)

WHEREFORE, premises considered, we DISMISS the

instant petition for lack of merit.

Costs against petitioner.

SO ORDERED.

||| (Eagle Ridge Golf & Country Club v. Court of Appeals,

G.R. No. 178989, [March 18, 2010], 630 PHIL 108-135)

Page 33 of 47
28 G.R. No. 169717 March 16, 2011
SAMAHANG MANGGAGAWA SA CHARTER
CHEMICAL SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS
(SMCC-SUPER), ZACARRIAS JERRY VICTORIO-
Union President,Petitioner,
vs. CHARTER CHEMICAL and COATING
CORPORATION, Respondent.
PONENTE: DEL CASTILLO (First Division)
CASE LAW/ DOCTRINE: The inclusion of supervisory
employees in a labor organization seeking to represent the
bargaining unit of rank-and-file employees does not divest it
of its status as a legitimate labor organization.
Emergency Recitation: Petitioner union, which consisted
of supervisory and rank-and-file employees, filed a petition
for certification election before the Arbitration Unit of DOLE.
Respondent company opposed on the ground that petitioner
union is not a legitimate labor organization because of the
inclusion of supervisory employees within petitioner union.
In granting the petition of the union, the SC said that the
inclusion of supervisory employees in a labor organization
seeking to represent the bargaining unit of rank-and-file
employees does not divest it of its status as a legitimate labor
organization.
FACTS: Petitioner union filed a petition for certification
election among the regular rank-and-file employees of
respondent company with the Mediation Arbitration Unit of
the DOLE, NCR. Respondent company filed an Answer with
MTD on the ground that petitioner union is not a legitimate
labor organization because of (1) failure to comply with the
documentation requirements set by law, and (2) the inclusion
of supervisory employees within petitioner union.
Med-Arbiter’s Ruling: Dismissed the petition for certification
election.
 that petitioner union is not a legitimate labor
organization because the Charter Certificate were not
executed under oath and certified by the union secretary
and attested to by the union president
 that the list of membership of petitioner union consisted
of 12 batchman, mill operator and leadman who
performed supervisory functions. Under Article 245 of
the Labor Code, said supervisory employees are
prohibited from joining petitioner union which seeks to
represent the rank-and-file employees of respondent
company.
 As a result, not being a legitimate labor organization,
petitioner union has no right to file a petition for
certification election for the purpose of collective
bargaining.
DOLE Ruling: Sustained the dismissal for certification after
it took judicial notice that another union, i.e., Pinag-isang
Lakas Manggagawa sa Charter Chemical and Coating
Corporation, previously filed a petition for certification
election.
On MR, however, the DOLE reversed its earlier ruling. It
held that a review of the records indicates that no
certification election was previously conducted in respondent
company. On the contrary, the prior certification election
filed by Pinag-isang Lakas Manggagawa sa Charter
Page 34 of 47
Chemical and Coating Corporation was, likewise, denied by
the Med-Arbiter and, on appeal, was dismissed by the DOLE
for being filed out of time. Hence, there was no obstacle to the
grant of petitioner union’s petition for certification election.
CA’s Ruling: Nullified DOLE’s decision.
 that petitioner union failed to comply with the
documentation requirements
 that petitioner union consisted of both rank-and-file and
supervisory employees
 that the issues as to the legitimacy of petitioner union
may be attacked collaterally in a petition for certification
election and the infirmity in the membership of
petitioner union cannot be remedied through the
exclusion-inclusion proceedings in a pre-election
conference pursuant to the Toyota case
 that petitioner union is not a legitimate labor
organization, it has no legal right to file a petition for
certification election
ISSUE(S)/HELD:
1. Whether the mixture of rank-and-file and supervisory
employees in petitioner union nullifies its legal
personality as a legitimate labor organization? NO.
2. Whether the legal personality of petitioner union can be
collaterally attacked by respondent company in the
certification election proceedings? NO.
RATIO: The 1997 Amended Omnibus Rules removed the
requirement “that the petition for certification election
indicate that the bargaining unit of rank-and-file employees
has not been mingled with supervisory employees”.
In Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay
Highlands Employees Union-PGTWO, the SC abandoned the
doctrine in the Toyota Case and said that while there is a
prohibition against the mingling of supervisory and rank-
and-file employees in one labor organization, the Labor Code
does not provide for the effects thereof. Thus, the Court held
that after a labor organization has been registered, it may
exercise all the rights and privileges of a legitimate labor
organization. Any mingling between supervisory and rank-
and-file employees in its membership cannot affect its
legitimacy for that is not among the grounds for cancellation
of its registration, unless such mingling was brought about
by misrepresentation, false statement or fraud under Article
239 of the Labor Code.
As a result, petitioner union was not divested of its status as
a legitimate labor organization even if some of its members
were supervisory employees; it had the right to file the
subject petition for certification election.
Except when it is requested to bargain collectively, an
employer is a mere bystander to any petition for certification
election; such proceeding is non-adversarial and merely
investigative, for the purpose thereof is to determine which
organization will represent the employees in their collective
bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the
employer cannot have any partisan interest therein; it cannot
interfere with, much less oppose, the process by filing a
motion to dismiss or an appeal from it; not even a mere
allegation that some employees participating in a petition for
certification election are actually managerial employees will
lend an employer legal personality to block the certification
election. The employer's only right in the proceeding is to be
notified or informed thereof.

Page 35 of 47
SECOND DIVISION
[G.R. No. 163532. March 10, 2010. n]
YOKOHAMA TIRE PHILIPPINES, INC., petitioner, vs.
YOKOHAMA EMPLOYEES UNION, respondent.
RESOLUTION
CARPIO, J p:
This is a petition 1 for review on certiorari under Rule 45 of
the Rules of Court. The petition challenges the 16 January
2004 Decision 2 and 12 May 2004 Resolution 3 of the Court
of Appeals in CA-G.R. SP No. 65460. The Court of Appeals
affirmed the 12 March 4 and 3 May 5 2001 Resolutions of the
Bureau of Labor Relations (BLR) in BLR-A-C-7-2-05-01,
reversing the 18 December 2000 Decision 6 of the
Department of Labor and Employment (DOLE) Regional
Office No. 3, San Fernando, Pampanga (Regional Office), in
Case No. RO300-0001-CP-002.
Yokohama Employees Union (YEU) is the labor organization
of the rank-and-file employees of Yokohama Tire Philippines,
Inc. (YTPI). YEU was registered as a legitimate labor union
on 10 September 1999.
YEU filed before the Regional Office a petition for
certification election. YTPI filed before the Regional Office a
petition 7 dated 24 January 2000 for the revocation of YEU's
registration. YTPI alleged that YEU violated Article 239 (a)
8 of the Labor Code: (1) YEU fraudulently included the
signature of a certain Ronald O. Pineda (Pineda) in the
organizational documents; (2) Pineda was not aware of any
election of union officers; (3) YEU fraudulently obtained the
employees' signatures by making them believe that they were
signing a petition for a 125% increase in the minimum wage,
not a petition for registration; (4) the employees did not
belong to a single bargaining unit; and (5) YEU fraudulently
stated in its organizational meeting minutes that its second
vice president was Bernard David, not Bernardo David.
In its 18 December 2000 Decision, the Regional Office
granted the 24 January 2000 petition. The Regional Office
held that YEU committed misrepresentation: (1) YEU failed
to remove Pineda's signature from the organizational
documents despite instructions to do so; and (2) YEU
declared that it conducted an election of union officers when,
in truth, it did not.
YEU appealed the 18 December 2000 Decision to the BLR. In
its 12 March 2001 Resolution, the BLR reversed the 18
December 2000 Decision. The BLR found that (1) Pineda did
not approach any officer of YEU to have his signature
removed from the organizational documents; (2) Pineda's
affidavit that no election of officers took place was unreliable
and inconsistent with his earlier written statement; (3) the
affidavit of a certain Rachelle Gonzales (Gonzales) that no
election of officers took place was unreliable and inconsistent
with her earlier resignation letter; (4) the affidavit of a
certain Arthur Calma (Calma) did not state that no election
of officers took place; (5) at least 82 other members of YEU
did not question the legality of YEU's organization; and (6)
50 YEU members executed a Sama-Samang Pahayag 9
stating that: ESDcIA
Page 36 of 47
3. Noong ika-25 ng Hulyo 1999, kami ay dumalo sa isang
pulong para sa pag-oorganisa ng aming Unyon at
pagraratipika ng Saligang Batas at Alituntunin nito. . . .
xxx xxx xxx
5. Walang katotohanan ang alegasyon ng Yokohama na
walang naganap na pagpupulong kaugnay ng pag-oorganisa
o pagtatayo namin ng Unyon. Nakakatuwa ring isipin ang
alegasyon ng kompanya na hindi namin lubos na
naiintindihan ang aming kapasyahang magtayo at sumapi
sa aming Unyon.
6. Malinaw na ginagawa ng kompanya ang lahat ng paraan
upang hadlangan ang aming karapatan sa pag-oorganisa at
kilalanin bilang kinatawan ng lahat ng mga regular na
manggagawa para sa sama-samang pakikipagtawaran.
7. Sa kabila ng lahat ng ito, kami ay lubos pa ring
naninindigan sa aming Unyon at patuloy na ipaglalaban ang
aming karapatan sa pag-oorganisa at sa sama-samang
pakikipagtawaran; 10
The BLR also held that (1) YTPI was estopped from
questioning the fact that the Sama-Samang Pahayag was an
unsworn document since it filed the 24 January 2000 petition
for the revocation of YEU's registration based on unsworn
documents; (2) the fact that there was no express mention of
an election of union officers in the Sama-Samang Pahayag
did not necessarily mean that no election occurred; (3) there
was an organizational meeting and an organizational
meeting may include an election of union officers; (4) any
infirmity in the election of union officers may be remedied
under the last paragraph 11 of Article 241 of the Labor Code
and under Rule XIV of DOLE Department Order No. 9; and
(5) cancellation of union registration must be done with great
caution.
YTPI filed before the BLR a motion 12 for reconsideration. In
its 3 May 2001 Resolution, the BLR denied the motion for
lack of merit.
YTPI filed before the Court of Appeals a petition 13 for
certiorari under Rule 65 of the Rules of Court. In its 16
January 2004 Decision, the Court of Appeals denied the
petition and held that the BLR did not commit grave abuse
of discretion: (1) Pineda's affidavit that no election of officers
took place was unreliable and inconsistent with his earlier
written statement; (2) Gonzales' affidavit that no election of
officers took place was unreliable and inconsistent with her
earlier resignation letter; (3) Calma's affidavit was unreliable
because he admitted that he stayed at the organizational
meeting for only 20 minutes; (4) the affidavit of a certain
Bernardino David (David) that no election of officers took
place was unreliable and inconsistent with his earlier
sinumpaang salaysay; (5) David's affidavit was only filed
before the BLR when YTPI filed its motion for
reconsideration of the BLR's 12 March 2001 Resolution; (6)
Pineda did not approach any officer of YEU to have his
signature removed from the organizational documents; (7)
the Sama-Samang Pahayag was entitled to credit even if it
was an unsworn document; (8) the allegation that the
signatures of a certain Denry Villanueva (Villanueva) and a
certain Apolinar Bognot (Bognot) in the Sama-Samang
Pahayag were forged was only raised for the first time before
the BLR when YTPI filed its motion for reconsideration of the
BLR's 12 March 2001 Resolution; (9) Villanueva and Bognot
were not signatories to YEU's organizational documents; (10)
cancellation of union registration must be done with great
caution; (11) YTPI, in filing the petition for revocation of
YEU's registration, had the burden of proving that YEU
committed fraud and misrepresentation; and (12) YTPI failed
to prove that YEU committed fraud and misrepresentation.
EDHCSI
YTPI filed before the Court of Appeals a motion 14 for
reconsideration. In its 12 May 2004 Resolution, the Court of
Appeals denied the motion for lack of merit.
Hence, the present petition. YTPI raises as issues that (1) the
Court of Appeals erred in finding that YEU did not commit
fraud or misrepresentation, and (2) the Court of Appeals
erred in holding that YTPI had the burden of proving that
YEU committed fraud and misrepresentation.
The petition is unmeritorious.
The Court of Appeals found that YEU did not commit fraud
or misrepresentation:
Anent whether an election of officers was conducted or not,
the petitioner relied largely on the affidavit of Pineda to
substantiate its claim that no election of officers was held by
the union. However, respondent BLR Director accorded
greater credence to Pineda's handwritten statement, wherein
he made references to at least 2 meetings he had attended
during which he had signed the organizational documents,
than to Pineda's later affidavit, whereby he denied any
knowledge of the holding of an election. A perusal of the
affirmative handwritten statement easily explains why the
public respondent preferred it to the negating affidavit, to
wit:
Noong unang araw na pumirma ako galing ako sa graveyard.
Pagkatapos yung pangalawang meeting graveyard din ako,
pinapirma ako doon sa siyam (9) na pirasong papel noong
umagang pag-uwi namin. . . .
July 25, 99 —Unang Pirmahan
July 26, 99 —Pinirmahan ko ang siyam na piraso
July 27, 99 —Pinatatanggal ko ang aking pangalan sa
listahan
The petitioner also relied on the affidavit of Ma. Rachelle
Gonzales attesting that there was no election of officers, but
respondent BLR Director dismissed the affidavit as nothing
but the petitioner's belated attempt to establish its claim
about the election being held considering that Gonzales did
not even intimate such matter in her handwritten
resignation letter to YEU.
Another affidavit, that of Arthur Calma, stated that no
election was held, but, again, respondent BLR Director gave
Calma's affidavit scant consideration because the affiant
admittedly remained in the YEU office for only 20 minutes.
In contrast, the public respondent accorded more weight to
the sama-samang pahayag executed by 50 YEU members
who averred about the holding of an organizational meeting.
The public respondent justifiably favored the latter, deeming
the meeting to include the holding of an election of officers,
Page 37 of 47
for, after all, Art. 234, (b), Labor Code, does not itself
distinguish between the two.
Respondent BLR Director is further assailed for not taking
into consideration the affidavit asserting that no election of
officers was ever conducted, which Bernardino David, YEU's
second vice president, executed. The omission is not serious
enough, however, because the affidavit was submitted only
when the petitioner moved for the reconsideration of the
questioned decision, and because the affidavit was even
inconsistent with David's earlier sinumpaang salaysay,
whereby he attested to his attendance at the organizational
meeting and to his election thereat as vice president. ASTIED
As to the inclusion of Pineda's signature in the organizational
documents, the BLR Director correctly ruled that evidence to
prove the participation of YEU in the failure to delete
Pineda's signature from the organizational documents was
wanting. It is not deniable that Pineda never approached any
officer of YEU; and that Pineda approached a certain Tonton
whom he knew to be a union organizer but who was not an
officer of the union nor an employee of the company.
If the petitioner was [sic] sincere and intent on this imputed
error, its effort to show so does not [sic] appear in the record.
What appears is its abject failure to establish Tonton's actual
identity. The petitioner seemed content in making the
insinuation in the petition for certiorari that Tonton was
widely recognized as the organizer behind the creation of
YEU. That was not enough.
In sum, the BLR Director was neither capricious nor
whimsical in his exercise of judgment, and, therefore, did not
commit grave abuse of discretion. For certiorari to lie, more
than mere abuse of discretion is required to be established by
the petitioner. Herein, no degree of abuse of discretion was
attendant. 15
YTPI claims that the Court of Appeals erred in finding that
YEU did not commit fraud or misrepresentation. YTPI stated
that:
There was evidence that respondent committed fraud and
misrepresentation in its failure to omit the name of Ronald
Pineda prior to the filing of the respondents organizational
documents with the Department of Labor and Employment.
On the other hand, the Regional Director held that there
was no election of officers that had taken place during
respondent's alleged organizational meeting as there
was no proof of such election. 16 (Emphasis in the
original)
The Court is not convinced. A petition for review on certiorari
under Rule 45 of the Rules of Court should include only
questions of law — questions of fact are not reviewable. A
question of law exists when the doubt centers on what the
law is on a certain set of facts, while a question of fact exists
when the doubt centers on the truth or falsity of the alleged
facts. There is a question of law if the issue raised is capable
of being resolved without need of reviewing the probative
value of the evidence. Once the issue invites a review of the
evidence, the question is one of fact. 17
Whether YEU committed fraud and misrepresentation in
failing to remove Pineda's signature from the list of
employees who supported YEU's application for registration
and whether YEU conducted an election of its officers are
questions of fact. They are not reviewable.
Factual findings of the Court of Appeals are binding on the
Court. Absent grave abuse of discretion, the Court will not
disturb the Court of Appeals' factual findings. 18 In
Encarnacion v. Court of Appeals, 19 the Court held that,
"unless there is a clearly grave or whimsical abuse on its part,
findings of fact of the appellate court will not be disturbed.
The Supreme Court will only exercise its power of review in
known exceptions such as gross misappreciation of evidence
or a total void of evidence." YTPI failed to show that the Court
of Appeals gravely abused its discretion.
The Court of Appeals held that YTPI had the burden of
proving that YEU committed fraud and misrepresentation:
HASDcC
The cancellation of union registration at the employer's
instance, while permitted, must be approached with caution
and strict scrutiny in order that the right to belong to a
legitimate labor organization and to enjoy the privileges
appurtenant to such membership will not be denied to the
employees. As the applicant for cancellation, the petitioner
naturally had the burden to present proof sufficient to
warrant the cancellation. The petitioner was thus expected to
satisfactorily establish that YEU committed
misrepresentations, false statements or fraud in connection
with the election of its officers, or with the minutes of the
election of officers, or in the list of votes, as expressly required
in Art. 239, (c), Labor Code. But, as the respondent BLR
Director has found and determined, and We fully agree with
him, the petitioner simply failed to discharge its burden. 20
Did respondent PIGLAS union commit fraud and
misrepresentation in its application for union registration?
We agree with the DOLE-NCR and the BLR that it did not.
Except for the evident discrepancies as to the number of
union members involved as these appeared on the documents
that supported the union's application for registration,
petitioner company has no other evidence of the
alleged misrepresentation. But those discrepancies alone
cannot be taken as an indication that respondent
misrepresented the information contained in these
documents.
The charge that a labor organization committed fraud
and misrepresentation in securing its registration is a
serious charge and deserves close scrutiny. It is serious
because once such charge is proved, the labor union acquires
none of the rights accorded to registered organizations.
Consequently, charges of this nature should be clearly
established by evidence and the surrounding
circumstances. 23 (Emphasis supplied) SaETCI
WHEREFORE, we DENY the petition. We AFFIRM the 16
January 2004 Decision and 12 May 2004 Resolution of the
Court of Appeals in CA-G.R. SP No. 65460.
SO ORDERED.
Brion, Del Castillo, Abad and Perez, JJ., concur.
||| (Yokohama Tire Philippines, Inc. v. Yokohama
Employees Union, G.R. No. 163532, [March 10, 2010], 629
PHIL 146-156)

YTPI claims that the Court of Appeals erred in holding that

YTPI had the burden of proving that YEU committed fraud
and misrepresentation. YTPI stated that:

5.5 In the Decision dated 16 January 2004, the Honorable

Court of Appeals upheld the BLR Director's ruling that the
petitioner had the burden of proving that subject election of
officers never took place.

5.6 However, the petitioner does not have the burden of proof
vis-à-vis whether or not the said elections took place. The
respondent has the burden of proof in showing that an
election of officers took place. 21 (Emphasis in the
original)

The Court is not convinced. YTPI, being the one which filed
the petition for the revocation of YEU's registration, had the
burden of proving that YEU committed fraud and
misrepresentation. YTPI had the burden of proving the
truthfulness of its accusations — that YEU fraudulently
failed to remove Pineda's signature from the organizational
documents and that YEU fraudulently misrepresented that
it conducted an election of officers.

In Heritage Hotel Manila v. Pinag-Isang Galing at Lakas ng

mga Manggagawa sa Heritage Manila, 22 the employer filed
a petition to revoke the registration of its rank-and-file
employees' union, accusing it of committing fraud and
misrepresentation. The Court held that the petition was
rightfully denied because the employer failed to prove that
the labor union committed fraud and misrepresentation. The
Court held that:

Page 38 of 47
42 Takata Corporation v. BLR
[G.R. No. 196276 | 04 June 2014]
TOPIC: Labor Organization – Cancellation of Union
Certificate of Registration
PONENTE: J. Peralta
CASE LAW/ DOCTRINE:
Labor Unions; After the issuance of the certificate of
registration, the labor organization’s registration could be
assailed directly through cancellation of registration
proceedings in accordance with Articles 238 and 239 of the
Labor Code.—After the issuance of the certificate of
registration, the labor organization’s registration could be
assailed directly through cancellation of registration
proceedings in accordance with Articles 238 and 239 of the
Labor Code. And the cancellation of union certificate of
registration and the grounds thereof are as follows:
ART. 238. Cancellation of Registration.—The certificate of
registration of any legitimate labor organization, whether
national or local, may be cancelled by the Bureau, after due
hearing, only on the grounds specified in Article 239 hereof.
ART. 239. Grounds for Cancellation of Union Registration.—
The following may constitute grounds for cancellation of
union registration: (a)Misrepresentation, false statement or
fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the
minutes of ratification, and the list of members who took part
in the ratification; (b) Misrepresentation, false statements or
fraud in connection with the election of officers, minutes of
the election of officers, and the list of voters; (c) Voluntary
dissolution by the members.
The 20% minimum requirement pertains to the employees’
membership in the union and not to the list of workers who
participated in the organizational meeting.—It does not
appear in Article 234(b) of the Labor Code that the attendees
in the organizational meeting must comprise 20% of the
employees in the bargaining unit. In fact, even the
Implementing Rules and Regulations of the Labor Code does
not so provide. It is only under Article 234(c) that requires
the names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit
where it seeks to operate. Clearly, the 20% minimum
requirement pertains to the employees’ membership in the
union and not to the list of workers who participated in the
organizational meeting. In- deed, Article 234(b) and (c)
provide for separate requirements, which must be submitted
for the union’s registration, and which respondent did
submit.
EMERGENCY RECIT
Takata Corp. filed with DOLE to cancel the certificate of
union registration of SALAMAT (Union) due to their
misrepresentation, false statements, and fraud. Takata
claims that only 68 of the 119 members attended the
organizational meeting; less than 20% of 369 employees. SC
held that 20% requirement does not apply to Art 234 (b) or to
those who joined the org. meeting. 20% only applies to 234 (c)
or all employees in the bargaining unit. The “Pangalan ng
mga Kasapi ng Unyon” showed 119 names; more than 20% of
396. The two repeated names is not a valid ground for
Page 39 of 47
cancellation because they do not constitute grave
misrepresentation.
FACTS:
 Takata filed with DOLE a petition for cancellation of
the Certificate of Union Registration of respondent
SALAMAT on the ground that the latter was guilty
of misrepresentation, false statement and fraud with
respect to the number of those who participated in
the organizational meeting, the adoption and
ratification of its Constitution and by-laws, and in
the election of its officers.
 Takata contends the following:
o During an organizational meeting, only 68
signed the attendance sheet out of 296
rank-and-file employees
o That out of 119 members, only 117 really
existed due to repetition of certain names in
the record
o That the total number of employees was
actually 470, not 396
 Respondent denied these charges and claimed that
the 20% minimum membership requirement was
sastisfied as evidenced by their document (Sama-
Samang Pahayag ng Pagsapi). Further, they state
that petitioner was estopped from assailing its legal
personality as it agreed to a certification election and
activity participated in it.
 DOLE Regional Director: Granted the petition for
cancellation. It found that the 68 employees who
attended the organizational meeting was obviously
less than 20% of the total number of 396 rank-and-
file employees which respondent sought to
represent. The document presented by respondent
was never attached to its application for
registration, but was only later submitted in its
petition for certification election.
 BLR: Reversed the DOLE Regional Director stating
that Takata failed to prove that SALAMAT
deliberately and maliciously misrepresented the
number of rank-and-file employees. It pointed out
petitioner's basis for the alleged noncompliance with
the minimum membership requirement for
registration was the attendance of 68 members to
the May 1, 2009 organizational meeting supposedly
comprising only 17% of the total 396 regular rank-
and-file employees. However, the BLR found that
the list of employees who participated in the
organizational meeting was a separate and distinct
requirement from the list of the names of members
comprising at least 20% of the employees in the
bargaining unit; and that there was no requirement
for signatures opposite the names of the union
members; and there was no evidence showing that
the employees assailed their inclusion in the list of
union members.
CA: Affirmed the BLR Ruling.
ISSUE(S): W/N SALAMAT’s certificate registration should
be cancelled based on fraud and misrepresentation bearing
on the minimum requirement of the law as to its membership
HELD: No.
RATIO:
Petitioner's allegation of misrepresentation and fraud is
based on its claim that during the organizational meeting on
May 1, 2009, only 68 employees attended, while respondent
claimed that it has 119 members as shown in the document
denominated as "Pangalan ng mga Kasapi ng Unyon;" hence,
respondent misrepresented on the 20% requirement of the
law as to its membership.
registration under Article 239 of the Labor Code, the nature
of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of
union members.
Petitioner claims that in the list of members, there was an
employee whose name appeared twice and another employee
who was merely a project employee. Such could not be
considered a misrepresentation in the absence of showing
that respondent deliberately did so for the purpose of
increasing their union membership. In fact, even if those two
names were not included in the list of union members, there
would still be 117 members which was still more than 20% of
the 396 rank-and-file employees.
As to petitioner's argument that the total number of its
employees as of May 1, 2009 was 470, and not396 as
respondent claimed, still the 117 union members comprised
more than the 20% membership requirement for respondent's
registration.

In this case, we agree with the BLR and the CA that

It does not appear in Article 234 (b) of the Labor Code that
the attendees in the organizational meeting must comprise
20% of the employees in the bargaining unit. In fact, even the
Implementing Rules and Regulations of the Labor Code does
not so provide.
It is only under Article 234 (c) that requires the names of all
its members comprising at least twenty percent (20%) of all
the employees in the bargaining unit where it seeks to
operate.
respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged
failure of respondent to indicate with mathematical precision
the total number of employees in the bargaining unit is of no
moment, especially as it was able to comply with the 20%
minimum membership requirement. Even if the total
number of rank-and-file employees of petitioner is 528, while
respondent declared that it should only be 455, it still cannot
be denied that the latter would have more than complied with
the registration requirement.

Clearly, the 20% minimum requirement pertains to the

employees’ membership in the union and not to the list of
workers who participated in the organizational meeting.
Indeed, Article 234 (b) and (c) provide for separate
requirements, which must be submitted for the union's
registration, which SALAMAT submitted. Here, the total
number of employees in the bargaining unit was 396, and
20% of which was about 79. Respondent submitted a
document entitled "Pangalan ng Mga Kasapi ng Unyon"
showing the names of 119 employees as union members, thus
respondent sufficiently complied even beyond the 20%
minimum membership requirement.

SALAMAT also submitted the attendance sheet of the

organizational meeting which contained the names and
signatures of the 68 union members who attended the
meeting. Considering that there are 119 union members
which are more than 20% of all the employees of the
bargaining unit, and since the law does not provide for the
required number of members to attend the organizational
meeting, the 68 attendees which comprised at least the
majority of the 119 union members would already constitute
a quorum for the meeting to proceed and to validly ratify the
Constitution and By-laws of the union. There is, therefore, no
basis for petitioner to contend that grounds exist for the
cancellation of respondent's union registration. For fraud and
misrepresentation to be grounds for cancellation of union
Page 40 of 47
SECOND DIVISION
[G.R. No. 208986. January 13, 2016.]
HIJO RESOURCES CORPORATION, petitioner, vs.
EPIFANIO P. MEJARES, REMEGIO C. BALURAN, JR.,
DANTE SAYCON, and CECILIO CUCHARO,
represented by NAMABDJERA-HRC, respondents.
DECISION
CARPIO, J p:
The Case
This petition for review 1 assails the 29 August 2012 Decision
2 and the 13 August 2013 Resolution 3 of the Court of Appeals
in CA-G.R. SP No. 04058-MIN. The Court of Appeals reversed
and set aside the Resolutions dated 29 June 2009 and 16
December 2009 of the National Labor Relations Commission
(NLRC) in NLRC No. MIC-03-000229-08 (RAB XI-09-00774-
2007), and remanded the case to the Regional Arbitration
Branch, Region XI, Davao City for further proceedings.
ISHCcT
The Facts
Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr.,
Dante Saycon, and Cecilio Cucharo (respondents) were
among the complainants, represented by their labor union
named "Nagkahiusang Mamumuo ng Bit, Djevon, at Raquilla
Farms sa Hijo Resources Corporation" (NAMABDJERA-
HRC), who filed with the NLRC an illegal dismissal case
against petitioner Hijo Resources Corporation (HRC).
Complainants (which include the respondents herein) alleged
that petitioner HRC, formerly known as Hijo Plantation
Incorporated (HPI), is the owner of agricultural lands in
Madum, Tagum, Davao del Norte, which were planted
primarily with Cavendish bananas. In 2000, HPI was
renamed as HRC. In December 2003, HRC's application for
the conversion of its agricultural lands into agri-industrial
use was approved. The machineries and equipment formerly
used by HPI continued to be utilized by HRC.
Complainants claimed that they were employed by HPI as
farm workers in HPI's plantations occupying various
positions as area harvesters, packing house workers, loaders,
or labelers. In 2001, complainants were absorbed by HRC,
but they were working under the contractor-growers:
Buenaventura Tano (Bit Farm); Djerame Pausa (Djevon
Farm); and Ramon Q. Laurente (Raquilla Farm).
Complainants asserted that these contractor-growers
received compensation from HRC and were under the control
of HRC. They further alleged that the contractor-growers did
not have their own capitalization, farm machineries, and
equipment.
On 1 July 2007, complainants formed their union
NAMABDJERA-HRC, which was later registered with the
Department of Labor and Employment (DOLE). On 24
August 2007, NAMABDJERA-HRC filed a petition for
certification election before the DOLE.
When HRC learned that complainants formed a union, the
three contractor-growers filed with the DOLE a notice of
cessation of business operations. In September 2007,
complainants were terminated from their employment on the
Page 41 of 47
ground of cessation of business operations by the contractor-
growers of HRC. On 19 September 2007, complainants,
represented by NAMABDJERA-HRC, filed a case for unfair
labor practices, illegal dismissal, and illegal deductions with
prayer for moral and exemplary damages and attorney's fees
before the NLRC.
On 19 November 2007, DOLE Med-Arbiter Lito A. Jasa
issued an Order, 4 dismissing NAMABDJERA-HRC's
petition for certification election on the ground that there was
no employer-employee relationship between complainants
(members of NAMABDJERA-HRC) and HRC. Complainants
did not appeal the Order of Med-Arbiter Jasa but pursued the
illegal dismissal case they filed.
On 4 January 2008, HRC filed a motion to inhibit Labor
Arbiter Maria Christina S. Sagmit and moved to dismiss the
complaint for illegal dismissal. The motion to dismiss was
anchored on the following arguments: (1) Lack of jurisdiction
under the principle of res judicata; and (2) The Order of the
Med-Arbiter finding that complainants were not employees
of HRC, which complainants did not appeal, had become final
and executory.
The Labor Arbiter's Ruling
On 5 February 2008, Labor Arbiter Sagmit denied the motion
to inhibit. Labor Arbiter Sagmit likewise denied the motion
to dismiss in an Order dated 12 February 2008. Labor Arbiter
Sagmit held that res judicata does not apply. Citing the cases
of Manila Golf & Country Club, Inc. v. IAC 5 and Sandoval
Shipyards, Inc. v. Pepito, 6 the Labor Arbiter ruled that the
decision of the Med-Arbiter in a certification election case, by
the nature of that proceedings, does not foreclose further
dispute between the parties as to the existence or non-
existence of employer-employee relationship between them.
Thus, the finding of Med-Arbiter Jasa that no employment
relationship exists between HRC and complainants does not
bar the Labor Arbiter from making his own independent
finding on the same issue. The non-litigious nature of the
proceedings before the Med-Arbiter does not prevent the
Labor Arbiter from hearing and deciding the case. Thus,
Labor Arbiter Sagmit denied the motion to dismiss and
ordered the parties to file their position papers.
HRC filed with the NLRC a petition for certiorari with a
prayer for temporary restraining order, seeking to nullify the
5 February 2008 and 12 February 2008 Orders of Labor
Arbiter Sagmit.
The Ruling of the NLRC
The NLRC granted the petition, holding that Labor Arbiter
Sagmit gravely abused her discretion in denying HRC's
motion to dismiss. The NLRC held that the Med-Arbiter
Order dated 19 November 2007 dismissing the certification
election case on the ground of lack of employer-employee
relationship between HRC and complainants (members of
NAMABDJERA-HRC) constitutes res judicata under the
concept of conclusiveness of judgment, and thus, warrants
the dismissal of the case. The NLRC ruled that the Med-
Arbiter exercises quasi-judicial power and the Med-Arbiter's
decisions and orders have, upon their finality, the force and
effect of a final judgment within the purview of the doctrine
of res judicata.
On the issue of inhibition, the NLRC found it moot and
academic in view of Labor Arbiter Sagmit's voluntary
inhibition from the case as per Order dated 11 March 2009.
The Ruling of the Court of Appeals
The Court of Appeals found the ruling in the Sandoval case
more applicable in this case. The Court of Appeals noted that
the Sandoval case, which also involved a petition for
certification election and an illegal dismissal case filed by the
union members against the alleged employer, is on all fours
with this case. The issue in Sandoval on the effect of the Med-
Arbiter's findings as to the existence of employer-employee
relationship is the very same issue raised in this case. On the
other hand, the case of Chris Garments Corp. v. Hon. Sto.
Tomas 7 cited by the NLRC, which involved three petitions
for certification election filed by the same union, is of a
different factual milieu.
The Court of Appeals held that the certification proceedings
before the Med-Arbiter are non-adversarial and merely
investigative. On the other hand, under Article 217 of the
Labor Code, the Labor Arbiter has original and exclusive
jurisdiction over illegal dismissal cases. Although the
proceedings before the Labor Arbiter are also described as
non-litigious, the Court of Appeals noted that the Labor
Arbiter is given wide latitude in ascertaining the existence of
employment relationship. Thus, unlike the Med-Arbiter, the
Labor Arbiter may conduct clarificatory hearings and even
avail of ocular inspection to ascertain facts speedily.
Hence, the Court of Appeals concluded that the decision in a
certification election case does not foreclose further dispute
as to the existence or non-existence of an employer-employee
relationship between HRC and the complainants.
On 29 August 2012, the Court of Appeals promulgated its
Decision, the dispositive portion of which reads:
WHEREFORE, the petition is hereby GRANTED and the
assailed Resolutions dated June 29, 2009 and December 16,
2009 of the National Labor Relations Commission are hereby
REVERSED AND SET ASIDE. Let NLRC CASE No. RAB-
XI-09-00774-0707 be remanded to the Regional Arbitration
Branch, Region XI, Davao City for further proceedings.
SO ORDERED. 8
The Issue
Whether the Court of Appeals erred in setting aside the
NLRC ruling and remanding the case to the Labor Arbiter for
further proceedings.
The Ruling of the Court
We find the petition without merit.
There is no question that the Med-Arbiter has the authority
to determine the existence of an employer-employee
relationship between the parties in a petition for certification
election. As held in M.Y. San Biscuits, Inc. v. Acting Sec.
Laguesma: 9
Under Article 226 of the Labor Code, as amended, the Bureau
of Labor Relations (BLR), of which the med-arbiter is an
officer, has the following jurisdiction —
Page 42 of 47
"ART. 226. Bureau of Labor Relations. — The Bureau of
Labor Relations and the Labor Relations Division[s] in the
regional offices of the Department of Labor shall have
original and exclusive authority to act, at their own initiative
or upon request of either or both parties, on all inter-union
and intra-union conflicts, and all disputes, grievances or
problems arising from or affecting labor-management
relations in all workplaces whether agricultural or non-
agricultural, except those arising from the implementation or
interpretation of collective bargaining agreements which
shall be the subject of grievance procedure and/or voluntary
arbitration.
The Bureau shall have fifteen (15) working days to act on
labor cases before it, subject to extension by agreement of the
parties." (Italics supplied)
From the foregoing, the BLR has the original and exclusive
jurisdiction to inter alia, decide all disputes, grievances or
problems arising from or affecting labor-management
relations in all workplaces whether agricultural or non-
agricultural. Necessarily, in the exercise of this jurisdiction
over labor-management relations, the med-arbiter has the
authority, original and exclusive, to determine the existence
of an employer-employee relationship between the parties.
Apropos to the present case, once there is a determination as
to the existence of such a relationship, the med-arbiter can
then decide the certification election case. As the authority to
determine the employer-employee relationship is necessary
and indispensable in the exercise of jurisdiction by the med-
arbiter, his finding thereon may only be reviewed and
reversed by the Secretary of Labor who exercises appellate
jurisdiction under Article 259 of the Labor Code, as amended,
which provides —
"ART. 259. Appeal from certification election orders. — Any
party to an election may appeal the order or results of the
election as determined by the Med-Arbiter directly to the
Secretary of Labor and Employment on the ground that the
rules and regulations or parts thereof established by the
Secretary of Labor and Employment for the conduct of the
election have been violated. Such appeal shall be decided
within fifteen (15) calendar days." 10
In this case, the Med-Arbiter issued an Order dated 19
November 2007, dismissing the certification election case
because of lack of employer-employee relationship between
HRC and the members of the respondent union. The order
dismissing the petition was issued after the members of the
respondent union were terminated from their employment in
September 2007, which led to the filing of the illegal
dismissal case before the NLRC on 19 September 2007.
Considering their termination from work, it would have been
futile for the members of the respondent union to appeal the
Med-Arbiter's order in the certification election case to the
DOLE Secretary. Instead, they pursued the illegal dismissal
case filed before the NLRC.
The Court is tasked to resolve the issue of whether the Labor
Arbiter, in the illegal dismissal case, is bound by the ruling
of the Med-Arbiter regarding the existence or non-existence
of employer-employee relationship between the parties in the
certification election case. CAacTH
The Court rules in the negative. As found by the Court of
Appeals, the facts in this case are very similar to those in the
Sandoval case, which also involved the issue of whether the
ruling in a certification election case on the existence or non-
existence of an employer-employee relationship operates as
res judicata in the illegal dismissal case filed before the
NLRC. In Sandoval, the DOLE Undersecretary reversed the
finding of the Med-Arbiter in a certification election case and
ruled that there was no employer-employee relationship
between the members of the petitioner union and Sandoval
Shipyards, Inc. (SSI), since the former were employees of the
subcontractors. Subsequently, several illegal dismissal cases
were filed by some members of the petitioner union against
SSI. Both the Labor Arbiter and the NLRC ruled that there
was no employer-employee relationship between the parties,
citing the resolution of the DOLE Undersecretary in the
certification election case. The Court of Appeals reversed the
NLRC ruling and held that the members of the petitioner
union were employees of SSI. On appeal, this Court affirmed
the appellate court's decision and ruled that the Labor
Arbiter and the NLRC erred in relying on the pronouncement
of the DOLE Undersecretary that there was no employer-
employee relationship between the parties. The Court cited
the ruling in the Manila Golf 11 case that the decision in a
certification election case, by the very nature of that
proceeding, does not foreclose all further dispute between the
parties as to the existence or non-existence of an employer-
employee relationship between them.

This case is different from the Chris Garments case cited by

the NLRC where the Court held that the matter of employer-
employee relationship has been resolved with finality by the
DOLE Secretary, whose factual findings were not appealed
by the losing party. As mentioned earlier, the Med-Arbiter's
order in this case dismissing the petition for
certification, election on the basis of non-existence of
employer-employee relationship was issued after the
members of the respondent union were dismissed from
their employment. The purpose of a petition for
certification election is to determine which organization will
represent the employees in their collective bargaining with
the employer. 12 The respondent union, without its
member-employees, was thus stripped of its
personality to challenge the Med-Arbiter's decision in
the certification election case. Thus, the members of
the respondent union were left with no option but to
pursue their illegal dismissal case filed before the
Labor Arbiter. To dismiss the illegal dismissal case filed
before the Labor Arbiter on the basis of the pronouncement
of the Med-Arbiter in the certification election case that there
was no employer-employee relationship between the parties,
which the respondent union could not even appeal to the
DOLE Secretary because of the dismissal of its members,
would be tantamount to denying due process to the
complainants in the illegal dismissal case. This, we cannot
allow.

WHEREFORE, we DENY the petition. We AFFIRM the 29

August 2012 Decision and the 13 August 2013 Resolution of
the Court of Appeals in CA-G.R. SP No. 04058-MIN.

SO ORDERED.

||| (Hijo Resources Corp. v. Mejares, G.R. No. 208986,

[January 13, 2016])

Page 43 of 47
FIRST DIVISION
[G.R. No. 207971. January 23, 2017.]
ASIAN INSTITUTE OF MANAGEMENT, petitioner, vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY
ASSOCIATION, respondent.
DECISION
DEL CASTILLO, J p:
This Petition for Review on Certiorari 1 assails the January
8, 2013 Decision 2 of the Court of Appeals (CA) which
dismissed the Petition for Certiorari 3 in CA-G.R. SP No.
114122, and its subsequent June 27, 2013 Resolution 4
denying herein petitioner's Motion for Reconsideration. 5
Factual Antecedents
Petitioner Asian Institute of Management (AIM) is a duly
registered non-stock, non-profit educational institution.
Respondent Asian Institute of Management Faculty
Association (AFA) is a labor organization composed of
members of the AIM faculty, duly registered under
Certificate of Registration No. NCR-UR-12-4076-2004.
On May 16, 2007, respondent filed a petition for
certification election 6 seeking to represent a bargaining
unit in AIM consisting of forty (40) faculty members. The case
was docketed as DOLE Case No. NCR-OD-M-0705-
007.Petitioner opposed the petition, claiming that
respondent's members are neither rank-and-file nor
supervisory, but rather, managerial employees. 7
On July 11, 2007, petitioner filed a petition for
cancellation of respondent's certificate of registration
8 — docketed as DOLE Case No. NCR-OD-0707-001-
LRD — on the grounds of misrepresentation in registration
and that respondent is composed of managerial employees
who are prohibited from organizing as a union.
On August 30, 2007, the Med-Arbiter in DOLE Case No.
NCR-OD-M-0705-007 issued an Order 9 denying the petition
for certification election on the ground that AIM's faculty
members are managerial employees. This Order was
appealed by respondent before the Secretary of the
Department of Labor and Employment (DOLE),10 who
reversed the same via a February 20, 2009 Decision 11 and
May 4, 2009 Resolution, 12 decreeing thus:
WHEREFORE, the appeal filed by the Asian Institute of
Management Faculty Association (AIMFA) is GRANTED.
The Order dated 30 August 2007 of DOLE-NCR Mediator-
Arbiter Michael T. Parado is hereby REVERSED and SET
ASIDE.
Accordingly, let the entire records of the case be remanded to
DOLE-NCR for the conduct of a certification election among
the faculty members of the Asian Institute of Management
(AIM),with the following choices:
1. ASIAN INSTITUTE OF MANAGEMENT FACULTY
ASSOCIATION (AIMFA);and
2. No Union.
SO ORDERED. 13
Page 44 of 47
Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an
Order 14 dated February 16, 2009 was issued by DOLE-NCR
Regional Director Raymundo G. Agravante granting AIM's
petition for cancellation of respondent's certificate of
registration and ordering its delisting from the roster of
legitimate labor organizations. This Order was appealed by
respondent before the Bureau of Labor Relations 15
(BLR),which, in a December 29, 2009 Decision, 16 reversed
the same and ordered respondent's retention in the roster of
legitimate labor organizations. The BLR held that the
grounds relied upon in the petition for cancellation are not
among the grounds authorized under Article 239 of the Labor
Code, 17 and that respondent's members are not managerial
employees. Petitioner moved to reconsider, but was rebuffed
in a March 18, 2010 Resolution. 18
CA-G.R. SP No. 109487 and G.R. No. 197089
Petitioner filed a Petition for Certiorari before the CA,
questioning the DOLE Secretary's February 20, 2009
Decision and May 4, 2009 Resolution relative to DOLE Case
No. NCR-OD-M-0705-007, or respondent's petition for
certification election. Docketed as CA-G.R. SP No. 109487,
the petition is based on the arguments that 1) the bargaining
unit within AIM sought to be represented is composed of
managerial employees who are not eligible to join, assist, or
form any labor organization, and 2) respondent is not a
legitimate labor organization that may conduct a certification
election.
On October 22, 2010, the CA rendered its Decision 19
containing the following pronouncement: CAIHTE
AIM insists that the members of its tenure-track faculty are
managerial employees, and therefore, ineligible to join, assist
or form a labor organization. It ascribes gave abuse of
discretion on SOLE 20 for its rash conclusion that the
members of said tenure-track faculty are not managerial
employees solely because the faculty's actions are still subject
to evaluation, review or final approval by the board of
trustees ("BOT").AIM argues that the BOT does not manage
the day-to-day affairs, nor the making and implementing of
policies of the Institute, as such functions are vested with the
tenure-track faculty.
We agree.
Article 212(m) of the Labor Code defines managerial
employees as:
'ART. 212. Definitions. — x x x
(m) '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.
Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent
judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for
purposes of this Book.'
There are, therefore, two (2) kinds of managerial employees
under Art. 212(m) of the Labor Code. Those who 'lay down x
x x management policies,' such as the Board of Trustees, and
those who 'execute management policies and/or hire,
transfer, suspend, lay-off, recall, discharge, assign or
discipline employees.'
xxx xxx xxx
On its face, the SOLE's opinion is already erroneous because
in claiming that the 'test of 'supervisory' or 'managerial
status' depends on whether a person possesses authority to
act in the interest of his employer in the matter specified in
Article 212(m) of the Labor Code and Section 1(m) of its
Implementing Rules,' he obviously was referring to the old
definition of a managerial employee.Such is evident in
his use of 'supervisory or managerial status,' and reference to
'Section 1(m) of its Implementing Rules.' For presently, as
aforequoted in Article 212(m) of the Labor Code and as
amended by Republic Act 6715 which took effect on March
21, 1989, a managerial employee is already different
from a supervisory employee.x x x aScITE
xxx xxx xxx
In further opining that a managerial employee is one whose
'authority is not merely routinary or clerical in nature
but requires the use of independent judgment,' a
description which fits now a supervisory employee under
Section 1(t),Rule I, Book V of the Omnibus Rules
Implementing the Labor Code, it then follows that the SOLE
was not aware of the change in the law and thus gravely
abused its discretion amounting to lack of jurisdiction in
concluding that AIM's 'tenure-track' faculty are not
managerial employees.
SOLE further committed grave abuse of discretion when it
concluded that said tenure-track faculty members are not
managerial employees on the basis of a 'footnote' in AIM's
Policy Manual, which provides that 'the policy[-]making
authority of the faculty members is merely
recommendatory in nature considering that the faculty
standards they formulate are still subject to evaluation,
review or final approval by the [AIM]'s Board of
Trustees.' x x x
xxx xxx xxx
Clearly, AIM's tenure-track faculty do not merely recommend
faculty standards. They 'determine all faculty standards,'
and are thus managerial employees. The standards' being
subjected to the approval of the Board of Trustees would not
make ATM's tenure-track faculty non-managerial because as
earlier mentioned, managerial employees are now of two
categories: (1) those who 'lay down policies,' such as the
members of the Board of Trustees, and (2) those who
'execute management policies (etc.),' such as AIM's tenure-
track faculty.
xxx xxx xxx
It was also grave abuse of discretion on the part of the SOLE
when he opined that AIM's tenure-track faculty members are
not managerial employees, relying on an impression that
they were subjected to rigid observance of regular hours of
work as professors. x x x
xxx xxx xxx
Page 45 of 47
More importantly, it behooves the SOLE to deny AFA's
appeal in light of the February 16, 2009 Order of
Regional Director Agravante delisting AFA from the
roster of legitimate labor organizations.For, only
legitimate labor organizations are given the right to be
certified as sole and exclusive bargaining agent in an
establishment.
xxx xxx xxx
Here, the SOLE committed gave abuse of discretion by giving
due course to AFA's petition for certification election, despite
the fact that: (1) AFA's members are managerial employees;
and (2) AFA is not a legitimate labor organization. These
facts rendered AFA ineligible, and without any right to file a
petition for certification election, the object of which is to
determine the sole and exclusive bargaining representative
of qualified AIM employees.
WHEREFORE,the instant petition is GRANTED.The
assailed Decision dated February 20, 2009 and Resolution
dated May 4, 2009 are hereby REVERSED and SET
ASIDE.The Order dated August 30, 2007 of Mediator-Arbiter
Parado is hereby REINSTATED.
SO ORDERED.21 (Emphasis in the original)
Respondent sought reconsideration, but was denied. It thus
instituted a Petition for Review on Certiorari before this
Court on July 4, 2011. The Petition, docketed as G.R. No.
197089, remains pending to date.
The Assailed Ruling of the Court of Appeals
Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-
LRD or petitioner AIM's petition for cancellation of
respondent's certificate of registration, petitioner filed on
May 24, 2010 a Petition for Certiorari 22 before the CA,
questioning the BLR's December 29, 2009 decision and
March 18, 2010 resolution. The petition, docketed as CA-G.R.
SP No. 114122, alleged that the BLR committed grave abuse
of discretion in granting respondent's appeal and affirming
its certificate of registration notwithstanding that its
members are managerial employees who may not join, assist,
or form a labor union or organization.
On January 8, 2013, the CA rendered the assailed Decision,
stating as follows:
The petition lacks merit.
xxx xxx xxx
It is therefore incumbent upon the Institute to prove that the
BLR committed grave abuse of discretion in issuing the
questioned Decision. Towards this end, AIM must lay the
basis by showing that any of the grounds provided under
Article 239 of the Labor Code, exists, to wit:
Article 239. Grounds for cancellation of union registration. —
The following may constitute grounds for cancellation of
union registration:
(a) Misrepresentation, false statement or fraud in connection
with the adoption or ratification of the constitution and by-
laws or amendments thereto, the minutes of ratification, and
the list of members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in
connection with the election of officers, minutes of the
election of officers, and the list of voters;
(c) Voluntary dissolution by the members. HEITAD
Article 238 of the Labor Code provides that the enumeration
of the grounds for cancellation of union registration, is
exclusive;in other words, no other grounds for cancellation
is acceptable, except for the three (3) grounds stated in Article
239. The scope of the grounds for cancellation has been
explained —
For the purpose of de-certifying a union such as respondent,
it must be shown that there was misrepresentation, false
statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments
thereto; the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the
list of voters, or failure to submit these documents together
with the list of the newly elected-appointed officers and their
postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list
of those who participated in the organizational meeting
would not, to our mind, provide a valid reason to cancel
respondent's certificate of registration. The cancellation of a
union's registration doubtless has an impairing dimension on
the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union
registration under the Labor Code, the nature of the fraud
and misrepresentation must be grave and compelling enough
to vitiate the consent of a majority of union members. 23
In this regard, it has also been held that:
Another factor which militates against the veracity of the
allegations in the Sinumpaang Petisyon is the lack of
particularities on how, when and where respondent union
perpetrated the alleged fraud on each member. Such details
are crucial for, in the proceedings for cancellation of union
registration on the ground of fraud or misrepresentation,
what needs to be established is that the specific act or
omission of the union deprived the complaining employees-
members of their right to choose. 24
A cursory reading of the Petition shows that AIM did NOT
allege any specific act of fraud or misrepresentation
committed by AFA. What is clear is that the Institute seeks
the cancellation of the registration of AFA based on Article
245 of the Labor Code on the ineligibility of managerial
employees to form or join labor unions. Unfortunately for the
petitioner, even assuming that there is a violation of Article
245, such violation will not result in the cancellation of the
certificate of registration of a labor organization.
It should be stressed that a Decision had already been issued
by the DOLE in the Certification Election case; and the
Decision ordered the conduct of a certification election among
the faculty members of the Institute, basing its directive on
the finding that the members of AFA were not managerial
employees and are therefore eligible to form, assist and join
a labor union. As a matter of fact, the certification election
had already been held on October 16, 2009, albeit the results
have not yet been resolved as inclusion/exclusion proceedings
are still pending before the DOLE. The remedy available to
the Institute is not the instant Petition, but to question the
Page 46 of 47
status of the individual union members of the AFA in the
inclusion/exclusion proceedings pursuant to Article 245-A of
the Labor Code, which reads:
Article 245-A. Effect of inclusion as members of employees
outside the bargaining unit. — The inclusion as union
members of employees outside the bargaining unit shall not
be a ground for the cancellation of the registration of the
union. Said employees are automatically deemed removed
from the list of membership of said union.
Petitioner insists that Article 245-A is not applicable to this
case as all AFA members are managerial employees. We are
not persuaded.
The determination of whether any or all of the members of
AFA should be considered as managerial employees is better
left to the DOLE because,
It has also been established that in the determination of
whether or not certain employees are managerial employees,
this Court accords due respect and therefore sustains the
findings of fact made by quasi-judicial agencies which are
supported by substantial evidence considering their expertise
in their respective fields. 25
From the discussion, it is manifestly clear that the petitioner
failed to prove that the BLR committed grave abuse of
discretion; consequently, the Petition must fail.
WHEREFORE,the Petition is hereby DENIED.The
Decision and Resolution of public respondent Bureau of
Labor Relations in BLR-A-C-19-3-6-09 (NCR-OD-0707-001)
are hereby AFFIRMED.
SO ORDERED.26 (Emphasis in the original)
Petitioner filed its Motion for Reconsideration, which was
denied by the CA via its June 27, 2013 Resolution. Hence, the
instant Petition.
In a November 10, 2014 Resolution, 27 the Court resolved to
give due course to the Petition.
Issue
Petitioner claims that the CA seriously erred in affirming the
dispositions of the BLR and thus validating the respondent's
certificate of registration notwithstanding the fact that its
members are all managerial employees who are disqualified
from joining, assisting, or forming a labor organization.
Petitioner's Arguments
Praying that the assailed CA dispositions be set aside and
that the DOLE-NCR Regional Director's February 16, 2009
Order granting AIM's petition for cancellation of respondent's
certificate of registration and ordering its delisting from the
roster of legitimate labor organizations be reinstated instead,
petitioner maintains in its Petition and Reply 28 that
respondent's members are all managerial employees; that the
CA erred in declaring that even if respondent's members are
all managerial employees, this alone is not a ground for
cancellation of its certificate of registration; that precisely,
the finding in DOLE Case No. NCR-OD-M-0705-007, which
the CA affirmed in CA-G.R. SP No. 109487, is that
respondent's members are managerial employees; that
respondent's declaration that its members are eligible to join,
assist, or form a labor organization is an act of WHEREFORE,considering that the outcome of this case
misrepresentation, given the finding in CA-G.R. SP No. depends on the resolution of the issue relative to the nature
109487 that they are managerial employees; and that the of respondent's membership pending in G.R. No. 197089, this
grounds for cancellation of union registration enumerated in case is ordered CONSOLIDATED with G.R. No. 197089.
Article 239 of the Labor Code are not exclusive. ATICcS
SO ORDERED.
Respondent's Arguments
||| (Asian Institute of Management v. Asian Institute of
In its Comment, 29 respondent maintains that the CA was Management Faculty Association, G.R. No. 207971, [January
right to treat petitioner's case for cancellation of its union 23, 2017])
registration with circumspection; that petitioner's ground for
filing the petition for cancellation is not recognized under
Article 239; that petitioner's accusation of misrepresentation
is unsubstantiated, and is being raised for the first time at
this stage; that its members are not managerial employees;
and that petitioner's opposition to respondent's attempts at
self-organization constitutes harassment, oppression, and
violates the latter's rights under the Labor Code and the
Constitution.

Our Ruling

In Holy Child Catholic School v. Hon. Sto. Tomas,30 this

Court declared that "[i]n case of alleged inclusion of
disqualified employees in a union, the proper procedure for
an employer like petitioner is to directly file a petition for
cancellation of the union's certificate of registration due to
misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor Code,
as amended."

On the basis of the ruling in the above-cited case, it can be

said that petitioner was correct in filing a petition for
cancellation of respondent's certificate of registration.
Petitioner's sole ground for seeking cancellation of
respondent's certificate of registration — that its members
are managerial employees and for this reason, its registration
is thus a patent nullity for being an absolute violation of
Article 245 of the Labor Code which declares that managerial
employees are ineligible to join any labor organization — is,
in a sense, an accusation that respondent is guilty of
misrepresentation for registering under the claim that its
members are not managerial employees.

However, the issue of whether respondent's members are

managerial employees is still pending resolution by way of
petition for review on certiorari in G.R. No. 197089, which is
the culmination of all proceedings in DOLE Case No. NCR-
OD-M-0705-007 — where the issue relative to the nature of
respondent's membership was first raised by petitioner itself
and is there fiercely contested. The resolution of this issue
cannot be pre-empted; until it is determined with finality in
G.R. No. 197089, the petition for cancellation of respondent's
certificate of registration on the grounds alleged by petitioner
cannot be resolved. As a matter of courtesy and in order to
avoid conflicting decisions, We must await the resolution of
the petition in G.R. No. 197089.

x x x If a particular point or question is in issue in the second

action, and the judgment will depend on the determination of
that particular point or question, a former judgment between
the same parties or their privies will be final and conclusive
in the second if that same point or question was in issue and
adjudicated in the first suit. x x x Identity of cause of action
is not required, but merely identity of issues. 31 (Citation
omitted)

Page 47 of 47