Electromat Manufacturing v Lagunzad (2011)
cancellation of the union’s registration for the union's
J. Brion
Summary and Doctrine:
Topic: Government Regulation
Nagkakaisang Samahan ng Manggagawa ng
Electromat- Wasto became a charter affiliate of
WASTO, which Electromat tried to have the
registration cancelled on the grounds of D.O. 40-03
being unconstitutional to the Labor Code’s union
registration requirement under Art. 234.
SC ruled that the DOLE has the power to change the
rules on Labor through the Government’s
implementing policy on trade unionism, specifically the
executive department’s promulgation of rules
implementing the Labor Code.
I. FACTS:
Nagkakaisang Samahan ng Manggagawa ng
Electromat- Wasto (union), a charter affiliate of the
Workers Advocates for Struggle, Transformation and
Organization (WASTO), applied for registration with
the Bureau of Labor Relations (BLR).
Supporting Documents for application:
1. Ratified Constitution and By-Laws
2. Minutes of the Adoption of Constitution and
By-Laws
3. Names and Address of Union Officers
4. List of Union Officers
5. List of Union Members
6. List of Rank and File employees in the
company
7. Certification of non-existence of CBA
8. Resolution of affiliation with WASTO
9. Resolution of affiliation with the Union by
WASTO
10. Charter Certificate
11. Verification under oath
Bureau issued the Union a Certification of Creation of
Local Chapters, pursuant to D.O. 40-03.
Oct 1, 2003 – Electromat filed a petition for
failure to comply with Article 234 of the Labor Code. It
argued that D.O. 40-03 is an unconstitutional
diminution of the Labor Code's union registration
requirements under Article 234.
Nov 27, 2003 – Acting Director Lagunzad dismissed
the petition
Subsequent appeal to BLR was also affirmed lower
court’s decision.
Feb 3, 2006 – CA affirmed BLR ruling. Hence this case.
II. ISSUES:
W/N D.O. 40-03 is a valid exercise of the rule making
power of the DOLE. YES
III. RATIONALE:
Rule-making power of the DOLE
In their discussion of Progressive Development Corp v.
Secretary of DOLE, the question is on the validity of old
Sec. 3 Rule II, Book V of the Rules Implementing the
Labor Code
Union affiliation; direct membership with a national
union. — The affiliate of a labor federation or national
union may be a local or chapter thereof or an
independently registered union.
a) The labor federation or national union
concerned shall issue a charter certifcate
indicating the creation or establishment of a
local or chapter, copy of which shall be
submitted to the Bureau of Labor Relations
within thirty (30) days from issuance of such
charter certificate.
xxx xxx xxx
e) The local or chapter of a labor federation
or national union shall have and maintain
a constitution and by-laws, set of officers
and books of accounts. For reporting
purposes, the procedure governing the
reporting of independently registered
unions, federations or national unions
shall be observed.
By force of law, the local or chapter of a labor
federation or national union becomes a legitimate
labor organization upon compliance with Section
3, Rule II, Book V of the Rules Implementing the
Labor Code, the only requirement being the
submission of the charter certificate to the BLR.
Further, the Court noted that Section 3 omitted several
requirements which are otherwise required for union
registration, as follows:
1. The requirement that the application for
registration must be signed by at least 20% of
the employees in the appropriate bargaining
unit;
2. The submission of officers' addresses,
principal address of the labor organization,
the minutes of organization meetings and the
list of the workers who participated in such
meetings;
3. The submission of the minutes of the adoption
or ratification of the constitution and by-laws
and the list of the members who participated
in it.
Despite these omissions, the Court upheld the
government's implementing policy expressed in the old
rules when it declared
federation or national union to enhance the local's
bargaining power.
If changes were made at all, these were those made to
recognize the distinctions made in the law itself
between federations and their local chapters, and
independent unions; local chapters seemingly have
lesser requirements because they and their members
are deemed to be direct members of the federation to
which they are affiliated, which federations are the
ones subject to the strict registration requirements of
the law.
Union Compliant with the Rules
The Union satisfied the requirements Electromat
Manufacturing complains of, since these have been
properly verified as required.
IV. DISPOSITIVE:
WHEREFORE, premises considered, we DENY the
petition for lack of merit. The assailed decision and
resolution of the Court of Appeals are AFFIRMED.
Costs against the petitioner Electromat Manufacturing
and Recording Corporation.

“Undoubtedly, the intent of the law in imposing lesser

requirements in the case of a branch or local of a
registered federation or national union is to encourage
the affiliation of a local union with a federation or
national union in order to increase the local union's
bargaining powers respecting terms and conditions of
labor.“

Implementing Policy on Trade Unionism

As in the case of D.O. 9 (which introduced the above-

cited Section 3 of the old rules) in Progressive
Development, D.O. 40-03 represents an expression of
the government's implementing policy on trade
unionism. It builds upon the old rules by further
simplifying the requirements for the establishment of
locals or chapters.

As it stands, D.O. 40-03 this department order is

consistent with the intent of the government to
encourage the affiliation of a local union with a