001 NUWHRAIN v.
SECRETARY OF LABOR (APASAN) while that of the supervisory employees should be excluded, it follows that the
July, 31, 2009 | Carpio Morales, J. | Right to self-organization of probationary
employees
PETITIONER: National Union of Workers in Hotels, Restaurants and Allied
Industries – Manila Pavilion Hotel Chapter
RESPONDENTS: Secretary of Labor and Holiday Inn Manila Pavillion Hotel
Labor Union
SUMMARY: A certification election was conducted on June 16, 2006 among
the rank-and-file employees of respondent Holiday Inn Manila Pavilion Hotel
(the Hotel). In view of the significant number of segregated votes, contending
unions, petitioner, NUHWHRAIN-MPHC, and respondent Holiday Inn Manila
Pavillion Hotel Labor Union (HIMPHLU), referred the case back to Med-
Arbiter Ma. Several votes were excluded in the certification election, namely:
11 votes by dismissed employees, 6 votes by supervisory, 5 votes by
probationary. Simonette Calabocal to decide which among those votes would be
opened and tallied. The Med-Arbiter issued an order for the opening of 17 out
of 22 votes, excluding the probationary employees. NUWHRAIN-MPHC
appealed to the Secretary of Labor and Employment (SOLE) arguing that the
votes of the probationary employees should have been included. And
NUWHRAIN-MPHC 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. The
SOLE affirmed the Med-Arbiter’s ruling. NUWHRAIN-MPHC appealed before
the CA but the latter affirmed the SOLE’s decision. Hence this petition.
Whether employees on probationary status at the time of the certification
elections should be allowed to vote – YES, (read doctrine). 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.
Whether HIMPHLU was able to obtain the required majority for it to be
certified as the exclusive bargaining agent – NO. Prescinding from the Court’s
ruling that all the probationary employees’ votes should be deemed valid votes
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
NUWHRAIN-MPHC 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 NUWHRAIN-MPHC, still, HIMPHLU would win,
is thus untenable
DOCTRINE: 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”.
FACTS:
1. 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 and
of the Secretary of Labor and Employment’s January 25, 2008 Resolution in
OS-A-9-52-05 which affirmed the Med-Arbiter’s Resolutions dated January
22, 2007 and March 22, 2007.
2. A certification election was conducted on June 16, 2006 among the rank-
and-file employees of respondent Holiday Inn Manila Pavilion Hotel (the
Hotel)1.
1
RESULTS:
EMPLOYEES IN VOTERS’ LIST = 353
TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
3. In view of the significant number of segregated votes, contending unions,
petitioner, NUHWHRAIN-MPHC, and respondent Holiday Inn Manila
Pavillion 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.
a. 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.
b. Six (6) other votes were segregated because the employees who
cast them were already occupying supervisory positions at the time
of the election.
c. Still five (5) 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.
4. 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.
5. NUWHRAIN-MPHC, 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 NUWHRAIN-
MPHC 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.
6. 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.
7. 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.
8. 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.
9. 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. In fine, the SOLE concluded that the certification
of HIMPHLU as the exclusive bargaining agent was proper.
10. NUWHRAIN-MPHC’s motion for reconsideration having been denied by
the SOLE by Resolution of March 22, 2007, it appealed to the Court of
Appeals.
11. By the assailed Decision promulgated on November 8, 2007, the appellate
court affirmed the ruling of the SOLE. It held that, contrary to
NUWHRAIN-MPHC’s assertion, the ruling in Airtime Specialist, Inc. v.
Ferrer Calleja 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.
12. 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.
13. The appellate court brushed aside NUWHRAIN-MPHC’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. NUWHRAIN-MPHC’s motion for reconsideration having been denied
by Resolution of January 25, 2008, the present recourse was filed.
14. NUWHRAIN-MPHC 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.
15. Respecting the certification of HIMPHLU as the exclusive bargaining
agent, NUWHRAIN-MPHC 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.
ISSUE/s:
1. Whether employees on probationary status at the time of the
certification elections should be allowed to vote – YES, all rank and file
employees, probationary or permanent, have a substantial interest in
the selection of the bargaining representative.
2. Whether HIMPHLU was able to obtain the required majority for it to be
certified as the exclusive bargaining agent – NO, the majority is 170 and
HIMPHLU obtained 169 while NUWHRAIN-MPHC received 151 votes.
Clearly, HIMPHLU was not able to obtain a majority vote.
RULING: 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.
RATIO:
First issue (IMPT)
1. 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:
a. 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.”
2. 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:
a. 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.
3. 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.
4. 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.
5. 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-
032.
7. In light of the said 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
2
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;
(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)
xxxx
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)
filed from the Order of the MedArbiter, the date when the Order of the
Secretary of Labor and Employment,whether affirming or denying the 
appeal, becomes final and executory.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
 14. But while the Court rules that the votes of all the probationary obtained the required majority, it follows that a run-off election must be
employees should be included, under the particular circumstances of held to determine which between HIMPHLU and petitioner should
this case and the period of time which it took for the appeal to be represent the rank-and-file employees.
decided, the votes of the six supervisory employees must be excluded 8. A run-off election refers to an election between the labor unions receiving
because at the time the certification elections was conducted, they had the two (2) highest number of votes in a certification or consent election
ceased to be part of the rank and file, their promotion having taken with three (3) or more choices, where such a certified or consent election
effect two months before the 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
Second issue unions is at least fifty percent (50%) of the number of votes cast. With 346
3. As to whether HIMPHLU should be certified as the exclusive bargaining votes cast, 337 of which are now deemed valid and HIMPHLU having only
agent, the Court rules in the negative. It is well-settled that under the so- garnered 169 and petitioner having obtained 151 and the choice "NO
called "double majority rule," for there to be a valid certification election, UNION" receiving 1 vote, then the holding of a run-off election between
majority of the bargaining unit must have voted AND the winning union HIMPHLU and petitioner is in order.
must have garnered majority of the valid votes cast.
4. 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.
5. HIMPHLU obtained 169 while NUWHRAIN-MPHC 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
NUWHRAIN-MPHC, still, HIMPHLU would win, is thus untenable.
6. 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 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.
7. Having declared that no choice in the certification election conducted
002 Samahan ng Manggagawa sa Hanjin v. Bureau of Labor Relations FACTS:
(Valle edited by Arcenas) 1. Alfie Alipio, the authorized representative of Samahan, filed an application
14 Oct 2015 | Mendoza, J. | Right to Self-Organization for registration of the Samahan’s name with the DOLE. Attached were the
list of names of officers and members, signatures of the attendees of the Feb
7, 2010 meeting, copy of their Constitution and By Laws. They had a total
PETITIONER: Samahan ng Manggagawa sa Hanjin Shipyard Represented by
of 120 members.
its President, Alfie Alipio
2. DOLE regional office No. 3 San Francisco, Pampanga issued the certificate
RESPONDENTS: Bureau of Labor Relations, Hanjin heavy Industries and
of registration in favor of Samahan.
Constricton Co, LTD.
3. Hanjin Heavy Industries and Construction Co (Hanjin) filed a petition with
DOLE praying for the cancellation of the certificate of registration on the
SUMMARY: Samahan filed an application for registration of its name with
ground that its members did not fall under any of the types of workers
DOLE. This was opposed by Hanjin. Hanjin claimed that Samahan committed
enumerated in the second sentence of Art 243 (now 249).
misrepresentation with the list of members since SAmahan made it appear that
4. Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-
all of its members are qualified to be in the association. DOLE ruled in favor of
employed, and those without definite employers may form a workers'
Hanjin. Samahan filed an appeal before the BLR saying that Hanjin had no right
association.
to petition for the cancellation. It said that Hanjin Shipyard In its name referred
a. It further posited that 1/3 of the members of the association had
to the place of work and not to the company. BLR granted the appeal and Hanjin
definite employers and the continued existence and registration of
filed an MR. BLR affirmed its decision and told Smahan to drop “Hanjin from
the association would prejudice the company's goodwill.
its name.” Samahan brought this up to the CA. The CA added that they should
b. Hanjin also claimed that the Samahan committed
have decided to form a Union instead of a Workers’ association.
misrepresentation in connection with the list of members and/or
voters who took part in the ratification of the constitution and by-
The issue is w/n the CA erred in ordering that Samahan be instead a Union
laws. It claims that Samahan made it appear its members were all
and not a Worker’s association. NO. The right to self organization and
qualified to be members of the workers’ association.
association is given to the workers. The Samahan has the right to choose whether
5. DOLE called for a conference where Samahan requested for a 10-day
to establish a Union or a Workers’ association as this right is conferred to them.
period to file a responsive pleading. No pleading was submitted. Instead,
The right to form or join a labor organization necessarily includes the right to
Samahan filed a motion to dimiss.
refuse or refrain from exercising the said right. It is self-evident that just as no
6. DOLE RULING: DOLE regional director ruled in favor of Hanjin and
one should be denied the exercise of a right granted by law, so also, no one
cancelled Samahan’s registration.
should be compelled to exercise such a conferred right.
a. The regional director found that the preamble in the constitution
and by laws was an admission that of its members were employees
Samahan did not commit misrepresentation. There was no malice and the alleged
of Hanjin.3
misrepresentation had nothing to do with the by laws or the constitution.
b. Samahan failed to adduce evidence that the remaining 63
Samahan was also directed to drop “Hanjin Shipyard” from its name since it is
employees were employees of Hanjin, which bolstered Hanjin’s
be misleading as it would associate non-employee members to Hanjin. But note
claim that Samahan committed misrepresentation in its application
that removal of “Hanjin Shipyard” from name does not infringe right to self-
for registration (that all of its members were employees)
organization because it is according to the policy of Corporation Code, which is
c. Hence, the 57 members should have formed a labor union for
against registration of identical or deceptively or confusingly similar corporate
collective bargaining.
names, and DO No. 40-04, which states that change of name of labor
7. SAMAHAN APPEALED: Samahan filed an appeal before the BLR saying
organizations does not affect its legal personality and its rights and obligations
are retained. 3
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
DOCTRINE: The right to form or join a labor organization necessarily includes
pagpapaunlad ng kasanayan ng para sa mga kasapi nito. Naniniwala na sa pamamagitan ng aming mga
the right to refuse or refrain from exercising the said right. It is self-evident that
angking lakas, kaalaman at kasanayan ay anting maitataguyod at makapag-aambag sa kaunlaran ng
just as no one should be denied the exercise of a right granted by law, so also, no isang lipunan. Na mararating at makakamit ang antas ng pagkilala, pagdakila at pagpapahalaga sa mga
one should be compelled to exercise such a conferred right. tulad naming mga manggagawa.
 that Hanjin had no right to petition for the cancellation. 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.
a. It explained that when a shipyard was put up in Subic, Zambales, it
became known as Hanjin Shipyard.
b. Further, the remaining 63 members signed the Sama-Samang
Pagpapatunay which stated that they were either working or had
worked at Hanjin.
c. Thus, the alleged misrepresentation committed by Samahan had no
leg to stand on.
8. HANJIN’S COMMENT: avered that it was a party in interest and
reiterated that Samahan committed misrepresentation.
a. 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.
9. BLR RULING: granted Samahan’s appeal and reversed the DOLE’s
ruling.
a. It stated that the law clearly afforded the right to self-organization
to all workers including those without definite employers.
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
b. 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.
c. BLR said that Samahan did not commit misrepresentation.
i. That the use of “at” instead of “of” would indicate that
Hankin Shipyard was intended to be a place (We the
workers at Hanjin) it was translated to English in the
case.
d. Hanjin filed a MR, but BLR affirmed its decision.
e. BLR directed Samahan to remove the words “Hanjin Shipyard”
from its name.
i. 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.
10. CA RULING: Samahan’s petition for certiorari was dismissed. But the CA
granted Samahan’s MR. Hanjin claimed that requiring Samahan to change
its name is not tantamount to interfering with the right to self organization.
a. The CA held that the registration was contrary to Art 243 of the
LC. Only 57 out of the 120 were actually working in Hanjin.
Anyway, dropping Hanjin shipyard would not interfere with the
right to self-organization.
ISSUE/s:
1. WoN Samahan can form a workers’ association of emoloyees in Hajin
and instead should have formed a UNION – NO. The right to self
organization and association is given to the workers. The Samahan has the
right to choose whether to establish a Union or a Workers’ association as
this right is conferred to them.
2. WoN there was misrepresentation – NONE. For there to be
misrepresentation it must be deliberate and malicious intent. There is none
proven here.
3. WoN they should drop “Hanjin” from the name – YES. Using the name can
be misleading.
RULING: 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.
RATIO:
1. The right to self-organization connotes unionism. Workers, however, can
also form and join a workers' association as well as labor-management
councils.
2. Expressed in the highest law of the land is the right of all workers to self-
organization under Section 3, Article XIII 4 and Section 8, Article III of the
1987 Constitution,5 in relation thereto, Article 3 of the Labor Code.6
3. 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.
4. The right to form a union or association has two notions: (1) liberty or
freedom, that is, absence of restraint which guarantees that the employee
may act for himself without being prevented by law and (2) the power, by
virtue of which an employee may, as he pleases, join or refrain from joining
an association.
4
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. xxx
5
Section 8. The right of the people, including those employed in the public and private sectors, to form
unions, associations, or societies for purposes not contrary to law shall not be abridged.
6
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.
 5. The law expressly allows and 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."
a. A labor organization has two broad rights: (1) to bargain
collectively and (2) to deal with the employer concerning terms
and conditions of employment.
6. 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.
7. A union refers to any labor organization in the private sector organized
for collective bargaining and for other legitimate purpose, 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.
8. 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.
9. A common element between unionism and the formation of LMCs is
the existence of an employer-employee relationship.
a. Where neither party is an employer nor an employee of the other,
no duty to bargain collectively would exist.
10. 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."
11. Collective bargaining is just one of the forms of employee participation.
The real aim of which is employee participation in whatever form it may
appear, bargaining or no bargaining, union or no union.
a. To further strengthen employee participation, Article 255 (now
261) 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.
Right to choose whether to form or join a union or workers' association belongs to
workers themselves
12. No one should be compelled to exercise such a conferred right. The
workers have the right to choose whether to join a union or workers’
association.
a. SC cannot sanction that Samahan should have formed a union
instead of a workers’ association because the choice belonged to
the workers.
b. 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.
c. But, the right is subject to certain limitations in law. For instance,
the LC disallows managerial employees from joining, assisting or
forming a union.
13. SC disagreed with Hanjin when it posited that the members of Samahan
have definite employers which meant that they should have formed a union.
There is no provision that states the employees with definite employers may
form unions only.
14. Also SC 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, which should be read together with DO No,
40-03 Rule 2 ( see end of digest)
a. There is nothing in the 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.
No misrepresentation so cancellation of registration not warranted
1. 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
2. Misrepresentation must be done maliciously and deliberately. The
mistakes appearing in the application or attachments must be grave or
refer to significant matters.
3. 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 HAN JIN Shipyard."
4. In this case, there is no deliberate or malicious intent to commit
misrepresentation. 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.
5. 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 bargaining. Alien employees with valid working permits issued by the Department may exercise the right
the election of its officers. to self-organization and join or assist labor unions for purposes of collective bargaining if they are
Removal of “Hanjin Shipyard” from name does not infringe right to self- nationals of a country which grants the same or similar rights to Filipino workers, as certified by the
Department of Foreign Affairs.
organization
6. As to the name, there is no provision under our labor laws which speak of For purposes of this section, any employee, whether employed for a definite period or not, shall beginning
the use of name by a workers' association, SC refers to the Corporation on the first day of his/her service, be eligible for membership in any labor organization.
Code, which governs the names of juridical persons.7
7. The policy underlying the prohibition in Section 18 against the registration All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers
of a corporate name which is "identical or deceptively or confusingly and those without any definite employers may form labor organizations for their mutual aid and protection
similar" to that of any existing corporation or which is "patently deceptive" and other legitimate purposes except collective bargaining
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
8. It would be misleading to use Hanjin Shipyard in the name as it could
gve a wrong impression that all of its members are Hanjin employees.
9. 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.

DO No 40-03
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

7
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.
 003 Holy Child Catholic School v. HCCS-TELU-PIGLAS (lindon) Labor Code.
July 23, 2013 | Peralta, J. | Scope & Concept; Labor Relations
FACTS:
PETITIONER: Holy Child Catholic School 1. On May 31, 2002, a petition for certification election was filed by private
RESPONDENTS: Hon. Patricia Sto. Tomas as SOLE, HCCS-TELU-PIGLAS respondent Pinag-Isang Tinig at Lakas ng Anakpawis Holy Child Catholic
School Teachers and Employees Labor Union (HCCS-TELUPIGLAS).
SUMMARY: On May 31, 2002, a petition for certification election was filed by
2. In its Comment and Position Paper, petitioner raised that the members of
private respondent Pinag-Isang Tinig at Lakas ng Anakpawis Holy Child
the union are a mixture of managerial, supervisory, and rank-and-file
Catholic School Teachers and Employees Labor Union (HCCS-TELUPIGLAS).
employees as three (3) are vice-principals, one (1) is a department
In its Comment and Position Paper, petitioner raised that the members of the
head/supervisor, and eleven (11) are coordinators.
union are a mixture of managerial, supervisory, and rank-and-file employees as
3. It is likewise a mixture of teaching and non-teaching personnel. It insisted
three (3) are vice-principals, one (1) is a department head/supervisor, and eleven
that, for not being in accord with Article 245 of the Labor Code, private
(11) are coordinators. It is likewise a mixture of teaching and non-teaching
respondent is an illegitimate labor organization lacking in personality to file
personnel. It insisted that, for not being in accord with Article 245 of the Labor
a petition for certification election, as held in Toyota Motor Philippines
Code, private respondent is an illegitimate labor organization lacking in
Corporation v. Toyota Motor Philippines Corporation Labor Union and in
personality to file a petition for certification election, as held in Toyota Motor
Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and Employment.
Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union
4. The med arbiter denied the petition for certification election on the ground
and in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and Employment.
that the bargaining unit is inappropriate.
The med arbiter denied the petition for certification election on the ground that
5. Private respondent appealed to the SOLE and the latter reversed the ruling
the bargaining unit is inappropriate. Private respondent appealed to the SOLE
of the med arbiter and ordered two certification elections, one among
and the latter reversed the ruling of the med arbiter and ordered two certification
teaching personnel and another for non- teaching personnel.
elections, one among teaching personnel and another for non- teaching
6. Petitioner filed a petition for certiorari before the CA with prayer for
personnel. Petitioner filed a petition for certiorari before the CA with prayer for
Temporary Restraining Order and Preliminary Injunction.
Temporary Restraining Order and Preliminary Injunction. The CA dismissed
7. The CA dismissed the petition and ruled that the vice-principals,
the petition and ruled that the vice-principals, coordinators and department
coordinators and department heads are not managerial nor supervisory
heads are not managerial nor supervisory employees. Anent the alleged mixture
employees.
of teaching and non-teaching personnel, the CA agreed with petitioner that the
8. Anent the alleged mixture of teaching and non-teaching personnel, the CA
nature of the formers work does not coincide with that of the latter.
agreed with petitioner that the nature of the formers work does not coincide
Petitioner filed a motion for reconsideration but the same was denied. Hence,
this petition before the SC. with that of the latter.
9. Petitioner filed a motion for reconsideration but the same was denied.
Issue is whether a petition for certification election is dismissible on the ground Hence, this petition before the SC.
that the labor organization’s membership allegedly consists of supervisory and
rank-and-file employees. No. Not a ground for dismissal.
RULING: Ruling REVERSED and SET ASIDE.
ISSUE: whether a petition for certification election is dismissible on the ground that
DOCTRINE: After a labor organization has been registered, it may the labor organization’s membership allegedly consists of supervisory and rank-and-
exercise all the rights and privileges of a legitimate labor organization. Any file employees. No. Not a ground for dismissal
mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds RATIO:
for cancellation of its registration, unless such mingling was brought about
by misrepresentation, false statement or fraud under Article 239 of the 1. The Nothing in R.A. No. 875, however, tells of how the questioned
 mingling can affect the legitimacy of the labor organization. Under Section
15, the only instance when a labor organization loses its legitimacy is when
it violates its duty to bargain collectively; but there is no word on whether
such mingling would also result in loss of legitimacy. Thus, when the issue
of whether the membership of two supervisory employees impairs the
legitimacy of a rank-and-file labor organization came before the Court En
Banc in Lopez v. Chronicle Publication Employees Association, the
majority pronounced:
a. It may be observed that nothing is said of the effect of such
ineligibility upon the union itself or on the status of the other
qualified members thereof should such prohibition be disregarded.
Considering that the law is specific where it intends to divest a
legitimate labor union of any of the rights and privileges granted to
it by law, the absence of any provision on the effect of the
disqualification of one of its organizers upon the legality of the
union, may be construed to confine the effect of such ineligibility
only upon the membership of the supervisor. In other words, the
invalidity of membership of one of the organizers does not make
the union illegal, where the requirements of the law for the
organization thereof are, nevertheless, satisfied and met.
2. When the issue of the effect of mingling was brought to the fore in
Toyota, the Court, citing Article 245 of the Labor Code, as amended
by R.A. No. 6715, it was held:
Clearly, based on this provision, a labor organization composed of
both rank-and-file and supervisory employees is no labor
organization at all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an organization which
carries a mixture of rank-and-file and supervisory employees cannot
possess any of the rights of a legitimate labor organization, including
the right to file a petition for certification election for the purpose of
collective bargaining.
In Dunlop, in which the labor organization that filed a petition for
certification election was one for supervisory employees, but in
which the membership included rank-and-file employees, the Court
reiterated that such labor organization had no legal right to file a
certification election to represent a bargaining unit composed of
supervisors for as long as it counted rank-and-file employees among
its members.
It should be emphasized that the petitions for certification election
involved in Toyota and Dunlop were filed on November 26, 1992
and September 15, 1995, respectively; hence, the 1989 Rules was
applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was
further amended by Department Order No. 9, series of 1997 (1997
Amended Omnibus Rules).
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay
Highlands Employees Union-PTGWO in which the core issue was
whether mingling affects the legitimacy of a labor organization and
its right to file a petition for certification election. This time, given
the altered legal milieu, the Court abandoned the view in Toyota and
Dunlop and reverted to its pronouncement in Lopez 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.
3. In San Miguel Corp. (Mandaue Packaging Products Plants) v.
Mandaue Packing Products Plants-San Miguel Packaging Products-
San Miguel Corp. Monthlies Rank-and-File Union-FFW, the Court
explained that since the 1997 Amended Omnibus Rules does not
require a local or chapter to provide a list of its members, it would be
improper for the DOLE to deny recognition to said local or chapter
on account of any question pertaining to its individual members.
More to the point is Air Philippines Corporation v. Bureau of Labor
 Relations, the Court therein reiterated its ruling in Tagaytay
Highlands that the inclusion in a union of disqualified employees is
not among the grounds for cancellation, unless such inclusion is due
to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article 239 of
the Labor Code.
4.
All said, while the latest issuance is R.A. No. 9481, the 1997
Amended Omnibus Rules, as interpreted by the Court in Tagaytay
Highlands, San Miguel and Air Philippines, had already set the tone
for it. Toyota and Dunlop no longer hold sway in the present altered
state of the law and the rules.
In 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 unions certificate of registration due
to misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor Code, as
amended.To reiterate, private respondent, having been validly issued
a certificate of registration, should be considered as having acquired
juridical personality which may not be attacked collaterally.
5.
A bargaining unit is a group of employees sought to be represented
by a petitioning union. Such employees need not be members of a
union seeking the conduct of a certification election. A union
certified as an exclusive bargaining agent represents not only its
members but also other employees who are not union members.
In the same manner, the teaching and non-teaching personnel of
petitioner school must form separate bargaining units. Thus, the
order for the conduct of two separate certification elections, one
involving teaching personnel and the other involving non-teaching
personnel. It should be stressed that in the subject petition, private
respondent union sought the conduct of a certification election
among all the rank-and-file personnel of petitioner school. Since the
decision of the Supreme Court in the U.P. case prohibits us from
commingling teaching and non-teaching personnel in one
bargaining unit, they have to be separated into two separate
bargaining units with two separate certification elections to
determine whether the employees in the respective bargaining
units desired to be represented by private respondent.

On the other hand, a bargaining unit has been defined as a "group of

employees of a given employer, comprised of all or less than all of
the entire body of employees, which the collective interests of all the
employees, consistent with equity to the employer, indicated to be
best suited to serve reciprocal rights and duties of the parties under
the collective bargaining provisions of the law."

Petitioner appears to have confused the concepts of membership in a

bargaining unit and membership in a union. In emphasizing the
phrase "to the exclusion of academic employees" stated in U.P. v.
Ferrer-Calleja, petitioner believed that the petitioning union could
not admit academic employees of the university to its membership.
But such was not the intention of the Supreme Court.

004 SAN MIGUEL CORPORATION EMPLOYEES UNION v. SAN MIGUEL
PACKAGING PRODUCTS EMPLOYEES UNION (Buenaventura)
September 12, 2007 | Chico-Nazario, J. | Registration Requirements
PETITIONERS: San Miguel Corporation Employees Union Philippine
Transport And General Workers Organization (SMCEU PTGWO)
RESPONDENTS: San Miguel Packaging Products Employees Union
Pambansang Diwa Ng Manggagawang Pilipino (SMPPEU PDMP)
SUMMARY: SMCEU PTGWO 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 namely San Miguel Corporate
Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San
Miguel Packaging Products (SMPP)
SMPPEU PDMP is registered as a chapter of Pambansang Diwa ng
Manggagawang Pilipino. Thereafter, SMPPEU PDMP filed three separate
petitions for certification election to represent SMPP, SMCSU, and SMBP. All
three petitions were dismissed, on the ground that the separate petitions
fragmented a single bargaining unit. SMCEU PTGWO filed with the DOLE-
NCR a petition seeking the cancellation of SMPPEU PDMP’s registration and
its dropping from the rolls of legitimate labor organizations. SMCEU PTGWO
accused SMPPEU PDMP of committing fraud and falsification, and non-
compliance with registration requirements in obtaining its certificate of
registration. It raised allegations that SMPPEU PDMP violated Articles 239(a),
(b) and (c) and 234(c) of the Labor Code.DOLE-NCR Regional Director
Maximo B. Lim found that SMPPEU PDMP 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
FACTS:
SMCEU PTGWO posits that SMPPEU PDMP is required to submit a list of
members comprising at least 20% of the employees in the bargaining unit
before it may acquire legitimacy, citing Article 234(c) of the Labor Code.
The issue is W/N SM Packing Employees met the requirements and thus, must
remain a legitimate labor organization – NO, Since SM Packing seeks to be a
legitimate labor organization, D.O No. 9 is not the one applicable, but Art 234
of the Labor Code, it should have submitted 20% of the names of the employees
SM Packing Employees Union is a LOCAL or CHAPTER of PDMP which
seeks to be an INDEPENDENT LABOR ORGANIZATION. For its registration
AS A CHAPTER, the applicable law to them is the D.O. No. 9 which no longer
requires the submission of the names of at least 20% of all its employees in the
bargaining unit. San Mig Corp Union claims that SM Packing failed to meet the
requirements set forth by Art 234 of the Labor Code which mandates the
submission of the 20% names and that the Implementing Rules of D.O. No. 9 is
violative of Art 234 of the Labor Code because it provides a less stringent rule
(which does not require the submission of the 20% names). SC ruled that the
requirements for the registration of an INDEPENDENT LABOR UNION and
the requirements for the creation of a LOCAL or CHAPTER are different. Since
SM Packing seeks to be a legitimate labor organization, D.O No. 9 is not the
one applicable, but Art 234 of the Labor Code.
DOCTRINE:
When an unregistered union becomes a branch, local or chapter, some of the
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.
1. SMCEU PTGWO 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 namely San Miguel Corporate Staff
Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San
 Miguel Packaging Products (SMPP)
2. SMPPEU PDMP is registered as a chapter of Pambansang Diwa ng
Manggagawang Pilipino. Thereafter, SMPPEU PDMP filed three separate
petitions for certification election to represent SMPP, SMCSU, and SMBP.
All three petitions were dismissed, on the ground that the separate petitions
fragmented a single bargaining unit.
3. SMCEU PTGWO filed with the DOLE-NCR a petition seeking the
cancellation of SMPPEU PDMP’s registration and its dropping from the
rolls of legitimate labor organizations. SMCEU PTGWO accused SMPPEU
PDMP of committing fraud and falsification, and non-compliance with
registration requirements in obtaining its certificate of registration. It raised
allegations that SMPPEU PDMP violated Articles 239(a), (b) and (c) and
234(c) of the Labor Code.
4. DOLE-NCR Regional Director Maximo B. Lim found that SMPPEU
PDMP 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. Bureau of Labor Relations: Reversed DOLE NCR and declared that SM
Packing Employees shall hereby remain in the roster of legitimate labor
organizations
6. CA affirmed BLR
7. SMCEU PTGWO posits that SMPPEU PDMP is required to submit a list of
members comprising at least 20% of the employees in the bargaining unit
before it may acquire legitimacy, citing Article 234(c) of the Labor Code.
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.
8. SMCEU PTGWO also insists that the 20% requirement for registration of
SMPPEU PDMP must be based not on the number of employees of a single
division, but in all three divisions of the company in all the offices and
plants of SMC since they are all part of one bargaining unit. SMCEU
PTGWO refers to Section 1, Article 1 of the Collective Bargaining
Agreement (CBA), quoted hereunder:
ARTICLE 1 Section 1. Appropriate Bargaining Unit. The appropriate
bargaining unit covered by this Agreement consists of all regular rank and
file employees paid on the basis of fixed salary per month and employed by
the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing
Products (SMBP) and San Miguel Packaging Products (SMPP) and in
different operations existing in the City of Manila and suburbs, including
Metal Closure and Lithography Plant located at Canlubang, Laguna subject
to the provisions of Article XV of this Agreement provided however, that if
during the term of this Agreement, a plant within the territory covered by
this Agreement is transferred outside but within a radius of fifty (50)
kilometers from the Rizal Monument, Rizal Park, Metro Manila, the
employees in the transferred plant shall remain in the bargaining unit
covered by this Agreement.
9. SMCEU PTGWO thus maintains that SMPPEU PDMP, in any case, failed
to meet this 20% membership requirement since it based its membership on
the number of employees of a single division only, namely, the SMPP.
ISSUE:
1. W/N SM Packing Employees met the requirements and thus, must remain a
legitimate labor organization – NO, Since SM Packing seeks to be a
legitimate labor organization, D.O No. 9 is not the one applicable, but Art
234 of the Labor Code, it should have submitted 20% of the names of the
employees
RULING: WHEREFORE, the instant Petition is GRANTED. The Decision dated
09 March 2005 of the Court of Appeals in CA-GR SP No. 66200
is REVERSED and SET ASIDE. The Certificate of Registration of San Miguel
Packaging Products Employees Union Pambansang Diwa ng Manggagawang
Pilipino is ORDERED CANCELLED, and SMPPEU-PDMP DROPPED from the
rolls of legitimate labor organizations. Costs against SMCEU PTGWO. SO
ORDERED.
RATIO:
1. 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.
2. A perusal of the records reveals that SMPPEU PDMP is registered with the
BLR as a local or chapter of PDMP. The applicable Implementing Rules
(Department Order No. 9) 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. The Implementing
Rules stipulate that a local or chapter may be directly created by a
federation or national union.
3. Petitioner insists that Section 3 of the Implementing Rules, as amended by
Department Order No. 9, violated Article 234 of the Labor Code when it
provided for less stringent requirements for the creation of a chapter or
local. Article 234 of the Labor Code provides that an independent labor
organization acquires legitimacy only upon its registration with the BLR:
xxx 3) 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
4. It is emphasized that the foregoing pertains to the registration of an
independent labor organization, association or group of unions or workers.
5. However, the creation of a branch, local or chapter is treated differently.
This Court, in the landmark case of 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. The
intent of the law in imposing less 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 unions bargaining powers respecting terms and conditions
of labor.
6. Petitioner's argument creates a predicament as it hinges on the legitimacy of
PDMP as a labor organization. Firstly, this line of reasoning attempts to
predicate that a trade union center is not a legitimate labor organization.
7. PDMP was registered as a trade union center and issued Registration
Certificate No. FED-11558-LC by the BLR on 14 February 1991. 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.
8. 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.
9. Corollarily, PDMP is granted all the rights and privileges appurtenant to a
legitimate labor organization, and continues to be recognized as such until
its certificate of registration is successfully impugned and thereafter
cancelled or revoked in an independent action for cancellation.
10. We now proceed to the contention that PDMP cannot directly create a local
or a chapter, it being a trade union center.
11. 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.
12. we find no legal justification to support the conclusion that a trade
union center is allowed to directly create a local or chapter through
chartering.  the enterprise level that acquired legal personality through a charter
13. Incidentally, the term trade union center was never mentioned under
Presidential Decree No. 442, even as it was amended by Republic Act No.
6715. The term trade union center was first adopted in the Implementing
Rules, under Department Order No. 9.
14. Culling from its definition as provided by Department Order No. 9, a trade
union center is any group of registered national unions or federations
organized for the mutual aid and protection of its members; for
assisting such members in collective bargaining; or for participating in
the formulation of social and employment policies, standards, and
programs, and is duly registered with the DOLE in accordance with
Rule III, Section 2 of the Implementing Rules.
15. The same rule provides that the application for registration of an industry
or trade union center shall be supported by the following:
(a) The list of its member organizations and their respective presidents and,
in the case of an industry union, the industry where the union seeks to
operate;
(b) The resolution of membership of each member organization, approved
by the Board of Directors of such union;
(c) The name and principal address of the applicant, the names of its
officers and their addresses, the minutes of its organizational meeting/s, and
the list of member organizations and their representatives who attended
such meeting/s; and
(d) A copy of its constitution and by-laws and minutes of its ratification by
a majority of the presidents of the member organizations, provided that
where the ratification was done simultaneously with the organizational
meeting, it shall be sufficient that the fact of ratification be included in the
minutes of the organizational meeting.
16. 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.
17. The Implementing Rules, as amended by Department Order No. 9, provide
that "a duly registered federation or national union" may directly create a
local or chapter.
18. 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
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.
19. 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."
20. 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.
21. This Court deems it proper to apply the Latin maxim expressio unius est
exclusio alterius. Under this maxim of statutory interpretation, the
expression of one thing is the exclusion of another. When certain persons or
things are specified in a law, contract, or will, an intention to exclude all
others from its operation may be inferred. If a statute specifies one
exception to a general rule or assumes to specify the effects of a certain
provision, other exceptions or effects are excluded. If its intent were
otherwise, the law could have so easily and conveniently included "trade
union centers" in identifying the labor organizations allowed to charter a
chapter or local. Anything that is not included in the enumeration is
excluded therefrom, and a meaning that does not appear nor is intended or
reflected in the very language of the statute cannot be placed therein.
22. 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.
 005 The Heritage Hotel Manila v. Piglas-Heritage (CO)
Oct. 30, 2009 | Abad, J.:| Labor Organizations, Registration, Chartering
PETITIONER: THE HERITAGE HOTEL MANILA (OWNED AND
OPERATED BY GRAND PLAZA HOTEL CORPORATION)
RESPONDENTS: PINAG-ISANG GALING AT LAKAS NG MGA
MANGGAGAWA SA HERITAGE MANILA (PIGLAS-HERITAGE),
SUMMARY
Certain rank and file employees of Heritage Hotel formed the "Heritage Hotel
Employees Union" (HHE union). DOLE-NCR issued a certificate of registration
to this union. Subsequently, the HHE union filed a petition for certification
election that Heritage Hotel opposed. The company alleged that the HHE union
misrepresented itself to be an independent union, when it was, in truth, a local
chapter of NUWHRAIN. Thus, Heritage Hotel also filed a petition for the
cancellation of the HHE union's registration certificate. The Med-Arbiter
granted the HHE union's petition for certification election. Heritage Hotel
appealed the decision to the Secretary of Labor but the latter denied the appeal.
Heritage Hotel filed a petition for certiorari with the CA. The CA issued a writ
of injunction against the holding of the HHE union's certification election,
effective until the petition for cancellation of that union's registration shall have
been resolved with finality. Certain rank and file employees of Heritage Hotel
held a meeting and formed another union, the respondent Pinag-Isang Galing at
Lakas ng mga Manggagawa sa Heritage Manila (PIGLAS union). This union
applied for registration with the DOLE-NCR and got its registration certificate.
HHE union then filed a petition for cancellation of its union registration.
PIGLAS union filed a petition for certification election that Heritage Hotel also
opposed. Heritage Hotel filed a petition to cancel the union registration of
FACTS:
PIGLAS union. The company alleged that the misrepresentation was evidenced
by the discrepancy in the number of union members appearing in the application
and the list as well as in the number of signatories to the attendance and
signature sheets. DOLE-NCR denied the petition to cancel PIGLAS union's
registration for the reason that the discrepancies in the number of members
stated in the application's supporting documents were not material and did not
constitute misrepresentation. That dual unionism is not a ground for canceling
registration. It merely exposed a union member to a possible charge of
disloyalty, an internal matter.
Issue: W/N the union made fatal misrepresentation in its application for union
registration –- NO
W/N "dual unionism" is a ground for canceling a union's registration – NO
PIGLAS union did not commit fraud and misrepresentation in its application for
union registration. 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, Heritage Hotel has no other evidence of the
alleged misrepresentation. But those discrepancies alone cannot be taken as an
indication that PIGLAS Union misrepresented the information contained in
these documents. The 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 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. Here, the PIGLAS union's
supporting documents reveal the unmistakable yearning of petitioner company's
rank and file employees to organize. The fact that some of 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.
Doctrine
The Labor Code and its IRR 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.
Dual Unionism is not a ground for cancellation of a union’s registration.
1. Sometime in 2000, certain rank and file employees of Heritage Hotel
formed the "Heritage Hotel Employees Union" (the HHE union). The
Department of Labor and Employment-National Capital Region (DOLE-
NCR) later issued a certificate of registration to this union.
2. Subsequently, the HHE union filed a petition for certification election that
Heritage Hotel opposed. The company alleged that the HHE union
misrepresented itself to be an independent union, when it was, in truth, a
local chapter of the National Union of Workers in Hotel and Restaurant and
Allied Industries (NUWHRAIN). The company claimed that the HHE
union intentionally omitted disclosure of its affiliation with NUWHRAIN
because the company's supervisors union was already affiliated with it.
3. Thus, Heritage Hotel also filed a petition for the cancellation of the HHE
union's registration certificate.
4. Meanwhile, the Med-Arbiter granted the HHE union's petition for
 certification election. Heritage Hotel appealed the decision to the Secretary
of Labor but the latter denied the appeal.
5. Heritage Hotel filed a petition for certiorari with the CA.
6. The CA issued a writ of injunction against the holding of the HHE union's
certification election, effective until the petition for cancellation of that
union's registration shall have been resolved with finality.
7. Certain rank and file employees of Heritage Hotel held a meeting and
formed another union, the respondent Pinag-Isang Galing at Lakas ng mga
Manggagawa sa Heritage Manila (the PIGLAS union). This union applied
for registration with the DOLE-NCR and got its registration certificate.
8. Two months later, the members of the first union, the HHE union, adopted a
resolution for its dissolution. The HHE union then filed a petition for
cancellation of its union registration.
9. PIGLAS union filed a petition for certification election that Heritage Hotel
also opposed, alleging that the new union's officers and members were also
those who comprised the old union.
10. According to the company, the employees involved formed the PIGLAS
union to circumvent the Court of Appeals' injunction against the holding of
the certification election sought by the former union. Despite the company's
opposition, however, the Med-Arbiter granted the petition for certification
election.
11. Heritage Hotel filed a petition to cancel the union registration of PIGLAS
union. The company claimed that the documents submitted with the union's
application for registration bore the following false information:
(a) The List of Members showed that the PIGLAS union had 100 union members;
(b) The Organizational Minutes said that 90 employees attended the meeting on December 10,
2003;
(c) The Attendance Sheet of the meeting of December 10, 2003 bore the signature of 127
members who ratified the union's Constitution and By-Laws; and
(d) The Signature Sheet bore 128 signatures of those who attended that meeting.
12. Heritage Hotel alleged that the misrepresentation was evidenced by the
discrepancy in the number of union members appearing in the application
and the list as well as in the number of signatories to the attendance and
signature sheets. The minutes reported that only 90 employees attended the
meeting. The company further alleged that 33 members of PIGLAS union
were members of the defunct HHE union. This, according to the company,
violated the policy against dual unionism and showed that the new union
was merely an alter ego of the old
13. DOLE-NCR denied the petition to cancel PIGLAS union's registration for
the reason that the discrepancies in the number of members stated in the
application's supporting documents were not material and did not constitute
misrepresentation. That dual unionism is not a ground for canceling
registration. It merely exposed a union member to a possible charge of
disloyalty, an internal matter. Here, the members of the former union
simply exercised their right to self-organization and to the freedom of
association when they subsequently joined the PIGLAS union.
14. On appeal, the Bureau of Labor Relation (BLR) affirmed the ruling of the
DOLE-NCR. It reasoned that respondent PIGLAS union's organization
meeting lasted for 12 hours. It was possible for the number of attendees to
have increased from 90 to 128 as the meeting progressed. Besides, with a
total of 250 employees in the bargaining unit, the union needed only 50
members to comply with the 20 percent membership requirement. Thus, the
union could not be accused of misrepresentation since it did not pad its
membership to secure registration.
15. Heritage Hotel filed a petition for certiorari with the Court of Appeals, but
the latter court dismissed the petition, for not being accompanied by
material documents and portions of the record. The company filed a motion
for reconsideration, attaching parts of the record that were deemed
indispensable but the court denied it for lack of merit.
16. Heritage Hotel filed this petition for review under Rule 45.
ISSUE/s: W/N the union made fatal misrepresentation in its application for union
registration –- NO
W/N "dual unionism" is a ground for canceling a union's registration - NO
RULING: 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.
RATIO:
1. PIGLAS union did not commit fraud and misrepresentation in its
application for union registration. 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, Heritage Hotel has no
other evidence of the alleged misrepresentation. But those discrepancies
alone cannot be taken as an indication that PIGLAS Union misrepresented
the information contained in these documents.
2. 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.
3. Here, the discrepancies in the number of union members or employees
stated in the various supporting documents that PIGLAS union submitted to
labor authorities can be explained.
4. 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.
5. 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.
6. The Labor Code and its IRR 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.
7. Heritage Hotel claims that 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.
8. 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 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.
9. Labor laws are liberally construed in favor of labor especially if doing so
would affirm its constitutionally guaranteed right to self-organization. Here,
the PIGLAS union's supporting documents reveal the unmistakable
yearning of petitioner company's rank and file employees to organize. \
10. The fact that some of 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, Heritage Hotel's arguments on this point
may also be now regarded as moot and academic.
 006 EAGLE RIDGE GOLF & COUNTRY CLUB v. CA (Cruz)
March 18, 2010 | Velasco, Jr., J. | Labor Organizations
PETITIONER: Eagle Ridge Golf & Country Club
RESPONDENTS: Court of Appeals an Eagle Ridge Employees Union (EREU)
SUMMARY: Eagle Ridge Golf and Country Club(Eagle Ridge), which has
around 112 rank-and-file employees, seeks to have Eagle Ridge Employees
Union’s (EREU) registration cancelled when the Union filed a petition for
certification election. Eagle Ridge alleged that EREU committed fraud,
misrepresentation and false statement when it filed for its registration and that it
failed to comply with the membership requirement for the registration as a labor
organization. Eagle Ridge also alleged that the EREU declared in its application
for registration that it has 30 members, when the minutes of its organizational
meeting showed it only had 26 members. The misrepresentation was aggravated
by the discrepancy between the certification issued by the Union secretary and
president that 25 members ratified the constitution and by-laws and the fact that
26 members affixed their signatures on the documents, making one signature a
forgery. DOLE Regional Director granted Eagle Ridge’s petition and delisted
EREU from the roster of legitimate labor organizations. EREU appealed to the
BLR, which initially affirmed the order of the Regional Director, but reinstated
EREU upon filing an MR. Eagle Ridge filed an MR but was denied. The CA
dismissed Eagle Ridge’s petition for being deficient as the verification and
certification of non-forum shopping was subscribed to by Luna C. Piezas on her
representation as the legal counsel of Eagle Ridge, but without the required
Secretary’s Certificate or Board Resolution authorizing her to execute and sign
the same. The CA denied a motion for reconsideration. The issue in this case is
W/N EREU’s registration should be cancelled. The SC ruled in the negative. A
scrutiny of the records fails to show any misrepresentation, false statement, or
fraud committed by EREU to merit cancellation of its registration. The Union
submitted the required documents attesting to the facts of the organizational
meeting, the election of its officers, and the adoption of the Union’s constitution
and by-laws. EREU complied with the mandatory minimum 20% membership
requirement under Art. 234(c). when it had 30 employees as member when it
registered. 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.
In the issue of the affidavits of retraction executed by six union members, the
probative 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. 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. 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. 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, the
six affidavits of retraction are inadmissible as evidence against the Union in the
instant case. Twenty percent (20%) of 112 rank-and-file employees in Eagle
Ridge would require a union membership of at least 22 employees. When the
EREU filed its application for registration, 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. Prior to
their withdrawal, the six employees who retracted were bona fide union
members. 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.
DOCTRINE: 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. It is not but logical to assume that if a withdrawal
from union membership was done after a petition for certification election has
been filed such withdrawal cannot work to nullify the registration of the union
FACTS:
11. 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), elected a set of officers, and
ratified their constitution and by-laws.
12. On December 19, 2005, EREU formally applied for registration and filed
BLR Reg. Form No. I-LO, s. 1998 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.
13. The EREU then filed a petition for certification election in Eagle Ridge
Golf & Country Club.
14. Eagle Ridge opposed this petition, followed by its filing of a petition for the
cancellation of Reg. Cert., 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.
15. Eagle Ridge alleged that the EREU declared in its application for
registration having 30 members, when the minutes of its 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 and the fact that 26 members affixed their
signatures on the documents, making one signature a forgery.
16. 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,
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.
17. 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.
18. As a counterpoint, EREU, in its Comment, argued in gist:
a. 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;
b. 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;
c. 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;
d. the retraction of 5 union members should not be given any
credence for the reasons that:
i. 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;
ii. the retracting members did not deny signing the union
documents;
iii. following, Belyca Corporation v. Ferrer-
Calleja and Oriental Tin Can Labor Union v. Secretary of
Labor and Employment, it can be presumed that "duress,
coercion or valuable consideration" was brought to bear
on the retracting members; and
iv. citing La Suerte Cigar and Cigarette Factory v. Director
of Bureau of Labor Relations, 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.
19. The Union presented the duly accomplished union membership forms 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 of eight union members;
another Sama-Samang Sinumpaang Salaysay of four other union members;
and the Sworn Statement 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.
20. In its Reply, 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.
21. Moreover, Eagle Ridge presented another Sinumpaang Salaysay of
retraction 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 presented by the Union but did
not sign it.
22. After due proceedings, the DOLE Regional Director, Region IV-A,
 focusing on the question of misrepresentation, issued an Order to cancel
theReg. Cert. and EREU being delisted from the roster of legitimate labor
organizations.
23. Aggrieved, the Union appealed to the BLR.
24. Initially, the BLR, then headed by an Officer-in-Charge (OIC), affirmed the
appealed order of the DOLE Regional Director.
25. Undeterred by successive set backs, EREU interposed a motion for
reconsideration, contending that:
a. 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;
b. 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.
26. In a Decision, the BLR, granted the motion for reconsideration.
Accordingly, the Eagle Ridge Employees Union (EREU) shall remain in the
roster of legitimate organizations.
27. 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.
28. In turn aggrieved, Eagle Ridge sought but was denied reconsideration
29. Eagle Ridge thereupon went to the CA on a petition for certiorari which
was dismissed:
a. the questioned [BLR] Decision and the Resolution [appended to
the petition] are mere machine copies; and
b. 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.
30. 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.
ISSUE/s:
4. WoN ERUE’s registration must be cancelled– NO. A scrutiny of the
records fails to show any misrepresentation, false statement, or fraud
committed by EREU to merit cancellation of its registration. EREU
complied with the mandatory minimum 20% membership requirement
under Art. 234(c)
RULING: WHEREFORE, premises considered, we DISMISS the instant petition
for lack of merit.
RATIO:
Procedural Issue: Lack of Authority
1. Petitions for certiorari under Rule 65 of the Rules of Court require a "sworn
certification of non-forum shopping
2. 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.
3. 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.
4. Eagle Ridge tried to address its faux pas by submitting its board secretary’s
Certificate attesting to the issuance of a Board Resolution that authorized its
counsel of record, Atty. Luna C. Piezas, to represent it before theCA
5. The CA, however, rejected Eagle Ridge’s virtual plea, observing that the
board resolution adverted to was approved after Atty. Piezas has signed and
filed for Eagle Ridge the petition for certiorari.
6. 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.
7. 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.
8. 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
9. 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.
10. Before their amendment by Republic Act No. 948140 on June 15, 2007, the
then governing Art. 234 8 (on the requirements of registration of a labor
union) and Art. 2399 (on the grounds for cancellation of union registration)
of the Labor Code respectively provided as follows:
8
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;
xxxx
(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.
xxxx
9
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;
xxxx
(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.
11. A scrutiny of the records fails to show any misrepresentation, false
statement, or fraud committed by EREU to merit cancellation of its
registration.
12. First. The Union submitted the required documents attesting to the facts of
the organizational meeting, 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, the following documents:
a. the minutes of its organizational meeting showing 26 founding
members who elected its union officers by secret ballot;
b. the list of rank-and-file employees 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 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;
e. the list of officers and their addresses;
f. the list of union members showing a total of 30 members; and
g. the Sworn Statement of the union’s elected president and secretary.
13. All the foregoing documents except the sworn statement of the president
and the secretary were accompanied by Certifications by the union secretary
duly attested to by the union president.
14. Second. The members of the EREU totaled 30 employees when it applied
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.
15. 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.
a. 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 was 30, which was truthfully indicated
in its application for registration.
16. Fourth. 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.
a. 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 factthat 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.
17. 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.
18. Sixth. In the more meaty issue of the affidavits of retraction executed by six
union members, we hold that the probative 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.
19. 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 to.
Sec. 11, Rule XI of DO 40-03 specifically requires:
a. 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.
20. 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. 
21. 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.
22. 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.
23. 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 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.
24. 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.
25. 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.
26. 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, 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.
27. 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 ascertaining the will of a collective bargaining unit as to its choice of its
organizational meetings. While they alleged that they did not know what exclusive representative. It is the fairest and most effective way of
they were signing, it bears stressing that their affidavits of retraction were determining which labor organization can truly represent the working force.
not re-affirmed during the hearings of the instant case rendering them of It is a fundamental postulate that the will of the majority, if given
little, if any, evidentiary value. expression in an honest election with freedom on the part of the voters to
28. With the withdrawal of six union members, there is still compliance with make their choice, is controlling.
the mandatory membership requirement under Art. 234(c), for the 35. The Court ends this disposition by reproducing the following apt excepts
remaining 24 union members constitute more than the 20% membership from its holding in S.S. Ventures International, Inc. v. S.S. Ventures Labor
requirement of 22 employees. Union (SSVLU)  : We have in precedent cases said that the employees’
29. Eagle Ridge further argues that the list of union members includes a withdrawal from a labor union made before the filing of the petition for
supervisory employee. This is a factual issue which had not been raised at certification election is presumed voluntary, while withdrawal after the
the first instance before the DOLE Regional Director and cannot be filing of such petition is considered to be involuntary and does not
appreciated in this proceeding. affect the same. Now then, if a withdrawal from union membership
30. Eighth. Finally, given the factual antecedents of the instant case, that Eagle done after a petition for certification election has been filed does not
Ridge has apparently resorted to filing the instant case for cancellation of vitiate such petition, is it not but logical to assume that such withdrawal
the Union’s certificate of registration to bar the holding of a certification cannot work to nullify the registration of the union?
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.
31. Evidently, 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. Indisputably, all six were
executed way after the filing of the petition for certification election.
32. In Eastland Manufacturing Company, Inc. v. Noriel: 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."
33. Philippine Association of Free Labor Unions v. Bureau of Labor Relations:
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.
34. 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
 007 SMCC-SUPER v. Charter Chemical (DAGUMAN)
March 16, 2011 | Del Castillo, J. | Grounds for Cancellation
PETITIONER: Samahang Manggagawa sa Charter Chemical Solidarity
Unions in the Philippines for Empowerment and Reforms, Zacarias Jerry
Victorio- Union President
RESPONDENTS: Charter Chemical and Coating Corporation
SUMMARY Samahang Manggagawasa Charter Chemical Solidarity of Unions
in the Philippines for Empowerment and Reforms (petitioner union) filed a
petition for certification election among the regular rank-and-file employees of
Charter Chemical and Coating Corporation (respondent company) with the
Mediation Arbitration Unit of the DOLE, National Capital Region. On April 14,
1999, respondent company filed an Answer with Motion to Dismiss 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.The Med-Arbiter
agreed with the respondent company. Though the DOLE disagreed with the
Med-Arbiter on its findings regarding the documentation requirements and the
inclusion of supervisory employees in the union, it ruled that the petitioner
union did not file its petition on time. Another union, supposedly, had filed a
petition for certification election and its petition has been decided with finality.
The CA upheld the findings of the Med-Arbiter. ISSUES: WoN the unions
charter certificate needed to be certified under oath? WoN the mingling of
supervisory employees with rank and file employees nullifies the legal
personality of the union? No and No. First issue: Section 1, Rule VI of the
FACTS:
Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997 does
require that a charter certificate be under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing
Products Plants-San Miguel Corporation Monthlies Rank-and-File Union-FFW
(MPPP-SMPP-SMAMRFU-FFW), which was decided under the auspices of
D.O. No. 9, Series of 1997, we ruled that it was not necessary for the charter
certificate to be certified and attested by the local/chapter officers, since it does
not make sense to have the local/chapters officers certify or attest to a document
which they had no hand in the preparation of. In accordance with this ruling,
petitioner unions charter certificate need not be executed under oath.
Consequently, it validly acquired the status of a legitimate labor organization
upon submission of (1) its charter certificate, (2) the names of its officers, their
addresses, and its principal office, and (3) its constitution and by-laws the last
two requirements having been executed under oath by the proper union officials
as borne out by the records.
Second issue: In Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay
Highlands Employees Union-PGTWO in which the core issue was whether
mingling affects the legitimacy of a labor organization and its right to file a
petition for certification election, the Court, given the altered milieu, abandoned
the view inToyotaandDunlopand reverted to its pronouncement in Lopez 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.
DOCTRINE:
The right to file a petition for certification election is accorded to a labor
organization provided that it complies with the requirements of law for proper
registration.
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. We apply these principles to this case.
1. Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the
Philippines for Empowerment and Reforms (petitioner union) filed a
petition for certification election among the regular rank-and-file employees
of Charter Chemical and Coating Corporation (respondent company) with
the Mediation Arbitration Unit of the DOLE, National Capital Region.
2. Respondent company filed an Answer with Motion to Dismiss 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
3. he Med-Arbiter ruled 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 as
required by Section 235 of the Labor Code in relation to Section 1, Rule VI
of Department Order (D.O.) No. 9, series of 1997.
4. 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.
5.
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
6. DOLE ruled, contrary to the findings of the Med-Arbiter, that the charter
certificate need not be verified and that there was no independent evidence
presented to establish respondent company's claim that some members of
petitioner union were holding supervisory positions, the DOLE sustained
the dismissal of the petition 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 January 16, 1998. The Decision granting the said petition
became final and executory on September 16, 1998 and was remanded for
immediate implementation. Under Section 7, Rule XI of D.O. No. 9, series
of 1997, a motion for intervention involving a certification election in an
unorganized establishment should be filed prior to the finality of the
decision calling for a certification election. Considering that petitioner
union filed its petition only on February 14, 1999, the same was filed out of
time.
7. In nullifying the decision of the DOLE, the appellate court (CA) gave
credence to the findings of the Med-Arbiter that petitioner union failed to
comply with the documentation requirements under the Labor Code. It,
likewise, upheld the Med-Arbiter's finding that petitioner union consisted of
both rank-and-file and supervisory employees.  Moreover, the CA held 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 ruling
in Toyota Motor Philippines v. Toyota Motor Philippines Corporation
Labor Union. Thus, considering that petitioner union is not a legitimate
labor organization, it has no legal right to file a petition for certification
election.
8. Petitioner union claims that the litigation of the issue as to its legal
personality to file the subject petition for certification election is barred by
the July 16, 1999 Decision of the DOLE. In this decision, the DOLE ruled
that petitioner union complied with all the documentation requirements and
that there was no independent evidence presented to prove an illegal
mixture of supervisory and rank-and-file employees in petitioner union.
After the promulgation of this Decision, respondent company did not move
for reconsideration, thus, this issue must be deemed settled.
9. Petitioner union further argues that the lack of verification of its charter
certificate and the alleged illegal composition of its membership are not
grounds for the dismissal of a petition for certification election under
Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are they
grounds for the cancellation of a union's registration under Section 3, Rule
VIII of said issuance. It contends that what is required to be certified under
oath by the local union's secretary or treasurer and attested to by the local
union's president are limited to the union's constitution and by-laws,
statement of the set of officers, and the books of accounts.
10. Finally, the legal personality of petitioner union cannot be collaterally
attacked but may be questioned only in an independent petition for
cancellation pursuant to Section 5, Rule V, Book IV of the Rules to
Implement the Labor Code and the doctrine enunciated in Tagaytay
Highlands International Golf Club Incoprorated v. Tagaytay Highlands
Empoyees Union-PTGWO
11. Respondent company asserts that it cannot be precluded from challenging
the July 16, 1999 Decision of the DOLE. The said decision did not attain
finality because the DOLE subsequently reversed its earlier ruling and, from
this decision, respondent company timely filed its motion for
reconsideration.
12. On the issue of lack of verification of the charter certificate, respondent
company notes that Article 235 of the Labor Code and Section 1, Rule VI of
the Implementing Rules of Book V, as amended by D.O. No. 9, series of
1997, expressly requires that the charter certificate be certified under oath.
13. It also contends that petitioner union is not a legitimate labor organization
because its composition is a mixture of supervisory and rank-and-file
employees in violation of Article 245 of the Labor Code. Respondent
company maintains that the ruling in Toyota Motor Philippines vs. Toyota
Motor Philippines Labor Union continues to be good case law. Thus, the
illegal composition of petitioner union nullifies its legal personality to file
the subject petition for certification election and its legal personality may be
collaterally attacked in the proceedings for a petition for certification
election as was done here.
ISSUE/s:
1. WoN the unions charter certificate needed to be certified under oath? NO.
In accordance with this ruling, petitioner union's charter certificate
need not be executed under oath. Consequently, it validly acquired the
status of a legitimate labor organization upon submission of (1) its
charter certificate, (2) the names of its officers, their addresses, and its
principal office, and (3) its constitution and by-laws-- the last two
requirements having been executed under oath by the proper union
officials as borne out by the records.
1. WoN the mingling of supervisory employees with rank and file employees
nullifies the legal personality of the union? NO. The applicable law and
rules in the instant case are the same as those in Kawashima because the
present petition for certification election was filed in 1999 when D.O. No.
9, series of 1997, was still in effect. Hence, Kawashima applies with equal
force here. 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
 2.
RULING: SC affirmed the petition
RATIO:
2. The issue as to the legal personality of the union is not barred by the
July 16, 1999 Decision of DOLE
3. A review of the records indicates that the issue as to petitioner union's legal
personality has been timely and consistently raised by respondent company
before the Med-Arbiter, DOLE, CA and now this Court. In its July 16, 1999
Decision, the DOLE found that petitioner union complied with the
documentation requirements of the Labor Code and that the evidence was
insufficient to establish that there was an illegal mixture of supervisory and
rank-and-file employees in its membership. Nonetheless, the petition for
certification election was dismissed on the ground that another union had
previously filed a petition for certification election  seeking  to  represent
the  same  bargaining unit  in respondent company.
4. Upon motion for reconsideration by petitioner union on January 13, 2000,
the DOLE reversed its previous ruling. It upheld the right of petitioner
union to file the subject petition for certification election because its
previous decision was based on a mistaken appreciation of facts. From this
adverse decision, respondent company timely moved for reconsideration by
reiterating its previous arguments before the Med-Arbiter that petitioner
union has no legal personality to file the subject petition for certification
election.
The July 16, 1999 Decision of the DOLE, therefore, never attained finality
because the parties timely moved for reconsideration. The issue then as to
the legal personality of petitioner union to file the certification election was
properly raised before the DOLE, the appellate court and now this Court.
5. The charter certificate need not be certified under oath by the local
union’s secretary or treasurer and attested to by its president.
6. Preliminarily, we must note that Congress enacted Republic Act (R.A.) No.
9481 which took effect on June 14, 2007. This law introduced substantial
amendments to the Labor Code. However, since the operative facts in this
case occurred in 1999, we shall decide the issues under the pertinent legal
provisions then in force (i.e., R.A. No. 6715, amending Book V of the
Labor Code, and the rules and regulations implementing R.A. No. 6715, as
amended by D.O. No. 9, series of 1997) pursuant to our ruling in Republic
v. Kawashima Textile Mfg., Philippines, Inc.
7. In the main, the CA ruled that petitioner union failed to comply with the
requisite documents for registration under Article 235 of the Labor Code
and its implementing rules. It agreed with the Med-Arbiter that the Charter
Certificate, Sama-samang Pahayag ng Pagsapi
at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong
at mga Sumang-ayon at Nagratipika sa Saligang Batas were not executed
under oath. Thus, petitioner union cannot be accorded the status of a
legitimate labor organization.We disagree. The then prevailing Section 1,
Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9,
series of 1997, provides:10
8. As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization
and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-
ayon at Nagratipika sa Saligang Batas are not among the documents that
need to be submitted to the Regional Office or Bureau of Labor Relations in
order to register a labor organization. As to the charter certificate, the
above-quoted rule indicates that it should be executed under oath. Petitioner
union concedes and the records confirm that its charter certificate was not
executed under oath. However, in San Miguel Corporation (Mandaue
Packaging Products Plants) v. Mandaue Packing Products Plants-San
Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-
SMAMRFU-FFW), which was decided under the auspices of D.O. No. 9,
Series of 1997, we ruled –
9. In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil.
356 (1996), the Court ruled that it was not necessary for the charter
certificate to be certified and attested by the local/chapter
officers. Id. While this ruling was based on the interpretation of the
previous Implementing Rules provisions which were supplanted by the
1997 amendments, we believe that the same doctrine obtains in this case.
Considering that the charter certificate is prepared and issued by the
national union and not the local/chapter, it does not make sense to have
the local/chapter's officers x x x certify or attest to a document which
they had no hand in the preparation of. (Emphasis supplied)
10.
10
Section 1. Chartering and creation of a local chapter -- A duly registered federation or national union
may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) 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/chapter's officers, their addresses, and the principal office of the local/chapter;
and
(c)  The local/chapter's constitution and by-laws provided that where the local/chapter's constitution and
by-laws [are] the same as [those] 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.
 In accordance with this ruling, petitioner union's charter certificate
need not be executed under oath. Consequently, it validly acquired the
status of a legitimate labor organization upon submission of (1) its
charter certificate, (2) the names of its officers, their addresses, and its
principal office, and (3) its constitution and by-laws-- the last two
requirements having been executed under oath by the proper union
officials as borne out by the records.
11. The legal personality of petitioner union cannot be collaterally attacked
by respondent company in the certification election proceedings.
12. Petitioner union correctly argues that its legal personality cannot be
collaterally attacked in the certification election proceedings. As we
explained in Kawashima:
a. 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.
13. The mixture of rank-and-file and supervisory employees in petitioner
union does not nullify its legal personality as a legitimate labor
organization.
14. The CA found that petitioner union has for its membership both rank-
and-file and supervisory employees. However, petitioner union sought
to represent the bargaining unit consisting of rank-and-file employees.
Under Article 245 of the Labor Code, supervisory employees are not
eligible for membership in a labor organization of rank-and-file
employees. Thus, the appellate court ruled that petitioner union
cannot be considered a legitimate labor organization pursuant
to Toyota Motor Philippines v. Toyota Motor Philippines Corporation
Labor Union (hereinafter Toyota).
15. Preliminarily, we note that petitioner union questions the factual
findings of the Med-Arbiter, as upheld by the appellate court, that 12
of its members, consisting of batchman, mill operator and leadman, are
supervisory employees. However, petitioner union failed to present
any rebuttal evidence in the proceedings below after respondent
company submitted in evidence the job descriptions of the aforesaid
employees. The job descriptions indicate that the aforesaid employees
exercise recommendatory managerial actions which are not merely
routinary but require the use of independent judgment, hence, falling
within the definition of supervisory employees under Article 212(m) of
the Labor Code. For this reason, we are constrained to agree with the
Med-Arbiter, as upheld by the appellate court, that petitioner union
consisted of both rank-and-file and supervisory employees.
16. Nonetheless, the inclusion of the aforesaid supervisory employees in
petitioner union does not divest it of its status as a legitimate labor
organization. The appellate court's reliance on Toyota  is misplaced in
view of this Court's subsequent ruling in Republic v. Kawashima Textile
Mfg., Philippines, Inc. (hereinafter Kawashima).  In Kawashima, we
explained at length how and why the Toyota doctrine no longer holds
sway under the altered state of the law and rules applicable to this
case, viz:
17. R.A. No. 6715 omitted specifying the exact effect any violation of the
prohibition [on the co-mingling of supervisory and rank-and-file
employees] would bring about on the legitimacy of a labor
organization.
18. It was the Rules and Regulations Implementing R.A. No. 6715 (1989
Amended Omnibus Rules) which supplied the deficiency by introducing
the following amendment to Rule II (Registration of Unions):
a. "Sec. 1. Who may join unions. - x x
x Supervisory employees and security guards
shall not be eligible for membership in a
labor organization of the rank-and-file
employees but may join, assist or form
separate labor organizations of their own;
Provided, that those supervisory employees
who are included in an existing rank-and-file
 bargaining unit, upon the effectivity of the ground of mixed membership: the Court therein reiterated its ruling
Republic Act No. 6715, shall remain in that in Tagaytay Highlands that the inclusion in a union of disqualified
employees is not among the grounds for cancellation, unless such inclusion
unit x x x. (Emphasis supplied) is due to misrepresentation, false statement or fraud under the circumstances
19. In Dunlop, in which the labor organization that filed a petition for enumerated in Sections (a) and (c) of Article 239 of the Labor Code.
certification election was one for supervisory employees, but in which the 25. All said, while the latest issuance is R.A. No. 9481, the 1997 Amended
membership included rank-and-file employees, the Court reiterated that Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San
such labor organization had no legal right to file a certification election to Miguel and Air Philippines, had already set the tone for
represent a bargaining unit composed of supervisors for as long as it it. Toyota and Dunlop no longer hold sway in the present altered state of the
counted rank-and-file employees among its members. law and the rules.[32] [Underline supplied]
20. It should be emphasized that the petitions for certification election involved 26. The applicable law and rules in the instant case are the same as those
in Toyota and Dunlop were filed on November 26, 1992 and September 15, in Kawashima because the present petition for certification election was
1995, respectively; hence, the 1989 Rules was applied in both cases. filed in 1999 when D.O. No. 9, series of 1997, was still in effect.
21. But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further Hence, Kawashima applies with equal force here. As a result, petitioner
amended by Department Order No. 9, series of 1997 (1997 Amended union was not divested of its status as a legitimate labor organization even if
Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 some of its members were supervisory employees; it had the right to file the
Amended Omnibus Rules - that the petition for certification election subject petition for certification election
indicate that the bargaining unit of rank-and-file employees has not been
mingled with supervisory employees - was removed. Instead, what the 1997
Amended Omnibus Rules requires is a plain description of the bargaining
unit
22. Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands
Employees Union-PGTWO in which the core issue was whether mingling
affects the legitimacy of a labor organization and its right to file a petition
for certification election. This time, given the altered legal milieu, the Court
abandoned the view in Toyota and Dunlop and reverted to its
pronouncement in Lopez 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.
23. In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue
Packing Products Plants-San Miguel Packaging Products-San Miguel
Corp. Monthlies Rank-and-File Union-FFW, the Court explained that since
the 1997 Amended Omnibus Rules does not require a local or chapter to
provide a list of its members, it would be improper for the DOLE to deny
recognition to said local or chapter on account of any question pertaining to
its individual members.
24. More to the point is Air Philippines Corporation v. Bureau of Labor
Relations, which involved a petition for cancellation of union registration
filed by the employer in 1999 against a rank-and-file labor organization on
 should be clearly established by evidence and the surrounding circumstances.
008 Yokohama Tire PH v. Yokohama Employees Union (DAYU)
March 10, 2010 | Carpio, J. | Labor Organizations, Registration, Chartering
FACTS:
31. Yokohama Employees Union (YEU) is the labor organization of the rank-
PETITIONER: Yokohama Tire Philippines
RESPONDENTS: Yokohama Employees Union
SUMMARY: 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. YEU filed before the Regional Office
a petition for certification election. Meanwhile, YTPI filed a petition for the
revocation of YEU’s registration. YTPI alleges that YEU fradulently included
the signature of Pineda in its organizational documents, that Pineda was not
aware of any election of union officers, that YEU fraudulently obtained
employee’s signatures by making them believe that they were signing a petition
for a 125% increase in the minimum wage, not a petition for registration, that
the employees did not belong to a single bargaining unit, and that YEU
fraudulently stated in its organizational meeting minutes that its second vice
president was Bernard David, not Bernardo David. Regional Office granted the
petition and held that YEU committed misrepresentation. BLR reversed this and
gave more credence to the “Sama-samang Pahayag” executed by 50 YEU
members attesting to their meeting. The CA likewise agreed with the BLR and
held that there was no fraud and misrepresentation, and that YTPI has the burden
of proving that YEU committed such.
Issue: (1) W/N CA erred in finding that YEU did not commit fraud or
misrepresentation—NO, in petition for review on certiorari (Rule 45) only
questions of law included; questions of fact are not reviewable. 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.
(2) W/N CA erred in holding that YTPI had the burden of proving that YEU
committed fraud and misrepresentation—NO, being the one which filed the
petition for the revocation of YEU’s registration, YTPI 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
DOCTRINE:
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
and-file employees of Yokohama Tire Philippines, Inc. (YTPI). YEU was
registered as a legitimate labor union on 10 September 1999.
32. YEU filed before the Regional Office a petition for certification election.
YTPI filed before the Regional Office a petition for the revocation of
YEU’s registration.
a. YTPI alleged that YEU violated Article 239(a) of the Labor Code:
(1) YEU fraudulently included the signature of a certain Ronald O.
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.
33. Regional Office granted the YTPI petition. 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. 
34. YEU appealed to the BLR.
a. BLR reversed the decision: 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
that no election of officers took place was unreliable and
inconsistent with her earlier resignation letter; (4) the affidavit of a
certain Arthur 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 stating that:  took place was unreliable and inconsistent with his earlier sinumpaang
b. 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. x x x
c. 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.
d.  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.
e. 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;
35. 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 its
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 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.
36. CA held that 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 that no election of officers
salaysay; (5) David’s affidavit was only filed before the BLR when YTPI
filed its motion for reconsideration of the BLR’s 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 and a certain Apolinar 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 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.
ISSUE/s:
5. WoN CA erred in finding that YEU did not commit fraud or
misrepresentation—NO, not reviewable because questions of fact.
6. WoN CA erred in holding that YTPI had the burden of proving that YEU
committed fraud and misrepresentation—NO, 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.
RULING: Wherefore, petition denied.
RATIO:
15. [Additional facts lang of CA decision, can be skipped] The CA found that
YEU did not commit fraud or misrepresentation:
16. “Anent whether an election of officers was conducted or not, the YTPI
relied largely on the affidavit of Pineda to substantiate its claim that no
election of officers was held by the union. However, 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 BLR
Director preferred it to the negating affidavit, to wit:
a. Noong unang araw na pumirma ako galing ako sa
 graveyard. Pagkatapos yung pangalawang meetinggraveyard din
ako, pinapirma ako doon sa siyam (9) na pirasong papel noong
umagang pag-uwi namin. x x x
b. July 25, 99 - Unang Pirmahan
c. July 26, 99 - Pinirmahan ko ang siyam na piraso
d. July 27, 99 - Pinatatanggal ko ang aking pangalan sa listahan
17. The YTPI also relied on the affidavit of Ma. Rachelle Gonzales attesting
that there was no election of officers, but BLR Director dismissed
the affidavit as nothing but YTPI’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.
18. Another affidavit, that of Arthur Calma, stated that no election was held,
but, again, BLR Director gave Calma’s affidavit scant consideration
because the affiant admittedly remained in the YEU office for only 20
minutes. In contrast, the BLR accorded more weight to the sama-samang
pahayag executed by 50 YEU members who averred about the holding of
an organizational meeting. BLR justifiably favored the latter, deeming the
meeting to include the holding of an election of officers, for, after all, Art.
234, (b), Labor Code, does not itself distinguish between the two.
19. 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.
20. The omission is not serious enough, however, because the affidavit was
submitted only when the YTPI 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.
21. 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.
22. If YTPI was sincere and intent on this imputed error, its effort to show so
does not appear in the record. What appears is its abject failure to
establish Tonton’s actual identity. YTPI seemed content in making the
insinuation that Tonton was widely recognized as the organizer behind the
creation of YEU. That was not enough.
23. In sum, the BLR Director was neither capricious nor whimsical in his
exercise of judgment, and, therefore, did not commit grave abuse of
discretion.”
24. [Issue 1] YTPI claims that the CA erred in finding that YEU did not commit
fraud or misrepresentation. YTPI stated that:
a. “There was evidence that YEU committed fraud and
misrepresentation in its failure to omit the name of Ronald Pineda
prior to the filing of the organizational documents with DOLE. On
the other hand, the Regional Director held that there was no
election of officers that had taken place during YEU’s alleged
organizational meeting as there was no proof of such election.”
25. The Court is not convinced. A petition for review on certiorari (Rule 45)
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.
26. 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.
27. Factual findings of the CA are binding on the Court. Absent grave abuse of
discretion, the Court will not disturb the CA’s factual findings.
28. The SC will only exercise its power of review in known exceptions such as
gross misappreciation of evidence or a total void of evidence.
29. YTPI failed to show that CA gravely abused its discretion.
30. [Issue 2] The CA held that YTPI had the burden of proving that YEU
committed fraud and misrepresentation:
31. “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.
32. As the applicant for cancellation, YTPI naturally had the burden to present
proof sufficient to warrant the cancellation. YTPI 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.
33. But, as the BLR Director has found and determined, and We fully agree
with him, YTPI simply failed to discharge its burden.”
34. YTPI claims that CA erred in holding that YTPI had the burden of proving
that YEU committed fraud and misrepresentation. YTPI stated that:
Manggagawa sa Heritage Manila, 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. Court held:
a. 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.
b. 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.

a. 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.

35. 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. 

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

 009 Takata Philippines v. BLR and SALAMAT (De Chavez) ratification of its Constitution and By-Laws, and in the election of its officers.
January 25, 1990 | Cruz, J. | Labor Organization, Registration, Chartering 2. TAKATA contends that in the May 1, 2009 organizational meeting of
SALAMAT, only 68 attendees signed the attendance sheet which comprised
only 17% of the total number of the 396 regular rank-and-file employees which
PETITIONER: TAKATA Philippines
SALAMAT sought to represent. Thus, SALAMAT failed to comply with the
RESPONDENTS: BLR and Samahang Lakas Manggagawa ng Takata
20% minimum membership requirement. TAKATA insisted that the document
“Pangalan ng mga Kasapi ng Unyon” bore no signatures on the alleged 119
SUMMARY: Takata contends that in the May 1, 2009 organizational meeting
union members; and that employees were not given sufficient information on the
of SALAMAT, only 68 attendees signed the attendance sheet which comprised
documents they signed; that the document was not submitted at the time of the
only 17% of the total number of the 396 regular rank and file employees; thus,
filing of respondent’s application for union registration; that the 119 union
SALAMAT failed to comply with the 20% minimum membership requirement.
members were actually only 117; and, that the total number of TAKATA’s
It contended that the document of names of union members bore no signatures,
employees as of May 1, 2009 was 470, and not 396 as TAKATA claimed.
among others. The DOLE Regional Director granted the petition for
3. SALAMAT denied the charge and claimed that 119 union members were more
cancellation. BLR reversed. It held that TAKATA failed to prove that
than the 20% requirement for union registration. It also contended that
SALAMAT deliberately and maliciously misrepresented the number of rank-
TAKATA was estopped from assailing its legal personality as it agreed to a
and-file employees. The list of employees who participated in the organizational
certification election and actively participated in the pre-election conference of
meeting was separate and distinct requirement from the list of names of
the certification election proceedings. SALAMAT argued that the union
members comprising at least 20% of the employees in the bargaining unit.
members were informed of the contents of the documents and that the 68
There was no requirement for signatures opposite the names of the union
attendees constituted more than 50% of the total union membership, hence, a
members and there was no evidence showing that the employees assailed their
quorum existed for the conduct of the said meeting.
inclusion in the list of union members. Takata appealed.
4. The DOLE Regional Director granted the petition for cancellation of
SALAMAT’s certificate of registration.
ISSUE/s: W/N SALAMAT’s registration should be cancelled for fraud and
a. The 68 employees are less than 20% of the total number of 396 regular
misrepresentation? No. It does not appear in Article 234 (b) of the Labor
rank-and-file employees.
Code that the attendees in the organizational meeting must comprise 20% of the
b. There is a contradiction in the list of names in the “Pangalan ng mga
employees in the bargaining unit. The 20% minimum requirement pertains to
Kasapi ng Unyon” and the attendance sheet.
the employees' membership in the union and not to the list of workers who
c. “Sama-Samang Pahayag ng Pagsapi” was not attached to the
participated in the organizational meeting. Considering that there are 119 union
application. It was only submitted in the petition for certification
members which are more than 20% of all the employees of the bargaining unit,
election filed at a later date.
and since the law does not provide for the required number of members to
d. The proceedings in the cancellation of registration and certification
attend the organizational meeting, the 68 attendees which comprised at least the
elections are two different and entirely separate and independent
majority of the 119 union members would already constitute a quorum for the
proceedings which were not dependent of each other.
meeting to proceed and to validly ratify the Constitution and By-laws of the
5. SALAMAT, through Bukluran ng Manggagawang Pilipino Paralegal Officer
union.
Mole, filed a Notice and Memorandum of Appeal with the BLR. However,
SALAMAT, through its counsels, filed an Appeal Memorandum to the DOLE
DOCTRINE/S: For fraud and misrepresentation to be grounds for
Secretary which was eventually referred to the BLR. TAKATA opposed on the
cancellation of union registration under Article 239 of the Labor Code, the
ground of forum shopping, failure to avail of the correct remedy, and that the
nature of the fraud and misrepresentation must be grave and compelling
certificate of registration was tainted with fraud, misrepresentation and
enough to vitiate the consent of a majority of union members.
falsification.
6. The BLR reversed the Order of the Regional Director: SALAMAT shall remain
FACTS: in the roster of labor organizations.
1. TAKATA Philippines filed with the DOLE Regional Office a Petition for a. TAKATA failed to prove that SALAMAT deliberately and maliciously
Cancellation of the Certificate of Union Registration of Samahang Lakas misrepresented the number of rank-and-file employees.
Manggagawa ng Takata (SALAMAT) on the ground that SALAMAT is guilty b. The list of employees who participated in the organizational meeting
of misrepresentation, false statement and fraud with respect to the number of was separate and distinct requirement from the list of names of
those who participated in the organizational meeting, the adoption and members comprising at least 20% of the employees in the bargaining
 unit. nature of the fraud and misrepresentation must be grave and compelling
c. There was no requirement for signatures opposite the names of the enough to vitiate the consent of a majority of union members.
union members and there was no evidence showing that the employees
assailed their inclusion in the list of union members.
7. TAKATA filed an MR which was denied. It went to the CA under Rule 65. CA
denied the petition and the succeeding MR.

ISSUE/s:
1. W/N forum shopping was committed by SALAMAT? No. The appeal by Mole
was not specifically authorized by the respondent, thus, such appeal is
considered to have not been filed at all.
2. (RELEVANT) W/N SALAMAT’s registration should be cancelled for fraud and
misrepresentation? No. For fraud and misrepresentation to be grounds for
cancellation of union 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.

RULING: WHEREFORE, premises considered, the petition for review is DENIED.

The Decision dated December 22, 2010 and the Resolution dated March 28, 2011 of
the Court of Appeals, in CA-G.R. SP No. 112406, are AFFIRMED.

RATIO: Only as to the 2nd issue.

1. 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.
2. 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.
3. Here, the total number of employees in the bargaining unit was 396, and 20% of
which was about 79.
4. SALAMAT submitted a document entitled "Pangalan ng Mga Kasapi ng
Unyon" showing the names of 119 employees as union members, thus it
sufficiently complied even beyond the 20% minimum membership requirement.
It also submitted the attendance sheet of the organizational meeting which
contained the names and signatures of the 68 union members who attended the
meeting.
5. 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
TAKATA to contend that grounds exist for the cancellation of SALAMAT’s
union registration. For fraud and misrepresentation to be grounds for
cancellation of union registration under Article 239 of the Labor Code, the
 010 AIM vs. AIM FACULTY ASSOC. (Eleazar)
January 23, 2017 | Del Castillo, J. | Labor Organization
PETITIONERS: Asian Institute of Management
RESPONDENTS: Asian Institute of Management Faculty Association
SUMMARY: AFA filed a petition for certification election seeking to represent
a barganining unit at AIM. The bargaining unit consists of 40 faculty members.
AIM opposed the petition claiming that the members are neither rank-and-file
nor supervisory, but managerial employees. AIM filed a petition for cancellation
of AFA’s certificate of registration on the ground of misrepresentation in their
registration and that they are composed of managerial employees who are
prohibited from organizing as a union. The Med-Arbiter issued an order denying
the petition for certification election because AIM’s faculty members are
managerial employees. AFA appealed order before the Labor Secretary who
reversed the same. In another order, the DOLE-NCR RD granted the petition of
AIM for the cancellation of the certificate of registration of AFA and ordered the
delisting from the roster of legitimate labor organizations. AFA appealed before
the Bureau of Labor Relations who reversed the same and ordered retention of
AFA in the roster. AIM appealed both orders to the CA and the CA ruled as
follows: (1) With regard to petition for certification election – Reversed because
the bargaining unit with AIM sought to berepresented is composed of managerial
employees who are not eligible to join, assist, or form a labor organization and
AFA is not a legitimate labor organization that may conduct a certification
election. (2) With regard to the petition for cancellation of certificate of
registration – affirmed because there is no grave abuse of discretion on the part
of the Bureau of Labor Relations. The grounds for cancellation under the Labor
Code is exclusive and that no other ground is acceptable except for the 3 grounds
under Article 239. The issue is WoN the Certificate of Registration of AFA
should be cancelled? The SC held that the outcome of this case depends on the
resolution of the issue relative to the nature of respondent's membership. AIM's
sole ground for seeking cancellation of AFA'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 AFA'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.
DOCTRINE: 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. Misrepresentation in the application for registration,
however, is a ground for cancellation.
FACTS:
1. Petitioner, Asian Institute of Management (AIM), is a duly registered non-
stock, non-profit educational institution.
2. 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.
3. AFA filed a petition for certification election 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. AIM opposed the
petition, claiming that AFA's members are neither rank-and-file nor
supervisory, but rather, managerial employees.
4. AIM filed a petition for cancellation of AFA's certificate of registration -
docketed as DOLE Case No. NCROD-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.
5. The Med-Arbiter in DOLE Case No. NCR-OD-M-0705-007 issued an
Order 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 and May 4, 2009 Resolution.
6. Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order dated
February 16, 2009 was issued by DOLE-NCR Regional Director Raymundo
G. Agravante granting AIM's petition for cancellation of AFA's certificate
of registration and ordering its delisting from the roster of legitimate labor
organizations.
7. This Order was appealed by AFA before the Bureau labor Relations (BLR),
which, in a December 29, 2009 Decision, reversed the same and ordered
AFA'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, and
that respondent's members are not managerial employees. Petitioner moved
to reconsider, but was rebuffed in a March 18, 2010 Resolution.
8. AIM filed a Petition for Certiorari before the CA, questioning the DOLE
Secretary's Decision and Resolution relative to AFA'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.
9. According to the CA:
a. Here, the SOLE committed grave abuse of discretion by giving due
 course to AFA's petition for certification election, despite the fact
that:
b. (1) AFA's members are managerial employees; and
c. (2) AFA is not a legitimate labor organization.
d. 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.
10. Meanwhile, relative to AIM's petition for cancellation of AFA's certificate
of registration, AIM filed Petition for Certiorari before the CA, questioning
the BLR’s decision and resolution.
11. The petition, docketed as CA-G.R. SP No. 114122, alleged that the BLR
committed grave abuse of discretion in granting AFA'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.
12. CA denied this petition stating that:
a. 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.
b. 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 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:
c. 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.
d. Petitioner insists that Article 245-A is not applicable to this case as
all AFA members are managerial employees. We are not
persuaded.
e. 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.
f. 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.
ISSUE/s
W/N 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 – No, the outcome of this case depends on the resolution of the
issue relative to the nature of respondent's membership. AIM's sole ground for
seeking cancellation of AFA'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.
RULING: WHEREFORE, considering that the outcome of this case depends on the
resolution of the issue relative to the nature of respondent's membership pending in
G.R. No. 197089, this case is ordered CONSOLIDATED with G.R. No. 197089.
RATIO:
1. In Holy Child Catholic School v. Hon. Sto. Tomas, 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."
2. On the basis of the ruling in the above-cited case, it can be said that AIM
was correct in filing a petition for cancellation of AFA's certificate of
registration.
3. AIM's sole ground for seeking cancellation of AFA'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.
4. However, the issue of whether AFA'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.
5. The resolution of this issue cannot be pre-empted; until it is determined with
finality in G.R. No. l 97089, 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.
6. 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.
 011 CATHAY PACIFIC STEEL CORP v. CA (Escalona)
August 30, 2006 | Chico-Nazario, J. | Eligibility for Membership
PETITIONER: Cathay Pacific Steel Corporation (CAPASCO), Benjamin Chua
Jr., Virgilio Agero, and Leonardo Visorro, Jr.
RESPONDENTS: Hon. Court of Appeals, Capasco Union of Supervisory
Employees (CUSE) and Enrique Tamondong III
SUMMARY: CAPASCO hired Tamondong as Assistant to the Personnel
Manager for its Cainta Plant. Later on he was promoted to Personnel
Superintendent. The supervisory personnel of CAPASCO moved to organize a
union among their ranks, known as CUSE. Tamondong actively participated in
the formation of the union and was elected as one of its officers. CAPASCO then
sent a memo to Tamondong requiring him to explain and discontinue from his
union activities, with a warning that his continuance would lead to dismissal.
Tamondong ignored the warning and continued his activities with the union.
CAPASCO then terminated his employment on the ground of loss of trust and
confidence, citing his union activities as acts constituting serious disloyalty to
the company. The Labor arbiter rendered a Decision in favor of Tamondong.
The NLRC, RTC, and CA concurred.
CAPASCO argues that Tamondong was actually executing managerial
functions, thus disqualifying him from being able to unionize, as such acts
constitute the breach of trust with the company.
The issue is WoN Tamondong is a supervisory employee. YES.
The SC ruled that Tamondong is a supervisory employee because of numerous
reasons. First, Tamondong reported for work from 8am to 5pm, which is a
quality not found in managerial employees. Second, there lacked evidence that
Tamondong was at liberty in executing major business and operational policies
for and on behalf of CAPASCO. Third, there was no showing that Tamondong
had the power to hire, transfer, dismiss, or terminate erring employees in the
company. At most, evidence showed that he had informed and warned rank-and-
file employees of their violations of CAPASCO’s regulations, which is the
function of a regular supervisor. Fourth, Tamondong is not a managerial
employee based on the Labor Code (see doctrine). Thus, Tamondong is only a
supervisory employee, not a manager of CAPASCO.
DOCTRINE: 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; whereas, managerial employees are those who are vested
with powers or prerogatives to lay down and execute management policies
and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline
employees.
FACTS:
1. Four former employees of Cathay Pacific Steel Corp. (CAPASCO)
originally filed this labor case before the NLRC, namely: Fidel Lacambra,
Armando Dayson, Reynaldo Vacalares, and Enrique Tamondong III.
However, in the course of the proceedings, Fidel Lacambra and Armando
Dayson executed a Release and Quitclaim. Later on, Reynaldo Vacalares
also signed a Quitclaim/Release/Waiver. Hence, this Petition shall focus
solely on issues affecting private respondent Tamondong.
2. CAPASCO, hired private respondent Tamondong as Assistant to the
Personnel Manager for its Cainta Plant. Thereafter, he was promoted to
the position of Personnel/Administrative Officer, and later to that of
Personnel Superintendent. The supervisory personnel of CAPASCO
launched a move to organize a union among their ranks, later known as
private respondent CUSE. Tamondong actively involved himself in the
formation of the union and was even elected as one of its officers after its
creation. Consequently, CAPASCO sent a memo , to Tamondong
requiring him to explain and to discontinue from his union activities,
with a warning that a continuance thereof shall adversely affect his
employment in the company. Tamondong ignored said warning and made
a reply letter, invoking his right as a supervisory employee to join and
organize a labor union. In view of that, CAPASCO through a
memo terminated the employment of Tamondong on the ground of loss
of trust and confidence, citing his union activities as acts constituting
serious disloyalty to the company.
3. Tamondong challenged his dismissal for being illegal and as an act
involving unfair labor practice by filing a Complaint for Illegal Dismissal
and Unfair Labor Practice before the NLRC. According to him, there was
no just cause for his dismissal and it was anchored solely on his
involvement and active participation in the organization of the union of
supervisory personnel in CAPASCO. Though Tamondong admitted his
active role in the formation of a union composed of supervisory personnel
in the company, he claimed that such was not a valid ground to terminate
his employment because it was a legitimate exercise of his constitutionally
guaranteed right to self-organization.
4. In contrast, CAPASCO contended that by virtue of Tamondong’s position
 as Personnel Superintendent and the functions actually performed by him in
the company, he was considered as a managerial employee, thus, under
the law he was prohibited from joining a union as well as from being
elected as one of its officers. Accordingly, CAPASCO maintained their
argument that the dismissal of Tamondong was perfectly valid based on loss
of trust and confidence because of the latter’s active participation in the
affairs of the union.
5. Acting Executive Labor Arbiter Pedro C. Ramos rendered a Decision in
favor of Tamondong
6. CAPASCO filed a Motion for Clarification and Partial Reconsideration,
while, Tamondong filed a Motion for Reconsideration of the said NLRC
Decision, but the NLRC affirmed its original Decision in its Resolution.
7. Dissatisfied with the Decision of the NLRC, Tamondong and CUSE filed a
Petition for Certiorari under Rule 65 of the Rules of Court before the Court
of Appeals, alleging grave abuse of discretion on the part of the NLRC.
Then, the Court of Appeals in its Decision dated 28 October 2003, granted
the said Petition.
8. Consequently, petitioners filed a Motion for Reconsideration of the
aforesaid Decision of the Court of Appeals. Nonetheless, the Court of
Appeals denied the said Motion for Reconsideration for want of convincing
and compelling reason to warrant a reversal of its judgment.
9. Hence the petition for Certiorari to the SC.
ISSUES:
1. WoN Tamandong is a supervisory employee and not a managerial
employee, thus allowing him to unionize – YES. Because Tamandong
executed supervisory functions instead of managerial.
RULING: Petition is DISMISSED. The Decision and Resolution reinstating the
Decision of the Labor Arbiter is affirmed.
RATIO:
1. In the Memorandum filed by CAPASCO, they aver that Tamondong as
Personnel Superintendent of CAPASCO was performing functions of a
managerial employee because he was the one laying down major
management policies on personnel relations such as: issuing memos on
company rules and regulations, imposing disciplinary sanctions such as
warnings and suspensions, and executing the same with full power and
discretion. They claim that no further approval or review is necessary for
Tamondong to execute these functions, and the notations "NOTED BY" of
petitioner Agerro, the Vice-President of petitioner CAPASCO, on the
aforesaid memos are nothing but mere notice that petitioner Agerro was
aware of such company actions performed by Tamondong. Additionally,
Tamondong was not only a managerial employee but also a confidential
employee having knowledge of confidential information involving
company policies on personnel relations. Hence, the Court of Appeals
acted with grave abuse of discretion amounting to lack or excess of
jurisdiction when it held that Tamondong was not a managerial employee
but a mere supervisory employee, therefore, making him eligible to
participate in the union activities of private respondent CUSE.
2. CAPASCO further argues that they are not guilty of illegal dismissal and
unfair labor practice because Tamondong was validly dismissed and the
reason for preventing him to join a labor union was the nature of his
position and functions as Personnel Superintendent, which position was
incompatible and in conflict with his union activities.
3. Lastly, CAPASCO maintains that the Court of Appeals gravely abused its
discretion when it reinstated the Decision of Executive Labor Arbiter Pedro
C. Ramos holding CAPASCO liable for backwages, 13th month pay,
service incentive leave, moral damages, exemplary damages, and attorney’s
fees.
4. In any event, granting that the present petition is proper, still it is
dismissible. The Court of Appeals cannot be said to have acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in annulling
the Decision of the NLRC because the findings of the Court of Appeals that
Tamondong was indeed a supervisory employee and not a managerial
employee, thus, eligible to join or participate in the union activities of
CUSE, were supported by evidence on record. In the Decision of the
Court of Appeals, it made reference to the Memorandum, which required
Tamondong to observe fixed daily working hours from 8:00 am to
12:00 noon and from 1:00 pm to 5:00 pm. This imposition upon
Tamondong, according to the Court of Appeals, is very
uncharacteristic of a managerial employee. To support such a conclusion,
the Court of Appeals cited the case of Engineering Equipment, Inc. v.
NLRC where this Court held that one of the essential characteristics of an
employee holding a managerial rank is that he is not subjected to the
rigid observance of regular office hours or maximum hours of work.
5. Moreover, the Court of Appeals also held that upon careful examination of
the documents submitted before it, it found out that:
Tamondong may have possessed enormous powers and was performing
important functions that goes with the position of Personnel Superintendent,
nevertheless, there was no clear showing that he is at liberty, by using his own
discretion and disposition, to lay down and execute major business and
 operational policies for and in behalf of CAPASCO. CAPASCO miserably failed
to establish that Tamondong was authorized to act in the interest of the company
using his independent judgment. x x x. Withal, Tamondong may have been
exercising certain important powers, such as control and supervision over
erring rank-and-file employees, however, x x x he does not possess the power to
hire, transfer, terminate, or discipline erring employees of the company. At the
most, the record merely showed that Tamondong informed and warned rank-
and-file employees with respect to their violations of CAPASCO’s rules and
regulations. x x x. issuance of warning to employees with irregular attendance
and unauthorized leave of absences and requiring employees to explain
regarding charges of abandonment of work, are normally performed by a mere
supervisor, and not by a manager.
6. Accordingly, Article 212(m) of the Labor Code, as amended,
differentiates supervisory employees from managerial employees, to
wit: 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; whereas, managerial employees are those who are
vested with powers or prerogatives to lay down and execute management
policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or
discipline employees. Thus, from the foregoing provision of the Labor
Code, it can be clearly inferred that Tamondong was just a supervisory
employee. Tamondong did not perform any of the functions of a managerial
employee as stated in the definition given to it by the Code. Hence, the
Labor Code provisions regarding disqualification of a managerial employee
from joining, assisting or forming any labor organization does not apply to
herein Tamondong. Being a supervisory employee of CAPASCO, he
cannot be prohibited from joining or participating in the union
activities of CUSE, and in making such a conclusion, the Court of
Appeals did not act whimsically, capriciously or in a despotic manner,
rather, it was guided by the evidence submitted before it. Thus, given
the foregoing findings of the Court of Appeals that Tamandong is a
supervisory employee, it is indeed an unfair labor practice on the part of
CAPASCO to dismiss him on account of his union activities, thereby
curtailing his constitutionally guaranteed right to self-organization.
7. With regard to the allegation that Tamondong was not only a managerial
employee but also a confidential employee, the same cannot be validly
raised in this Petition for Certiorari. It is settled that an issue which was not
raised in the trial court cannot be raised for the first time on appeal. This
principle applies to a special civil action for certiorari under Rule 65. In
addition, CAPASCO failed to adduced evidence which will prove that,
indeed, Tamondong was also a confidential employee.
 012 SAN MIGUEL CORP. SUPERVISORS v. LAGUESMA
(ESGUERRA)
August 15, 1997 | Romero, J. | Confidential Employees; Bargaining Unit
PETITIONER: SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT
UNION (Union) AND ERNESTO L. PONCE, President
RESPONDENT: HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY
AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE
DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN
MIGUEL CORPORATION (SMC)
SUMMARY: The Union filed a Petition for Certification Election before DOLE among
the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of
1) Cabuyao, 2) San Fernando, and 3) Otis. The Med-Arbiter ordered the conduct of
certification election. SMC appealed arguing that the Med-Arbiter erred in grouping
together the three (3) separate plants into one (1) bargaining unit, and in including
supervisory levels 3 and above whose positions are confidential in nature. The DOLE
USec issued an Order directing the conduct of separate certification elections among the
three (3) plants and subsequently ruling that employees under supervisory levels 3 and 4
and the exempt employees are not allowed to join the bargaining unit and could not
participate in the certification election.
ISSUES: (1) Whether Supervisory employees 3 and 4 and the exempt employees of the
company are considered confidential employees, hence ineligible from joining a union.
(2) If they are not confidential employees, do the employees of the three plants constitute
an appropriate single bargaining unit?
HELD: (1) The said employees do not fall within the term "confidential employees" who
may be prohibited from joining a union. See Doctrine 1. An important element of the
"confidential employee rule" is the employee's need to use labor relations information.
See Doctrine 2. The confidential information handled by the questioned employees
relate to product formulation, product standards, and product specification which by no
means relate to "labor relations”. The confidential information said employees have
access to concern the employer's internal business operations. Since the employees are
not classifiable under the confidential type, they may appropriately form a bargaining
unit for purposes of collective bargaining. Even assuming that they are confidential
employees, jurisprudence has established that there is no legal prohibition against
confidential employees who are not performing managerial functions to form and join a
union.
(2) An appropriate bargaining unit is defined as a group of employees of a given
employer, comprised of all or less than all of the entire body of employees, which the
collective interest of all the employees, consistent with equity to the employer, indicate
to be best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law. See Doctrine 3. The employees have
community or mutuality of interests. They all belong to the Magnolia Poultry Division of
San Miguel Corporation. Although they belong to three different plants, they perform
work of the same nature, receive the same wages and compensation, and most
importantly, share a common stake in concerted activities. Geographical location can be
completely disregarded if the communal or mutual interests of the employees are not
sacrificed.
DOCTRINE: (1) Confidential employees are those who (a) assist or act in a confidential
capacity, (b) to persons who formulate, determine, and effectuate management policies in
the field of labor relations. The two criteria are cumulative, and both must be met if an
employee is to be considered a confidential employee.
(2) In determining the confidentiality of certain employees, a key question frequently
considered is the employee's necessary access to confidential labor relations information.
(3) A unit to be appropriate must effect a grouping of employees who have substantial,
mutual interests in wages, hours, working conditions and other subjects of collective
bargaining.
FACTS:
1. On October 5, 1990, San Miguel Corp (SMC) Supervisors and Exempt
Union filed before DOLE a Petition for Direct Certification or Certification
Election11 among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of (1) Cabuyao, (2) San Fernando, and (3)
Otis.
2. On December 19, 1990, Med-Arbiter Danilo Reynante issued an Order
ordering the conduct of certification election among the supervisors and
exempt employees of the SMC Magnolia Poultry Products Plants of
Cabuyao, San Fernando and Otis as one bargaining unit.
3. On January 18, 1991, SMC filed a Notice of Appeal with Memorandum on
Appeal, pointing out the Med-Arbiter's error in grouping together all three
(3) separate plants into one bargaining unit, and in including supervisory
levels 3 and above whose positions are confidential in nature.
4. On July 23, 1991, Undersecretary Laguesma granted SMC’s Appeal and
ordered the remand of the case to the Med-Arbiter of origin for
determination of the true classification of each of the employees sought to
be included in the appropriate bargaining unit.
5. Upon the Union’s motion, the Undersecretary granted the reconsideration
prayed for on September 3, 1991 and directed the conduct of separate
certification elections among the supervisors ranked as supervisory levels 1
to 4 (S1 to S4) and the exempt employees in each of the three plants.
6. On September 21, 1991, SMC filed a Motion for Reconsideration with
Motion to suspend proceedings.
11
Case No. OS MA A-2-70-91 entitled "In Re: Petition for Certification Election Among the Supervisory
and Exempt Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando
and Otis, San Miguel Corporation Supervisors and Exempt Union, Petitioner”
 7. On March 11, 1993, an Order12 was issued by the Undersecretary granting
the Motion, excluding employees under S3 and S4 and exempt employees
from participating in the certification election.
8. Hence, this Petition for Certiorari with Prayer for the Issuance of
Preliminary Injunction seeking to reverse and set aside the Order of the
Undersecretary dated March 11, 1993.
The Union’s Arguments:
1. The creation of three (3) separate bargaining units, one each for Cabuyao,
Otis and San Fernando is contrary to the one-company, one-union policy.
2. Supervisors level 1 to 4 and exempt employees of the three plants have a
similarity or a community of interests.
SMC’s Argument:
1. Supervisor employees 3 and 4 and the exempt employees come within the
meaning of the term "confidential employees" primarily because they
answered in the affirmative when asked "Do you handle confidential data or
documents?" in the Position Questionnaires submitted by the Union.
ISSUES:
1. Whether S3 and S4 and the exempt employees of the company are
considered confidential employees, hence ineligible from joining a union.
2. If they are not confidential employees, do the employees of the three plants
constitute an appropriate single bargaining unit?
RULING: WHEREFORE, the assailed Order of March 11, 1993 is hereby SET
ASIDE and the Order of the Med-Arbiter on December 19, 1990 is REINSTATED
under which a certification election among the supervisors (level 1 to 4) and exempt
employees of the San Miguel Corporation Magnolia Poultry Products Plants of
Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.
RATIO:
First Issue
12
Confidential employees, like managerial employees, are not allowed to form, join or assist a labor
union for purposes of collective bargaining.
In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential
employees and therefore, they are not allowed to form, join or assist a labor union for purposes of
collective bargaining following the above court's ruling. Consequently, they are not allowed to
participate in the certification election.
WHEREFORE, the Motion is hereby granted and the Decision of this Office dated 03 September 1991
is hereby modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-
called exempt employees are not allowed to join the proposed bargaining unit and are therefore
excluded from those who could participate in the certification election
1. The said employees do not fall within the term "confidential employees"
who may be prohibited from joining a union.
2. Confidential employees are those who (1) assist or act in a confidential
capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations. The two criteria are
cumulative, and both must be met if an employee is to be considered a
confidential employee — that is, the confidential relationship must exist
between the employee and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations.
3. The exclusion from bargaining units of employees who, in the normal
course of their duties, become aware of management policies relating to
labor relations is a principal objective sought to be accomplished by the
''confidential employee rule." The broad rationale behind this rule is that
employees should not be placed in a position involving a potential conflict
of interests. "Management should not be required to handle labor relations
matters through employees who are represented by the union with which the
company is required to deal and who in the normal performance of their
duties may obtain advance information of the company's position with
regard to contract negotiations, the disposition of grievances, or other labor
relations matters."
4. An important element of the "confidential employee rule" is the employee's
need to use labor relations information. Thus, in determining the
confidentiality of certain employees, a key question frequently considered is
the employee's necessary access to confidential labor relations information. 
5. The confidential information handled by questioned employees relate to
product formulation, product standards, and product specification which by
no means relate to "labor relations."
6. Granting arguendo that an employee has access to confidential labor
relations information but such is merely incidental to his duties and
knowledge thereof is not necessary in the performance of such duties, said
access does not render the employee a confidential employee.  Knowledge
of labor relations information pertaining to the companies with which the
union deals, or which the association represents, will not cause an employee
to be excluded from the bargaining unit representing employees of the
union or association. Access to information which is regarded by the
employer to be confidential from the business standpoint, such as financial
information or technical trade secrets, will not render an employee a
confidential employee.
7. It is evident that whatever confidential data the questioned employees may
handle will have to relate to their functions. From the list of supervisors 3
and higher’s functions13, it can be gleaned that the confidential information,
13
1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.
2. To effectively oversee the quality control function at the processing lines in the storage of chicken and
other products.
 said employees have access to, concern the employer's internal business
operations.
8. Section 3 of Article XIII of the 1987 Constitution mandates the State to
guarantee to "all" workers the right to self-organization. Hence, confidential
employees who may be excluded from bargaining unit must be strictly
defined so as not to needlessly deprive many employees of their right to
bargain collectively through representatives of their choosing.
9. Since the employees are not classifiable under the confidential type, they
may appropriately form a bargaining unit for purposes of collective
bargaining. Furthermore, even assuming that they are confidential
employees, jurisprudence has established that there is no legal prohibition
against confidential employees who are not performing managerial
functions to form and join a union.
frustrate the provisions of the Labor Code and the mandate of the
Constitution. 
5. The fact that the three plants are located in three different places is
immaterial. Geographical location can be completely disregarded if the
communal or mutual interests of the employees are not sacrificed. The
distance among the three plants is not productive of insurmountable
difficulties in the administration of union affairs. Neither are there regional
differences that are likely to impede the operations of a single bargaining
representative.

Second Issue
1. An appropriate bargaining unit is "a group of employees of a given
employer, comprised of all or less than all of the entire body of employees,
which the collective interest of all the employees, consistent with equity to
the employer, indicate to be best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law."
2. A unit to be appropriate must effect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions and other
subjects of collective bargaining.
3. It is readily seen that the employees in the instant case have community or
mutuality of interests. It is undisputed that they all belong to the Magnolia
Poultry Division of San Miguel Corporation. This means that, although they
belong to three different plants, they perform work of the same nature,
receive the same wages and compensation, and most importantly, share a
common stake in concerted activities.
4.  The Solicitor General has opined that separate bargaining units in the three
different plants of the division will fragmentize the employees of the said
division, thus greatly diminishing their bargaining leverage. Any concerted
activity held against the private respondent for a labor grievance in one
bargaining unit will, in all probability, not create much impact on the
operations of the private respondent. The two other plants still in operation
can well step up their production and make up for the slack caused by the
bargaining unit engaged in the concerted activity. This situation will clearly

3. To administer efficient system of evaluation of products in the outlets.

4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials.

5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the
plant.

013 Standard Chartered Bank Employees Union (SCBEU-NUBE)
v.
Standard Chartered Bank (FARCON)
April 22, 2008 | Austria-Martinez, J. | Eligibility for Membership
PETITIONER: Standard Chartered Bank Employees Union (SCBEU-NUBE)
RESPONDENT: Standard Chartered Bank and Annemarie Durbin, in her
capacity as Chief Executive Officer, Philippines, Standard Chartered Bank
SUMMARY: Petitioner Standard Chartered Bank Employees Union (Union)
and the Standard Chartered Bank (Bank) began negotiating for a new CBA in
May 2000 as their 1998-2000 CBA already expired. Due to a deadlock in the
negotiations, SCBEU-NUBE filed a Notice of Strike prompting the Secretary of
Labor and Employment to assume jurisdiction over the labor dispute. The CBA
provisions in dispute are the exclusion of certain employees from the
appropriate bargaining unit and the adjustment of remuneration for employees
serving in an acting capacity for one month. In their proposal, the Union sought
the exclusion of only the following employees from the appropriate bargaining
unit – all managers who are vested with the right to hire and fire employees,
confidential employees, those with access to labor relations materials, Chief
Cashiers, Assistant Cashiers, personnel of the Telex Department and one
Human Resources (HR) staff. Secretary Sto. Tomas of the DOLE, however,
maintained the previous exclusions because the Union failed to show that the
employees sought to be removed from the list qualify for exclusion. Both the
Union and the Bank filed their respective motions for reconsideration, which
were denied by the Secretary. The Union sought recourse with the CA via a
petition for certiorari, but the CA dismissed their petition and affirmed the
Secretary's Orders.
ISSUE: WoN the Bank's Chief Cashiers and Assistant Cashiers, personnel of
the Telex Department and HR staff are confidential employees, such that they
should be excluded. – YES. The Union insists that the foregoing employees are
not confidential employees; however, it failed to buttress its claim. Aside from
its generalized arguments, and despite the Secretary's finding that there was no
evidence to support it, the Union still failed to substantiate its claim. The Union
did not even bother to state the nature of the duties and functions of these
employees, depriving the Court of any basis on which it may be concluded that
they are indeed confidential employees.
As aptly stated by the CA, the Union failed to show that the employees sought
to be removed from the list of exclusions are actually rank and file employees
who are not managerial or confidential in status and should, accordingly, be
included in the appropriate bargaining unit. Absent any proof that Chief
Cashiers and Assistant Cashiers, personnel of the Telex department and one (1)
HR Staff have mutuality of interest with the other rank and file employees, then
they are rightfully excluded from the appropriate bargaining unit. The Union
cannot simply rely on jurisprudence without explaining how and why it should
apply to this case. Allegations must be supported by evidence. In this case, there
is barely any at all.
DOCTRINE: The disqualification of managerial and confidential employees
from joining a bargaining unit for rank and file employees is already well-
entrenched in jurisprudence. While Article 245 of the Labor Code limits the
ineligibility to join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are
required to assist or act in a fiduciary manner to managerial employees and
hence, are likewise privy to sensitive and highly confidential records.
FACTS:
1. Petitioner Standard Chartered Bank Employees Union (Union) and the
Standard Chartered Bank (Bank) began negotiating for a new Collective
Bargaining Agreement (CBA) in May 2000 as their 1998-2000 CBA
already expired. Due to a deadlock in the negotiations, SCBEU-NUBE filed
a Notice of Strike prompting the Secretary of Labor and Employment to
assume jurisdiction over the labor dispute.
2. On May 31, 2001, Secretary Patricia A. Sto. Tomas of the DOLE issued an
Order in which the Standard Chartered Bank and the Union were directed to
execute their collective bargaining agreement effective 01 April 2001 until
30 March 2003, incorporating therein the foregoing dispositions and the
agreements they reached in the course of negotiations and conciliation. The
Order dismissed for lack of merit the charge of unfair labor practice for
bargaining in bad faith and the claim for damages relating thereto. The
charge of unfair labor practice for gross violation of the economic
provisions of the CBA was also dismissed for want of jurisdiction.
3. Both the Union and the Bank filed their respective motions for
reconsideration, which were denied by the Secretary. The Union sought
recourse with the CA via a petition for certiorari, but the CA dismissed their
petition and affirmed the Secretary's Orders.
ISSUE/s:
1. WoN the Bank's Chief Cashiers and Assistant Cashiers, personnel of the
Telex Department and HR staff are confidential employees, such that they
should be excluded. – YES.
RULING: WHEREFORE, the petition is DENIED.
RATIO:
1. The resolution of this case has been overtaken by the execution of the
parties' 2003-2005 CBA. While this would render the case moot and
academic, nevertheless, the likelihood that the same issues will come up in
the parties' future CBA negotiations is not far-fetched, thus compelling its
resolution. Courts will decide a question otherwise moot if it is capable of
 repetition yet evading review.
2. The CBA provisions in dispute are the exclusion of certain employees from
the appropriate bargaining unit and the adjustment of remuneration for
employees serving in an acting capacity for one month. In their proposal,
the Union sought the exclusion of only the following employees from the
appropriate bargaining unit – all managers who are vested with the right to
hire and fire employees, confidential employees, those with access to labor
relations materials, Chief Cashiers, Assistant Cashiers, personnel of the
Telex Department and one Human Resources (HR) staff. The Secretary,
however, maintained the previous exclusions because the Union failed to
show that the employees sought to be removed from the list qualify for
exclusion. With regard to the remuneration of employees working in an
acting capacity, it was the Union's position that additional pay should be
given to an employee who has been serving in a temporary/acting capacity
for one week. The Secretary likewise rejected the Union's proposal and
instead, allowed additional pay for those who had been working in such
capacity for one month. The Secretary agreed with the Bank's position that a
restrictive provision would curtail management's prerogative, and at the
same time, recognized that employees should not be made to work in an
acting capacity for long periods of time without adequate compensation.
3. The Court sustains the CA. Whether or not the employees sought to be
excluded from the appropriate bargaining unit are confidential employees is
a question of fact, which is not a proper issue in a petition for review under
Rule 45 of the Rules of Court. This holds more true in the present case in
which petitioner failed to controvert with evidence the findings of the
Secretary and the CA.
4. The disqualification of managerial and confidential employees from joining
a bargaining unit for rank and file employees is already well-entrenched in
jurisprudence. While Article 245 of the Labor Code limits the ineligibility
to join, form and assist any labor organization to managerial employees,
jurisprudence has extended this prohibition to confidential employees or
those who by reason of their positions or nature of work are required to
assist or act in a fiduciary manner to managerial employees and hence, are
likewise privy to sensitive and highly confidential records. In this case, the
question that needs to be answered is whether the Bank's Chief
Cashiers and Assistant Cashiers, personnel of the Telex Department
and HR staff are confidential employees, such that they should be
excluded.
5. As regards the qualification of bank cashiers as confidential employees:
a. National Association of Trade Unions (NATU) – Republic Planters
Bank Supervisors Chapter v. Torres declared that they are confidential
employees having control, custody and/or access to confidential matters,
e.g., the branch's cash position, statements of financial condition, vault
combination, cash codes for telegraphic transfers, demand drafts and
other negotiable instruments, pursuant to Sec. 1166.4 of the Central
Bank Manual regarding joint custody, and therefore, disqualified from
joining or assisting a union; or joining, assisting or forming any other
labor organization.
b. Golden Farms, Inc. v. Ferrer-Calleja meanwhile stated that
"confidential employees such as accounting personnel, radio and
telegraph operators who, having access to confidential information, may
become the source of undue advantage. Said employee(s) may act as spy
or spies of either party to a collective bargaining agreement."
c. In Philips Industrial Development, Inc. v. National Labor Relations
Commission, the Court designated personnel staff, in which human
resources staff may be qualified, as confidential employees because by
the very nature of their functions, they assist and act in a confidential
capacity to, or have access to confidential matters of, persons who
exercise managerial functions in the field of labor relations.
6. The Union insists that the foregoing employees are not confidential
employees; however, it failed to buttress its claim. Aside from its
generalized arguments, and despite the Secretary's finding that there
was no evidence to support it, the Union still failed to substantiate its
claim. The Union did not even bother to state the nature of the duties
and functions of these employees, depriving the Court of any basis on
which it may be concluded that they are indeed confidential employees.
7. As aptly stated by the CA, the Union failed to show that the employees
sought to be removed from the list of exclusions are actually rank and
file employees who are not managerial or confidential in status and
should, accordingly, be included in the appropriate bargaining unit.
Absent any proof that Chief Cashiers and Assistant Cashiers, personnel
of the Telex department and one (1) HR Staff have mutuality of interest
with the other rank and file employees, then they are rightfully
excluded from the appropriate bargaining unit. The Union cannot
simply rely on jurisprudence without explaining how and why it should
apply to this case. Allegations must be supported by evidence. In this
case, there is barely any at all.
8. There is likewise no reason for the Court to disturb the conclusion of the
Secretary and the CA that the additional remuneration should be given to
employees placed in an acting capacity for one month. As correctly stated
by the CA, no employee should be temporarily placed in a position (acting
capacity) for more than one month without the corresponding adjustment in
the salary. Such order of the public respondent is not in violation of the
"equal pay for equal work" principle, considering that after one (1) month,
the employee performing the job in an acting capacity will be entitled to
salary corresponding to such position.
 014 COASTAL SUBIC BAY TERMINAL, INC. v. DOLE (FORDAN)
Nov. 20, 2006 | Quisumbing, J. | Eligibility for Membership; Special Groups of
Employees
PETITIONER: Coastal Subic Bay Terminal, Inc.
RESPONDENTS: Department of Labor and Employment (DOLE)— Office of
The Secretary, Coastal Subic Bay Terminal, Inc. Supervisory Union-APSOTEU,
and Coastal Subic Bay Terminal, Inc. Rank-And-File Union-ALU-TUCP
SUMMARY: CSBTI-RFU and CSBTI-SU filed separate petitions for certification
election before Med-Arbiter of the Regional Office No. III. They both alleged that
CSBTI, in which they sought to operate, was unorganized. CSBTI-RFU claimed
that it is a legitimate labor organization having been issued a charter certificate by
the ALU while CSBTI-SU claimed that it has also been issued a charter certificate
by APSOTEU. On its part, CSBTI opposed both petitions and claimed that both
unions are not legitimate labor organization. Without ruling on the legitimacy of
the unions, the Med-Arbiter dismissed both petitions and held that the ALU and
APSOTEU are one and the same federation having a common set of officers. Thus,
the CSBTI-RFU and CSBTI-SU were in effect affiliated with only one federation.
On appeal, the Secretary of DOLE reversed the decision which was affirmed by the
CA. Hence, the current petition.
The issue is whether or not CSBTI-RFU and CSBTI-SU were engaged in
commingling and thus, cannot file separate petitions for certification election. YES.
Under the rules implementing the Labor Code, a chartered local union acquires
legal personality through the charter certificate issued by a duly registered
federation or national union, and reported to the Regional Office in accordance
with the rules implementing the Labor Code. Local unions are considered
principals while the federation is deemed to be merely their agent. As such
principals, the unions are entitled to exercise the rights and privileges of a
legitimate labor organization, including the right to seek certification as the sole
and exclusive bargaining agent in the appropriate employer unit. On the other hand,
the supervisory employees are allowed to form their own union but they are not
allowed to join the rank-and-file union because of potential conflicts of interest.
Further, to avoid a situation where supervisors would merge with the rank-and-file
or where the supervisors' labor union would represent coflicting interests, a local
supervisors' union should not be allowed to affiliate with the national federation of
unions of rank-and-file employees where that federation actively participates in the
union activity within the company. In this case, the national federations that exist as
separate entities to which the rank-and-file and supervisory unions are separately
affiliated with, do have a common set of officers. In addition, APSOTEU, the
supervisory federation, actively participates in the CSBTI-SU while ALU, the rank-
and-file federation, actively participates in the CSBTI-RFU, giving occasion to
possible conflicts of interest among the common officers of the federation of rank-
and-file and the federation of supervisory unions. For as long as they are affiliated
with the APSOTEU and ALU, the supervisory and rank-and-file unions both do not
meet the criteria to attain the status of legitimate labor organizations, and thus could
not separately petition for certification elections. *doctrine*
DOCTRINE: The purpose of affiliation of the local unions into a common
enterprise is to increase the collective bargaining power in respect of the terms and
conditions of labor. When there is commingling of officers of a rank-and-file union
with a supervisory union, the constitutional policy on labor is circumvented.
FACTS:
1. On July 8, 1998, Coastal Subic Bay Terminal, Inc. Rank-and- File Union
(CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union
(CSBTI-SU) filed separate petitions for certification election before Med-Arbiter
Eladio de Jesus (Med-Arbiter) of the Regional Office No. III.
2. The CSBTI-RFU insists that it is a legitimate labor organization having
been issued a charter certificate by the Associated Labor Union (ALU), and the
supervisory union by the Associated Professional, Supervisory, Office and
Technical Employees Union (APSOTEU).
3. Both CSBTI-RFU and CSBTI-SU also alleged that the establishment in
which they sought to operate was unorganized.
4. Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for
certification election alleging that the CSBTI-RFU and CSBTI-SU were not
legitimate labor organizations, and that the proposed bargaining units were not
 particularly described.
5. Without ruling on the legitimacy of the unions, the Med-Arbiter dismissed,
without prejudice, both petitions which had been consolidated. It held that the
ALU and APSOTEU are one and the same federation having a common set of
officers. Thus, the CSBTI-RFU and CSBTI-SU were in effect affiliated with only
one federation.
6. Both parties appealed to the Secretary of Labor and Employment, who
reversed the decision of the Med-Arbiter. The Secretary ruled that CSBTI-RFU
and CSBTI-SU have separate legal personalities to file their separate petitions for
certification election.
 The Secretary held that APSOTEU is a legitimate labor organization because
it was properly registered pursuant to the 1989 Revised Rules and Regulations
implementing RA No. 6715, the rule applicable at the time of its registration.
 It further ruled that ALU and APSOTEU are separate and distinct labor
unions having separate certificates of registration from the DOLE. They also
have different sets of locals.
 It then declared CSBTI-RFU and CSBTI-SU as legitimate labor organizations
having been chartered respectively by ALU and APSOTEU after submitting
all the requirements with the Bureau of Labor Relations (BLR).
 Accordingly, the Secretary ordered the holding of separate certification
election.
7. On appeal, the CA affirmed the decision of the Secretary. Hence, the
current petition.
ISSUES:
1. Whether or not APSOTEU, mother federation of the supervisory union, has
a valid certificate of registration. – YES, it has a valid certificate of registration
since the Regional Office still has the authority to process the registration.
2. Whether or not the the Secretary's decision based on stare decisis was
correct. – YES, since the legitimacy of a labor organization cannot be subject of
collateral attack.
3. (main issue) Whether or not CSBTI-RFU and CSBTI-SU were engaged
in commingling and thus, cannot file separate petitions for certification
election. – YES, since the national federations that exist as separate entities to
which the CSBTI-RFU and CSBTI-SU are separately affiliated with, do have a
common set of officers.
RULING: The petition is granted. The CA's decision and the Resolution are set
aside. The decision of the Med-Arbiter is hereby affirmed.
RATIO:
On the issue of status of APSOTEU
1. CSBTI argues that:
 APSOTEU improperly secured its registration from the DOLE Regional
Director and not from the BLR;
 it is the BLR that is authorized to process applications and issue certificates of
registration in accordance with the ruling in Phil. Association of Free Labor
Unions v. Secretary of Labor;
 the certificates of registration issued by the DOLE Regional Director pursuant
to the rules are questionable, and possibly even void ab initio for being ultra
vires;
 the CA erred when it ruled that the law applicable at the time of APSOTEU's
registration was the 1989 Revised Implementing Rules and Regulations of
RA No. 6715.
2. APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot
attain the status of a legitimate labor organization to file a petition for
certification election, pursuant to Villar v. Inciong14.
3. Pertinent is Art. 235 of the Labor Code which provides that applications for
registration shall be acted upon by the Bureau. “Bureau” means the BLR and/or
the Labor Relations Division in the Regional Offices of the DOLE. Further, Sec.
215, Rule II, Book V of the 1989 Revised Implementing Rules of the Labor Code
(Implementing Rules) provides for the procedure for the application filing.
4. The Implementing Rules specifically Sec. 116, Rule III of Book V, as amended by
14
The SC held therein that Amigo Employees Union was not a duly registered independent union absent
any record of its registration with the Bureau.
15
Section 2. Where to file application; procedure — Any national labor organization or labor federation
or local union may file an application for registration with the Bureau or the Regional Office where the
applicant's principal offices is located. The Bureau or the Regional Office shall immediately process and
approve or deny the application. In case of approval, the Bureau or the Regional Office shall issue the
registration certificate within thirty (30) calendar days from receipt of the application, together with all the
requirements for registration as hereinafter provided.
16
SECTION 1. Where to file applications. — The application for registration of any federation, national
or industry union or trade union center shall be filed with the Bureau. Where the application is filed with
 Department Order (DO) No. 9, provides for the place for application filing.
5. Thereafter, the DOLE issued DO No. 40-03 further amending Book V of the
above implementing rules. The new implementing rules explicitly provide that
applications for registration of labor organizations shall be filed either with the
Regional Office or with the BLR.
6. Even after the amendments, the rules did not divest the Regional Office and the
BLR of their jurisdiction over applications for registration by labor organizations.
The amendments to the implementing rules merely specified that when the
application was filed with the Regional Office, the application would be acted
upon by the BLR.
7. The records in this case showed that APSOTEU was registered on Mar. 1, 1991.
Accordingly, the law applicable at that time was Sec. 2, Rule II, Book V of the
Implementing Rules and not DO No. 9 (effective only on June 21, 1997). Thus,
considering further that APSOTEU's principal office is located in Diliman,
Quezon City, and its registration was filed with the NCR Regional Office, the
certificate of registration is valid.
8. CSBTI misapplied Villar v. Inciong. In said case, there was no record in the BLR
that Amigo Employees Union was registered.
On the issue of stare decisis
9. The SC held that the CA did not err in its application of stare decisis when it
upheld the Secretary's ruling that APSOTEU is a legitimate labor organization
and its personality cannot be assailed unless in an independent action for
cancellation of registration certificate.
10. Sec. 517, Rule V, Book V of the Implementing Rules states the effect of
registration.
11. Thus, APSOTEU is a legitimate labor organization and has authority to issue
charter to its affiliates. It may issue a local charter certificate to CSBTI-SU and
correspondingly, CSBTI-SU is legitimate.
the Regional Office, the same shall be immediately forwarded to the Bureau within forty-eight (48) hours
from filing thereof, together with all the documents supporting the registration.
The applications for registration of an independent union shall be filed with and acted upon by the
Regional Office where the applicant's principal office is located . . . .
17
Section 5. Effect of registration — The labor organization or workers' association shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of registration. Such
legal personality cannot thereafter be subject to collateral attack, but maybe questioned only in an
independent petition for cancellation in accordance with these Rules.
(IMPORTANT) On the issue of commingling and petition for certification election
12. CSBTI contends that applying by analogy, the doctrine of piercing the veil of
corporate fiction, APSOTEU and ALU are the same federation. Both CSBTI-
RFU and CSBTI-SU disagree.
13. As earlier discoursed, once a labor union attains the status of a legitimate labor
organization, it continues as such until its certificate of registration is cancelled or
revoked in an independent action for cancellation. In addition, the legal
personality of a labor organization cannot be collaterally attacked. Thus, when
the personality of the labor organization is questioned in the same manner the
veil of corporate fiction is pierced, the action partakes the nature of a collateral
attack.
14. Hence, in the absence of any independent action for cancellation of registration
against either APSOTEU or ALU, and unless and until their registrations are
cancelled, each continues to possess a separate legal personality. The CSBTI-
RFU and CSBTI-SU are therefore affiliated with distinct and separate
federations, despite the commonalities of APSOTEU and ALU.
15. Under the rules implementing the Labor Code, a chartered local union acquires
legal personality through the charter certificate issued by a duly registered
federation or national union, and reported to the Regional Office in
accordance with the rules implementing the Labor Code.
16. A local union does not owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. Mere affiliation does not divest the local
union of its own personality, neither does it give the mother federation the
license to act independently of the local union. It only gives rise to a contract
of agency, where the former acts in representation of the latter.
17. Hence, local unions are considered principals while the federation is deemed
to be merely their agent. As such principals, the unions are entitled to
exercise the rights and privileges of a legitimate labor organization,
including the right to seek certification as the sole and exclusive bargaining
agent in the appropriate employer unit.
18. However, under Art. 245 of the Labor Code, supervisory employees are not
eligible for membership in a labor union of rank-and-file employees.
19. The supervisory employees are allowed to form their own union but they are
not allowed to join the rank-and-file union because of potential conflicts of
interest. Further, to avoid a situation where supervisors would merge with
the rank-and-file or where the supervisors' labor union would represent
coflicting interests, a local supervisors' union should not be allowed to
affiliate with the national federation of unions of rank-and-file employees
where that federation actively participates in the union activity within the
 company.
20. Thus, the limitation is not confined to a case of supervisors wanting to join a
rank-and-file union. The prohibition extends to a supervisors' local union
applying for membership in a national federation the members of which include
local unions of rank-and-file employees.
21. In De La Salle University Medical Center and College of Medicine v. Laguesma,
the SC reiterated the rule that for the prohibition to apply, it is not enough that the
supervisory union and the rank-and-file union are affiliated with a single
federation. In addition, the supervisors must have direct authority over the rank-
and-file employees.
22. In the instant case, the national federations that exist as separate entities to
which the rank-and-file and supervisory unions are separately affiliated
with, do have a common set of officers. In addition, APSOTEU, the
supervisory federation, actively participates in the CSBTI-SU while ALU,
the rank-and-file federation, actively participates in the CSBTI-RFU, giving
occasion to possible conflicts of interest among the common officers of the
federation of rank-and-file and the federation of supervisory unions.
23. For as long as they are affiliated with the APSOTEU and ALU, the
supervisory and rank-and-file unions both do not meet the criteria to attain
the status of legitimate labor organizations, and thus could not separately
petition for certification elections.
24. The purpose of affiliation of the local unions into a common enterprise is to
increase the collective bargaining power in respect of the terms and
conditions of labor. When there is commingling of officers of a rank-and-file
union with a supervisory union, the constitutional policy on labor is
circumvented.
25. Labor organizations should ensure the freedom of employees to organize
themselves for the purpose of leveling the bargaining process but also to ensure
the freedom of workingmen and to keep open the corridor of opportunity to
enable them to do it for themselves.
 015 TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA
BREWERY v. ASIA BREWERY (GALINDEZ)
3 August 2010 | Villarama, Jr., J. | Eligibility for membership
PETITIONER: Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery
RESPONDENTS: Asia Brewery, Inc.
SUMMARY: ABI and BLMA-INDEPENDENT entered into a CBA. The CBA
shows a list of those excluded from joining the rank-and-file union.
A dispute arose when ABI’s management stopped deducting union dues from
several employees, believing that their membership in the Union violated the
CBA. The matters was brought to the grievance machinery and as it remained
unresolved, the Union lodged a complaint before the NCMB.
The NCMB sustained the Union after finding that the records submitted by ABI
shows that the positions of the subject employees qualify under the rank-and-
file category as their functions were merely clerical and routinary. The matter
was brought to the CA. It reversed the ruling and denied the MR.
ISSUE: WoN the subject employees are eligible to join the union – YES. Their
functions are merely clerical and routinary and cannot be said to fall under
“confidential employees” excluded from joining the rank-and-file union.
It is rather curious that there would be several secretaries/clerks for just 1
department/division performing tasks mostly routine and clerical. ABI insisted
they fall under the "Confidential and Executive Secretaries" expressly excluded
by the CBA from the rank-and-file bargaining unit. However, perusal of the job
descriptions of these secretaries/clerks reveals that their assigned duties and
responsibilities involve routine activities of recording and monitoring, and other
paper works for their respective departments while secretarial tasks such as
receiving telephone calls and filing of office correspondence appear to have
been commonly imposed as additional duties.
With respect to the Inspectors/technician, there is no dispute that they form part
of the Quality Control Staff who, under the express terms of the CBA, fall under
a distinct category. But we disagree with ABI’s contention that the twenty (20)
checkers are similarly confidential employees being "quality control staff"
entrusted with the handling and custody of company properties and sensitive
information. Again, the job descriptions of these checkers assigned in the
storeroom section of the Materials Department, finishing section of the
Packaging Department, and the decorating and glass sections of the Production
Department plainly showed that they perform routine and mechanical tasks
preparatory to the delivery of the finished products.
DOCTRINE: Confidential employees are defined as those who (1) assist or act
in a confidential capacity, (2) to persons who formulate, determine, and
effectuate management policies in the field of labor relations. The two (2)
criteria are cumulative, and both must be met if an employee is to be considered
a confidential employee – that is, the confidential relationship must exist
between the employee and his supervisor, and the supervisor must handle the
prescribed responsibilities relating to labor relations.
The exclusion from bargaining units of employees who, in the normal course of
their duties, become aware of management policies relating to labor relations is
a principal objective sought to be accomplished by the "confidential employee
rule."
FACTS:
1. Respondent Asia Brewery (ABI) is engaged in the manufacture, sale and
distribution of beer, shandy, bottled water and glass products. ABI entered
into a CBA effective for 5 years (Aug 1, 1997 – July 31, 2002) with Bisig at
Lakas ng mga Manggagawa sa Asia-Independent (BLMA-
INDEPENDENT), the exclusive bargaining rep of ABI’s rank-and-file
employees.
2. They signed a renegotiated CBA effective from August 1, 2000 – July 31,
2003. Article 1 of the CBA defined the scope of the bargaining unit.18
18
Section 1. Recognition. The COMPANY recognizes the UNION as the sole and exclusive bargaining
representative of all the regular rank-and-file daily paid employees within the scope of the appropriate
bargaining unit with respect to rates of pay, hours of work and other terms and conditions of
employment. The UNION shall not represent or accept for membership employees outside the scope of
the bargaining unit herein defined.
Section 2. Bargaining Unit. The bargaining unit shall be comprised of all regular rank-and-file daily-paid
employees of the COMPANY. However, the following jobs/positions as herein defined shall be excluded
from the bargaining unit, to wit:
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
 3. A dispute arose when ABI’s management stopped deducting union dues
from 81 employees, believing their membership in BLMA-
INDEPENDENT violated the CBA. 18 of these employees are Sampling
Inspectors and Machine Gauge Technician. 20 checkers are assigned in the
Materials Department, and the rest are secretaries.
4. BLMA-INDEPENDENT claimed that ABI’s actions restrained the
employees’ right to self-organization and brought the matter to the
grievance machinery. As the parties failed to amicably settle the matter,
BLMA-INDEPENDENT lodged a complaint before the NCMB.
5. The parties agreed to submit the case for arbitration to resolve the issue of
WoN there is restraint to employees in the exercise of their right to self-
organization.
6. Voluntary Arbitrator Devera sustained the BLMA-INDEPENDENT after
finding that the records submitted by ABI showed that the positions of the
subject employees qualify under the rank-and-file category because their
functions are merely routinary and clerical.
7. He noted that the positions occupied by the checkers and secretaries/clerks
are not managerial or supervisory.
8. With respect to the inspectors and the technician, he ruled that ABI failed to
establish their basic functions as to consider them Quality Control Staff who
were excluded from the CBA’s coverage.
9. Accordingly, the employees were declared eligible for inclusion within the
bargaining unit represented by BLMA-INDEPENDENT.
10. On appeal, CA reversed, ruling that the 81 employees are not eligible for
inclusion as defined in Sec. 2, Art. 1 of the CBA. The MR was likewise
denied.
ISSUES:
1. WoN the subject employees are eligible to join the union – YES. Their
functions are merely clerical and routinary and cannot be said to fall under
“confidential employees” excluded from joining the rank-and-file union.
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing and Quality Control Staff6 
RULING: WHEREFORE, the petition is GRANTED. The Decision dated
November 22, 2002 and Resolution dated January 28, 2004 of the Court of Appeals
in CA-G.R. SP No. 55578 are hereby REVERSED and SET ASIDE. The checkers
and secretaries/clerks of respondent company are hereby declared rank-and-file
employees who are eligible to join the Union of the rank-and-file employees.
RATIO:
1. Although Art. 245 of the Labor Code limits the ineligibility to join, form
and assist any labor organization to managerial employees, jurisprudence
has extended this prohibition to confidential employees or those who by
reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.
2. Confidential employees are thus excluded from the rank-and-file bargaining
unit.
3. The rationale is similar to the inhibition for managerial employees because
if allowed to be affiliated with a Union, the latter might not be assured of
their loyalty in view of evident conflict of interests and the Union can also
become company-denominated.
4. In Philips v. NLRC, the Court held that Philips’ “division secretaries, all
Staff of General Management, Personnel and Industrial Relations
Department, Secretaries of Audit, EDP and Financial Systems" are
confidential employees not included within the rank-and-file bargaining
unit.
5. Pier 8 v. Roldan-Confesor, the Court ruled that legal secretaries who are
tasked with, among others, the typing of legal documents, memoranda and
correspondence, the keeping of records and files, the giving of and
receiving notices, and such other duties as required by the legal personnel of
the corporation, fall under the category of confidential employees and hence
excluded from the bargaining unit composed of rank-and-file employees.
6. Also considered having access to "vital labor information" are the executive
secretaries of the General Manager and the executive secretaries of the
Quality Assurance Manager, Product Development Manager, Finance
Director, Management System Manager, Human Resources Manager,
Marketing Director, Engineering Manager, Materials Manager and
Production Manager.
7. Here the CBA expressly excluded “Confidential and Executive Secretaries”
from the rank-and-file bargaining unit, for which reason ABI seeks their
disaffiliation from petitioner. BLMA-INDEPENDENT, however, maintains
that except for Daisy Laloon, Evelyn Mabilangan and Lennie Saguan who
had been promoted to monthly paid positions, the following
secretaries/clerks are deemed included among the rank-and-file employees
of ABI (in the list, there were several secretaries per department)
8. As can be seen, it is rather curious that there would be several
secretaries/clerks for just 1 department/division performing tasks mostly
routine and clerical.
9. ABI insisted they fall under the "Confidential and Executive Secretaries" considered a confidential employee – that is, the confidential relationship
expressly excluded by the CBA from the rank-and-file bargaining unit. must exist between the employee and his supervisor, and the supervisor
10. However, perusal of the job descriptions of these secretaries/clerks reveals must handle the prescribed responsibilities relating to labor relations.
that their assigned duties and responsibilities involve routine activities of 20. The exclusion from bargaining units of employees who, in the normal
recording and monitoring, and other paper works for their respective course of their duties, become aware of management policies relating to
departments while secretarial tasks such as receiving telephone calls and labor relations is a principal objective sought to be accomplished by the
filing of office correspondence appear to have been commonly imposed as "confidential employee rule."
additional duties. 21. There is no showing here that the employees acted in a confidential capacity
11. ABI failed to indicate who among these numerous secretaries/clerks have to managerial employees and obtained confidential information relating to
access to confidential data relating to management policies that could give labor relations policies. And even assuming that they had exposure to
rise to potential conflict of interest with their Union membership. Clearly, internal business operations of the company, respondent claimed, this is not
the rationale under our previous rulings for the exclusion of executive per se ground for their exclusion in the bargaining unit of the daily-paid
secretaries or division secretaries would have little or no significance rank-and-file employees.
considering the lack of or very limited access to confidential information of 22. Hence, they are not disqualified from membership in the Union.
these secretaries/clerks. 23. There is also no ULP because the dispute arose from a simple disagreement
12. It is not even farfetched that the job category may exist only on paper since in the interpretation of the CBA provision.
they are all daily-paid workers. Quite understandably, petitioner had earlier
expressed the view that the positions were just being "reclassified" as these
employees actually discharged routine functions.
13. Hence these secretaries/clerks, about 40, are rank-and-file employees and
not confidential employees.
14. With respect to the Inspectors/technician, there is no dispute that they form
part of the Quality Control Staff who, under the express terms of the CBA,
fall under a distinct category.
15. But we disagree with ABI’s contention that the twenty (20) checkers are
similarly confidential employees being "quality control staff" entrusted with
the handling and custody of company properties and sensitive information.
16. Again, the job descriptions of these checkers assigned in the storeroom
section of the Materials Department, finishing section of the Packaging
Department, and the decorating and glass sections of the Production
Department plainly showed that they perform routine and mechanical tasks
preparatory to the delivery of the finished products.
17. While it may be argued that quality control extends to post-production
phase -- proper packaging of the finished products -- no evidence was
presented by ABI to prove that these daily-paid checkers actually form part
of the company’s Quality Control Staff who as such "were exposed to
sensitive, vital and confidential information about [company’s] products" or
"have knowledge of mixtures of the products, their defects, and even their
formulas" which are considered ‘trade secrets’.
18. Hence, the 20 checkers may not be considered confidential employees
under the category of Quality Control Staff expressly excluded from the
CBA.
19. Confidential employees are defined as those who (1) assist or act in a
confidential capacity, (2) to persons who formulate, determine, and
effectuate management policies in the field of labor relations. The two (2)
criteria are cumulative, and both must be met if an employee is to be

016 SAN MIGUEL FOODS v. SMC SUPERVISORS (Gonzales)
August 1, 2011 | Peralta, J. | Eligibility for membership
PETITIONER: San Miguel Foods Incorporated
RESPONDENTS: San Miguel Corporation Supervisors, and Exempt Union
SUMMARY: Pursuant to the Court’s decision in SMC Supervisors v.
Laguesma, the DOLE conducted pre-election conferences. However, there was
a discrepancy in the list of eligible voters, i.e., San Miguel submitted a list of 23
employees for the San Fernando plant and 33 for the Cabuyao plant, while
Union listed 60 and 82, respectively. On the date of the election, San Miguel
filed the Omnibus Objections and Challenge to Voters, questioning the
eligibility to vote by some of its employees on the grounds that some employees
do not belong to the bargaining unit which the Union seeks to represent or that
there is no existence of employer-employee relationship with San Miguel.
Based on the results, the Union was certified to be the exclusive bargaining
agent. San Miguel challenges the result.
The issues are:
1. WoN there should only one bargaining unit for the employees in
Cabuyao, San Fernando, and Otis of Magnolia Poultry Products Plant
involved in "dressed" chicken processing and Magnolia Poultry Farms
engaged in "live" chicken operations – YES. Although they seem
separate and distinct from each other, the specific tasks of each
division are actually interrelated and there exists mutuality of interests
which warrants the formation of a single bargaining unit.
2. WoN the position of Payroll Master should be excluded in the
definition of a confidential employee – NO. The position of Payroll
Master does not involve dealing with confidential labor relations
information in the course of the performance of his functions.
3. WoN the positions of Human Resource Assistant and Personnel
Assistant belong to the category of confidential employees and, hence,
are excluded from the bargaining unit – YES. In the discharge of their
functions, both gain access to vital labor relations information which
outrightly disqualifies them from union membership.
DOCTRINE: The test of grouping is community or mutuality of interest. This
is so because the basic test of an asserted bargaining unit's acceptability is
whether or not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights.
Confidential employees are defined as those who (1) assist or act in a
confidential capacity, in regard (2) to persons who formulate, determine, and
effectuate management policies in the field of labor relations
FACTS:
11. Pursuant to the Court's decision in San Miguel Corporation Supervisors and
Exempt Union v. Laguesma (G.R. No. 110399), 19 the DOLE-NCR
conducted pre-election conferences. However, there was a discrepancy in
the list of eligible voters, i.e., San Miguel submitted a list of 23 employees
for the San Fernando plant and 33 for the Cabuyao plant, while Union listed
60 and 82, respectively.
12. A certification election was conducted and it yielded the following results.20
13. On the date of the election, San Miguel filed the Omnibus Objections and
19
The Court held that even if they handle confidential data regarding technical and internal business
operations, supervisory employees 3 and 4 and the exempt employees of petitioner San Miguel Foods, Inc.
(SMFI) are not to be considered confidential employees, because the same do not pertain to labor
relations, particularly, negotiation and settlement of grievances. Consequently, they were allowed to form
an appropriate bargaining unit for the purpose of collective bargaining. The Court also declared that the
employees belonging to the three different plants of San Miguel Corporation Magnolia Poultry Products
Plants in Cabuyao, San Fernando, and Otis, having "community or mutuality of interests," constitute a
single bargaining unit. They perform work of the same nature, receive the same wages and compensation,
and most importantly, share a common stake in concerted activities. It was immaterial that the three plants
have different locations as they did not impede the operations of a single bargaining representative.
20
Cabuyao Plant San Fernando Plant Total
Yes 23 23 46
No 0 0 0
Spoiled 2 0 2
 Challenge to Voters, questioning the eligibility to vote by some of its
employees on the grounds that some employees do not belong to the
bargaining unit which the Union seeks to represent or that there is no
existence of employer-employee relationship with San Miguel. Specifically,
it argued that certain employees should not be allowed to vote as they are:
(1) confidential employees; (2) employees assigned to the live chicken
operations, which are not covered by the bargaining unit; (3) employees
whose job grade is level 4, but are performing managerial work and
scheduled to be promoted; (4) employees who belong to the Barrio Ugong
plant; (5) non-SMFI employees; and (6) employees who are members of
other unions.
14. Union averred that (1) the bargaining unit contemplated in the original
petition is the Poultry Division of San Miguel Corporation, now known as
San Miguel Foods, Inc.; (2) it covered the operations in Calamba, Laguna,
Cavite, and Batangas and its home base is either in Cabuyao, Laguna or San
Fernando, Pampanga; and (3) it submitted individual and separate
declarations of the employees whose votes were challenged in the election.
15. Adding the results to the number of votes canvassed during the September
30, 1998 certification election, the final tally showed that: number of
eligible voters — 149; number of valid votes cast — 121; number of spoiled
ballots — 3; total number of votes cast — 124, with 118 (i.e., 46 + 72 =
118) "Yes" votes and 3 "No" votes.
16. The segregated ballots were opened, showing that out of the 76 segregated
votes, 72 were cast for "Yes" and 3 for "No," with one "spoiled" ballot.
17. Based on the results, the Med-Arbiter issued the stating that since the "Yes"
vote received 97% of the valid votes cast, Union is certified to be the
exclusive bargaining agent of the supervisors and exempt employees of San
Miguel’s Magnolia Poultry Products Plants in Cabuyao, San Fernando, and
Otis.
18. On appeal, the then Acting DOLE Undersecretary affimed the Order with
modification that Matias, Lozano, Delos Reyes, and Pajaron be excluded
from the bargaining unit. Matias and Lozano are members of Magnolia
Poultry Processing Plants Monthly Employees Union, while Delos Reyes
and Pajaron are employees of San Miguel Corporation, which is a separate
and distinct entity from San Miguel.
19. San Miguel contends that with the Court's ruling in G.R. No. 110399
identifying the specific employees who can participate in the certification
election, i.e., the supervisors (levels 1 to 4) and exempt employees of San
Miguel Poultry Products Plants in Cabuyao, San Fernando, and Otis, the
CA erred in expanding the scope of the bargaining unit so as to include
employees who do not belong to or who are not based in its Cabuyao or San
Fernando plants. It also alleges that the employees of the Cabuyao, San
Fernando, and Otis plants of its predecessor, San Miguel Corporation were
Segregated 41 35 76
Total Votes Cast 66 58 124
engaged in "dressed" chicken processing, i.e., handling and packaging of
chicken meat, while the new bargaining unit, as defined by the CA in the
present case, includes employees engaged in "live" chicken operations, i.e.,
those who breed chicks and grow chickens.
ISSUES:
2. WoN there should only one bargaining unit for the employees in Cabuyao,
San Fernando, and Otis of Magnolia Poultry Products Plant involved in
"dressed" chicken processing and Magnolia Poultry Farms engaged in
"live" chicken operations – YES. Although they seem separate and distinct
from each other, the specific tasks of each division are actually interrelated
and there exists mutuality of interests which warrants the formation of a
single bargaining unit.
3. WoN the position of Payroll Master should be excluded in the definition of
a confidential employee – NO. The position of Payroll Master does not
involve dealing with confidential labor relations information in the course
of the performance of his functions.
4. WoN the positions of Human Resource Assistant and Personnel Assistant
belong to the category of confidential employees and, hence, are excluded
from the bargaining unit – YES. In the discharge of their functions, both
gain access to vital labor relations information which outrightly disqualifies
them from union membership.
RULING: Petition denied.
RATIO:
One Bargaining Unit
24. In G.R. No. 110399, the Court explained that the employees of San Miguel
Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando,
and Otis constitute a single bargaining unit, which is not contrary to the
one-company, one-union policy. An appropriate bargaining unit is defined
as a group of employees of a given employer, comprised of all or less than
all of the entire body of employees, which the collective interest of all the
employees, consistent with equity to the employer, indicate to be best suited
to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.
25. National Association of Free Trade Unions v. Mainit Lumber Development
Company Workers Union: While the existence of a bargaining history is a
factor that may be reckoned with in determining the appropriate bargaining
unit, the same is not decisive or conclusive. Other factors must be
considered. The test of grouping is community or mutuality of interest.
This is so because the basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination
which will best assure to all employees the exercise of their collective
bargaining rights.
26. Thus, applying the ruling to the present case, the Court affirms the finding
 of the CA that there should be only one bargaining unit for the employees in
Cabuyao, San Fernando, and Otis of Magnolia Poultry Products Plant
involved in "dressed" chicken processing and Magnolia Poultry Farms
engaged in "live" chicken operations. Certain factors, such as specific line
of work, working conditions, location of work, mode of compensation, and
other relevant conditions do not affect or impede their commonality of
interest. Although they seem separate and distinct from each other, the
specific tasks of each division are actually interrelated and there exists
mutuality of interests which warrants the formation of a single
bargaining unit.
employees are thus excluded from the rank-and-file bargaining unit. The
rationale for their separate category and disquali fication to join any labor
organization is similar to the inhibition for managerial employees, because
if allowed to be affiliated with a union, the latter might not be assured of
their loyalty in view of evident conflict of interests and the union can also
become company-denominated with the presence of managerial employees
in the union membership. Having access to confidential information,
confidential employees may also become the source of undue advantage.
Said employees may act as a spy or spies of either party to a collective
bargaining agreement.

Exclusion of the position of Payroll Master Exclusion of the positions of Human Resource Assistant and Personnel Assistant
1. San Miguel asserts that the CA erred in not excluding the position of 6. In this regard, the CA correctly ruled that the positions of Human Resource
Payroll Master in the definition of a confidential employee and, thus, prays Assistant and Personnel Assistant belong to the category of confidential
that the said position and all other positions with access to salary and employees and, hence, are excluded from the bargaining unit, considering
compensation data be excluded from the bargaining unit. their respective positions and job descriptions. As Human Resource
2. This argument must fail. Confidential employees are defined as those Assistant, the scope of one's work necessarily involves labor relations,
who (1) assist or act in a confidential capacity, in regard (2) to persons recruitment and selection of employees, access to employees' personal
who formulate, determine, and effectuate management policies in the files and compensation package, and human resource management. As
field of labor relations. The two criteria are cumulative, and both must be regards a Personnel Assistant, one's work includes the recording of
met if an employee is to be considered a confidential employee — that is, minutes for management during collective bargaining negotiations,
the confidential relationship must exist between the employee and his assistance to management during grievance meetings and
supervisor, and the supervisor must handle the prescribed responsibilities administrative investigations, and securing legal advice for labor issues
relating to labor relations. The exclusion from bargaining units of from the petitioner's team of lawyers, and implementation of company
employees who, in the normal course of their duties, become aware of programs. Therefore, in the discharge of their functions, both gain access
management policies relating to labor relations is a principal objective to vital labor relations information which outrightly disqualifies them from
sought to be accomplished by the "confidential employee rule." union membership.
3. A confidential employee is one entrusted with confidence on delicate, or
with the custody, handling or care and protection of the employer's
property. Confidential employees, such as accounting personnel, should be
excluded from the bargaining unit, as their access to confidential
information may become the source of undue advantage.
4. However, such fact does not apply to the position of Payroll Master and the
whole gamut of employees who, as perceived by San Miguel, has access to
salary and compensation data. The CA correctly held that the position of
Payroll Master does not involve dealing with confidential labor
relations information in the course of the performance of his functions.
Since the nature of his work does not pertain to company rules and
regulations and confidential labor relations, it follows that he cannot be
excluded from the subject bargaining unit.
5. Corollarily, although Article 245 of the Labor Code limits the ineligibility
to join, form and assist any labor organization to managerial employees,
jurisprudence has extended this prohibition to confidential employees or
those who by reason of their positions or nature of work are required to
assist or act in a fiduciary manner to managerial employees and, hence, are
likewise privy to sensitive and highly confidential records. Confidential
 017 HERITAGE HOTEL V. SECRETARY (GUERRERO)
July 23, 2014 | Bersamin, J. | Eligibility of Membership; Special Group of
Employees
PETITIONER: THE HERITAGE HOTEL MANILA, ACTING THROUGH
ITS OWNER, GRAND PLAZA HOTEL CORPORATION
RESPONDENTS: SECRETARY OF LABOR AND EMPLOYMENT; MED-
ARBITER TOMAS F. FALCONITIN; and NATIONAL UNION OF
WORKERS IN THE HOTEL, RESTAURANT and ALLIED INDUSTRIES-
HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-
HHMSC)
SUMMARY: (note: this case only clarified the nuances between the cases. The
applicable rule is still what we know from Labor2! Please don’t get confused.)
The labor union filed a petition for certification election. The employer
protested the legitimacy of the labor union during the proceedings of the
petition. Afterwhich, the petitioner finally filed a petition of the cancellation of
the union’s registration, initially on the ground that it failed to submit its annual
financial reports. In the DOLE level, the petitioner invoked the ground that there
was commingling of managerial, confidential, and rank and file employees. It
invoked Toyota Motor and Dunlop Slazenger as its basis, which held that a
union cannot become a legitimate labor union if it shelters under its wing both
types of employee. Meanwhile, during the pendency of the case, the labor union
won the certification election.
Issue: Should the petition for the cancellation of union registration based on
mixed membership of supervisors and managers in a labor union justify the
suspension of the proceedings for the certification elections or even the denial of
the petition for the certification election? No.
It must be noted that the applicable rule now is Tagaytay Highlands, which held
that commingling will not affect the legitimacy of the labor union unless it is
done through misrepresentation and fraud. In this case, when the labor union
filed its petition for certification election, the applicable rule was Toyota Motor
and Dunlop where it was ruled that a supervisory union has no right to file a
certification election for as long as it counts rank-and-file employees among its
ranks. Consequently, Toyota Motor and Dunlop will be applied.
Still, the SC ruled in favor of the labor union. It held that though Toyota Motor
and Dunlop is applicable, the petitioners in these cases adduced enough
evidence that there was indeed commingling of members. In this case, the
petitioner did not adduce evidence. It merely identified the positions that were
either confidential or managerial, but did not present any supporting evidence to
prove or explain the identification.
Doctrine: The mixed membership does not result in the illegitimacy of the
registered labor union unless the same was done through misrepresentation,
false statement or fraud according to Article 239 of the Labor Code.
FACTS:
1. Although case law has repeatedly held that the employer was but a
bystander in respect of the conduct of the certification election to
decide the labor organization to represent the employees in the
bargaining unit, and that the pendency of the cancellation of union
registration brought against the labor organization applying for the
certification election should not prevent the conduct of the certification
election, this review has to look again at the seemingly never-ending
quest of the petitioner employer to stop the conduct of the certification
election on the ground of the pendency of proceedings to cancel the
labor organization's registration it had initiated on the ground that the
membership of the labor organization was a mixture of managerial and
supervisory employees with the rank-and-file employees.
2. This is a petition for certiorari filed by the employer to question the decision
of the CA on not cancelling that application of the labor union on the
ground that there is a mixture of members.
3. On October 11, 1995, respondent National Union of Workers in Hotel
 Restaurant and Allied Industries-Heritage Hotel Manila Supervisors
Chapter (NUWHRAIN-HHMSC) filed a petition for certification election,
seeking to represent all the supervisory employees of Heritage Hotel
Manila. The petitioner filed its opposition, but the opposition was deemed
denied on February 14, 1996 when the Med-Arbiter issued his order for the
conduct of the certification election.
4. Pre-election was suspended due to the repeated non-appearance of the
union. Petitioner filed appeals and motions to cancel the registration but all
were denied.
5. On May 12, 2000, the petitioner filed a petition for the cancellation of
NUWHRAIN-HHMSC's registration as a labor union for failing to submit
its annual financial reports and an updated list of members as required by
Article 238 and Article 239 of the Labor Code. But the DOLE issued a
notice scheduling the certification election. Hence, this petition for
certiorari. Meanwhile, the respondent union won the certification election.
6. Then the petitioner filed a protest, alleging the illegitimacy of the union.
This was denied.
7. The petitioner appealed to the DOLE Secretary.
a. The petitioner timely appealed to the DOLE Secretary claiming
that: (a) the membership of NUWHRAIN-HHMSC consisted of
managerial, confidential, and rank-and-file employees; (b)
NUWHRAIN-HHMSC failed to comply with the reportorial
requirements; and (c) Med-Arbiter Falconitin simply brushed aside
serious questions on the illegitimacy of NUWHRAIN-HHMSC. It
contended that a labor union of mixed membership of supervisory
and rank-and-file employees had no legal right to petition for the
certification election pursuant to the pronouncements in Toyota
Motor and Dunlop Slazenger.
i. Toyota Motor and Dunlop Slazenger are anchored on the
provisions of Article 245 of the Labor Code which
prohibit managerial employees from joining any labor
union and permit supervisory employees to form a
separate union of their own. The language naturally
suggests that a labor organization cannot carry a mixture
of supervisory and rank-and-file employees. Thus, courts
have held that a union cannot become a legitimate labor
union if it shelters under its wing both types of
employees.
b. This was also denied. In its ruling, the DOLE Secretary declared
that the mixture or co-mingling of employees in a union was not a
ground for dismissing a petition for the certification election under
Section 11, par. II, Rule XI of Department Order No. 9; that the
appropriate remedy was to exclude the ineligible employees from
the bargaining unit during the inclusion-exclusion proceedings;
that the dismissal of the petition for the certification election based
on the legitimacy of the petitioning union would be inappropriate
because it would effectively allow a collateral attack against the
union's legal personality; and that a collateral attack against the
personality of the labor organization was prohibited under Section
5, Rule V of Department Order No. 9, Series of 1997.
i. Further, Toyota Motors and Dunlop was clarified in
Tagaytay Highlands. (see CA discussion)
8. The CA also denied the appeal. The CA discussed cases in deciding on the
current case.
a. In Toyota Motor, the SC makes the blanket statement that a
supervisory union has no right to file a certification election for as
long as it counts rank-and-file employees among its ranks.
b. In Tagaytay Highlands, 4 years after Dunlop, the Court clarified
that while Article 245 prohibits supervisory employees from
joining a rank-and-file union, it does not provide what the effect is
if a rank-and-file union takes in supervisory employees as
members, or vice versa.
i. Further, it clarified that after a certificate of registration is
issued to a union, its legal personality cannot be subject to
a collateral attack. It may be questioned only in an
independent petition for cancellation. Hence, Toyota and
Dunlop are no longer applicable.
c. Lastly, the fact that the cancellation proceeding has not yet been
resolved makes it obvious that the legal personality of the
respondent union is still very much in force. The DOLE has thus
every reason to proceed with the certification election and commits
 no grave abuse of discretion in allowing it to prosper because the
right to be certified as collective bargaining agent is one of the
legitimate privileges of a registered union. It is for the petitioner to
expedite the cancellation case if it wants to put an end to the
certification case, but it cannot place the issue of the union's
legitimacy in the certification case, for that would be tantamount to
making the collateral attack the DOLE has staunchly argued to be
impermissible.
9. Thus, this petition for certiorari.
ISSUE/s:
1. Should the petition for the cancellation of union registration based on mixed
membership of supervisors and managers in a labor union, and the non-
submission of reportorial requirements to the DOLE justify the suspension
of the proceedings for the certification elections or even the denial of the
petition for the certification election? No. Petitioner did not prove the
commingling of members, and the law provides that non-submission of
reportorial requirements is not a ground for cancellation of union
registration.
RULING: WHEREFORE, the Court DENIES the petition for review on
certiorari; AFFIRMS the decision promulgated on December 13, 2005 by the
Court of Appeals; and ORDERS the petitioner to pay the costs of suit.
RATIO:
1. Basic in the realm of labor union rights is that the certification election is
the sole concern of the workers, and the employer is deemed an intruder as
far as the certification election is concerned. Thus, the petitioner lacked the
legal personality to assail the proceedings for the certification election, and
should stand aside as a mere bystander who could not oppose the petition,
or even appeal the Med-Arbiter's orders relative to the conduct of the
certification election.
a. 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.
b. The petitioner's meddling in the conduct of the certification
election among its employees unduly gave rise to the suspicion that
it intended to establish a company union. For that reason, the
challenges it posed against the certification election proceedings
were rightly denied.
2. Further, the filing of the petition for the cancellation of NUWHRAIN-
HHMSC's registration should not bar the conduct of the certification
election. Hence, only a final order for the cancellation of the registration
would have prevented NUWHRAIN-HHMSC from continuing to enjoy all
the rights conferred on it as a legitimate labor union, including the right to
the petition for the certification election.
a. This is pursuant to the Labor Code.
i. Article 238-A. Effect of a Petition for Cancellation of
Registration. — A petition for cancellation of union
registration shall not suspend the proceedings for
certification election nor shall it prevent the filing of a
petition for certification election.
3. Still, the petitioner assails the failure of NUWHRAIN-HHMSC to submit
its periodic financial reports and updated list of its members pursuant to
Article 238 and Article 239 of the Labor Code. It contends that the serious
challenges against the legitimacy of NUWHRAIN-HHMSC as a union
raised in the petition for the cancellation of union registration should have
cautioned the Med-Arbiter against conducting the certification election. The
Supreme Court is not convinced.
a. In Tagaytay Highlands, it is viewed that petitions to cancel union
registrations should be dismissed if the purpose is to abridge
employees’ right to organize. In that specific case, the late
submission of documents should not be the cause of the denial of
the petition. Articles 238 and 239 of the Labor Code give the
Regional Director ample discretion in dealing with a petition for
cancellation of a union's registration, particularly, determining
whether the union still meets the requirements prescribed by law. It
is sufficient to give the Regional Director license to treat the late
filing of required documents as sufficient compliance with the
requirements of the law. After all, the law requires the labor
organization to submit the annual financial report and list of
members in order to verify if it is still viable and financially
sustainable as an organization so as to protect the employer and
employees from fraudulent or fly-by-night unions. With the
submission of the required documents by respondent, the purpose
of the law has been achieved, though belatedly.
i. Labor authorities should act with circumspection in
treating petitions for cancellation of union registration,
lest they be accused of interfering with union activities. In
resolving the petition, consideration must be taken of the
fundamental rights guaranteed by Article XIII, Section 3
of the Constitution, i.e., the rights of all workers to self-
organization, collective bargaining and negotiations, and
peaceful concerted activities. Labor authorities should
bear in mind that registration confers upon a union the
status of legitimacy and the concomitant right and
privileges granted by law to a legitimate labor
organization, particularly the right to participate in or ask
for certification election in a bargaining unit. Thus, the
cancellation of a certificate of registration is the
equivalent of snuffing out the life of a labor organization.
For without such registration, it loses — as a rule — its
rights under the Labor Code.
ii. It should also be noted that the amendments of the Labor
Code specifically stated that failure to comply with the
reportorial requirements shall not be a ground for
cancellation of union registration but shall subject the
erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.
4. Toyota Motor, Dunlop and Tagaytay Highlands were explained, as it
emphasized the prevailing laws in the three cases:
a. Toyota Motor and Dunlop Slazenger involved petitions for
certification election filed on November 26, 1992 and
September 15, 1995, respectively. In both cases, we applied the
Rules and Regulations Implementing R.A. No. 6715 (also
known as the 1989 Amended Omnibus Rules), the prevailing
rule then. The rules then stated that commingling of members
will affect the legitimacy of the labor union.
b. The Amended Omnibus Rules were further amended by the
the removal of the requirement of indicating in the petition for
the certification election that there was no co-mingling of rank-
and-file and supervisory employees in the membership of the
labor union.
c. Thus, in Tagaytay Highlands, the rule was mixed membership
should have no bearing on the legitimacy of a registered labor
organization, unless the co-mingling was due to
misrepresentation, false statement or fraud.
5. It should be noted that when the union filed for its petition for
certification, the applicable rules were Toyota Motor and Dunlop (not
Tagaytay Highlands). Eitherway, the Court would still decide in favor
of the union.
a. The Court clarified the cases invoked by the petitioners. In
both cases, the employers were able to adduce evidence that
there was indeed commingling of rank and file and
supervisorial employees.
b. In the current case, the petitioner did not adduce evidence. It
merely identified the positions that were either confidential or
managerial, but did not present any supporting evidence to
prove or explain the identification.
i. The SC also reiterated that the actual function, and
not the job designation, determines whether the
employee is managerial, supervisorial, confidential, or
rank and file. Mere allegations sans substance would
not be enough, most especially because the
constitutional right of workers to self-organization
would be compromised.
 018 BPI v BPI Employees Union-Davao Chapter (GUSTILO)
August 10, 2010| Leonardo-Castro, J. | Union Security Clause
PETITIONER: BPI
RESPONDENTS: BPI Employees Union-Davao Chapter-Federation of Unions in
BPI Unibank
SUMMARY: The Bangko Sentral ng Pilipinas approved the Articles of Merger
executed on January 20, 2000 by and between BPI and FEBTC. This Article and
Plan of Merger was approved by the Securities and Exchange Commission.
Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC
were transferred to and absorbed by BPI as the surviving corporation.  FEBTC
employees, including those in its different branches across the country, were hired
by BPI as its own employees, with their status and tenure recognized and salaries
and benefits maintained. BPI Employees Union-Davao Chapter - Federation of
Unions in BPI Unibank (Union) is the exclusive bargaining agent of BPI's rank and
file employees in Davao City. The former FEBTC rank-and-file employees in
Davao City did not belong to any labor union at the time of the merger.  Prior to the
effectivity of the merger, or on March 31, 2000, the Union invited said FEBTC
employees to a meeting regarding the Union Shop Clause (Article II, Section 2) of
the existing CBA between BPI and the Union. After the meeting called by the
Union, some of the former FEBTC employees joined the Union, while others
refused.  Later, however, some of those who initially joined retracted their
membership. The Union then sent notices to the former FEBTC employees who
refused to join, as well as those who retracted their membership, and called them to
a hearing regarding the matter.  When these former FEBTC employees refused to
attend the hearing, the president of the Union requested BPI to implement the
Union Shop Clause of the CBA and to terminate their employment pursuant
thereto. After two months of management inaction on the request, the Union
informed BPI of its decision to refer the issue of the implementation of the Union
Shop Clause of the CBA to the Grievance Committee. However, the issue remained
unresolved at this level and so it was subsequently submitted for voluntary
arbitration by the parties.
The VA ruled in favor of BPI’s interpretation that the former FEBTC employees
were not covered by the Union Security Clause of the CBA between the Union and
the Bank on the ground that the said employees were not new employees who were
hired and subsequently regularized, but were absorbed employees "by operation of
law" because the "former employees of FEBTC can be considered assets and
liabilities of the absorbed corporation." The former FEBTC employees could not be
compelled to join the Union, as it was their constitutional right to join or not to join
any organization. The Union then appealed the VA decision to the CA.
The CA reversed the decision of the VA. The CA is persuaded that
the similarities of "new" and "absorbed" employees far outweighs
the distinction between them.  The similarities lies on the following, to wit: (a) they
have a new employer; (b) new working conditions; (c) new terms of employment
and; (d) new company policy to follow.  As such, they should be considered as
"new" employees for purposes of applying the provisions of the CBA regarding the
"union-shop" clause.
The issue is WoN the former FEBTC employees that were absorbed by BPI upon
the merger between FEBTC and BPI should be covered by the Union Shop Clause
found in the existing CBA between BPI and the Union?- YES
The SC held that in law or even under the express terms of the CBA, there is no
special class of employees called "absorbed employees." In order for the Court to
apply or not apply the Union Shop Clause, we can only classify the former FEBTC
employees as either "old" or "new."  If they are not "old" employees, they are
necessarily "new" employees.  If they are new employees, the Union Shop Clause
did not distinguish between new employees who are non-regular at their hiring but
who subsequently become regular and new employees who are "absorbed" as
regular and permanent from the beginning of their employment.  The Union Shop
Clause did not so distinguish, and so neither must we.
Thus, in the case at bar, since the former FEBTC employees are deemed covered by
the Union Shop Clause, they are required to join the certified bargaining agent,
which supposedly has gathered the support of the majority of workers within the
bargaining unit in the appropriate certification proceeding.  Their joining the
certified union would, in fact, be in the best interests of the former FEBTC
employees for it unites their interests with the majority of employees in the
bargaining unit.  It encourages employee solidarity and affords sufficient protection
to the majority status of the union during the life of the CBA which are the
precisely the objectives of union security clauses, such as the Union Shop Clause
involved herein.  We are indeed not being called to balance the interests of
individual employees as against the State policy of promoting unionism, since the
employees, who were parties in the court below, no longer contested the adverse
Court of Appeals' decision.  Nonetheless, settled jurisprudence has already swung
the balance in favor of unionism, in recognition that ultimately the individual
employee will be benefited by that policy.
Doctrine: The union shop clause offers protection to the certified bargaining agent
by ensuring that future regular employees who (a) enter the employ of the company
during the life of the CBA; (b) are deemed part of the collective bargaining unit;
and (c) whose number will affect the number of members of the collective
bargaining unit will be compelled to join the union. Such compulsion has legal
effect, precisely because the employer by voluntarily entering in to a union shop
clause in a CBA with the certified bargaining agent takes on the responsibility of
dismissing the new regular employee who does not join the union.
12. After the meeting called by the Union, some of the former FEBTC
FACTS:
8. On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles
of Merger executed on January 20, 2000 by and between BPI and FEBTC.
This Article and Plan of Merger was approved by the Securities and
Exchange Commission.
9. Pursuant to the Article and Plan of Merger, all the assets and liabilities of
FEBTC were transferred to and absorbed by BPI as the surviving
corporation.  FEBTC employees, including those in its different branches
13. After two months of management inaction on the request, the Union
across the country, were hired by BPI as its own employees, with their
status and tenure recognized and salaries and benefits maintained.
10. Respondent BPI Employees Union-Davao Chapter - Federation of Unions
in BPI Unibank (Union) is the exclusive bargaining agent of BPI's rank and
file employees in Davao City. The former FEBTC rank-and-file employees
14. The VA ruled in favor of BPI’s interpretation that the former FEBTC
in Davao City did not belong to any labor union at the time of the merger.  
Prior to the effectivity of the merger, or on March 31, 2000, the Union
invited said FEBTC employees to a meeting regarding the Union Shop
Clause (Article II, Section 2) of the existing CBA between BPI and the
Union.
11. The parties both advert to certain provisions of the existing CBA,
which are quoted below: (a) Article 1: Section 1. Recognition and
Bargaining Unit - The BANK recognizes the UNION as the sole and
exclusive collective bargaining representative of all the regular rank
and file employees of the Bank offices in Davao City; (b) Article 2:
Section 1.  Maintenance of Membership - All employees within the
bargaining unit who are members of the Union on the date of the
effectivity of this Agreement as well as employees within the bargaining
unit who subsequently join or become members of the Union during the
lifetime of this Agreement shall as a condition of their continued
employment with the Bank, maintain their membership in the Union in
good standing.; (c) Article 2: Section 2 Union Shop  - New
employees falling within the bargaining unit as defined in Article I of
this Agreement, who may hereafter be regularly employed by the Bank
shall, within thirty (30) days after they become regular employees, join
the Union as a condition of their continued employment.  It is
understood that membership in good standing in the Union is a
condition of their continued employment with the Bank.
employees joined the Union, while others refused.  Later, however, some of
those who initially joined retracted their membership. The Union then sent
notices to the former FEBTC employees who refused to join, as well as
those who retracted their membership, and called them to a hearing
regarding the matter.  When these former FEBTC employees refused to
attend the hearing, the president of the Union requested BPI to implement
the Union Shop Clause of the CBA and to terminate their employment
pursuant thereto.
informed BPI of its decision to refer the issue of the implementation of the
Union Shop Clause of the CBA to the Grievance Committee. However, the
issue remained unresolved at this level and so it was subsequently submitted
for voluntary arbitration by the parties.
employees were not covered by the Union Security Clause of the CBA
between the Union and the Bank on the ground that the said employees
were not new employees who were hired and subsequently regularized, but
were absorbed employees "by operation of law" because the "former
employees of FEBTC can be considered assets and liabilities of the
absorbed corporation." The former FEBTC employees could not be
compelled to join the Union, as it was their constitutional right to join or not
to join any organization.
 15. The Union then appealed the VA decision to the CA. The CA reversed the
decision of the VA. The CA ruled that a union-shop clause has been defined
as a form of union security provision wherein non-members may be hired,
but to retain employment must become union members after a certain
period.
16. The CA agrees with the voluntary arbitrator that the ABSORBED
employees are distinct and different from NEW employees BUT only in so
far as their employment service is concerned. The distinction ends there.  In
the case at bar, the absorbed employees' length of service from its former
employer is tacked with their employment with BPI.  Otherwise stated, the
absorbed employees service is continuous and there is no gap in their
service record.
17. The CA is persuaded that the similarities of "new" and "absorbed"
employees far outweighs the distinction between them.  The similarities lies
on the following, to wit: (a) they have a new employer; (b) new working
conditions; (c) new terms of employment and; (d) new company policy to
follow.  As such, they should be considered as "new" employees for
purposes of applying the provisions of the CBA regarding the "union-shop"
clause.
18. The existing BPI employees by virtue of the "union-shop" clause are
required to pay the monthly union dues, remain as members in good
standing of the union otherwise, they shall be terminated from the company,
and other union-related obligations.  On the other hand, the "absorbed"
employees shall enjoy the "fruits of labor" of the petitioner-union and its
members for nothing in exchange.  Certainly, this would disturb industrial
peace in the company which is the paramount reason for the existence of the
CBA and the union.
ISSUE/s:
1. WoN the former FEBTC employees that were absorbed by BPI upon the
merger between FEBTC and BPI should be covered by the Union Shop
Clause found in the existing CBA between BPI and the Union?- Yes they
should be covered because they are new employees not absorbed
employees
RULING: WHEREFORE, the petition is hereby DENIED, and the Decision dated
September 30, 2003 of the Court of Appeals is AFFIRMED, subject to the thirty
(30) day notice requirement imposed herein.  Former FEBTC employees who opt not
to become union members but who qualify for retirement shall receive their
retirement benefits in accordance with law, the applicable retirement plan, or the
CBA, as the case may be.
RATIO:
2. BPI argues that the term "new employees" in the Union Shop Clause of the
CBA is qualified by the phrases "who may hereafter be regularly employed"
and "after they become regular employees" which led BPI to conclude that
the "new employees" referred to in, and contemplated by, the Union Shop
Clause of the CBA were only those employees who were "new" to BPI, on
account of having been hired initially on a temporary or probationary status
for possible regular employment at some future date. 
3. BPI argues that the FEBTC employees absorbed by BPI cannot be
considered as "new employees" of BPI for purposes of applying the Union
Shop Clause of the CBA.
4. The SC does not agree with the interpretation of BPI. Section 2, Article II
of the CBA is silent as to how one becomes a "regular employee" of the BPI
for the first time.  There is nothing in the said provision which requires that
a "new" regular employee first undergo a temporary or probationary status
before being deemed as such under the union shop clause of the CBA.
5. Union security" is a generic term which is applied to and comprehends
"closed shop," "union shop," "maintenance of membership" or any other
form of agreement which imposes upon employees the obligation to acquire
or retain union membership as a condition affecting employment. There is
union shop when all new regular employees are required to join the union
within a certain period for their continued employment. 
6. There is maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who thereafter
become members, must maintain union membership as a condition for
continued employment until they are promoted or transferred out of the
bargaining unit or the agreement is terminated. 
7. A closed-shop, on the other hand, may be defined as an enterprise in which,
 by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed
departments of the enterprise unless he or she is, becomes, and, for the
duration of the agreement, remains a member in good standing of a union
entirely comprised of or of which the employees in interest are a part.
8. The purpose of a union shop or other union security arrangement is to
guarantee the continued existence of the union through enforced
membership for the benefit of the workers. All employees in the bargaining
unit covered by a Union Shop Clause in their CBA with management are
subject to its terms.  However, under law and jurisprudence, the following
kinds of employees are exempted from its coverage, namely, employees
who at the time the union shop agreement takes effect are bona fide
members of a religious organization which prohibits its members from
joining labor unions on religious grounds; employees already in the service
and already members of a union other than the majority at the time the
union shop agreement took effect; confidential employees who are excluded
from the rank and file bargaining unit; and employees excluded from the
union shop by express terms of the agreement.
9. Moreover, a closed shop agreement is an agreement whereby an employer
binds himself to hire only members of the contracting union who must
continue to remain members in good standing to keep their jobs.  It is "the
most prized achievement of unionism."  It adds membership and
compulsory dues.  By holding out to loyal members a promise of
employment in the closed shop, it wields group solidarity.
10. BPI insists that the term "new employees," as the same is used in the Union
Shop Clause of the CBA at issue, refers only to employees hired by BPI
as non-regular employees who later qualify for regular employment and
become regular employees, and not those who, as a legal consequence of a
merger, are allegedly automatically deemed regular employees of BPI. 
However, the CBA does not make a distinction as to how a regular
employee attains such a status.  Moreover, there is nothing in the
Corporation Law and the merger agreement mandating the automatic
employment as regular employees by the surviving corporation in the
merger.
Absorbed FEBTC Employees are Neither Assets nor Liabilities
11. There was no government regulation or law that compelled the merger of
the two banks or the absorption of the employees of the dissolved
corporation by the surviving corporation.  Had there been such law or
regulation, the absorption of employees of the non-surviving entities of the
merger would have been mandatory on the surviving corporation. In the
present case, the merger was voluntarily entered into by both banks
presumably for some mutually acceptable consideration.  In fact, the
Corporation Code does not also mandate the absorption of the employees of
the non-surviving corporation by the surviving corporation in the case of a
merger. 
12. Furthermore, this Court believes that it is contrary to public policy to
declare the former FEBTC employees as forming part of the assets or
liabilities of FEBTC that were transferred and absorbed by BPI in the
Articles of Merger.  Assets and liabilities, in this instance, should be
deemed to refer only to property rights and obligations of FEBTC and do
not include the employment contracts of its personnel. 
13. Employment is a personal consensual contract and absorption by BPI of a
former FEBTC employee without the consent of the employee is in
violation of an individual's freedom to contract.  It would have been a
different matter if there was an express provision in the articles of merger
that as a condition for the merger, BPI was being required to assume all the
employment contracts of all existing FEBTC employees with the
conformity of the employees. 
14. In the absence of such a provision in the articles of merger, then BPI
clearly had the business management decision as to whether or not
employ FEBTC's employees. FEBTC employees likewise retained the
prerogative to allow themselves to be absorbed or not; otherwise, that
would be tantamount to involuntary servitude.
Legal Effects of Mergers
15. Assuming for the sake of argument that there is an obligation to hire or
absorb all employees of the non-surviving corporation, there is still no basis
to conclude that the terms and conditions of employment under a valid
collective bargaining agreement in force in the surviving corporation should
not be made to apply to the absorbed employees.

New Employees under the CBA
16. Even though BPI steps into the shoes of FEBTC as the surviving
corporation, BPI does so at a particular point in time, i.e., the effectivity of
the merger upon the SEC's issuance of a certificate of merger. In fact, the
articles of merger themselves provided that both BPI and FEBTC will
continue their respective business operations until the SEC issues the
certificate of merger and in the event SEC does not issue such a certificate,
they agree to hold each other blameless for the non-consummation of the
merger.
17. BPI could have only become the employer of the FEBTC employees it
absorbed after the approval by the SEC of the merger.  If the SEC did not
approve the merger, BPI would not be in the position to absorb the
employees of FEBTC at all. BPI became the employer of the absorbed
employees only at some point after the effectivity of the merger,
notwithstanding the fact that the absorbed employees' years of service with
FEBTC were voluntarily recognized by BPI.
18. In law or even under the express terms of the CBA, there is no special
class of employees called "absorbed employees." In order for the Court
to apply or not apply the Union Shop Clause, we can only classify the
former FEBTC employees as either "old" or "new."  If they are not
"old" employees, they are necessarily "new" employees.  If they are
new employees, the Union Shop Clause did not distinguish between new
employees who are non-regular at their hiring but who subsequently
become regular and new employees who are "absorbed" as regular and
permanent from the beginning of their employment.  The Union Shop
Clause did not so distinguish, and so neither must we.
Non-Application of Union Shop Clause
Contrary to the Policy of the Labor Code
and Inimical to Industrial Peace (MOST IMPORTANT)
19. It is but fair that similarly situated employees who enjoy the same privileges
of a CBA should be likewise subject to the same obligations the CBA
imposes upon them.  A contrary interpretation of the Union Shop Clause
will be inimical to industrial peace and workers' solidarity.  This
unfavorable situation will not be sufficiently addressed by asking the former
FEBTC employees to simply pay agency fees to the Union in lieu of union
membership.
20. The fact remains that other new regular employees, to whom the "absorbed
employees" should be compared, do not have the option to simply pay the
agency fees and they must join the Union or face termination.
21. BPI's restrictive reading of the Union Shop Clause could also inadvertently
open an avenue, which an employer could readily use, in order to dilute the
membership base of the certified union in the collective bargaining unit
(CBU).  By entering into a voluntary merger with a non-unionized company
that employs more workers, an employer could get rid of its existing union
by the simple expedient of arguing that the "absorbed employees"
are not new employees, as are commonly understood to be covered by a
CBA's union security clause.  This could then lead to a new majority within
the CBU that could potentially threaten the majority status of the existing
union and, ultimately, spell its demise as the CBU's bargaining
representative.
22. Indeed, a union security clause in a CBA should be interpreted to give
meaning and effect to its purpose, which is to afford protection to the
certified bargaining agent and ensure that the employer is dealing with a
union that represents the interests of the legally mandated percentage of the
members of the bargaining unit.
23. The union shop clause offers protection to the certified bargaining
agent by ensuring that future regular employees who (a) enter the
employ of the company during the life of the CBA; (b) are deemed part
of the collective bargaining unit; and (c) whose number will affect the
number of members of the collective bargaining unit will be compelled
to join the union. Such compulsion has legal effect, precisely because
the employer by voluntarily entering in to a union shop clause in a CBA
with the certified bargaining agent takes on the responsibility of
dismissing the new regular employee who does not join the union.
24. Without the union shop clause or with the restrictive interpretation
thereof the company can jeopardize the majority status of the certified
union by excluding from union membership all new regular employees
whom the Company will "absorb" in future mergers and all new
regular employees whom the Company hires as regular from the
beginning of their employment without undergoing a probationary
 period. In this manner, the Company can increase the number of
members of the collective bargaining unit and if this increase is not
accompanied by a corresponding increase in union membership, the
certified union may lose its majority status and render it vulnerable to
attack by another union who wishes to represent the same bargaining
unit.
25. Or worse, a certified union whose membership falls below twenty
percent (20%) of the total members of the collective bargaining unit
may lose its status as a legitimate labor organization altogether, even in
a situation where there is no competing union. In such a case, an
interested party may file for the cancellation of the union's certificate of
registration with the Bureau of Labor Relations.
26. In the case at bar, since the former FEBTC employees are deemed
covered by the Union Shop Clause, they are required to join the
certified bargaining agent, which supposedly has gathered the support
of the majority of workers within the bargaining unit in the
appropriate certification proceeding.  Their joining the certified union
would, in fact, be in the best interests of the former FEBTC employees
for it unites their interests with the majority of employees in the
bargaining unit.  It encourages employee solidarity and affords
sufficient protection to the majority status of the union during the life
of the CBA which are the precisely the objectives of union security
clauses, such as the Union Shop Clause involved herein.  We are indeed
not being called to balance the interests of individual employees as
against the State policy of promoting unionism, since the employees,
who were parties in the court below, no longer contested the adverse
Court of Appeals' decision.  Nonetheless, settled jurisprudence has
already swung the balance in favor of unionism, in recognition that
ultimately the individual employee will be benefited by that policy.
27. In the hierarchy of constitutional values, this Court has repeatedly held that
the right to abstain from joining a labor organization is subordinate to the
policy of encouraging unionism as an instrument of social justice. In sum,
this Court finds it reasonable and just to conclude that the Union Shop
Clause of the CBA covers the former FEBTC employees who were
hired/employed by BPI during the effectivity of the CBA in a manner which
petitioner describes as "absorption."  A contrary appreciation of the facts of
this case would, undoubtedly, lead to an inequitable and very volatile labor
situation which this Court has consistently ruled against.
Dissenting Opinion of Justice Brion:
1. The case is simply about the interpretation and application, in a merger
situation, of union security clauses in BPI’s collective bargaining agreement
(CBA) with the union.  To be exact, the basic underlying issue of the case is
about the effects of merger on the merging corporations' employees - an
issue that arose soon after the merger and one that is still current despite the
execution of two subsequent CBAs.  It is not an issue, therefore, that simply
must be resolved because it will recur, as the ponencia posits; it must be
resolved because it is a live dispute that now exists between the parties.
2. In a corporate merger situation - where one corporation totally surrenders
itself, giving up to another corporation even the human resources that
enable its business to operate - the terms of the Constitution bar us from
looking at the corporate transaction purely as a contract that should be
analyzed purely on the basis of the law on contracts, in the way
the ponencia suggested. Nor can we accept as valid the ponencia's
pronouncement, apparently in line with its purely contractual analysis, that
the transfer of all assets and liabilities in a merger situation, as in this case,
refers only to FEBTC's property rights and obligations and does not include
the employment contracts of its personnel.
3. In the BPI-FEBTC situation, these employment contracts are part of the
obligations that the merging parties have to account and make provisions
for under the Constitution and the Corporation Code; in the absence of any
clear agreement, these employment contracts subsist, subject to the right of
the employees to reject them as they cannot be compelled to render service
but can only be made to answer in damages if the rejection constitutes a
breach. In other words, in mergers and consolidations, these contracts
should be held to be continuing, unless rejected by the employees
themselves or declared by the merging parties to be subject to the
authorized causes for termination of employment under Sections 282 and
283 of the Labor Code. In this sense, the merging parties' control and
business decision on how employees shall be affected, in the same manner
that the affected employees' decision on whether to abide by the merger or
to opt out, remain unsullied.
CBA Union Security Clause
4. On the basis of this union security clause and the compulsory membership it
compels, there are three kinds of employees at BPI, namely - (1) those
who are not compelled to be union members because they were not union
 members at the time the CBA was signed; (2) those who are compelled to
continue membership because they were already union members when
the CBA was signed; and (3) those who, previously non-regular
employees, are compelled to be union members after they attain regular
status.
5. By its reference to employees who are as yet on non-regular status, what is
clearly a requirement for the application of the union shop clause, as framed
by this provision, is the grant of regular status. In other words, it applies to
those recently given regular employment and who, by necessary
implication, were hired as non-regular employees and were thereafter
accorded regular status.
6. In contrast with the non-regular employees that the CBA clearly referred to,
absorbed FEBTC employees did not undergo the process of waiting for the
grant of regular status; their regular employment simply continued from
FEBTC to BPI without any break because BPI only succeeded to the role of
FEBTC as employer in a merger, where the same employment was
maintained and only the employer's personality changed.  Thus, they cannot
be "new" under the terms of the union security clause. For that matter, they
are not even "new" under the ordinary meaning of this word which connotes
something that recently came into existence, use, or a particular state or
relation.
7. Ultimately, the absorbed employees are best recognized for what they really
are - a sui generis group of employees whose classification will not be
duplicated until BPI has another merger where it would be the surviving
corporation and no provision would be made to define the situation of the
employees of the merged constituent corporation.  Significantly, this
classification - obviously, not within the contemplation of the CBA parties
when they executed their CBA - is not contrary to, nor governed by, any of
the agreed terms of the existing CBA on union security, and thus occupies a
gap that BPI, in the exercise of its management prerogative, can fill.
8. In the meantime, whether to join or not to join the union is a choice that
these absorbed employees will have to make after the next CBA, when their
status becomes subject to the results of the collective negotiations.
Dissenting Opinion of Justice Carpio:
1. The absorbed FEBTC employees are NOT and cannot be considered as
"new employees" within the contemplation of the union shop clause. Verily,
BPI and the Union never agreed on requiring the former FEBTC employees
to join the Union as a condition for their employment by BPI. On the
contrary, BPI is questioning the applicability of the union shop clause to
said employees.
2. The ponencia states, "When certain employees are obliged to join a
particular union as a requisite for continued employment, as in the case of a
Union Shop Clause, a form of discrimination or a derogation of the freedom
or right not to join any labor organization occurs but these are valid
restrictions because they are in favor of unionism."  According to Justice
Carpio, in this case, a derogation of the employees' fundamental
constitutional right not to join a union is being done without a
determination of whether the employees are in favor of unionism.
Certainly, the union shop clause in a CBA cannot prevail over the
fundamental constitutional right of a worker to join or not to join a
union.
3. Sustaining petitioner's position will result in an awkward and unfair
situation wherein the absorbed employees will be in a better position than
the existing BPI employees, since the latter will be required to pay monthly
union dues, while the absorbed employees will "enjoy the fruits of labor of
the [union] and its members for nothing in exchange."  According to Justice
Carpio, this is not correct.  Section 248(e) of the Labor Code provides that,
"Employees of an appropriate collective bargaining unit who are not
members of the recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by members of the
recognized collective bargaining agent, if such non-union members accept
the benefits under the collective bargaining agreement x x x." The absorbed
FEBTC employees who refuse to join the Union will not be free riders. 
4. In the present case, since the absorbed FEBTC employees will pay all
union dues and fees, there is no reason to force them to join the Union
except to humiliate them by trampling upon their fundamental
constitutional right to join or not to join a union.  This the Court should
not allow.
5. It is this Court's solemn duty to implement the State policy of
promoting unionism.  However, this duty cannot be done at the expense
of a fundamental constitutional right of a worker.  We cannot exalt
union rights over and above the freedom and right of employees to join
or not to join a union.
 019 General Milling Corp. v Casio (Hilario)
March 10, 2010| Leonardo-de Castro, J. | Topic
PETITIONER: GENERAL MILLING CORPORATION, PETITIONER
RESPONDENTS: ERNESTO CASIO, ROLANDO IGOT, MARIO
FAMADOR, NELSON LIM, FELICISIMO BOOC, PROCOPIO OBREGON,
JR., AND ANTONIO ANINIPOK, and VIRGILIO PINO, PAULINO
CABREROS, MA. LUNA P. JUMAOAS, DOMINADOR BOOC, FIDEL
VALLE, BARTOLOME AUMAN, REMEGIO CABANTAN, LORETO
GONZAGA, EDILBERTO MENDOZA AND ANTONIO PANILAG
SUMMARY: The CBA between General Milling Corp (GMC) and IBM (Ilaw
Buklod ng Mangagawa) currently has a union security clause (see fact 2).
Gabiana, the IBM Regional Director for Visayas and Mindanao, furnished
Casio, et al. with copies of the Affidavits of GMC employees Basilio Inoc and
Juan Potot, charging Casio, et al. with "acts inimical to the interest of the
union." Through the same letter, Gabiana gave Casio, et al. three days from
receipt thereof within which to file their answers or counter-affidavits.
However, Casio, et al. refused to acknowledge receipt of Gabiana’s letter.
Subsequently, on February 29, 1992, Pino, et al., as officers and members of the
IBM-Local 31, issued a Resolution expelling Casio, et al. from the union. With
this, Gabiana wrote a letter to GMC to inform them of the expulsion of Casio
and requested that Casio be immediately dismissed from their work. GMC at
first refused but later budged because the union threatened to strike. ISSUE:
WON Casio’s dismissal was illegal for violating due process—YES, it was
illegal because due process was not observed.
The Court finds that GMC illegally dismissed Casio, et al. because not only did
GMC fail to make a determination of the sufficiency of evidence to support the
decision of IBM-Local 31 to expel Casio, et al., but also to accord the expelled
union members procedural due process, i.e., notice and hearing, prior to the
termination of their employment. In terminating the employment of an
employee by enforcing the union security clause, the employer needs only
to determine and prove that: (1) the union security clause is applicable; (2)
the union is requesting for the enforcement of the union security provision
in the CBA; and (3) there is sufficient evidence to support the decision of
the union to expel the employee from the union. These requisites constitute
just cause for terminating an employee based on the union security provision of
the CBA. There is no question that in the present case, the CBA between GMC
and IBM-Local 31 included a maintenance of membership and closed shop
clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by
written request, can ask GMC to terminate the employment of the
employee/worker who failed to maintain its good standing as a union member.
It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM
Regional Director for Visayas and Mindanao, twice requested GMC, in the
letters dated March 10 and 19, 1992, to terminate the employment of Casio, et
al. as a necessary consequence of their expulsion from the union. It is the third
requisite – that there is sufficient evidence to support the decision of IBM-
Local 31 to expel Casio, et al. – which appears to be lacking in this case.
The letter made no mention at all of the evidence supporting the decision of
IBM-Local 31 to expel Casio, et al. from the union. GMC never alleged nor
attempted to prove that the company actually looked into the evidence of IBM-
Local 31 for expelling Casio, et al. and made a determination on the sufficiency
thereof. Without such a determination, GMC cannot claim that it had
terminated the employment of Casio, et al. for just cause. The failure of
GMC to make a determination of the sufficiency of evidence supporting the
decision of IBM-Local 31 to expel Casio, et al. is a direct consequence of the
non-observance by GMC of procedural due process in the dismissal of
employees.
DOCTRINE: Irrefragably, GMC cannot dispense with the requirements of
notice and hearing before dismissing Casio, et al. even when said dismissal is
pursuant to the closed shop provision in the CBA. The rights of an employee
to be informed of the charges against him and to reasonable opportunity to
present his side in a controversy with either the company or his own union
are not wiped away by a union security clause or a union shop clause in a
collective bargaining agreement.
FACTS:
1. The labor union Ilaw at Bukod ng Mangagawa (IBM) Local 31 chapter (Local
31) was the sole and exclusive bargaining agent of the rank and file
employees of General Milling Corp in Lapu-Lapu City.
2. It entered into a Collective Bargaining Agreement with General Milling
 Corp sometime in November 1991, so it retroacted to August 1991.
a. Section 3. MAINTENANCE OF MEMBERSHIP - All employees/workers employed by
the Company with the exception of those who are specifically excluded by law and
by the terms of this Agreement must be members in good standing of the Union
within thirty (30) days upon the signing of this agreement and shall maintain
such membership in good standing thereof as a condition of their employment or
continued employment.
Section 6. The Company, upon written request of the Union, shall terminate the
services of any employee/worker who fails to fulfill the conditions set forth in
Sections 3 and 4 thereof, subject however, to the provisions of the Labor Laws of
the Philippines and their Implementing Rules and Regulations. The Union shall
absolve the Company from any and all liabilities, pecuniary or otherwise, and
responsibilities to any employee or worker who is dismissed or terminated in
pursuant thereof.
3. Casio was elected IBM-Local 31 President for a three-year term in June
1991, while his co-respondents were union shop stewards.
4. Gabiana, the IBM Regional Director for Visayas and Mindanao, furnished
Casio, et al. with copies of the Affidavits of GMC employees Basilio Inoc
and Juan Potot, charging Casio, et al. with "acts inimical to the interest of
the union." Through the same letter, Gabiana gave Casio, et al. three days
from receipt thereof within which to file their answers or counter-
affidavits.
5. However, Casio, et al. refused to acknowledge receipt of Gabiana’s letter.
6. Subsequently, on February 29, 1992, Pino, et al., as officers and members
of the IBM-Local 31, issued a Resolution expelling Casio, et al. from the
union.
7. Gabiana then wrote a letter dated March 10, 1992, addressed to Eduardo
Cabahug (Cabahug), GMC Vice-President for Engineering and Plant
Administration, informing the company of the expulsion of Casio, et al.
from the union pursuant to the Resolution dated February 29, 1992 of
IBM-Local 31 officers and board members.
8. Gabiana likewise requested that Casio, et al. "be immediately dismissed
from their work for the interest of industrial peace in the plant."
9. Gabiana followed-up with another letter dated March 19, 1992, inquiring
from Cabahug why Casio, et al. were still employed with GMC despite the
request of IBM-Local 31 that Casio, et al. be immediately dismissed from
service pursuant to the closed shop provision in the existing CBA. Gabiana
reiterated the demand of IBM-Local 31 that GMC dismiss Casio, et al., with
the warning that failure of GMC to do so would constitute gross violation
of the existing CBA and constrain the union to file a case for unfair labor
practice against GMC.
10. Pressured by the threatened filing of a suit for unfair labor practice, GMC
acceded to Gabiana’s request to terminate the employment of Casio, et al.
GMC issued a Memorandum dated March 24, 1992 terminating the
employment of Casio, et al. effective April 24, 1992 and placing the latter
under preventive suspension for the meantime.
11. On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed a
Notice of Strike with the NCMB-Regional Office No. VII (NCMB-RO). Casio,
et al. alleged as bases for the strike the illegal dismissal of union officers
and members, discrimination, coercion, and union busting.
12. The Voluntary Arbitration Award presented the following findings: (1) the
termination by GMC of the employment of Casio, et al. was in valid
compliance with the closed shop provision in the CBA; (2) GMC had no
competence to determine the good standing of a union member; (3) Casio,
et al. waived their right to due process when they refused to receive
Gabiana’s letter dated February 24, 1992, which required them to submit
their answer to the charges against them; (4) the preventive suspension of
Casio, et al. by GMC was an act of self-defense; and (5) the IBM-Local 31
Resolution dated February 29, 1992 expelling Casio, et al. as union
members, also automatically ousted them as union officers.
13. Dissatisfied with the Voluntary Arbitration Award, Casio, et al. went to the
Court of Appeals by way of a Petition for Certiorari under Rule 65 of the
Rules of Court to have said Award set aside. The Court of Appeals granted
the writ of certiorari and set aside the Voluntary Arbitration Award.
14. The appellate court ruled that while the dismissal of Casio, et al., was made
by GMC pursuant to a valid closed shop provision under the CBA, the
company, however, failed to observe the elementary rules of due process
in implementing the said dismissal. Consequently, Casio, et al. were
entitled to reinstatement with backwages from the time of their dismissal
up to the time of their reinstatement
ISSUE/s:
1. WON Casio’s dismissal was illegal for violating due process—YES, it was
illegal because due process was not observed
RULING: WHEREFORE, the instant petition is hereby DENIED. The assailed
decision of the Court of Appeals dated March 30, 2001 in CA-G.R. SP No.
40280 is AFFIRMED.
RATIO:
1. The dismissal of Casio, et al. was indeed illegal, having been done
without just cause and the observance of procedural due process.
2. "Union security" is a generic term, which is applied to and comprehends
"closed shop," "union shop," "maintenance of membership," or any
other form of agreement which imposes upon employees the obligation to
acquire or retain union membership as a condition affecting employment.
3. There is union shop when all new regular employees are required to join the
union within a certain period as a condition for their continued employment.
There is maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who thereafter
become members, must maintain union membership as a condition for
continued employment until they are promoted or transferred out of the
bargaining unit or the agreement is terminated. A closed shop, on the other
hand, may be defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person may be
employed in any or certain agreed departments of the enterprise unless he or
she is, becomes, and, for the duration of the agreement, remains a member
in good standing of a union entirely comprised of or of which the
employees in interest are a part.
4. It is State policy to promote unionism to enable workers to negotiate with
management on an even playing field and with more persuasiveness than if
they were to individually and separately bargain with the employer. For this
reason, the law has allowed stipulations for "union shop" and "closed shop"
as means of encouraging workers to join and support the union of their
choice in the protection of their rights and interest vis-à-vis the employer.
5. Moreover, a stipulation in the CBA authorizing the dismissal of
employees are of equal import as the statutory provisions on dismissal
under the Labor Code, since "a CBA is the law between the company and
the union and compliance therewith is mandated by the express policy to
give protection to labor."
6. In terminating the employment of an employee by enforcing the union
security clause, the employer needs only to determine and prove that:
(1) the union security clause is applicable; (2) the union is requesting
for the enforcement of the union security provision in the CBA; and (3)
there is sufficient evidence to support the decision of the union to expel
the employee from the union. These requisites constitute just cause for
terminating an employee based on the union security provision of the CBA.
7. There is no question that in the present case, the CBA between GMC and
IBM-Local 31 included a maintenance of membership and closed shop
clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31,
by written request, can ask GMC to terminate the employment of the
employee/worker who failed to maintain its good standing as a union
member. It is similarly undisputed that IBM-Local 31, through Gabiana, the
IBM Regional Director for Visayas and Mindanao, twice requested GMC,
in the letters dated March 10 and 19, 1992, to terminate the employment of
Casio, et al. as a necessary consequence of their expulsion from the union.
It is the third requisite – that there is sufficient evidence to support the
decision of IBM-Local 31 to expel Casio, et al. – which appears to be
lacking in this case.
8. The letter made no mention at all of the evidence supporting the
decision of IBM-Local 31 to expel Casio, et al. from the union. GMC
never alleged nor attempted to prove that the company actually looked into
the evidence of IBM-Local 31 for expelling Casio, et al. and made a
determination on the sufficiency thereof. Without such a determination,
GMC cannot claim that it had terminated the employment of Casio, et
al. for just cause.
9. The failure of GMC to make a determination of the sufficiency of
evidence supporting the decision of IBM-Local 31 to expel Casio, et al.
is a direct consequence of the non-observance by GMC of procedural
due process in the dismissal of employees.
10. As a defense, GMC contends that as an employer, its only duty was to
ascertain that IBM-Local 31 accorded Casio, et al. due process; and, it is the
finding of the company that IBM-Local 31 did give Casio, et al. the
opportunity to answer the charges against them, but they refused to avail
themselves of such opportunity. This argument is without basis. The Court
has stressed time and again that allegations must be proven by sufficient
evidence because mere allegation is definitely not evidence.
11. Time and again we have ruled that in illegal dismissal cases like the present
one, the onus of proving that the employee was not dismissed or if
dismissed, that the dismissal was not illegal, rests on the employer and
failure to discharge the same would mean that the dismissal is not
justified and therefore illegal.
12. The records of this case are absolutely bereft of any supporting evidence to
substantiate the bare allegation of GMC that Casio, et al. were accorded due
process by IBM-Local 31. There is nothing on record that would
indicate that IBM-Local 31 actually notified Casio, et al. of the charges
against them or that they were given the chance to explain their side.

13. Contrary to the position of GMC, the acts of Pino, et al. as officers and
board members of IBM-Local 31, in expelling Casio, et al. from the
union, do not enjoy the presumption of regularity in the performance
of official duties, because the presumption applies only to public officers
from the highest to the lowest in the service of the Government,
departments, bureaus, offices, and/or its political subdivisions.

14. Irrefragably, GMC cannot dispense with the requirements of notice and
hearing before dismissing Casio, et al. even when said dismissal is pursuant
to the closed shop provision in the CBA. The rights of an employee to be
informed of the charges against him and to reasonable opportunity to
present his side in a controversy with either the company or his own
union are not wiped away by a union security clause or a union shop
clause in a collective bargaining agreement. An employee is entitled to be
protected not only from a company which disregards his rights but also
from his own union the leadership of which could yield to the temptation of
swift and arbitrary expulsion from membership and hence dismissal from
his job.

15. In the case at bar, Casio, et al. did not receive any other communication
from GMC, except the written notice of termination dated March 24, 1992.
GMC, by its own admission, did not conduct a separate and independent
investigation to determine the sufficiency of the evidence supporting the
expulsion of Casio, et al. by IBP-Local 31. It straight away acceded to the
demand of IBP-Local 31 to dismiss Casio, et al.
 020 PICOP Resources v. Tañeca et al (LAGUILLES)
August 9, 2010 | Peralta, J. | Union Security Clause
PETITIONER: PICOP Resources Incorporated
RESPONDENTS: Anacleto L. Tañeca, et al.
SUMMARY: Respondents Tañeca et al were regular rank-and-file employees of
PRI and bona fide members of NAMAPRI-SPFL, which is the CBA for the
rank-and-file employees of PRI. PRI has a CBA with NAMAPRI-SPFL for 5
years. PRI served notices of termination to several rank-and-file employees
including respondents for acts of disloyalty by supporting and signing the
Petition for Certification Election of FFW before the freedom period during
effectivity of the CBA. Respondents then filed a complaint for unfair labor
practice, illegal dismissal, and money claims against PRI and its officers.
Issue is WON an existing Collective Bargaining Agreement can be given full
force and effect in all its terms and condition including its union security clause
even beyond the 5-year period when no new CBA has yet been entered into? SC
held NO, because the fact that there already exists a bargaining representative in
the unit concerned is of no moment as long as the petition for certification
election was filed within the freedom period. In terminating the employment of
an employee by enforcing the union security clause, the employer needs to
determine and prove that: (1) the union security clause is applicable; (2) the
union is requesting for the enforcement of the union security provision in the
CBA; and (3) there is sufficient evidence to support the decision of the union to
expel the employee from the union. As to the third requisite, there is no
sufficient evidence to support the decision of PRI to terminate the employment
of the respondents. While it is incumbent for the employer to continue to
recognize the majority status of the incumbent bargaining agent even after the
expiration of the freedom period, they could only do so when no petition for
certification election was filed. In this case, a petition for certification election
was filed during the freedom period. The mere signing of the authorization in
support of the Petition for Certification Election of FFW on March 19, 20 and
21, or before the freedom period, is not sufficient ground to terminate the
employment of respondents inasmuch as the petition itself was actually filed
during the freedom period.
DOCTRINE: An authorization letter to file a petition for certification election is
different from an actual Petition for Certification Election. If at all, the signing of
the authorization to file a certification election was merely preparatory to the
filing of the petition for certification election, or an exercise of respondents right
to self-organization.
FACTS:
1. On February 13, 2001, respondents Anacleto Tañeca, Loreto Uriarte, Joseph
Balgoa, Jaime Campos, Geremias Tato, Martiniano Magayon, Manuel
Abucay and 14 others filed a Complaint for unfair labor practice, illegal
dismissal and money claims against PICOP Resources, Incorporated (PRI),
Wilfredo Fuentes (PRI's Vice President/Resident Manager), Atty. Romero
Boniel (PRI's Manager of Legal/Labor), Southern Philippines Federation of
Labor (SPFL), Atty. Wilbur T. Fuentes (Secretary General of SPFL),
Pascasio Trugillo (Local President of Nagkahiusang Mamumuo sa PICOP
Resources, Inc.- SPFL [NAMAPRI-SPFL]) and Atty. Proculo Fuentes, Jr. 
(National President of SPFL).
2. Tañeca et al were regular rank-and-file employees of PRI and bona
fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines
Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining
agent for the rank-and-file employees of PRI.
3. PRI has a collective bargaining agreement with NAMAPRI-SPFL for a
period of 5 years from May 22, 1995 until May 22, 2000.
4. The CBA contained the following union security provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
All employees within the appropriate bargaining unit who are
members of the UNION at the time of the signing of this AGREEMENT
shall, as a condition of continued employment by the COMPANY,
maintain their membership in the UNION in good standing during the
effectivity of this AGREEMENT.
Any employee who may hereinafter be employed to occupy a
position covered by the bargaining unit shall be advised by the COMPANY
that they are required to file an application for membership with the
UNION within thirty (30) days from the date his appointment shall have
been made regular.
The COMPANY, upon the written request of the UNION and
after compliance with the requirements of the New Labor Code, shall give
notice of termination of services of any employee who shall fail to fulfill
the condition provided in Section 6.1 and 6.2 of this Article, but it assumes
no obligation to discharge any employee if it has reasonable grounds to
believe either that membership in the UNION was not available to the
employee on the same terms and conditions generally applicable to other
members, or that membership was denied or terminated for reasons other
than voluntary resignation or non-payment of regular union dues.
Separation under the Section is understood to be for cause, consequently,
the dismissed employee is not entitled to separation benefits provided under
the New Labor Code and in this AGREEMENT.
5. Atty. Fuentes sent a letter to the management of PRI demanding the
termination of employees who allegedly campaigned for, supported and
signed the Petition for Certification Election of the Federation of Free
Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL
considered said act of campaigning for and signing the petition for
certification election of FFW as an act of disloyalty and a valid basis for
termination for a cause in accordance with its Constitution and By-Laws,
 and the terms and conditions of the CBA, specifically Article II, Sections
6.1 and 6.2 on Union Security Clause.
6. In a letter, Mr. Pascasio Trugillo requested the management of PRI to
investigate those union members who signed the Petition for Certification
Election of FFW during the existence of their CBA. NAMAPRI-SPFL,
likewise, furnished PRI with machine copy of the authorization letters dated
March 19, 20 and 21, 2000, which contained the names and signatures of
employees.
7. Acting on the May 16 and May 23, 2000 letters of the NAMAPRI-SPFL,
Atty. Romero A. Boniel issued a memorandum addressed to the concerned
employees to explain in writing within 72 hours why their employment
should not be terminated due to acts of disloyalty as alleged by their Union.
8. A number of employees who were served explanation memorandum
submitted their explanation, while some did not. Atty. Boniel endorsed the
explanation letters of the employees to Atty. Fuentes for evaluation and
final disposition in accordance with the CBA.
9. After evaluation, Atty. Fuentes advised the management of PRI that the
Union found the member's explanations to be unsatisfactory. He reiterated
the demand for termination, but only of 46 member-employees, including
respondents.
10. PRI served notices of termination for causes to the 31 out of the 46
employees whom NAMAPRIL-SPFL sought to be terminated on the ground
of acts of disloyalty committed against it when Taeca et al allegedly
supported and signed the Petition for Certification Election of FFW before
the freedom period during the effectivity of the CBA.
11. Respondents then accused PRI of Unfair Labor Practice punishable under
Article 248 (a), (b), (c), (d) and (e) of the Labor Code, while Atty. Fuentes
and Wilbur T. Fuentes and Pascasio Trujillo were accused of violating
Article 248 (a) and (b) of the Labor Code.
12. They alleged that none of them ever withdrew their membership from
NAMAPRI-SPFL or submitted to PRI any union dues and check-off
disauthorizations against NAMAPRI-SPFL. They claimed that they
continue to remain on record as bona fide members of NAMAPRI-SPFL.
13. They insisted that mere affixation of signature on such authorization to file
a petition for certification election was not per se an act of disloyalty. They
claimed that while it may be true that they signed the said authorization
before the start of the freedom period, the petition of FFW was only filed
with the DOLE on May 18, 2000, or 58 days after the start of the freedom
period.
14. Respondents maintained that their acts of signing the authorization
signifying support to the filing of a Petition for Certification Election of
FFW was merely prompted by their desire to have a certification election
among the rank-and-file employees of PRI with hopes of a CBA negotiation
in due time; and not to cause the downfall of NAMAPRI-SPFL.
15. Respondents argued that at the time NAMAPRI-SPFL demanded their
termination, it was no longer the bargaining representative of the rank-and-
file workers of PRI, because the CBA had already expired on May 22,
2000. Hence, there could be no justification in PRIs act of dismissing
respondents due to acts of disloyalty. That the act of PRI, Wilfredo Fuentes
and Atty. Boniel in giving in to the wishes of the Union in discharging them
on the ground of disloyalty to the Union amounted to interference with,
restraint or coercion of respondents’ exercise of their right to self-
organization. The act indirectly required PRI to support and maintain their
membership with NAMAPRI-SPFL as a condition for their continued
employment. The acts of NAMAPRI-SPFL, Atty. Fuentes and Trujillo
amounted to actual restraint and coercion of PRI in the exercise of their
rights to self-organization and constituted acts of unfair labor practice.
16. The Labor Arbiter declared the respondents dismissal to be illegal and
ordered PRI to reinstate respondents to their former or equivalent positions
without loss of seniority rights and to jointly and solidarily pay their
backwages. 
17. NLRC reversed the decision of the Labor Arbiter, declaring the dismissal of
respondents from employment as legal.
18. CA reversed the decision of the NLRC and reinstated the decision of the
Labor Arbiter.
ISSUE/s:
7. WoN an existing Collective Bargaining Agreement can be given full force
and effect in all its terms and condition including its union security clause
even beyond the 5-year period when no new CBA has yet been entered into
– NO, because the fact that there already exists a bargaining representative
in the unit concerned is of no moment as long as the petition for
certification election was filed within the freedom period.
RULING: WHEREFORE, the petition is DENIED. The Decision dated July 25,
2003 and the Resolution dated October 23, 2003 of the Court of Appeals in CA-
G.R. SP No. 71760, which set aside the Resolutions dated October 8, 2001 and
April 29, 2002 of the National Labor Relations Commission in NLRC CA No.
M-006309-2001, are AFFIRMED accordingly. Respondents are hereby awarded
full backwages and other allowances, without qualifications and diminutions,
computed from the time they were illegally dismissed up to the time they are
actually reinstated. Let this case be remanded to the Labor Arbiter for proper
computation of the full backwages due respondents, in accordance with Article
279 of the Labor Code, as expeditiously as possible.
RATIO:
1. Union security is a generic term, which is applied to and comprehends
"closed shop," union shop," "maintenance of membership," or any other
form of agreement which imposes upon employees the obligation to acquire
or retain union membership as a condition affecting employment.
2. There is union shop when all new regular employees are required to
join the union within a certain period as a condition for their continued
employment.
3. There is maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who thereafter
become members, must maintain union membership as a condition for
continued employment until they are promoted or transferred out of the
bargaining unit, or the agreement is terminated.
4. A closed shop may be defined as an enterprise in which, by agreement
between the employer and his employees or their representatives, no
person may be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the duration of the
agreement, remains a member in good standing of a union entirely
comprised of or of which the employees in interest are a part.
5. In terminating the employment of an employee by enforcing the union
security clause, the employer needs to determine and prove that: (1) the
union security clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA; and (3) there is
sufficient evidence to support the decision of the union to expel the
employee from the union. These requisites constitute just cause for
terminating an employee based on the union security provision of the CBA.
6. As to the first requisite, there is no question that the CBA between PRI and
respondents included a union security clause, specifically, a maintenance of
membership as stipulated in Sections 6 of Article II, Union Security and
Check-Off. Following the same provision, PRI, upon written request from
the Union, can indeed terminate the employment of the employee who
failed to maintain its good standing as a union member.
7. Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2)
occasions demanded from PRI, in their letters dated May 16 and 23, 2000,
to terminate the employment of respondents due to their acts of disloyalty to
the Union.
8. However, as to the third requisite, there is no sufficient evidence to support
the decision of PRI to terminate the employment of the respondents.
9. PRI alleged that respondents were terminated from employment based on
the alleged acts of disloyalty they committed when they signed an
authorization for the Federation of Free Workers (FFW) to file a Petition for
Certification Election among all rank-and-file employees of PRI. It
contends that the acts of respondents are a violation of the Union Security
Clause, as provided in their Collective Bargaining Agreement. We are
unconvinced.
10. The mere signing of the authorization in support of the Petition for
Certification Election of FFW on March 19, 20 and 21, or before the
freedom period, is not sufficient ground to terminate the employment of
respondents inasmuch as the petition itself was actually filed during the
freedom period. Nothing in the records would show that respondents failed
to maintain their membership in good standing in the Union. Respondents
did not resign or withdraw their membership from the Union to which they
belong. Respondents continued to pay their union dues and never joined the
FFW.
11. PRI’s act of dismissing respondents stemmed from the latter's act of signing
an authorization letter to file a petition for certification election as they
signed it outside the freedom period. However, we are constrained to
believe that an authorization letter to file a petition for certification
election is different from an actual Petition for Certification Election. 
As per records, it was clear that the actual Petition for Certification Election
of FFW was filed only on May 18, 2000. Thus, it was within the ambit of
the freedom period which commenced from March 21, 2000 until May 21,
2000. Strictly speaking, what is prohibited is the filing of a petition for
certification election outside the 60-day freedom period. This is not the
situation in this case. If at all, the signing of the authorization to file a
certification election was merely preparatory to the filing of the petition
for certification election, or an exercise of respondents right to self-
organization.
12. PRI anchored their decision to terminate respondents employment on
Article 253 of the Labor Code which states that it shall be the duty of both
parties to keep the status quo and to continue in full force and effect the
terms and conditions of the existing agreement during the 60-day period
and/or until a new agreement is reached by the parties. It claimed that
they are still bound by the Union Security Clause of the CBA even after the
expiration of the CBA; hence, the need to terminate the employment of
respondents. PRI’s reliance on Article 253 is misplaced.
13. Part of Article 256 of the Labor Code is particularly enlightening. It reads:
At the expiration of the freedom period, the employer shall continue to
recognize the majority status of the incumbent bargaining agent where no
petition for certification election is filed.
14. Applying the same provision, it can be said that while it is incumbent
for the employer to continue to recognize the majority status of the
incumbent bargaining agent even after the expiration of the freedom period,
they could only do so when no petition for certification election was filed.
The reason is, with a pending petition for certification, any such agreement
entered into by management with a labor organization is fraught with the
risk that such a labor union may not be chosen thereafter as the collective
bargaining representative. The provision for status quo is conditioned on
the fact that no certification election was filed during the freedom period.
15. In the instant case, four (4) petitions were filed as early as May 12, 2000. In
fact, a petition for certification election was already ordered by the Med-
Arbiter of DOLE Caraga Region on August 23, 2000. Therefore, following
Article 256, at the expiration of the freedom period, PRI's obligation to
recognize NAMAPRI-SPFL as the incumbent bargaining agent does not
hold true when petitions for certification election were filed, as in this case.
16. Moreover, the last sentence of Article 253 which provides for automatic
renewal pertains only to the economic provisions of the CBA, and does not
 include representational aspect of the CBA. An existing CBA cannot
constitute a bar to a filing of a petition for certification election. When there
is a representational issue, the status quo provision in so far as the need to
await the creation of a new agreement will not apply. Otherwise, it will
create an absurd situation where the union members will be forced to
maintain membership by virtue of the union security clause existing under
the CBA and, thereafter, support another union when filing a petition for
certification election.
17. The workers’ freedom to choose who should be their bargaining
representative is of paramount importance. The fact that there already
exists a bargaining representative in the unit concerned is of no
moment as long as the petition for certification election was filed within
the freedom period. What is imperative is that by such a petition for
certification election the employees are given the opportunity to make
known of who shall have the right to represent them thereafter.
 021 Victoriano v Elizalde Rope Workers’ Union (Manahan)
September 12, 1974 | Zaldivar, J. | Union Security Clause
PETITIONER: Benjamin Victoriano
RESPONDENTS: Elizalde Rope Workers’ Union & Elizalde Rope Factory,
Inc.
SUMMARY: Benjamin Victoriano is a member of INC. He had been in the
employ of the Elizalde Rope Factory, Inc. As such employee, he was a member
of the Elizalde Rope Workers’ Union, which had with the company a CBA
containing a closed shop provision which reads, “Membership in the union shall
be required as a condition of employment for all permanent employees workers
covered by this Agreement.” Under RA 875 prior to its amendment by RA
3350, the employer was not precluded from making an agreement with a labor
organization to require as a condition of employment membership therein, if
such labor organization is the representative of the employees. However RA
3350 was enacted, introducing an amendment as follows, “… but such
agreement shall not cover members of any religious sects which prohibit
affiliation of their members in any such labor organization.” Being a member of
a religious sect that prohibits the affiliation of its member with any labor
organization, Victoriano presented his resignation to the union. The union wrote
a formal letter to the company asking the latter to separate Victoriano from the
service because he was resigning from the union as a member. The company
notified Victoriano that unless he could achieve a satisfactory arrangement with
the union, the company would be constrained to dismiss him from the service.
Victoriano filed an action for injunction in CFI Manila. In its answer, the union
invoked the “union security clause” of the CBA and assailed the
constitutionality of RA 3550. Court a quo rendered its decision, enjoining the
company from dismissing Victoriano and sentencing the union to pay
Victoriano attorney’s fees and costs. The union appealed directly to this Court,
ultimately arguing that the lower court erred when it did not rule that RA 3350
was unconstitutional.
WON RA 3350 is constitutional? YES.
1. It did not violate the right to form or join lawful associations. The right
comprehends at least two broad notions: liberty or freedom (whereby
an employee may act for himself without being prevented by law) and
power (whereby an employee may, as he pleases, join or refrain from
joining an association). The right to refrain from joining labor
organizations, however, is limited. The legal protection granted to such
right is withdrawn by operation of law, where a labor union and an
employer have agreed on a closed shop, by virtue of which the
employer may employ only members of the collective bargaining
union, and employees must continue to be members of the union for
duration of the contract to keep their jobs. RA 3350 introduced an
exception to the closed shop agreement, “… but such agreement shall
not cover members of any religious sects which prohibit affiliation of
their members in any such labor organization.” RA 3350 does not
infringe the constitutional provision on freedom of association, but
upholds and reinforces it. It does not prohibit members of religious
sects from affiliating with labor unions. It leaves to said members the
liberty and power to affiliate or not affiliate.
2. It did not impair the obligation of contracts. The prohibition to impair
the obligation of contracts is not absolute and unqualified, as the State
continues to possess authority to safeguard the vital interests of its
people. Legislation impairing the obligation of contracts can be
sustained when it is enacted for the promotion of the general good, and
when the means adopted to secure that end are reasonable. The purpose
of RA 3350 is to insure freedom of belief and religion, and to promote
the general welfare by preventing discrimination against those
members of religious sects which prohibit their members from joining
labor unions. The purpose is legitimate. The means adopted, exempting
members of religious sects from the coverage of union security
agreements, is reasonable.
3. It did not discriminatorily favor members of religious sects. The
exemption from the effects of the closed shop agreement does not
directly advance or diminish the interests of any particular religion.
Although it may benefit those who are members of religious sects that
prohibit their members from joining labor unions, the benefit is merely
incidental and indirect.
4. It did not violate the following constitutional provision, “No religious
test shall be required for the exercise of civil or political rights.” RA
 3350 does not require as a qualification or condition for joining any
lawful association, membership in any particular religion. Neither does
RA 3350 require affiliation with a religious sect that prohibits its
members from joining a labor union, as a qualification or condition for
withdrawing from a labor union. Joining or withdrawing from a labor
union requires a positive act. RA 3350 only exempts members with
such religious affiliation from the coverage of closed shop agreement.
It does not require a positive act on his part. How can there be a
religious test required for the exercise of a right, when no right need be
exercised?
5. It did not violate the EP clause. The EP clause allows classification,
provided that it is reasonable; the classification is based on substantial
distinctions which make for real differences; it is germane to the
purpose of the law; and it is not limited to existing conditions only. The
following requisites were met.
6. It did not violate the constitutional provision on social justice. Social
justice is intended to promote the welfare of the people. RA 3350
promotes that welfare insofar as it looks after the welfare of those who,
because of their religious belief, cannot joint labor unions. It prevents
their being deprived of work and of the means of livelihood.
DOCTRINE: RA 3350 amending RA 875 is constitutional. RA 3350 provides
that “Nothing in this Act or in any Act or statute of the Republic of the
Philippines shall preclude an employer from making an agreement with a labor
organization to require as a condition of employment membership therein, if
such labor organization is the representative of the employees as provided in
Section 12, but such agreement shall not cover members of any religious
sects which prohibit affiliation of their members in any such labor
organization.”
Long case since it discusses the constitutionality of RA 3350 amending RA 875.
FACTS:
1. Benjamin Victoriano (Victoriano), a member of Iglesia ni Cristo (INC), had
been in the employ of the Elizalde Rope Factory, Inc. (hereinafter referred
to as Company). As such employee, he was a member of the Elizalde Rope
Workers’ Union (hereinafter referred to as Union) which had with the
Company a CBA containing a closed shop provision which reads:
a. Membership in the Union shall be required as a condition of
employment for all permanent employee workers covered by this
Agreement.
2. Under RA 875, prior to its amendment by RA 3350, the employer was not
precluded from making an agreement with a labor organization to require as
a condition of employment membership therein, if such labor organization
is the representative of the employees. However, RA 3350 was enacted,
introducing an amendment as follows: “… but such agreement shall not
cover members of any religious sects which prohibit affiliation of their
members in any such labor organization.”
3. Being a member of a religious sect that prohibits the affiliation of its
members with any labor organization, Victoriano presented his resignation
to the Union and when no action was taken thereon, he reiterated his
resignation.
4. Thereupon, the Union wrote a formal letter to the Company asking the latter
to separate Victoriano from the service in view of the fact that he was
resigning from the Union as a member.
5. The management of the Company notified Victoriano and his counsel that
unless he could achieve a satisfactory arrangement with the Union, the
Company would be constrained to dismiss him from the service.
6. This prompted Victoriano to file an action for injunction in CFI Manila to
enjoin the Company and the Union from dismissing him. In its answer, the
Union invoked the “union security clause” of the CBA; assailed the
constitutionality of RA 3350 and contended that the Court had no
jurisdiction over the case pursuant to RA 875.
7. Court a quo rendered its decision, enjoining the Company from dismissing
Victoriano and sentencing the Union to pay Victoriano attorney’s fees and
costs for the action.
8. The Union appealed directly to this Court on purely questions of law,
assigning the ff. errors:
a. The lower court erred when it did not rule that RA 3350 is
unconstitutional;
b. The lower court erred when it sentenced the Union to pay
attorney’s fees and costs for the action.
9. In support of the alleged unconstitutionality of RA 3350, the Union
contended:
a. Firstly, the Act infringes on the fundamental right to form
 lawful associations; that the very phraseology of RA 3350, that
membership in a labor organization is banned to all those
belonging to such religious sect prohibiting affiliation with any
labor organization, prohibits all members of a given religious sect
form joining any labor union if such sect prohibits affiliations of
their members thereto, and consequently deprives said members of
their constitutional right to form or join lawful associations or
organizations guaranteed by the Bill of Rights, and thus becomes
obnoxious to Art. III, Sec. 1 (6) of the 1935 Constitution.
b. Secondly, the Act is unconstitutional for impairing the
obligation of contracts in that, while the Union is obliged to
comply with its CBA containing a “closed shop provision”, the Act
relieves the employer from its reciprocal obligation of cooperating
in the maintenance of union membership as a condition of
employment; and that said Act, furthermore, impairs the Union’s
rights as it deprives the union of dues from members who, under
the Act, are relieved from the obligation to continue as such
members.
c. Thirdly, the Act discriminatorily favors those religious sects
which ban their members from joining labor unions, in
violation of Art. III, Sec. 1 (7) of the 1935 Constitution; and while
said Act unduly protects certain religious sects, it leaves no rights
or protection to labor organizations.
d. Fourthly, the Act violates the constitutional provision that “no
religious test shall be required for the exercise of a civil right”
in that the laborer’s exercise of his civil right to join associations
for purposes not contrary to law has to be determined under the
Act by his affiliation with a religious sect; that conversely, if a
worker has to sever his religious connection with a sect that
prohibits membership in a labor organization in order to be able to
join a labor organization, said Act would violate religious freedom.
e. Fifthly, the Act violates the equal protection of laws clause, it
being a discriminatory legislation, inasmuch as by exemption from
the operation of closed shop agreement the members of INC, it has
granted said members undue advantages over their fellow workers,
for while the Act exempts them from union obligation and liability,
it nevertheless entitles them at the same time to the employment of
all concessions, benefits and other emoluments that the union
might secure from the employer.
f. Sixthly, the Act violates the constitutional provision regarding
the promotion of social justice.
10. The Union furthermore asserted that a “closed shop provision” in a CBA
cannot be considered violative of religious freedom, as to call for the
amendment introduced by RA 3350; and that unless RA 3350 is declared
unconstitutional, trade unionism in this country would be wiped out as
employers would prefer to hire or employ members of INC in order to do
away with labor organizations.
11. Victoriano assailed the Union’s arguments.
ISSUE/s:
1. Whether or not RA 3350 is constitutional? Yes. It did not violate the
fundamental right to form lawful associations; did not impair the obligation
of contracts; did not discriminatorily favor religious sects which ban their
members from joining labor organizations; did not violate the constitutional
provision on no religious test shall be required for the exercise of a civil
right; did not violate the EP clause; and did not violate the constitutional
provision regarding the promotion of social justice.
RULING: WHEREFORE, the instant appeal is dismissed, and the decision of the
CFI appealed from is affirmed, with costs against the Union.
RATIO:
Freedom of Association
1. The Union’s contention that RA 3350 prohibits and bans the members of
such religious sects that forbid affiliation of their members with labor
unions from joining labor unions appears nowhere in the wording of RA
335; neither can the same be deduced by necessary implication therefrom.
The Union committed error in contending that the Act is obnoxious to the
constitutional provision on freedom of association.
2. Both the Constitution and RA 875 recognize freedom of association. The
1935 and 1973 Constitutions provide that the right to form associations or
societies for purposes not contrary to law shall not be abridged. RA 875
provides that employees shall have the right to self-organization and to
form, join or assist labor organizations of their own choosing for the
 purpose of collective bargaining and to engage in concerted activities for
the purpose of collective bargaining and other mutual aid or protection.
3. What the Constitutions and RA 875 recognize and guarantee is the “right”
to form or join associations. The right comprehends at least two broad
notions: liberty or freedom (whereby an employee may act for himself
without being prevented by law) and power (whereby an employee may, as
he pleases, join or refrain from joining an association). It is therefore the
employee who should decide for himself whether or not he should join an
association, and should he choose to join, he himself makes up his mind as
to which association he would join. And even after he has joined, he still
retains the liberty and power to leave and cancel his membership with the
organization at any time.
Impairing the obligation of contracts
4. The right to refrain from joining labor organizations is however limited.
The legal protection granted to such right is withdrawn by operation of law,
where a labor union and an employer have agreed on a closed shop, by
virtue of which the employer may employ only members of the collective
bargaining union, and the employees must continue to be members of the
union for the duration of the contract in order to keep their jobs.
5. Thus, RA 875 before its amendment by RA 3350 provides that although it
would be unfair labor practice (ULP) for an employer “to discriminate in
regard to hire or tenure of employment or any term or condition of
employment to encourage or discourage membership in any labor
organization”, the employer, however, is not precluded “from making an
arrangement with a labor organization to require as a condition of
employment membership therein, if such labor organization is
representative of the employees.” By virtue, therefore, of a closed shop
agreement, before the enactment of RA 3350, if any person regardless of his
religious beliefs wishes to be employed or to keep his employment, he must
become a member of the collective bargaining union. Hence, the right of the
employee not to join the labor union is curtailed and withdrawn.
6. To that all-embracing coverage of the closed shop agreement, RA 3350
introduced an exception when it added the following proviso: “but such
agreement shall not cover members of any religious sects which prohibit
affiliation of their members in any such labor organization.” What the
exception provides is that members of said religious sects cannot be
compelled or coerced to join labor unions even when said unions have
closed shop agreements with employers; that in spite of any closed shop
agreement, members of said religious sects cannot be refused employment
or dismissed from their jobs on the sole ground that they are not members
of the collective bargaining union.
7. The assailed Act, far from infringing the constitutional provision on
freedom of association, upholds and reinforces it. It does not prohibit
members of religious sects from affiliating with labor unions. It leaves to
said members the liberty and power to affiliate or not to affiliate with labor
unions. RA 3350 therefore does not violate the constitutional provision on
freedom of association.
1. Any statute which introduces a change into the express terms of the
contract, its legal construction, validity, discharge or remedy for
enforcement impairs the contract.
2. It should not be overlooked however that the prohibition to impair the
obligation of contracts is not absolute and unqualified. In spite of the
constitutional prohibition, the State continues to possess authority to
safeguard the vital interests of its people.
3. Not only are existing laws read into contracts in order to fix the obligations
as between the parties, but the reservation of essential attributes of
sovereign power is also read into contracts as a postulate of legal order. All
contracts made with reference to any matter that is subject to regulation
under police power must be understood as made in reference to the possible
exercise of that power.
4. Not all legislations, which have the effect of impairing a contract, are
obnoxious to the constitutional prohibition as to impairment, and a statute
passed in the legitimate exercise of police power, although it incidentally
destroys existing contract rights, must be upheld by the court. This has
special application to contracts regulating relations between capital and
labor which are not merely contractual, and said labor contracts for being
impressed with public interest must yield to the common good.
5. Legislation impairing the obligation of contracts can be sustained when it is
enacted for the promotion of the general good of the people, and when the
means adopted to secure that end are reasonable.
6. Purpose of RA 3350: To insure freedom of belief and religion, and to
promote the general welfare by preventing discrimination against those
members of religious sects which prohibit their members from joining labor
 unions, confirming thereby their natural, statutory and constitutional right to
work, the fruits of which work are usually the only means whereby they can
maintain their own life and the life of their dependents. The purpose is
legitimate.
7. It cannot be denied that the means adopted by the Act to achieve that
purpose – exempting members of religious sects from coverage of union
security agreements – is reasonable.
8. It may not be amiss to point out here that the free exercise of religious
profession of belief is superior to contract rights. In case of conflict, the
latter must therefore yield to the former.
Discriminatorily favors members of religious sects
1. Any legislation whose effect or purpose is to impede the observation of one
or all religions, or to discriminate invidiously between the religions, is
invalid, even though the burden may be characterized as being only indirect.
2. But if the stage regulates conduct by enacting, within its power, a general
law which has for its purpose and effect to advance the state’s secular goals,
the statute is valid despite its indirect burden on religious observance, unless
the state can accomplish its purpose without imposing such burden.
3. The statute, in order to withstand the strictures of constitutional prohibition,
must have a secular legislative purpose and a primary effect that neither
advances nor inhibits religion.
4. Assessed by these criteria, RA 3350 cannot be said to violate the
constitutional inhibition of the “no-establishment” (of religion) clause of the
Constitution. The purpose of RA 3350 is secular, worldly and temporal, not
spiritual or religious or holy and eternal.
5. The exemption from the effects of closed shop agreement does not directly
advance or diminish the interests of any particular religion. Although the
exemption may benefit those who are members of religious sects that
prohibit their members from joining labor unions, the benefit upon the
religious sects is merely incidental and indirect.
6. In enacting RA 3350, Congress acted consistently with the spirit of the
constitutional provision. It acted merely to relieve the exercise of religion,
by certain person, of a burden that is imposed by union security agreements.
No religious test for the exercise of a civil right
1. The contention that RA 3350 violates the constitutional prohibition against
requiring a religious test for the exercise of a civil or political right is not
well taken. The Act does not require as a qualification or condition for
joining any lawful association membership in any particular religion or in
any religious sect; neither does the Act require affiliation with a religious
sect that prohibits its members from joining a labor union as a condition or
qualification for withdrawing from a labor union.
2. Joining or withdrawing from a labor union requires a positive act. RA 3350
only exempts members with such religious sects from the coverage of
closed shop agreements. So, under this Act, a religious objector is not
required to do a positive act – to exercise the right to join or to resign from
the union. He is exempted ipso jure without need of any positive act on his
part. How can there be a religious test required for the exercise of a right
when no right need be exercised?
Violation of equal protection clause
1. The guaranty of equal protection of the laws is not a guaranty of equality in
the application of the laws upon all citizens of the state.
2. The EP of laws clause allows classification. All that is required of a valid
classification is that it be reasonable, which means that the classification
should be based on substantial distinctions which make for real differences;
that it must be germane to the purpose of the law; that it must not be limited
to existing conditions only; and that it must apply equally to each member
of the class.
3. We believe that RA 3350 satisfies the aforementioned requirements. The
Act classifies employees and workers, as to the effect and coverage of the
union shop security agreements, into those who by reason of their religious
beliefs and convictions cannot sign up with a labor union, and those whose
religion does not prohibit membership in labor unions. The classification
rests on real or substantial distinctions.
4. The classification introduced by the Act is also germane to its purpose. The
purpose of the law is precisely to avoid those who cannot, because of their
religious belief, join labor unions, from being deprived of their right to work
and from being dismissed from their work because of union shop security
agreements.
5. RA 3350 is not limited in its application to conditions existing at the time of
its enactment. The law does not provide that it is to be effective for a certain
period only. It is intended to apply for all times as long as the conditions to
which the law is applicable exist. As long as there are closed shop
agreements between an employer and labor union, and there are employees
 who are prohibited by their religion from affiliating with labor unions, their
exemption from the coverage of said agreements continues.
6. Finally, the Act applies equally to all members of said religious sects; this is
evident from its provision.

Constitutional provision regarding promotion of social justice

1. The Union’s contention that RA 3350 violates the constitutional provision

on social justice is also baseless. Social justice is intended to promote the
welfare of all the people. RA 3350 promotes that welfare insofar as it looks
after the welfare of those who, because of their religious belief, cannot joint
labor unions; the Act prevents their being deprived of work and of the
means of livelihood.
2. Social justice also means the adoption by the Government of measures
calculated to insure economic stability of all component elements of
society, through the maintenance of a proper economic and social
equilibrium in the inter-relations of the members of the community. RA
3350 insured economic stability to the members of a religious sect, for it
insures security in their employment, notwithstanding their failure to join a
labor union having a closed shop agreement with the employer.
3. Social justice guarantees equality of opportunity, and this is precisely what
RA 3350 proposes to accomplish. It gives laborers, irrespective of their
religious scruples, equal opportunity for work.
022 KAPATIRAN SA MEAT AND CANNING DIVISION v. FERRER- 1. Petitioner Kapatiran sa Meat and Canning Division (TUPAS Local
CALLEJA (Marcos) Chapter), hereinafter referred to as “Tupas” seeks a review of the decision
June 20, 1988 | Griño-Aquino, J. | Union Security Clause of the BLR dismissing its appeal from the Order of the Med-Arbiter
ordering a certification election to be conducted among the regular daily
paid rank and file employees/workers of Universal Robina Corporation-
PETITIONER: KAPATIRAN SA MEAT AND CANNING DIVISION
Meat and Canning Division to determine which of the contending unions
(TUPAS Local Chapter No. 1027)
shall be the bargaining unit of the daily wage rank and file employees in the
RESPONDENTS: THE HONORABLE BLR DIRECTOR PURA FERRER
Meat and Canning Division.
CALLEJA, MEAT AND CANNING DIVISION UNIVERSAL ROBINA
2. The following are the contending unions: (1) petitioner TUPAS, (2) Meat
CORPORATION and MEAT AND CANNING DIVISION NEW
and Canning Division New Employees and Workers United Labor
EMPLOYEES AND WORKERS UNITED LABOR ORGANIZATION
Organization (or "NEW ULO”), or (3) No Union.
3. From 1984 to 1987 TUPAS was the sole and exclusive collective
SUMMARY: TUPAS used to be the sole and exclusive collective bargaining
bargaining representative of the workers in the Meat and Canning Division
representative of the workers in the Meat and Canning Division of the Universal
of the Universal Robina Corporation, with a 3-year collective bargaining
Robina Corporation (ROBINA). Within the freedom period of 60 days prior to
agreement (CBA) which was to expire on November 15, 1987.
the expiration of its CBA, TUPAS filed an amended notice of strike as a means
4. Within the freedom period of 60 days prior to the expiration of its CBA,
of pressuring the company to extend, renew, or negotiate a new CBA with it. A
TUPAS filed an amended notice of strike on September 28, 1987 as a
week after, the NEW ULO, composed mostly of workers belonging to the
means of pressuring the company to extend, renew, or negotiate a new CBA
IGLESIA NI KRISTO sect, registered as a labor union. TUPAS staged a strike.
with it.
ROBINA obtained an injunction against the strike, resulting in an agreement to
5. On October 8, 1987, the NEW ULO, composed mostly of workers
return to work and for the parties to negotiate a new CBA. The next day, NEW
belonging to the IGLESIA NI KRISTO sect, registered as a labor union.
ULO, claiming that it has "the majority of the daily wage rank and file
6. On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an
employees numbering 191," filed a petition for a certification election at the
injunction against the strike, resulting in an agreement to return to work and
BLR. TUPAS moved to dismiss the petition for being defective in form and that
for the parties to negotiate a new CBA.
the members of the NEW ULO were mostly members of the Iglesia ni Kristo
7. The next day, NEW ULO, claiming that it has "the majority of the daily
sect which refused to affiliate with any labor union for 3 years. Med-Arbiter
wage rank and file employees numbering 191," filed a petition for a
ordered the holding of a certification election within 20 days. TUPAS appealed
certification election at the BLR.
to the BLR, and on the meantime was able to negotiate a new 3-year CBA with
8. TUPAS moved to dismiss the petition for being defective in form and that
ROBINA. The BLR Director however dismissed the appeal, and the MR filed
the members of the NEW ULO were mostly members of the Iglesia ni
was subsequently denied. The issue in this case is WoN the BLR erred in
Kristo sect which refused to affiliate with any labor union for 3 years. It
dismissing TUPAS’ appeal given that the NEW ULO union consists of
also accused the company of using the NEW ULO to defeat TUPAS'
members of the INC – NO, jurisprudence which upheld the right of members of
bargaining rights.
the INC not to join a labor union for being contrary to their religious beliefs,
9. The Med-Arbiter ordered the holding of a certification election within 20
does not bar the members of that sect from forming their own union. The fact
days.
that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day
10. TUPAS appealed to the BLR, and on the meantime was able to negotiate a
freedom period of the existing CBA, does not foreclose the right of the rival
new 3-year CBA with ROBINA.
union, NEW ULO, to challenge TUPAS' claim to majority status, by filing a
11. The BLR Director however dismissed the appeal, and the MR filed was
timely petition for certification election before TUPAS' old CBA expire and
subsequently denied.
before it signed a new CBA with the company.
12. TUPAS then filed a petition with the SC alleging that the BLR acted with
abuse of discretion in affirming the Med-Arbiter's order for a certification
DOCTRINE: This Court's decision in Victoriano vs. Elizalde Rope Workers'
election.
Union upholding the right of members of the IGLESIA NI KRISTO sect not to
join a labor union for being contrary to their religious beliefs, does not bar the
ISSUE/s: WoN the BLR erred in dismissing TUPAS’ appeal given that the NEW
members of that sect from forming their own union.
ULO union consists of members of the INC – NO, jurisprudence which upheld the
right of members of the INC not to join a labor union for being contrary to their
FACTS: religious beliefs, does not bar the members of that sect from forming their own
union.

RULING: WHEREFORE, the petition for certiorari is denied, with costs against the
petitioner.

RATIO:
27. This Court's decision in Victoriano vs. Elizalde Rope Workers' Union
upholding the right of members of the IGLESIA NI KRISTO sect not to
join a labor union for being contrary to their religious beliefs, does not bar
the members of that sect from forming their own union.
28. The BLR correctly observed that the "recognition of the tenets of the
sect . . . should not infringe on the basic right of self-organization granted
by the constitution to workers, regardless of religious affiliation."
29. The fact that TUPAS was able to negotiate a new CBA with ROBINA
within the 60-day freedom period of the existing CBA, does not foreclose
the right of the rival union, NEW ULO, to challenge TUPAS' claim to
majority status, by filing a timely petition for certification election on
October 13, 1987 before TUPAS' old CBA expired on November 15, 1987
and before it signed a new CBA with the company on December 3, 1987.
30. As pointed out by Med-Arbiter Abdullah, a "certification election is the best
forum in ascertaining the majority status of the contending unions wherein
the workers themselves can freely choose their bargaining representative
thru secret ballot."
31. Since it has not been shown that this order is tainted with unfairness, this
Court will not thwart the holding of a certification election.
 023 Atlas v Laguesma (ARMAND)
January 6, 1992 | Guiterrez, J. | Article 245 of Labor Code
PETITIONER: Atlas Lithographic Services Inc
RESPONDENTS: Undersecretary Bienvenido E. Laguesma (DOLE), et al
SUMMARY: On July 1990, the supervisory, administrative personnel, production,
accounting and confidential employees of Atlas Lithographic Services, Inc. (ALSI)
affiliated with Kaisahan ng Manggagawang Pilipino, a national labor organization.
These supervisory employees’ name as they have adopted, ALSI-SAPPACEA-
KAMPIL (Atlas Lithographic Services, Inc. Supervisory, Administrative, Personnel,
Production, Accounting and Confidential Employees Association). Thereafter,
KAMPIL-KATIPUNAN filed a certification election so that it can be the sole
bargaining agent of the supervisory employees. ATLAS LITHOGRAPIC
SERVICES’s contention: that under the law (art.245 of LC) KAMPIL-
KATIPUNAN cannot represent the supervisory for collective bargaining purposes
because they (KAMPIL) also represents the rank-and-file employees. Hence, a
conflict of interest may arise in Collective bargaining and strike, and discipline.
KAMPIL’s contention: despite affiliation with a national federation, the local union
does not lose its personality which is separate, and distinct from the national
federation. It applies the 1984 Adamson Case – that interprets the right of a
supervisor’s union to affiliate under the Industrial Act. ISSUE: WoN under Article
245 of the Labor Code, a local union of supervisory employees may be allowed to
affiliate with a national federation of labor organizations of rank-and-file
employees – NO. Adamson case not applicable in this case because in Adamson the
rank-and-file employees are not under the supervisor’s union as in the case before us.
Also, the national union in Adamson case did not actively represent its local chapters,
unlike in this case where KAMPIL even filed for certification election to represent
the supervisors. (SEE DOCTRINE)
DOCTRINE: A local supervisors' union should not be allowed to affiliate with the
national federation of union of rank-and-file employees where that federation actively
participates in union activity in the company.The limitation is not confined to a case
of supervisors wanting to join a rank-and-file local union. The prohibition extends to
a supervisors' local union applying for membership in a national federation the
members of which include local unions of rank-and-file employees. The intent of the
law is clear especially where, as in the case at bar, the supervisors will be co-
mingling with those employees whom they directly supervise in their own bargaining
unit.
FACTS
1. On July 16, 1990, the supervisory, administrative personnel, production,
accounting and confidential employees of the petitioner Atlas Lithographic
Services, Inc. (ALSI) affiliated with private respondent Kaisahan ng
Manggagawang Pilipino, a national labor organization. The local union
adopted the name Atlas Lithographic Services, Inc. Supervisory,
Administrative, Personnel, Production, Accounting and Confidential
Employees Association or ALSI-SAPPACEA-KAMPIL in short and which
we shall hereafter refer to as the "supervisors" union.
2. Shortly thereafter, private respondent Kampil-Katipunan filed on behalf of
the "supervisors" union a petition for certification election so that it could
be the sole and exclusive bargaining agent of the supervisory employees.
3. The petitioners opposed the private respondent's petition claiming that
under Article 245 of the Labor bode the private respondent cannot represent
the supervisory employees for collective bargaining purposeless because the
private respondent also represents the rank-and-file employees' union.
4. On September 18, 1990, the Med-Arbiter issued an order in favor of the
private respondent.
5. The petitioners, as expected, appealed for the reversal of the above order.
The public respondent, however, issued a resolution affirming the Med-
Arbiter's order.
6. The petitioners, in turn, filed a motion for reconsideration but the same was
denied. Hence, this petition for certiorari.
7. The petitioner argues that KAMPIL-KATIPUNAN already represents its
rank-and-file employees and, therefore, to allow the supervisors of those
employees to affiliate with the private respondent is tantamount to allowing
the circumvention of the principle of the separation of unions under Article
245 of the Labor Code.
8. It further argues that the intent of the law is to prevent a single labor
organization from representing different classes of employees with
conflicting interests.
9. The public respondent, on the other hand, contends that despite affiliation
with a national federation, the local union does not lose its personality
which is separate, and distinct from the national federation. It cites as its
 legal basis the case of Adamson & Adamson, Inc. v. CIR. It maintains that
Rep. Act No. 6715 contemplates the principle laid down by this Court in the
Adamson case interpreting Section 3 of Rep. Act No. 875 (the Industrial
Peace Act) on the right of a supervisor's union to affiliate. The private
respondent asserts that the legislature must have noted the Adamson ruling
then prevailing when it conceived the reinstatement in the present Labor
Code of a similar provision on the right of supervisors to organize.
ISSUE:
1. WoN, under Article 245 of the Labor Code, a local union of supervisory
employees may be allowed to affiliate with a national federation of
labor organizations of rank-and-file employees and which national
federation actively represents its affiliates in collective bargaining
negotiations with the same employer of the supervisors and in the
implementation of resulting collective bargaining agreements.
RULING: WHEREFORE, the petition is hereby GRANTED. The private
respondent is disqualified from affiliating with a national federation of labor
organizations which includes the petitioner's rank-and-file employees.
RATIO:
10. Under the Industrial Peace Act of 1953, employees were classified into
three groups, namely: (1) managerial employees; (2) supervisors; and (3)
rank-and file employees. Supervisors, who were considered employees in
relation to their employer could join a union but not a union of rank-and-file
employees.
11. With the enactment in 1974 of the Labor Code (Pres Decree No. 442),
employees were classified into managerial and rank-and-file employees.
Neither the category of supervisors nor their right to organize under the old
statute were recognized. So that, in Bulletin Publishing Corporation v.
Sanchez, the Court interpreted the superseding labor law to have removed
from supervisors the right to unionize among themselves.
12. In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres.
Decree No. 442, the supervisory unions existing since the effectivity of the
New Code in January 1, 1975 ceased to operate as such and the members
who did not qualify as managerial employees under this definition in Article
212 (k) therein became eligible to form, to join or assist a rank-and-file
union.
13. A revision of the Labor Code undertaken by the bicameral Congress
brought about the enactment of Rep. Act No. 6715 in March 1989 in which
employees were reclassified into three groups, namely: (1) the managerial
employees; (2) supervisors; and (3) the rank and file employees. Under the
present law, the category of supervisory employees is once again
recognized. Hence, Art. 212 (m) states:
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. . . .
14. The rationale for the amendment is the government's recognition of the
right of supervisors to organize with the qualification that they shall
not join or assist in the organization of rank-and-file employees. The
reason behind the Industrial Peace Act provision on the same subject matter
has been adopted in the present statute. The interests of supervisors on the
one hand, and the rank-and-file employees on the other, are separate
and distinct. The functions of supervisors, being recommendatory in
nature, are more identified with the interests of the employer. The
performance of those functions may, thus, run counter to the interests
of the rank-and-file.This intent of the law is made clear in the deliberations
of the legislators on then Senate Bill 530 now enacted as Rep. Act No.
6715.
15. The definition of managerial employees was limited to those having
authority to hire and fire while those who only recommend effectively the
hiring or firing or transfers of personnel would be considered as closer to
rank-and-file employees. The exclusion, therefore, of middle level
executives from the category of managers brought about a third
classification, the supervisory employees. These supervisory employees
are allowed to form their own union but they are not allowed to join the
rank-and-file union because of conflict of interest.
16. In terms of classification, however, while they are more closely identified
with the rank-and-file they are still not allowed to join the union of rank-
and-file employees.
17. The peculiar role of supervisors is such that while they are not managers,
 when they recommend action implementing management policy or ask for
the discipline or dismissal of subordinates, they identify with the interests of
the employer and may act contrary to the interests of the rank-and-file.
18. We agree with the petitioner's contention that a conflict of interest may arise
in the areas of discipline, collective bargaining and strikes. Members of the
supervisory union might refuse to carry out disciplinary measures against
their co-member rank-and-file employees.
19. In the area of bargaining, their interests cannot be considered identical.
The needs of one are different from those of the other. Moreover, in the
event of a strike, the national federation might influence the
supervisors' union to conduct a sympathy strike on the sole basis of
affiliation.
20. More important, the factual issues in the Adamson case are different from
the present case. First, the rank-and-file employees in the Adamson case are
not directly under the supervisors who comprise the supervisors' union. In
the case at bar, the rank-and file employees are directly under the
supervisors organized by one and the same federation.
21. The contemplation of the law in Sec. 3 of the Industrial Peace Act is to
prohibit supervisors from joining a labor organization of employees under
their supervision.d This was not the consideration in the Adamson case
because as mentioned earlier, the rank-and-file employees in
the Adamson case were not under the supervision of the supervisors
involved.
22. Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No.
6715 provides:
Art. 245. Ineligibility of managerial employees to join any labor organization: right
of supervisory employees. — Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own.
23. The Court construes Article 245 to mean that, as in Section 3 of the
Industrial Peace Act, supervisors shall not be given an occasion to bargain
together with the rank-and-file against the interests of the employer
regarding terms and conditions of work
24. Second, the national union in the Adamson case did not actively represent
its local chapters. In the present case, the local union is actively represented
by the national federation. In fact, it was the national federation, the
KAMPIL-KATIPUNAN, which initially filed a petition for certification in
behalf of the respondent union.
25. Thus, if the intent of the law is to avoid a situation where supervisors
would merge with the rank and-file or where the supervisors' labor
organization would represent conflicting interests, then a local
supervisors' union should not be allowed to affiliate with the national
federation of union of rank-and-file employees where that federation
actively participates in union activity in the company.
26. The petitioner further contends that the term labor organization includes a
federation considering that Art. 212 (g) mentions "any union or association
of employees."
27. The respondent, however, argues that the phrase refers to a local union only
in which case, the prohibition in Art. 245 is inapplicable to the case at bar.
28. The prohibition against a supervisors' union joining a local union of rank-
and-file is replete with jurisprudence. The Court emphasizes that the
limitation is not confined to a case of supervisors wanting to join a
rank-and-file local union. The prohibition extends to a supervisors'
local union applying for membership in a national federation the
members of which include local unions of rank-and-file employees. The
intent of the law is clear especially where, as in the case at bar, the
supervisors will be co-mingling with those employees whom they
directly supervise in their own bargaining unit.
29. Technicalities should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. (Rapid
Manpower Consultants, Inc. v. NLRC, 190 SCRA 747 [1990]) What should
be paramount is the intent behind the law, not its literal construction. Where
one interpretation would result in mischievous consequences while another
would bring about equity, justice, and the promotion of labor peace, there
can be no doubt as to what interpretation shall prevail.
30. Finally, the respondent contends that the law prohibits the employer from
interfering with the employees' right to self-organization.
31. There is no question about this intendment of the law. There is, however, in
 the present case, no violation of such a guarantee to the employee.
Supervisors are not prohibited from forming their own union. What
the law prohibits is their membership in a labor organization of rank-
and-file employees (Art. 245, Labor Code) or their joining a national
federation of rank-and-file employees that includes the very local union
which they are not allowed to directly join.

32. In a motion dated November 15, 1991 it appears that the petitioner has
knuckled under to the respondents' pressures and agreed to let the national
federation KAMPIL-KATIPUNAN represent its supervisors in negotiating
a collective bargaining agreement. Against the advise of its own counsel
and on the basis of alleged "industrial peace", the petitioner expressed a loss
of interest in pursuing this action. The petitioner is, of course, free to grant
whatever concessions it wishes to give to its employees unilaterally or
through negotiations but we cannot allow the resulting validation of an
erroneous ruling and policy of the Department of Labor and Employment
(DOLE) to remain on the basis of the petitioner's loss of interest. The
December 14, 1990 order and the November 21, 1990 resolution of DOLE
are contrary to law and must be declared as such.
 024 DLSU Medical Center v. Laguesma (IYA) DOCTRINE: As a general rule, rank-and-file unions and supervisory unions
August 12, 1998 | Mendoza, J. | Topic may be members of the same national federation. However, when the federation
actively participates in union activities of the company, there may arise a
PETITIONER:DLSU Medical Center and College of Medicine situation of conflict of interest, when the two requisites are established: First,
(DLSUMCCM) the rank-and-file employees are directly under the authority of supervisory
RESPONDENTS: Hon. Bienvenido E. Laguesma, USec. of Labor and employees. Second, the national federation is actively involved in union
Employment et al. activities in the company.

SUMMARY: There are two labor unions in DLSUMCCM (DLSU). One is

composed of rank-and-file employees, while the other is composed of
FACTS:
supervisory employees. Both unions are affiliated under the same national
1. DLSUMCCM (hereinafter DLSU) is a hospital and medical school at
federation, the FFW. FFW on behalf of the supervisory employee union filed
Dasmariñas, Cavite.
for a petition for certification election. DLSU opposed arguing among others
2. Private respondent Federation of Free Workers-De La Salle University
that the supervisory union and the rank-and-file union cannot both be affiliated
Medical Center and College of Medicine Supervisory Union Chapter
with the same national federation.
(hereinafter UNION), on the other hand, is a labor organization composed
of the supervisory employees of petitioner DLSU.
The med-arbiter ruled in favor of the union and granted the certification
3. On April 17, 1991, the Federation of Free Workers (hereinafter Federation),
election. On appeal, the same was denied. Hence, the case before the SC.
a national federation of labor unions, issued a certificate to the Union
recognizing it as a local chapter.
The issue in this case is whether unions formed independently by supervisory
a. FFW also filed a petition for certification election among the
and rank-and-file employees of a company may validly affiliate with the same
supervisory employees of petitioner DLSU.
national federation.
1. This was opposed by DLSU on the grounds that several employees who
signed the petition were managerial employees and that the LOCAL
The SC held that as a general rule, rank-and-file unions and supervisory unions
CHAPTER was composed of both supervisory and rank-and-file
may be members of the same national federation. The affiliation of two local
employees.
unions in a company with the same national federation is not by itself a negation
a. The Union denied the allegations.
of their independence since in relation to the employer, the local unions are
2. de la Cruz, med-arbiter of DOLE, issued an order granted the Union’s
considered as the principals, while the federation is deemed to be merely their
certification election
agent.
3. DLSU pealed to the Secretary of DOLE citing substantially the same
arguments it raised before the med-arbiter.
However, to avoid a situation where supervisors would merge with the rank-
a. The appeal was dismissed.
and-file or where the supervisors' labor organization would represent conflicting
b. The resolution of USec. Laguesma stated that, Adamson &
interests, then a local supervisors' union should not be allowed to affiliate with a
Adamson, Inc. v. CIR,  unions formed independently by
national federation of unions of rank-and-file employees where that federation
supervisory and rank-and-file employees of a company may legally
actively participates in union activities in the company. But in order to fall
affiliate with the same national federation.
under this exception two requisites must be established: First, the rank-and-
4. A MR was filed but was denied.
file employees are directly under the authority of supervisory employees.
5. DLSU now contends that Laguesma gravely abused his discretion. While it
Second, the national federation is actively involved in union activities in the
does not anymore insist that several of those who joined the petition for
company.
certification election are holding managerial positions in the company,
DLSU nonetheless pursues the question whether unions formed
In this case, DLSU failed to show that the rank-and-file employees are directly
independently by supervisory and rank-and-file employees of a
under the authority of the supervisory employees. Therefore, there is nothing
company may validly affiliate with the same national federation.
which prohibits the two unions from affiliating with the same federation.
ISSUE/s:
1. WON unions formed independently by supervisory and rank-and-file
 employees of a company may validly affiliate with the same national b. Second, the national federation is actively involved in union
federation – YES, The affiliation of two local unions in a company with the activities in the company.
same national federation is not by itself a negation of their independence 10. The affiliation of two local unions in a company with the same national
since in relation to the employer, the local unions are considered as the federation is not by itself a negation of their independence since in relation
principals, while the federation is deemed to be merely their agent. to the employer, the local unions are considered as the principals, while the
2. federation is deemed to be merely their agent.
11. This conclusion is in accord with the policy that any limitation on the
RULING: WHEREFORE, the petition is DISMISSED. exercise by employees of the right to self-organization guaranteed in the
Constitution must be construed strictly. Workers should be allowed the
RATIO: practice of this freedom to the extent recognized in the fundamental law. 
1. Supervisory employees have the right to self-organization as do other 12. Although the two unions in DLSU, one for rank-and-file and another for
classes of employees save only managerial ones. supervisory, are affiliated with the same national federation, DLSU has not
2. The Constitution states that "the right of the people, including those presented any evidence showing that the rank-and-file employees
employed in the public and private sectors, to form unions, associations or composing the other union are directly under the authority of the
societies for purposes not contrary to law, shall not be abridged.” supervisory employees.
3. In the draft of the Constitution, Commissioner  Lerum's proposal to amend 13. The fact that the two groups of workers are employed by the same company
Art. III, § 8 by including labor unions in the guarantee of organizational and the fact that they are affiliated with a common national federation are
right should be taken in the context of statements that his aim was the not sufficient to justify the conclusion that their organizations are actually
removal of the statutory ban against security guards and supervisory just one.
employees joining labor organizations. a. Their immediate professional relationship must be established.
a. The approval by the Constitutional Commission of his proposal 14. In this case, while showing active involvement by the Federation in union
can only mean, therefore, that the Commission intended the activities at the company (by filing petition for certification election), is by
absolute right to organize of government workers, supervisory itself insufficient to justify a finding of violation of Art. 245 since there is
employees, and security guards to be constitutionally guaranteed. no proof that the supervisors who compose the local union have direct
4. Conformably with the constitutional mandate, Art. 245 of the Labor Code authority over the rank-and-file employees composing the other local union
now provides for the right of supervisory employees to self-organization, which is also affiliated with the FFW. 
subject to the limitation that they cannot join an organization of rank-and-
file employees
5. The reason for the segregation of supervisory and rank-and-file employees
of a company with respect to the exercise of the right to self-organization is
the difference in their interests.
6. Supervisory employees are more closely identified with the employer than
with the rank-and-file employees.
7. If supervisory and rank-and-file employees in a company are allowed to
form a single union, the conflicting interests of these groups impair their
relationship and adversely affect discipline, collective bargaining and
strikes. 
8. To avoid a situation where supervisors would merge with the rank-and-file
or where the supervisors' labor organization would represent conflicting
interests, then a local supervisors' union should not be allowed to affiliate
with a national federation of unions of rank-and-file employees where that
federation actively participates in union activities in the company.
9. As the SC explained, however, such a situation would obtain only where
two conditions concur:
a. First, the rank-and-file employees are directly under the authority
of supervisory employees.
 025 Tagaytay Highland’s International Golf Club Inc. v. Tagaytay
Highlands Employees Union-PGTWO (Montes)
22 Jan. 2003 | Carpio-Morales, J. | Conditions of Membership and Rights of
Members
FACTS:
PETITIONER: Tagaytay Highland’s International Golf Club Inc.
RESPONDENT: Tagaytay Highlands Employees Union-PGTWO
SUMMARY: THEU (Union) filed a petition for certification election before the
DOLE Mediation-Arbitration Unit. THIGCI (Company) opposed THEUs
petition for certification election (PCE) on the ground that the list of union
members submitted by it was defective and fatally flawed as it included the
names and signatures of supervisors, resigned, terminated and AWOL
employees, as well as employees of The Country Club, Inc.(different
company).THEU countered and said that Section 5, Rule V of DO no. 9 provides
that the legitimacy of its registration cannot be subject to collateral attack,
and for as long as there is no final order of cancellation, it continues to enjoy
the rights accorded to a legitimate organization.
WoN supervisory employees and non - employees could simply be removed
from THEU’s roster of rank-and-file membership instead of resolving the
legitimacy of respondent union status – YES. *Doctrine 1*
The inclusion in a union of disqualified employees is not among the grounds for
cancellation, unless such inclusion is due to misrepresentation, false statement or
fraud under the circumstances enumerated in Sections (a) and (c) of Article 239
of above-quoted Article 239 of the LC.
As for THIGCI’s allegation that some of the signatures in the PCE were obtained
through fraud, false statement and misrepresentation, the proper procedure is
for the Company to file a petition for cancellation of the certificate of
registration, and not to intervene in a petition for certification election.
THEU, having been validly issued a certificate of registration, should be
considered to have already acquired juridical personality which may not be
assailed collaterally.
WoN the disqualified employees’ status could readily be resolved during the
inclusion and exclusion proceedings – YES. DOCTRINE 2: The best forum for
determining whether there were indeed retractions from some of the laborers is
in the certification election itself wherein the workers can freely express their
choice in a secret ballot.
DOCTRINE 1: After a certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack.
1. The Tagaytay Highlands Employees Union (THEU) Philippine Transport
and General Workers Organization (PTGWO), Local Chapter a legitimate
labor organization said to represent majority of the rank-and-file
employees of THIGCI, filed a petition for certification election before
the DOLE Mediation-Arbitration Unit.
2. THIGCI (Petitioner), in its Comment, opposed THEUs petition for
certification election on the ground
o that the list of union members submitted by it was defective
and fatally flawed as it included the names and signatures of
supervisors, resigned, terminated and absent without leave
(AWOL) employees, as well as employees of The Country
Club, Inc., a corporation distinct and separate from THIGCI; and
o that out of the 192 signatories to the petition, only 71 were
actual rank-and-file employees of THIGCI.
3. THIGCI also alleged that some of the signatures in the list of union
members were secured through fraudulent and deceitful means, and
submitted copies of the handwritten denial and withdrawal of some of
its employees from participating in the petition
4. Replying to THIGCIs Comment, THEU asserted that it had complied
with all the requirements for valid affiliation and inclusion in the roster of
legitimate labor organizations pursuant to DOLE Department Order No. 9,
series of 1997, on account of which it was duly granted a Certification of
Affiliation by DOLE; and that Section 5, Rule V of said Department Order
provides that the legitimacy of its registration cannot be subject to
collateral attack, and for as long as there is no final order of
cancellation, it continues to enjoy the rights accorded to a legitimate
organization.
5. DOLE Med-Arbiter Anastacio Bactin - ordered the holding of a
certification election among the rank-and-file employees of THIGCI: “We
evaluated carefully this instant petition and we are of the opinion that it is
complete in form and substance.” The Med-Arbiter held that THIGCI
failed to submit the job descriptions of the questioned employees and
 other supporting documents to bolster its claim that they are disqualified
from joining THEU
6. Office of the DOLE Secretary - Resolution, set aside the said Med-
Arbiters Order and accordingly dismissed the petition for certification
election on the ground that there is a clear absence of community or
mutuality of interests, it finding that THEU sought to represent two
separate bargaining units (supervisory employees and rank-and-file
employees) as well as employees of two separate and distinct corporate
entities.
7. Undersecretary Dimapilis-Baldoz – November 12, 1998 (date is
important) undersecretary held that since THEU is a local chapter, the
twenty percent (20%) membership requirement is not necessary for it to
acquire legitimate status, hence, the alleged retraction and withdrawal of
support by 45 of the 70 remaining rank-and-file members cannot negate
the legitimacy it has already acquired before the petition; that rather
than disregard the legitimate status already conferred on THEU by the
Bureau of Labor Relations, the names of alleged disqualified
supervisory employees and employees of the Country Club, Inc., a
separate and distinct corporation, should simply be removed from the
THEUs roster of membership; and that regarding the participation of
alleged resigned and AWOL employees and those whose signatures are
illegible, the issue can be resolved during the inclusion-exclusion
proceedings at the pre-election stage. (IMPORTANT)
8. Court of Appeals - denied THIGCIs Petition for Certiorari and affirmed
the DOLE Resolution dated November 12, 1998. It held that while a
petition for certification election is an exception to the innocent bystander
rule, hence, the employer may pray for the dismissal of such petition on
the basis of lack of mutuality of interests of the members of the union as
well as lack of employer-employee relationship.
ISSUEs:
8. WoN supervisory employees and non - employees could simply be removed
from THEU’s roster of rank-and-file membership instead of resolving the
legitimacy of respondent union status – YES. After a certificate of
registration is issued to a union, its legal personality cannot be subject to
collateral attack.
9. WoN the disqualified employees’ status could readily be resolved during
the inclusion and exclusion proceedings – YES. The best forum for
determining whether there were indeed retractions from some of the
laborers is in the certification election itself wherein the workers can freely
express their choice in a secret ballot.
RULING: WHEREFORE, the petition is hereby DENIED. Let the records of the
case be remanded to the office of origin, the Mediation-Arbitration Unit, Regional
Branch No. IV, for the immediate conduct of a certification election subject to the
usual pre-election conference. SO ORDERED.
RATIO:
Issue No. 1:
37. The statutory authority for the exclusion of supervisory employees in a
rank-and-file union, and vice-versa, is Article 24521 of the Labor Code.
38. While Article 245 expressly prohibits supervisory employees from joining a
rank-and-file union, it does not provide what would be the effect if a rank-
and-file union counts supervisory employees among its members, or vice-
versa.
39. After a certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack. It may be questioned
only in an independent petition for cancellation in accordance with Section
522 of Rule V, Book IV of the "Rules to Implement the Labor Code"
(Implementing Rules).hanrob1es virtual
40. The grounds for cancellation of union registration are provided for under
Article 23923.
41. The inclusion in a union of disqualified employees is not among the
21
Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees. — Managerial employees are not eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their own.
22
Sec. 5. Effect of registration. The labor organization or workers’ association shall be deemed registered
and vested with legal personality on the date of issuance of its certificate of registration. Such legal
personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent
petition for cancellation in accordance with these Rules.
23
yArt. 239. Grounds for cancellation of union registration. The following shall constitute grounds for
cancellation of union registration:chanrob1es virtual 1aw library
(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) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from
adoption or ratification of the constitution and by-laws or amendments thereto;
(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 subject these documents together with the list of the
newly elected/appointed officers and their postal addresses within thirty (30) days from election;
 grounds for cancellation, unless such inclusion is due to misrepresentation,
false statement or fraud under the circumstances enumerated in Sections (a)
and (c) of Article 239 of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be
considered to have already acquired juridical personality which may not be
assailed collaterally.
42. As for THIGCI’s allegation that some of the signatures in the petition for
certification election were obtained through fraud, false statement and
misrepresentation, the proper procedure is, as reflected above, for it to
file a petition for cancellation of the certificate of registration, and not
to intervene in a petition for certification election.
Issue No.2:
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of
every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report
itself;
(e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any activity
prohibited by law;
(f) Entering into collective bargaining agreements which provide terms and conditions of employment
below minimum standards established by law;
(g) Asking for or accepting attorney’s fees or negotiation fees from employers;
(h) Other than for mandatory activities under this Code, checking off special assessments or any other fees
without duly signed individual written authorizations of the members;
(i) Failure to submit list of individual members to the Bureau once a year or whenever required by the
Bureau; and
(j) Failure to comply with the requirements under Articles 237 and 23, while the procedure for
cancellation of registration is provided for in Rule VIII, Book V of the Implementing Rules.
43. Regarding the alleged withdrawal of union members from participating in
the certification election, this Court’s following ruling is instructive:
"[T]he best forum for determining whether there were indeed
retractions from some of the laborers is in the certification election
itself wherein the workers can freely express their choice in a secret
ballot."
44. As for the lack of mutuality of interest argument of petitioner, it, at all
events, does not lie given, as found by the court a quo, its failure to present
substantial evidence that the assailed employees are actually occupying
supervisory positions.
45. While petitioner submitted a list of its employees with their corresponding
job titles and ranks, there is nothing mentioned about the supervisors’
respective duties, powers and prerogatives that would show that they can
effectively recommend managerial actions which require the use of
independent judgment.
1. As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of
Labor: Designation should be reconciled with the actual job description of
subject employees. The mere fact that an employee is designated manager
does not necessarily make him one. Otherwise, there would be an absurd
situation where one can be given the title just to be deprived of the right to
be a member of a union.