PAL vs. NLRC G.R. No. 85985, August 13, 1993 of workers concerning their rights and obligations as employees.
s and obligations as employees. The
FACTS: On March 15, 1985, the Philippine Airlines, Inc. (PAL)
completely revised its 1966 Code of Discipline. The Code was
circulated among the employees and was immediately implemented
without notice and prior discussion with the Philippine Airlines
Employees Association (PALEA) by the Management. Some
employees were subjected to the disciplinary measures embodied
therein.
On August 20, 1985, PALEA filed a complaint before the National
Labor Relations Commission (NLRC) for unfair labor practice with
the following remarks: "ULP with arbitrary implementation of PAL's
Code of Discipline without notice and prior discussion with Union by
Management" that being penal in nature the Code must conform with
the requirements of sufficient publication, and that the Code was
arbitrary, oppressive, and prejudicial to the rights of the employees. It
prayed that implementation of the Code be held in abeyance;
PAL filed a motion to dismiss the complaint, alleging that by
implementing the Code, it had not violated the collective bargaining
agreement (CBA) or any provision of the Labor Code.
On November 7, 1986, a decision was rendered finding no bad faith
on the part of PAL in adopting the Code and ruling that no unfair
labor practice had been committed. However, the arbiter held that
PAL was "not totally fault free" considering that while the issuance
of rules and regulations governing the conduct of employees is a
"legitimate management prerogative" such rules and regulations must
meet the test of "reasonableness, propriety and fairness." She found
Section 1 of the Code aforequoted as "an all embracing and all
encompassing provision that makes punishable any offense one can
think of in the company"; while Section 7, likewise quoted above, is
"objectionable for it violates the rule against double jeopardy thereby
ushering in two or more punishment for the same misdemeanor."
The labor arbiter also found that PAL "failed to prove that the new
Code was amply circulated." Noting that PAL's assertion that it had
furnished all its employees copies of the Code is unsupported by
documentary evidence, she stated that such "failure" on the part of
PAL resulted in the imposition of penalties on employees who
thought all the while that the 1966 Code was still being followed.
Thus, the arbiter concluded that "(t)he phrase ignorance of the law
excuses no one from compliance . . . finds application only after it
has been conclusively shown that the law was circulated to all the
parties concerned and efforts to disseminate information regarding
the new law have been exerted
PAL appealed to the NLRC. NLRC found no evidence of unfair labor
practice committed by PAL and affirmed the dismissal of PALEA's
charge.
PAL then filed the instant petition for certiorari charging public
respondents with grave abuse of discretion in: (a) directing PAL "to
share its management prerogative of formulating a Code of
Discipline"; (b) engaging in quasi-judicial legislation in ordering
PAL to share said prerogative with the union; (c) deciding beyond the
issue of unfair labor practice, and (d) requiring
ISSUE: Whether or not the formulation of a Code of Discipline
among employees is a shared responsibility of the employer and the
employees.
RULING: To achieve industrial peace, the employees must be
granted their just participation in the discussion of matters affecting
their rights. It is the policy of the State to promote the enlightenment
New Code of Discipline containing disciplinary measures cannot be
implemented in the absence of full cooperation of the employees as it
affects their rights, duties and welfare. Management cannot exclude
labor in the deliberation and adoption of rules and regulations that
will affect them. Workers have the right to participate in decision and
policy making process affecting their rights, duties and welfare.
Participation in Decision-Making Process –
A line must be drawn between management prerogatives regarding
business operations per se and those which affect the rights of the
employees. In treating the latter, management should see to it that its
employees are at least properly informed of its decisions or modes of
action. Indeed, industrial peace cannot be achieved if the employees
are denied their just participation in the discussion of matters
affecting their rights.
SAN MIGUEL FOODS, INC.-CEBU B-MEG FEED
PLANT, petitioner, vs. HON. BIENVENIDO E. LAGUESMA,
Undersecretary of DOLE and ILAW AT BUKLOD NG
MANGGAGAWA (IBM), respondents.
HERMOSISIMA, JR., J.:
This is a petition for certiorari under Rule 65 to review and set aside
two Resolutions of Mediator-Arbiter Achilles V. Manit, dated
January 5, 1994 and April 6, 1994, and the affirmation Order on
appeal of the public respondent, Undersecretary Bienvenido E.
Laguesma of the Department of Labor and Employment. The petition
below was entitled: In Re: Petition for Direct Certification as the Sole
and Exclusive Bargaining Agent of All Monthly Paid Employees of
SMFI-Cebu B-Meg Feeds Plant, docketed as OS-MA-A-3-51-94
(RO700-9309-RU-036).
The essential facts are not disputed.
On September 24, 1993, a petition for certification election among
the monthly-paid employees of the San Miguel Foods, Inc.-Cebu B-
Meg Feeds Plant was filed by private respondent labor federation
Ilaw at Buklod ng Manggagawa (IBM, for brevity) before Med-
Arbiter Achilles V. Manit, alleging, inter alia, that it is a legitimate
labor organization duly registered with the Department of labor and
Employment (DOLE) under the Registration Certificate No. 5369-
IP. SMFI-Cebu B-Meg Feeds Plant (SMFI, for brevity), herein
petitioner, is a business entity duly organized and existing under the
laws of the Philippines which employs roughly seventy-five (75)
monthly paid employees, almost all of whom support the present
petition. It was submitted in said petition that there has been no
certification election conducted in SMFI to determine the sole and
exclusive bargaining agent thereat for the past two years and that the
proposed bargaining unit, which is SMFIs monthly paid
employees, is an unorganized one. It was also stated therein that
petitioner IBM (herein private respondent) has already complied with
the mandatory requirements for the creation of its local or affiliate in
SMFIs establishment.
On October 25, 1993, herein petitioner SMFI filed a Motion to
Dismiss the aforementioned petition dated   September 24, 1993 on the
ground that a similar petition remains pending between the same
parties for the same cause of action before Med-Arbiter Achilles V.
Manit.
ISSUE: whether or not a particular labor organization is legitimate
since 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
When does a labor organization acquire legitimacy?
Whether or not petitioner is a legitimate labor organization will
depend on the documents submitted by the petitioner in the second
petition
HELD: Ordinarily, a labor organization attains the status of
legitamacy only upon the issuance in its name of a Certificate of
Registration by the Bureau of Labor Relations
    We agree with this position of the public respondent and the
Solicitor General. In addition, private respondents Comment to this
petition indicates that in the election of officers held  to determine the
representatives of IBM, the faction of Mr. Meron lost to the group of
Mr. Edilberto Galvez, and the latter was acknowledged as the duly
elected IBM National President.Thus, the authority of Mr. Galvez to
sign the charter certificate of IBM at SMFI, as President of the IBM
Federation,can no longer be successfully questioned. A punctilious
examination of the records presents no evidence to the contrary and
petitioner, instead of squarely refuting this point, skirted the issue by
insisting that the mere presence of two contending factions in the
IBM prevents the issuance of a valid and authentic charter certificate
in favor of IBM at SMFI.   This averment of petitioner simply does not
deserve any merit.
II
In any case, this Court notes that it is petitioner, the employer, which
has offered the most tenacious resistance to the holding of a
certification election among its monthly-paid rank-and-file
employees. This must not be so, for the choice of a collective
bargaining agent is the sole concern of the employees. [19] The only
exception to this rule is where the employer has to file the petition for
certification election pursuant to Article 258of the Labor Code
because it was requested to bargain collectively,which exception
finds no application in the case before us. Its role in a certification
election has aptly been described in Trade Unions of the Philippines
and Allied Services (TUPAS) v. Trajano, as that of a mere by-
stander. It has no legal standing in a certification election as it cannot
oppose the petition or appeal the Med-Arbiters orders related
thereto. An employer that involves itself in a certification election
lends suspicion to the fact that it wants to create a company
union.This Court should be the last agency to lend support to such an
attempt at interference with a purely internal affair of labor.
When does a labor organization acquire legitimacy?
Answer: a labor organization attains the status of legitamacy only
upon the issuance in its name of a Certificate of Registration by the
Bureau of Labor Relations
Calderon vs. Carale
Facts:  of the Constitution by adding thereto appointments requiring
Sometime in March 1989, RA 6715 (Herrera-Veloso Law), amending
the Labor Code (PD 442) was approved. Section 13 thereof provides
that the Chairman, the Division Presiding Commissioners and other
Commissioners of NLRC shall all be appointed by the President,
subject to confirmation by the Commission on Appointments.
President Aquino appointed respondents as the Chairman and
Commissioners of the NLRC.  It can not be overlooked that Sec. 16, Art. VII of the 1987
Carale filed a petition for prohibition questioning the constitutionality
and legality of respondents permanent appointments. Calderon insists
that the appointments must be submitted to the CA for confirmation.
He also posits that RA 6715 is not an encroachment on the appointing
power of the executive contained in Section 16, Art. VII, of the
Constitution, as Congress may, by law, require confirmation by the
Commission on Appointments of other officers appointed by the
President additional to those mentioned in the first sentence
of Section 16 of Article VII of the Constitution.
The Solicitor General, on the other hand, contends that RA 6715
which amended the Labor Code transgresses Section 16, Article VII
by expanding the confirmation powers of the Commission
on Appointments without constitutional basis.  whom he may be authorized by law to appoint..
Issue: 
Whether or not Congress may, by law, require confirmation by the
Commission on Appointments of appointments extended by the
President to government officers additional to those expressly
mentioned in the first sentence of Sec. 16, Art. VII of the
Constitution whose appointments require confirmation by the
Commission on Appointments
Held: 
No. In Sarmiento III vs. Mison case, the Court stated that there are
four (4) groups of officers whom the President shall appoint. These
four (4) groups, are: First, the heads of the executive
departments, ambassadors, other public ministers and consuls,
officers of the armed forces from the rank of colonel or naval captain,
and other officers whose appointments are vested in him in this
Constitution; Second, all other officers of the Government
whose appointments are not otherwise provided for by law; Third,
those whom the President may be authorized by law to appoint; and
Fourth, officers lower in rank whose appointments the Congress may
by law vest in the President alone. 
The second sentence of Sec. 16, Art. VII refers to all other officers of
the government whose appointment are not otherwise provided for by
law and those whom the President may be authorized by law to
appoint. 
Indubitably, the NLRC Chairman and Commissioners fall within the
second sentence of Section 16, Article VII of the Constitution, more
specifically under the "third groups" of appointees referred to
in Mison, i.e. those whom the President may be authorized by law to
appoint. Undeniably, the Chairman and Members of the NLRC are
not among the officers mentioned in the first sentence of  Section 16,
Article VII whose appointments requires confirmation by the
Commission on Appointments. To the extent that RA 6715 requires
confirmation by the Commission on Appointments of the
appointments of respondents Chairman and Members of the National
Labor Relations Commission, it is unconstitutional because:
1) it amends by legislation, the first sentence of Sec. 16, Art. VII
confirmation by the Commission on Appointments; and
2) it amends by legislation the second sentence of Sec. 16, Art. VII
of the Constitution, by imposing the confirmation of the Commission
on Appointments on appointments which are otherwise entrusted
only with the President.
Constitution was deliberately, not unconsciously, intended by the
framers of the 1987 Constitution to be a departure from the system
embodied in the 1935 Constitution where the Commission
on Appointments exercised the power of confirmation over almost all
presidential appointments, leading to may cases of abuse of such
power of confirmation. 
Subsection 3, Section 10, Art. VII of the 1935 Constitution provided
that the President shall nominate and with the consent of the
Commission on Appointments, shall appoint the heads of the
executive departments and bureau, officers of the Army from the
rank of the colonel, of the Navy and Air Forces from the rank of
captain or commander, and all other officers of the Government
whose appointments are not herein otherwise provided for, and those
 
The deliberate limitation on the power of confirmation of the
Commission on Appointments over presidential appointments,
embodied in Sec. 16, Art. VII of the 1987 Constitution, has
undoubtedly evoked the displeasure and disapproval of members of
the Congress. The solution to the apparent problem, if indeed a
problem, is not judicial or legislative but constitutional. A future
constitutional convention or Congress sitting as a constituent
(constitutional) assembly may then consider either a return to the
1935 Constitutional provisions or the adoption of a hybrid system
between the 1935 and 1987 constitutional provisions. Until then, it is
the duty of the Court to  apply the 1987 Constitution in accordance
with what it says and not in accordance with how the legislature or
the executive would want it interpreted. (Calderon vs. Carale, GR
No. 91636, April 23, 1992)