petitioner's opposition to a certification election and 
agreed to consider all the sales offices in
G.R. No. 100485 September 21, 1994
SAN MIGUEL CORPORATION, petitioner,
vs.
THE HONORABLE BIENVENIDO E. LAGUESMA and NORTH LUZON MAGNOLIA SALES LABOR
UNION-INDEPENDENT, respondents.
Petitioner San Miguel Corporation (SMC) prays that the Resolution dated March 19, 1991 and the
Order dated April 12, 1991 of public respondent Undersecretary Bienvenido E. Laguesma declaring
respondent union as the sole and exclusive bargaining agent of all the Magnolia sales personnel in
northern Luzon be set aside for having been issued in excess of jurisdiction and/or with grave abuse
of discretion.
On June 4, 1990, the North Luzon Magnolia Sales Labor Union (respondent union for brevity) filed
with the Department of Labor a petition for certification election among all the regular sales personnel
of Magnolia Dairy Products in the North Luzon Sales Area. 1
Petitioner opposed the petition and questioned the appropriateness of the bargaining unit sought to
be represented by respondent union. It claimed that its bargaining history in its sales offices, plants
and warehouses is to have a separate bargaining unit for each sales office.
The petition was heard on November 9, 1990 with petitioner
being represented by Atty. Alvin C. Batalla of the Siguion Reyna law office. Atty. Batalla withdrew
LABOR 2 - Batch 2
northern Luzon as one bargaining unit. At the pre-election conference, the parties agreed inter alia,
on the date, time and place of the consent election. Respondent union won the election held on
November 24, 1990. In an Order dated December 3, 1990, 2 Mediator-Arbiter Benalfre J. Galang
certified respondent union as the sole and exclusive bargaining agent for all the regular sales
personnel in all the sales offices of Magnolia Dairy Products in the North Luzon Sales Area.
Petitioner appealed to the Secretary of Labor. It claimed that
Atty. Batalla was only authorized to agree to the holding of certification elections subject to the
following conditions: (1) there would only be one general election; (2) in this general election, the
individual sales offices shall still comprise separate bargaining units. 3
In a Resolution dated March 19, 1991, 4 public respondent, by authority of the Secretary of Labor,
denied SMC's appeal and affirmed the Order of the Med- Arbiter.
Hence this petition for certiorari.
Petitioner claims that:
THE HONORABLE UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF
DISCRETION WHEN HE IGNORED AND TOTALLY DISREGARDED PETITIONER'S
VALID AND JUSTIFIABLE GROUNDS WHY THE ERROR MADE IN GOOD FAITH BY
PETITIONER'S COUNSEL BE CORRECTED, AND INSTEAD RULED:
THAT PRIVATE RESPONDENT IS "THE SOLE AND EXCLUSIVE
BARGAINING AGENT FOR ALL THE REGULAR SALES OFFICES OF
MAGNOLIA DAIRY PRODUCTS, NORTH LUZON SALES AREA",
COMPLETELY IGNORING THE ESTABLISHED BARGAINING
HISTORY OF PETITIONER SMC.
B
THAT PETITIONER IS ESTOPPED FROM QUESTIONING THE
"AGREEMENT" ENTERED INTO AT THE HEARING ON
9 NOVEMBER 1990, IN CONTRAVENTION OF THE ESTABLISHED
FACTS OF THE CASE AND THE APPLICABLE LAW ON THE MATTER.
We find no merit in the petition.
The issues for resolution are: (1) whether or not respondent union represents an appropriate
bargaining unit, and (2) whether or not petitioner is bound by its lawyer's act of agreeing to consider
the sales personnel in the north Luzon sales area as one bargaining unit.
Petitioner claims that in issuing the impugned Orders, public respondent disregarded its collective
bargaining history which is to have a separate bargaining unit for each sales office. It insists that its
prior collective bargaining history is the most persuasive criterion in determining the appropriateness
of the collective bargaining unit.
Page 1 of 39
There is no merit in the contention.
A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the
entire body of employees, consistent with equity to the employer, indicate to be the best suited to
serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the
law." 5
The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of
the employees (Globe Doctrine); 6 (2) affinity and unity of the employees' interest, such as
substantial similarity of work and duties, or similarity of compensation and working conditions
(Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of
employment status. 7
Contrary to petitioner's assertion, this Court has categorically ruled that the existence of a prior
collective bargaining history is neither decisive nor conclusive in the determination of what constitutes
an appropriate bargaining unit. 8
the substitute lawyer with respect to the matters involved in the case and the specific limits of his
authority. Unfortunately, this was not done in this case. The negligence of its lawyers binds petitioner.
As held by this Court in the case of Villa Rhecar Bus v. De la Cruz: 10
. . . As a general rule, a client is bound by the mistakes of his counsel. Only when
the application of the general rule would result in serious injustice should an
exception thereto be called for.
In the case at bench, petitioner insists that each of the sales offices in northern Luzon should be
considered as a separate bargaining unit for negotiations would be more expeditious. Petitioner
obviously chooses to follow the path of least resistance. It is not, however, the convenience of the
employer that constitutes the determinative factor in forming an appropriate bargaining unit. Equally,
if not more important, is the interest of the employees. In choosing and crafting an appropriate
bargaining unit, extreme care should be taken to prevent an employer from having any undue
advantage over the employees' bargaining representative. Our workers are weak enough and it is not
our social policy to further debilitate their bargaining representative.

In sum, we find that no arbitrariness or grave abuse of discretion can be attributed to public
Indeed, the test of grouping is mutuality or commonality of interests. The employees sought to be
respondents certification of respondent union as the sole and exclusive bargaining agent of all the
represented by the collective bargaining agent must have substantial mutual interests in terms of
regular Magnolia sales personnel of the north Luzon sales area.
employment and working conditions as evinced by the type of work they perform.

WHEREFORE, premises considered, the challenged Resolution and Order of public respondent are
In the case at bench, respondent union sought to represent the sales personnel in the various
hereby AFFIRMED in toto, there being no showing of grave abuse of discretion or lack of jurisdiction.
Magnolia sales offices in northern Luzon. There is similarity of employment status for only the regular
SO ORDERED.
sales personnel in the north Luzon area are covered. They have the same duties and responsibilities
and substantially similar compensation and working conditions. The commonality of interest among
he sales personnel in the north Luzon sales area cannot be gainsaid. In fact, in the certification
election held on November 24, 1990, the employees concerned accepted respondent union as their
exclusive bargaining agent. Clearly, they have expressed their desire to be one.

Petitioner cannot insist that each of the sales office of Magnolia should constitute only one bargaining
unit. What greatly militates against this position is the meager number of sales personnel in each of
the Magnolia sales office in northern Luzon. Even the bargaining unit sought to be represented by
respondent union in the entire north Luzon sales area consists only of approximately
fifty-five (55) employees. 9 Surely, it would not be for the best interest of these employees if they
would further be fractionalized. The adage "there is strength in number" is the very rationale
underlying the formation of a labor union.

Anent the second issue, petitioner claims that Atty. Batalla was merely a substitute lawyer for Atty.
Christine Ona, who got stranded in Legaspi City. Atty. Batalla was allegedly unfamiliar with the
collective bargaining history of its establishment. Petitioner claims it should not be bound by the
mistake committed by its substitute lawyer.

We are not persuaded. As discussed earlier, the collective bargaining history of a company is not
decisive of what should comprise the collective bargaining unit. Insofar as the alleged "mistake" of the
substitute lawyer is concerned, we find that this mistake was the direct result of the negligence of
petitioner's lawyers. It will be noted that Atty. Ona was under the supervision of two (2) other
lawyers, Attys. Jacinto de la Rosa, Jr. and George C. Nograles. There is nothing in the records to show
that these two (2) counsels were likewise unavailable at that time. Instead of deferring the hearing,
petitioner's counsels chose to proceed therewith. Indeed, prudence dictates that, in such case, the
lawyers allegedly actively involved in SMC's labor case should have adequately and sufficiently briefed

LABOR 2 - Batch 2 Page 2 of 39


G.R. No. 96189 July 14, 1992
UNIVERSITY OF THE PHILIPPINES, petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, Department of
Labor and Employment, and THE ALL U.P. WORKERS' UNION, represented by its President,
Rosario del Rosario, respondent.
 In this special civil action of certiorari the University of the Philippines seeks the nullification of the
Order dated October 30, 1990 of Director Pura Ferrer-Calleja of the Bureau of Labor Relations holding
that "professors, associate professors and assistant professors (of the University of the Philippines)
are . . rank-and-file employees . . ;" consequently, they should, together with the so-called non-
academic, non-teaching, and all other employees of the University, be represented by only one labor
organization. 1 The University is joined in this undertaking by the Solicitor General who "has taken a
position not contrary to that of petitioner and, in fact, has manifested . . that he is not opposing the
petition . . ." 2
The case 3 was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990 by a
registered labor union, the "Organization of Non-Academic Personnel of UP" (ONAPUP). 4 Claiming to
have a membership of 3,236 members — comprising more than 33% of the 9,617 persons
constituting the non-academic personnel of UP-Diliman, Los Baños, Manila, and Visayas, it sought the
holding of a certification election among all said non-academic employees of the University of the
Philippines. At a conference thereafter held on March 22, 1990 in the Bureau, the University stated
that it had no objection to the election.
On April 18, 1990, another registered labor union, the "All UP Workers' Union," 5 filed a comment, as
intervenor in the certification election proceeding. Alleging that its membership covers both academic
and non-academic personnel, and that it aims to unite all UP rank-and-file employees in one union, it
declared its assent to the holding of the election provided the appropriate organizational unit was first
clearly defined. It observed in this connection that the Research, Extension and Professional Staff
(REPS), who are academic non-teaching personnel, should not be deemed part of the organizational
unit.
For its part, the University, through its General Counsel, 6 made of record its view that there should
be two (2) unions: one for academic, the other for non-academic or administrative, personnel
considering the dichotomy of interests, conditions and rules governing these employee groups.
Director Calleja ruled on the matter on August 7, 1990. 7 She declared that "the appropriate
organizational unit . . should embrace all the regular rank-and-file employees, teaching and non-
teaching, of the University of the Philippines, including all its branches" and that there was no
sufficient evidence "to justify the grouping of the non-academic or administrative personnel into an
organization unit apart and distinct from that of the academic or teaching personnel." Director Calleja
adverted to Section 9 of Executive Order No. 180, viz.:
Sec. 9. The appropriate organizational unit shall be the employer unit consisting of
rank-and-file employees, unless circumstances otherwise require.
LABOR 2 - Batch 2
and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC. 2,
Resolution of Public Sector Labor Management Council dated May 14, 1989, viz.:
xxx xxx xxx
For purposes of registration, an appropriate organizational unit may refer to:
xxx xxx xxx
d. State universities or colleges, government-owned or controlled corporations with
original charters.
She went on to say that the general intent of EO 180 was "not to fragmentize the employer
unit, as "can be gleaned from the definition of the term "accredited employees'
organization," which refers to:
. . a registered organization of the rank-and-file employees as defined in these rules
recognized to negotiate for the employees in an organizational unit headed by an
officer with sufficient authority to bind the agency, such as . . . . . . state colleges
and universities.
The Director thus commanded that a certification election be "conducted among rank-and-file
employees, teaching and non-teaching" in all four autonomous campuses of the UP, and that
management appear and bring copies of the corresponding payrolls for January, June, and July, 1990
at the "usual pre-election conference . . ."
At the pre-election conference held on March 22, 1990 at the Labor Organizational Division of the
DOLE, 8 the University sought further clarification of the coverage of the term, "rank-and-file"
personnel, asserting that not every employee could properly be embraced within both teaching and
non-teaching categories since there are those whose positions are in truth managerial and policy-
determining, and hence, excluded by law.
At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking the
exclusion from the organizational unit of those employees holding supervisory positions among non-
academic personnel, and those in teaching staff with the rank of Assistant Professor or higher,
submitting the following as grounds therefor:
1) Certain "high-level employees" with policy-making, managerial, or confidential functions, are
ineligible to join rank-and-file employee organizations under Section 3, EO 180:
Sec. 3. High-level employees whose functions are normally considered as policy-
making or managerial or whose duties are of a highly confidential nature shall not
be eligible to join the organization of rank-and file government employees;
2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank-and file:
just as there are those occupying managerial positions within the non-teaching roster, there is also a
dichotomy between various levels of the teaching or academic staff;
Page 3 of 39
3) Among the non-teaching employees composed of Administrative Staff and Research personnel,
only those holding positions below Grade 18 should be regarded as rank-and-file, considering that
those holding higher grade positions, like Chiefs of Sections, perform supervisory functions including
that of effectively recommending termination of appointments or initiating appointments and
promotions; and
4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only those holding
appointments at the instructor level may be so considered, because those holding appointments from
Assistant Professor to Associate Professor to full Professor take part, as members of the University
Council, a policy-making body, in the initiation of policies and rules with respect to faculty tenure and
promotion. 9
1) UP professors do "wield the most potent managerial powers: the power to rule on tenure, on the
creation of new programs and new jobs, and conversely, the abolition of old programs and the
attendant re-assignment of employees.
2) To say that the Council is "limited to (acting on) academic matters" is error, since academic
decisions "are the most important decisions made in a University . . (being, as it were) the heart, the
core of the University as a workplace.
3) Considering that the law regards as a "high level" employee, one who performs either policy-
determining, managerial, or confidential functions, the Director erred in applying only the "managerial
functions" test, ignoring the "policy-determining functions" test.

The ONAPUP quite categorically made of record its position; that it was not opposing the University's
4) The Director's interpretation of the law would lead to absurd results, e.g.: "an administrative
proferred classification of rank-and file employees. On the other hand, the "All UP Workers' Union"
officer of the College of Law is a high level employee, while a full Professor who has published several
opposed the University's view, in a Position Paper presented by it under date of October 18, 1990.
treatises and who has distinguished himself in argument before the Supreme Court is a mere rank-
and-file employee. A dormitory manager is classified as a high level employee, while a full Professor
Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the "sole or Political Science with a Ph. D. and several Honorary doctorates is classified as rank-and-file." 10
issue" of "whether or not professors, associate professors and assistant professors are included in the
definition of high-level employee(s)" in light of Rule I, Section (1) of the Implementing Guidelines of
The motion for reconsideration was denied by Director Calleja, by Order dated November 20, 1990.
Executive Order No. 180, defining "high level employee" as follows:

The University would now have this Court declare void the Director's Order of October 30, 1990 as
1. High Level Employee — is one whose functions are normally considered policy
well as that of November 20, 1990. 11 A temporary restraining order was issued by the Court, by
determining, managerial or one whose duties are highly confidential in nature. A
Resolution dated December 5, 1990 conformably to the University's application therefor.
managerial function refers to the exercise of powers such as:

1. To effectively recommend such managerial actions;
2. To formulate or execute management policies and decisions; or
3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or
discipline employees.
The Director adjudged that said teachers are rank-and-file employees "qualified to join unions and
vote in certification elections." According to her —
A careful perusal of the University Code . . shows that the policy-making powers of
the Council are limited to academic matters, namely, prescribing courses of study
and rules of discipline, fixing student admission and graduation requirements,
recommending to the Board of Regents the conferment of degrees, and disciplinary
power over students. The policy-determining functions contemplated in the
definition of a high-level employee pertain to managerial, executive, or organization
policies, such as hiring, firing, and disciplining of employees, salaries,
teaching/working hours, other monetary and non-monetary benefits, and other
terms and conditions of employment. They are the usual issues in collective
bargaining negotiations so that whoever wields these powers would be placed in a
situation of conflicting interests if he were allowed to join the union of rank-and-file
employees.
The University seasonably moved for reconsideration, seeking to make the following points, to wit:
LABOR 2 - Batch 2
Two issues arise from these undisputed facts. One is whether or not professors, associate professors
and assistant professors are "high-level employees" "whose functions are normally considered policy
determining, managerial or . . highly confidential in nature." The other is whether or not, they, and
other employees performing academic functions, 12 should comprise a collective bargaining unit
distinct and different from that consisting of the non-academic employees of the
University, 13 considering the dichotomy of interests, conditions and rules existing between them.
As regards the first issue, the Court is satisfied that it has been correctly resolved by the respondent
Director of Bureau Relations. In light of Executive Order No. 180 and its implementing rules, as well
as the University's charter and relevant regulations, the professors, associate professors and assistant
professors (hereafter simply referred to as professors) cannot be considered as exercising such
managerial or highly confidential functions as would justify their being categorized as "high-level
employees" of the institution.
The Academic Personnel Committees, through which the professors supposedly exercise managerial
functions, were constituted "in order to foster greater involvement of the faculty and other academic
personnel in appointments, promotions, and other personnel matters that directly affect
them." 14 Academic Personnel Committees at the departmental and college levels were organized
"consistent with, and demonstrative of the very idea of consulting the faculty and other academic
personnel on matters directly affecting them" and to allow "flexibility in the determination of
guidelines peculiar to a particular department or college." 15
Personnel actions affecting the faculty and other academic personnel should, however, "be considered
under uniform guidelines and consistent with the Resolution of the Board (of Regents) adopted during
its 789th Meeting (11-26-69) creating the University Academic Personnel Board." 16 Thus, the
Departmental Academic Personnel Committee is given the function of "assist(ing) in the review of the
Page 4 of 39
recommendations initiated by the Department Chairman with regard to recruitment, selection,
performance evaluation, tenure and staff development, in accordance with the general guidelines
formulated by the University Academic Personnel Board and the implementing details laid down by
the College Academic Personnel Committee;" 17 while the College Academic Personnel Committee is
entrusted with the following functions: 18
1. Assist the Dean in setting up the details for the implementation of policies, rules,
standards or general guidelines as formulated by the University Academic Personnel
Board;
2. Review the recommendation submitted by the DAPCs with regard to recruitment,
selection, performance evaluation, tenure, staff development, and promotion of the
faculty and other academic personnel of the College;
3. Establish departmental priorities in the allocation of available funds for
promotion;
4. Act on cases of disagreement between the Chairman and the members of the
DAPC particularly on personnel matters covered by this Order;
5. Act on complaints and/or protests against personnel actions made by the
Department Chairman and/or the DAPC.
The University Academic Personnel Board, on the other hand, performs the following functions: 19
1. Assist the Chancellor in the review of the recommendations of the CAPC'S.
2. Act on cases of disagreement between the Dean and the CAPC.
3. Formulate policies, rules, and standards with respect to the selection,
compensation, and promotion of members of the academic staff.
4. Assist the Chancellor in the review of recommendations on academic promotions
and on other matters affecting faculty status and welfare.
From the foregoing, it is evident that it is the University Academic Personnel Committee, composed of
deans, the assistant for academic affairs and the chief of personnel, which formulates the policies,
rules and standards respecting selection, compensation and promotion of members of the academic
staff. The departmental and college academic personnel committees' functions are purely
recommendatory in nature, subject to review and evaluation by the University Academic Personnel
Board. In Franklin Baker Company of the Philippines vs. Trajano, 20 this Court reiterated the principle
laid down in National Merchandising Corp. vs. Court of Industrial Relations, 21 that the power to
recommend, in order to qualify an employee as a supervisor or managerial employee "must not only
be effective but the exercise of such authority should not be merely of a routinary or clerical nature
but should require the use of independent judgment." Where such recommendatory powers, as in the
case at bar, are subject to evaluation, review and final action by the department heads and other
higher executives of the company, the same, although present, are not effective and not an exercise
of independent judgment as required by law.
LABOR 2 - Batch 2
Significantly, the personnel actions that may be recommended by the departmental and college
academic personnel committees must conform with the general guidelines drawn up by the university
personnel academic committee. This being the case, the members of the departmental and college
academic personnel committees are not unlike the chiefs of divisions and sections of the National
Waterworks and Sewerage Authority whom this Court considered as rank-and-file employees
in National Waterworks & Sewerage Authority vs. NWSA Consolidated Unions, 22 because "given ready
policies to execute and standard practices to observe for their execution, . . . they have little freedom
of action, as their main function is merely to carry out the company's orders, plans and policies."
The power or prerogative pertaining to a high-level employee "to effectively recommend such
managerial actions, to formulate or execute management policies or decisions and/or to hire,
transfer, suspend, lay-off, recall, dismiss, assign or discipline employees" 23 is exercised to a certain
degree by the university academic personnel board/committees and ultimately by the Board of
Regents in accordance with Section 6 of the University
Charter, 24 thus:
(e) To appoint, on the recommendation of the President of the University,
professors, instructors, lecturers and other employees of the University; to fix their
compensation, hours of service, and such other duties and conditions as it may
deem proper; to grant them in its discretion leave of absence under such
regulations as it may promulgate, any other provision of law to the contrary
notwithstanding, and to remove them for cause after investigation and hearing shall
have been had.
Another factor that militates against petitioner's espousal of managerial employment status for all its
professors through membership in the departmental and college academic personnel committees is
that not all professors are members thereof. Membership and the number of members in the
committees are provided as follows: 25
Sec. 2. Membership in Committees. — Membership in committees may be made
either through appointment, election, or by some other means as may be
determined by the faculty and other academic personnel of a particular department
or college.
Sec. 3. Number of Members. — In addition to the Chairman, in the case of a
department, and the Dean in the case of a college, there shall be such number of
members representing the faculty and academic personnel as will afford a fairly
representative, deliberative and manageable group that can handle evaluation of
personnel actions.
Neither can membership in the University Council elevate the professors to the status of high-level
employees. Section 6 (f) and 9 of the UP Charter respectively provide: 26
Sec. 6. The Board of Regents shall have the following powers and duties . . . ;
xxx xxx xxx
(f) To approve the courses of study and rules of discipline drawn up by the
University Council as hereinafter provided; . . .
Page 5 of 39
 Sec. 9. There shall be a University Council consisting of the President of the unit shall be the exclusive representative of all the employees in such unit for the
University and of all instructors in the university holding the rank of professor, purpose of collective bargaining in respect to rates of pay, wages, hours of
associate professor, or assistant professor. The Council shall have the power to employment, or other conditions of employment; Provided, That any individual
prescribe the courses of study and rules of discipline, subject to the approval of the employee or group of employees shall have the right at any time to present
Board of Regents. It shall fix the requirements for admission to any college of the grievances to their employer.
university, as well as for graduation and the receiving of a degree. The Council
alone shall have the power to recommend students or others to be recipients of
Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the Labor
degrees. Through its president or committees, it shall have disciplinary power over
Code with minor changes, no guidelines were included in said Code for determination of an
the students within the limits prescribed by the rules of discipline approved by the
appropriate bargaining unit in a given case. 30 Thus, apart from the single descriptive word
Board of Regents. The powers and duties of the President of the University, in
"appropriate," no specific guide for determining the proper collective bargaining unit can be found in
addition to those specifically provided in this Act shall be those usually pertaining to
the statutes.
the office of president of a university.

Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section 9, is
It is readily apparent that the policy-determining functions of the University Council are subject to
that "(t)he appropriate organizational unit shall be the employer unit consisting of rank-and-file
review, evaluation and final approval by the Board of Regents. The Council's power of discipline is
employees, unless circumstances otherwise require." Case law fortunately furnishes some guidelines.
likewise circumscribed by the limits imposed by the Board of Regents. What has been said about the
recommendatory powers of the departmental and college academic personnel committees applies
with equal force to the alleged policy-determining functions of the University Council. When first confronted with the task of determining the proper collective bargaining unit in a particular
controversy, the Court had perforce to rely on American jurisprudence. In Democratic Labor
Association vs. Cebu Stevedoring Company, Inc., decided on February 28, 1958, 31 the Court
Even assuming arguendo that UP professors discharge policy-determining functions through the
observed that "the issue of how to determine the proper collective bargaining unit and what unit
University Council, still such exercise would not qualify them as high-level employees within the
would be appropriate to be the collective bargaining
context of E.O. 180. As correctly observed by private respondent, "Executive Order No. 180 is a law
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter abound . . (to
concerning public sector unionism. It must therefore be construed within that context. Within that
which resort may be had) considering that our present Magna Carta has been patterned after the
context, the University of the Philippines represents the government as an employer. 'Policy-
American law on the subject." Said the Court:
determining' refers to policy-determination in university mattes that affect those same matters that
may be the subject of negotiation between public sector management and labor. The reason why
'policy-determining' has been laid down as a test in segregating rank-and-file from management is to . . . Under these precedents, there are various factors which must be satisfied and
ensure that those who lay down policies in areas that are still negotiable in public sector collective considered in determining the proper constituency of a bargaining unit. No one
bargaining do not themselves become part of those employees who seek to change these policies for particular factor is itself decisive of the determination. The weight accorded to any
their collective welfare." 27 particular factor varies in accordance with the particular question or questions that
may arise in a given case. What are these factors? Rothenberg mentions a good
number, but the most pertinent to our case are: (1) will of the employees (Globe
The policy-determining functions of the University Council refer to academic matters, i.e. those
Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity
governing the relationship between the University and its students, and not the University as an
of work and duties, or similarity of compensation and working conditions; (3) prior
employer and the professors as employees. It is thus evident that no conflict of interest results in the
collective bargaining history; and (4) employment status, such as temporary,
professors being members of the University Council and being classified as rank-and-file employees.
seasonal probationary employees. . . .

Be that as it may, does it follow, as public respondent would propose, that all rank-and-file employees
xxx xxx xxx
of the university are to be organized into a single collective bargaining unit?

An enlightening appraisal of the problem of defining an appropriate bargaining unit

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 interest of all the employees,
consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the law. 28
Our labor laws do not however provide the criteria for determining the proper collective bargaining
unit. Section 12 of the old law, Republic Act No. 875 otherwise known as the Industrial Peace Act,
simply reads as follows: 29
Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. —
The labor organization designated or selected for the purpose of collective
bargaining by the majority of the employees in an appropriate collective bargaining
LABOR 2 - Batch 2
is given in the 10th Annual Report of the National Labor Relations Board wherein it
is emphasized that the factors which said board may consider and weigh in fixing
appropriate units are: the history, extent and type of organization of employees;
the history of their collective bargaining; the history, extent and type of
organization of employees in other plants of the same employer, or other employers
in the same industry; the skill, wages, work, and working conditions of the
employees; the desires of the employees; the eligibility of the employees for
membership in the union or unions involved; and the relationship between the unit
or units proposed and the employer's organization, management, and
operation. . . .
Page 6 of 39
 . . In said report, it is likewise emphasized that the basic test in determining the academic personnel dictate the separation of these two categories of employees for purposes of
appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping collective bargaining. The formation of two separate bargaining units, the first consisting of the rank-
of employees who have substantial, mutual interests in wages, hours, working and-file non-academic personnel, and the second, of the rank-and-file academic employees, is the
conditions and other subjects of collective bargaining (citing Smith on Labor Laws, set-up that will best assure to all the employees the exercise of their collective bargaining rights.
316-317; Francisco, Labor Laws, 162). . . . These special circumstances, i.e., the dichotomy of interests and concerns as well as the dissimilarity
in the nature and conditions of work, wages and compensation between the academic and non-
academic personnel, bring the case at bar within the exception contemplated in Section 9 of Executive
The Court further explained that "(t)he test of the grouping is community or mutuality of interests.
Order No. 180. It was grave abuse of discretion on the part of the Labor Relations Director to have
And this is so because 'the basic test of an asserted bargaining unit's acceptability is whether or not it
ruled otherwise, ignoring plain and patent realities.
is fundamentally the combination which will best assure to all employees the exercise of their
collective bargaining rights' (Rothenberg on Labor Relations, 490)." Hence, in that case, the Court
upheld the trial court's conclusion that two separate bargaining units should be formed, one WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it declares the
consisting of regular and permanent employees and another consisting of casual laborers or professors, associate professors and assistant professors of the University of the Philippines as rank-
stevedores. and-file employees. The Order of August 7, 1990 is MODIFIED in the sense that the non-academic
rank-and-file employees of the University of the Philippines shall constitute a bargaining unit to the
exclusion of the academic employees of the institution — i.e., full professors, associate professors,
Since then, the "community or mutuality of interests" test has provided the standard in determining
assistant professors, instructors, and the research, extension and professorial staff, who may, if so
the proper constituency of a collective bargaining unit. In Alhambra Cigar & Cigarette Manufacturing
minded, organize themselves into a separate collective bargaining unit; and that, therefore, only said
Company, et al. vs. Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting that
non-academic rank-and-file personnel of the University of the Philippines in Diliman, Manila, Los
the employees in the administrative, sales and dispensary departments of a cigar and cigarette
Baños and the Visayas are to participate in the certification election.
manufacturing firm perform work which have nothing to do with production and maintenance, unlike
those in the raw lead (malalasi), cigar, cigarette, packing (precintera) and engineering and garage
departments, authorized the formation of the former set of employees into a separate collective SO ORDERED.
bargaining unit. The ruling in the Democratic Labor Association case, supra, was reiterated
in Philippine Land-Air-Sea Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual
employees were barred from joining the union of the permanent and regular employees.

Applying the same "community or mutuality of interests" test, but resulting in the formation of only
one collective bargaining units is the case of National Association of Free Trade Unions vs. Mainit
Lumber Development Company Workers Union-United Lumber and General Workers of the
Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598. In said case, the Court ordered the
formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the Logging
Division in Zapanta Valley, Kitcharao, Agusan Norte of the Mainit Lumber Development Company. The
Court reasoned:

Certainly, there is a mutuality of interest among the employees of the Sawmill

Division and the Logging Division. Their functions mesh with one another. One
group needs the other in the same way that the company needs them both. There
may be difference as to the nature of their individual assignments but the
distinctions are not enough to warrant the formation of a separate bargaining unit.

In the case at bar, the University employees may, as already suggested, quite easily be categorized
into two general classes: one, the group composed of employees whose functions are non-
academic, i.e., janitors, messengers, typists, clerks, receptionists, carpenters, electricians, grounds-
keepers, chauffeurs, mechanics, plumbers; 32 and two, the group made up of those performing
academic functions, i.e., full professors, associate professors, assistant professors, instructors — who
may be judges or government executives — and research, extension and professorial staff. 33 Not
much reflection is needed to perceive that the community or mutuality of interests which justifies the
formation of a single collective bargaining unit is wanting between the academic and non-academic
personnel of the university. It would seem obvious that teachers would find very little in common with
the University clerks and other non-academic employees as regards responsibilities and functions,
working conditions, compensation rates, social life and interests, skills and intellectual pursuits,
cultural activities, etc. On the contrary, the dichotomy of interests, the dissimilarity in the nature of
the work and duties as well as in the compensation and working conditions of the academic and non-
LABOR 2 - Batch 2 Page 7 of 39

G.R. No. 102130 July 26, 1994
GOLDEN FARMS, INC., petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR and THE PROGRESSIVE FEDERATION OF
LABOR, respondents.
The sole issue for resolution in this Petition for Certiorari with prayer for the issuance of preliminary
injunction and/or restraining order is whether or not petitioner's monthly paid rank-and file
employees can constitute a bargaining unit separate from the existing bargaining unit of its daily paid
rank-and-file employees.
Petitioner Golden Farms, Inc., is a corporation engaged in the production and marketing of bananas
for export. On February 27, 1992, private respondent Progressive Federation of Labor (PFL) filed a
petition before the Med-Arbiter praying for the holding of a certification election among the monthly
paid office and technical rank-and-file employees of petitioner Golden Farms.
Petitioner moved to dismiss the petition on three (3) grounds. First, respondent PFL failed to show
that it was organized as a chapter within petitioner's establishment. Second, there was already an
existing collective bargaining agreement between the rank-and-file employees represented by the
National Federation of Labor (NFL) and petitioner. And third, the employees represented by PFL had
allegedly been disqualified by this Court from bargaining with management in Golden Farms, Inc., vs.
Honorable Director Pura Ferrer-Calleja, G.R. No. 78755, July 19, 1989. 1
Respondent PFL opposed petitioner's Motion to Dismiss. It countered that the monthly paid office and
technical employees should be allowed to form a separate bargaining unit because they were
expressly excluded from coverage in the Collecting Bargaining Agreement (CBA) between petitioner
and NFL. It also contended that the case invoked by petitioner was inapplicable to the present case.
In its reply, petitioner argued that the monthly paid office and technical employees should have
joined the existing collective bargaining unit of the rank-and-file employees if they are not manegerial
employees.
On April 18, 1991, the Med-Arbiter granted the petition and ordered that a certification election be
conducted, viz:
WHEREFORE, premises considered, the present petition filed by the Progressive
Federation of Labor, for certification election among the office and technical
employees of Golden Farms, Inc., is, as it is hereby, GRANTED with the following
choices:
1. Progressive Federation of Labor (PFL);
2. No. union.
The designated representation officer is hereby directed to call the parties to a pre-
election conference to thresh out the mechanics of the election and to conduct and
LABOR 2 - Batch 2
supervise the same within twenty (20) days from receipt by the parties of this
Order. The "Masterlist of Office and Technical Employees" shall be the basis in
determining the employees qualified to vote during the certification election.
SO ORDERED. 2
Petitioner seasonably appealed to public respondent Secretary of Labor. On August 6, 1991,
respondent Secretary of Labor issued the assailed Decision denying the appeal for lack of
merit. 3 Petitioner filed a Motion for Reconsideration but the same was also denied on September 13,
1991.
Thus, this petition for certiorari interposing two (2) issues.
I
THE CREATION OF AN ADDITIONAL BARGAINING UNIT FOR CERTAIN RANK AND
FILE EMPLOYEES WILL NOT ONLY SPLIT THE EXISTING ONE BUT WILL ALSO
NEGATE THE PRINCIPLE OF RES JUDICATA.
II
THE PROGRESSIVE FEDERATION OF LABOR BEING THE EXCLUSIVE BARGAINING
AGENT OF THE SUPERVISORY EMPLOYEES IS DISQUALIFIED FROM REPRESENTING
THE OFFICE AND TECHNICAL EMPLOYEES.
The petition is devoid of merit.
The monthly paid office and technical rank-and-file employees of petitioner Golden Farms enjoy the
constitutional right to self-organization and collective bargaining. 4 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 interest of all the employees, consistent with equity to the
employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under
the collective bargaining provisions of the law. 5 The community or mutuality of interest is therefore
the essential criterion in the grouping. "And 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.' 6
In the case at bench, the evidence established that the monthly paid rank-and-file employees of
petitioner primarily perform administrative or clerical work. In contradistinction, the petitioner's daily
paid rank-and-file employees mainly work in the cultivation of bananas in the fields. It is crystal clear
the monthly paid rank-and-file employees of petitioner have very little in common with its daily paid
rank-and-file employees in terms of duties and obligations, working conditions, salary rates, and
skills. To be sure, the said monthly paid rank-and-file employees have even been excluded from the
bargaining unit of the daily paid rank-and-file employees. This dissimilarity of interests warrants the
formation of a separate and distinct bargaining unit for the monthly paid rank-and-file employees of
the petitioner. To rule otherwise would deny this distinct class of employees the right to self-
organization for purposes of collective bargaining. Without the shield of an organization, it will also
expose them to the exploitations of management. So we held in University of the Philippines vs.
Ferrer-Calleja, 7 where we sanctioned the formation of two (2) separate bargaining units within the
establishment, viz:
Page 8 of 39
 [T]he dichotomy of interests, the dissimilarity in the nature of the work and duties
as well as in the compensation and working conditions of the academic and non-
academic personnel dictate the separation of these two categories of employees for
purposes of collective bargaining. The formation of two separate bargaining units,
the first consisting of the rank-and-file non-academic employees, and the second, of
the rank-and-file academic employees, is the set-up that will best assure to all the
employees the exercise of their collective bargaining rights.
Petitioner next contends that these monthly paid office and technical employees are managerial
employees. They allegedly include those in the accounting and personnel department, cashier, and
other employees holding positions with access to classified information.
We are not persuaded. Article 212, paragraph (m) of the Labor Code, as amended, defines as
managerial employee as follows:
cited case will reveal that it involves a petition for direct certification among the rank-and-file office
and technical employees of the Golden Farms Inc., (not supervisory employees) under the House of
Investment, Ladislawa Village, Buhaning, Davao City filed by the National Federation of Labor (not the
respondent Progressive Federation of Labor). The averment of petitioner is baseless and its
recklessness borders the contemptuous.
Finally, we note that it was petitioner company that filed the motion to dismiss the petition for
election. The general rule is that an employer has no standing to question a certification election since
this is the sole concern of the workers. 11 Law and policy demand that employers take a strick, hands-
off stance in certification elections. The bargaining representative of employees should be chosen free
from any extraneous influence of management. A labor bargaining representative, to be effective,
must owe its loyalty to the employees alone and to no other.
WHEREFORE, the petition is DISMISSED for lack of merit. With costs against petitioner.

"Managerial employee" is one who is vested with power or prerogatives to lay down SO ORDERED.
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in
the interest of the employer, effectively recommend such managerial actions if the
exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.

Given this definition, the monthly paid office and technical employees, accountants, and
cashiers of the petitioner are not managerial employees for they do not participate in policy-
making but are given cut out policies to execute and standard practices to observe. 8 In the
main, the discharge of their duties does not involve the use of independent judgment. As
factually found by the Med-Arbiter, to wit:

A perusal of the list of the office and technical employees sought to be represented
in the instant case, with their corresponding designation does not show that said
Office and Technical employees exercises supervisory or managerial functions.

The office believes and so hold that the employees whose names appear in the
"Masterlist of Office and Technical Employees" submitted during the hearing are
eligible to join/form a labor organization of their own choice. 9

Our decision in Golden Farms, Inc., vs. Honorable Pura Ferrer-Calleja, op. cit., does not pose any
obstacle in holding a certification election among petitioner's monthly paid rank-and-file employees.
The issue brought to fore in that case was totally different, i.e., whether or not petitioner's
confidential employees, considering the nature of their work, should be included in the bargaining unit
of the daily paid rank-and-file employees. In the case at bench, the monthly paid rank-and-file
employees of petitioner are being separated as a bargaining unit from its daily paid rank-and-file
employees, on the ground that they have different interest to protect. The principle of res
judicata is, therefore, inapplicable.

The second assigned error which was not raised in the proceedings below must necessarily fail. The
alleged error involves a question of fact which this Court cannot resolve. Petitioner submitted this
contention only in its Memorandum dated February 12, 1993.10 In this Memorandum, petitioner cited
LRD Case No. OXI-UR-70 for Direct Recognition/Certification Election. But even a side glance of the

LABOR 2 - Batch 2 Page 9 of 39


G.R. No. L-28223           August 30, 1968
MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE NATIONAL RAILWAYS, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS and SAMAHAN NG MGA MANGGAGAWA SA CALOOCAN
SHOPS, respondents.
Petition by the "Mechanical Department Labor Union sa PNR" for a review of an order of the Court of
Industrial Relations, in its Case No. 1475-MC, directing the holding of a plebiscite election to
determine whether the employees at the Caloocan Shops desire the respondent union, "Samahan ng
mga Manggagawa sa Caloocan Shops", to be separated from the Mechanical Department Labor Union,
with a view to the former being recognized as a separate bargaining unit.
The case began on 13 February 1965 by a petition of the respondent "Samahan ng mga Manggagawa,
etc." calling attention to the fact that there were three unions in the Caloocan shops of the Philippine
National Railways: the "Samahan", the "Kapisanan ng Manggagawa sa Manila Railroad Company",
and the Mechanical Department Labor Union; that no certification election had been held in the last
12 months in the Caloocan shops; that both the "Samahan" and the Mechanical Department Labor
Union had submitted different labor demands upon the management for which reason a certification
election was needed to determine the proper collective bargaining agency for the Caloocan shop
workers.
The petition was opposed by the management as well as by the Mechanical Department Labor Union,
the latter averring that it had been previously certified in two cases as sole and exclusive bargaining
agent of the employees and laborers of the PNR'S mechanical department, and had negotiated two
bargaining agreements with management in 1961 and 1963; that before the expiration of the latter, a
renewal thereof had been negotiated and the contract remained to be signed; that the "Samahan"
had been organized only in 21 January 1965; that the Caloocan shops unit was not established nor
separated from the Mechanical Department unit; that the "Samahan" is composed mainly of
supervisors who had filed a pending case to be declared non-supervisors; and that the purpose of the
petition was to disturb the present smooth working labor management relations.
By an order of 18 August 1967, Judge Arsenio Martinez, after receiving the evidence, made the
following findings:.1äwphï1.ñët
The trial judge then reviewed the collective bargaining history of the Philippine National Railways, as
follows: 1äwphï1.ñët
The Court, after a cursory examination of the evidence presented made the following
findings: That petitioner union is composed of workers exclusively at the Caloocan shops of
the Philippine National Railways charged with the maintenance of rolling stocks for repairs;
major repairs of locomotive, engines, etc. are done in the Caloocan shops while minor ones
in the Manila sheds; workers in the Caloocan shops do not leave their station unlike Manila
shop workers who go out along the routes and lines for repairs; workers both in the
Caloocan shops and Manila sheds are exposed to hazards occasioned by the nature of their
work; that with respect to wages and salaries of employees, categories under the Job
Classification and Evaluation Plan of the company apply to all workers both in the Caloocan
Shops and Manila sheds; administration over employees, members of petitioner union as
well as oppositor is under the Administrative Division of the company; that from the very
nature of their work, members of petitioner union and other workers of the Mechanical
Department have been under the coverage of the current collective bargaining agreement
which was a result of a certification by this Court of the Mechanical Department Labor union,
LABOR 2 - Batch 2
first in 1960 and later in 1963. Subsequently, when the latter contract expired, negotiations
for its renewal were had and at the time of the filing of this petition was already
consummated, the only act remaining to be done was to affix the signatures of the parties
thereto; that during the pendency of this petition, on June 14, 1965, the aforesaid collective
bargaining agreement was signed between the Philippine National Railways and the
Mechanical Department Labor Union sa Philippine National Railways (Manila Railroad
Company).
The main issue involved herein is: Whether or not a new unit should be established, the
Caloocan shops, separate and distinct from the rest of the workers under the Mechanical
Department now represented by the Mechanical Department Labor Union.
The Caloocan Shops, all located at Caloocan City have 360 workers more or less. It is part
and parcel of the whole Mechanical Department of the Philippine National Railways. The
department is composed of four main divisions or units, namely: Operations, Manila Area
and Lines; Locomotive Crew; Motor Car Crew; and the Shops Rolling Stocks Maintenance.
(Exhibits "D" and "D-1").
The Locomotive crew and Motor Car Crew, though part of the Mechanical Department, is a
separate unit, and is represented by the Union de Maquinistas, Fogoneros Y Motormen. The
workers under the other two main units of the departments are represented by the
Mechanical Department Labor Union. The workers of the Shops Rolling Stocks Maintenance
Division or the Caloocan Shops now seek to be separated from the rest of the workers of the
department and to be represented by the "Samahan Ng Mga Manggagawa sa Caloocan
Shops." .
There is certainly a community of interest among the workers of the Caloocan Shops. They
are grouped in one place. They work under one or same working condition, same working
time or schedule and are exposed to same occupational risk.
Though evidence on record shows that workers at the Caloocan Shops perform the same
nature of work as their counterparts in the Manila Shed, the difference lies in the fact that
workers at the Caloocan Shops perform major repairs of locomotives, rolling stocks, engines,
etc., while those in the Manila Shed, works on minor repairs. Heavy equipment and
machineries are found in the Caloocan Shops.
On several similar instances, this Court allowed the establishment of new and separate
bargaining unit in one company, even in one department of the same company, despite the
existence of the same facts and circumstances as obtaining in the case at bar.
The history of the collective bargaining in the Manila Railroad Company, now the Philippine
National Railways shows that originally, there was only one bargaining unit in the company,
represented by the Kapisanan Ng Manggagawa sa MRR. Under Case No. 237-MC, this Court
ordered the establishment of two additional units, the engine crew and the train crew to be
represented by the Union de Maquinistas, Fogoneros, Ayudante Y Motormen and Union de
Empleados de Trenes, respectively. Then in 1961, under Cases Nos. 491-MC, 494-MC and
507-MC three new separate units were established, namely, the yard crew unit, station
Page 10 of 39
 employees unit and engineering department employees unit, respectively, after the As to the charge that some of the members of the appellee, "Samahan Ng Manggagawa", are actually
employees concerned voted in a plebiscite conducted by the court for the separation from supervisors, it appears that the question of the status of such members is still pending final decision;
existing bargaining units in the company. Then again, under Case No. 763-MC, a new unit, hence, it would not constitute a legal obstacle to the holding of the plebiscite. At any rate, the
composed of the Mechanical Department employees, was established to be represented by appellant may later question whether the votes of those ultimately declared to be supervisors should
the Mechanical Department Labor Union. Incidentally, the first attempt of the employees of be counted.
the Mechanical Department to be separated as a unit was dismissed by this Court of Case
No. 488-MC.
Whether or not the agreement negotiated by the appellant union with the employer, during the
pendency of the original petition in the Court of Industrial Relations, should be considered valid and
In the case of the yard crew, station employees and the Engineering Department employees, binding on the workers of the Caloocan shops is a question that should be first passed upon by the
the Supreme Court sustained the order of this Court in giving the employees concerned the Industrial Court.
right to vote and decide whether or not they desire to be separate units (See G.R. Nos. L-
16292-94, L-16309 and L-16317-18, November, 1965).
IN VIEW OF THE FOREGOING, the order appealed from is affirmed, with costs against appellant
Mechanical Department Labor Union sa Philippine National Railways.
In view of its findings and the history of "union representation" in the railway company, indicating
that bargaining units had been formed through separation of new units from existing ones whenever
plebiscites had shown the workers' desire to have their own representatives, and relying on the
"Globe doctrine" (Globe Machine & Stamping Co., 3 NLRB 294) applied in Democratic Labor Union vs.
Cebu Stevedoring Co., L-10321, 28 February 1958, Judge Martinez held that the employees in the
Caloocan Shops should be given a chance to vote on whether their group should be separated from
that represented by the Mechanical Department Labor Union, and ordered a plebiscite held for the
purpose. The ruling was sustained by the Court en banc; wherefore, the Mechanical Department
Labor Union appealed to this Court questioning the applicability under the circumstances of the "Globe
doctrine" of considering the will of the employees in determining what union should represent them.

Technically, this appeal is premature, since the result of the ordered plebiscite among the workers of
the Caloocan shops may be adverse to the formation of a separate unit, in which event, as stated in
the appealed order, all questions raised in this case would be rendered moot and academic.
Apparently, however, the appellant Mechanical Department Labor Union takes it for granted that the
plebiscite would favor separation.

We find no grave abuse of discretion in the issuance of the ruling under appeal as would justify our
interfering with it. Republic Act No. 875 has primarily entrusted the prosecution of its policies to the
Court of Industrial Relations, and, in view of its intimate knowledge concerning the facts and
circumstances surrounding the cases brought before it, this Court has repeatedly upheld the exercise
of discretion of the Court of Industrial Relations in matters concerning the representation of employee
groups (Manila Paper Mills Employees & Workers' Association vs. C.I.R. 104 Phil. 10; Benguet
Consolidated vs. Bobok Lumber Jack Association, 103 Phil. 1150).

Appellant contends that the application of the "Globe doctrine" is not warranted because the workers
of the Caloocan shops do not require different skills from the rest of the workers in the Mechanical
Department of the Railway Company. This question is primarily one of facts. The Industrial Court has
found that there is a basic difference, in that those in the Caloocan shops not only have a community
of interest and working conditions but perform major repairs of railway rolling stock, using heavy
equipment and machineries found in said shops, while the others only perform minor repairs. It is
easy to understand, therefore, that the workers in the Caloocan shops require special skill in the use
of heavy equipment and machinery sufficient to set them apart from the rest of the workers. In
addition, the record shows that the collective bargaining agreements negotiated by the appellant
union have been in existence for more than two (2) years; hence, such agreements can not constitute
a bar to the determination, by proper elections, of a new bargaining representative (PLDT Employees'
Union vs. Philippine Long Distance Telephone Co., 51 Off. Gaz., 4519).

LABOR 2 - Batch 2 Page 11 of 39


G.R. No. 85343 June 28, 1989
PHILTRANCO SERVICE ENTERPRISES, petitioner,
vs.
BUREAU OF LABOR RELATIONS and KAPISANAN NG MGA KAWANI, ASSISTANT,
MANGGAGAWA AT KONPIDENSIYAL SA PHILTRANCO, respondents.
In this petition for certiorari, the petitioner assails the order of the Bureau of Labor Relations (BLR)
dated September 5, 1988. The dispositive portion of the order reads:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 4 April 1988 is hereby set
aside and vacated and a new one entered ordering the conduct of a certification election among
regular rank-and-file professional, technical, administrative and confidential employees of respondent
company, with the following choices:
1. Kapisanan ng mga Kawani, Assistant Manggagawa at Konpidensyal sa Philtranco
(KASAMA KO)
2. No Union.
Let, therefore the records of the case be remanded to the Office of origin for the
immediate conduct of the election.
SO ORDERED. (Rollo, p. 33)
The antecedent facts are as follows:
Petitioner Philtranco Service Enterprises, Inc. is a land transportation company engaged in the
business of carrying passengers and freight. The company employees included field workers
consisting of drivers, conductors, coach drivers, coach stewards and mechanics and office employees
like clerks, cashiers, programmers, telephone operators, etc.
On February 15, 1988, the Kapisanan ng mga Kawani, Assistant, Manggagawa at Konpidensyal sa
Philtranco (KASAMA KO), a registered labor organization filed a petition for certification election with
the Department of Labor and Employment, alleging among others that:
xxx xxx xxx
3. Petitioner desires to represent all professional, technical, administrative, and
confidential employees personnel of respondent at its establishments in Luzon,
Visayas and Mindanao for purposes of collective bargaining;
LABOR 2 - Batch 2
4. The aforementioned employees were always expressly excluded from
participating in the certification election conducted among the rank and file
employees (drivers, conductors, coach drivers, coach stewards, and mechanics) of
respondent and are excluded from the bargaining unit covered by the CBA between
respondent and its rank and file employees. In addition, there exist substantial
differences in the terms and conditions of employment between the above-
mentioned employees, hence, the former are covered by another appropriate
bargaining unit which is separate and distinct from that of the rank and file
employees of respondent and; which has been recognized by the Bureau of Labor
Relations and upheld by the Honorable Supreme Court. Attached hereto as Annex
'A' and Annex 'B' are copies of the decision of the BLR and the Supreme Court in
support thereof;
xxx xxx xxx
6. The petition is supported by the signatures of more than twenty percent (20%) of
all covered employees as provided for by law and which shall be presented during
the initial hearing;
xxx xxx xxx
8. There has been no Consent Election or Certification Election held and conducted
by this Honorable Office for the past three (3) years prior to the filing of this petition
in the bargaining unit petitioner sought to represent, the last Certification Election
having been held last November 27, 1984. Attached hereto as Annex "C" is a copy
of the Order issued by this Honorable Office relative to the result of the last
certification election. (Rollo, pp. 4-5)
On February 24, 1988, the National Mines and Allied Workers Union (NAMAWU-MIF) filed a motion for
intervention alleging that it is the bargaining agent of the workers at Philtranco and as such it has a
substantial interest in the outcome of the petition.
On February 26, 1988, Arbiter Paterno Adap called the parties to a hearing. Philtranco and NAMAWU
were ordered to submit their respective position papers and KASAMA KO was given the opportunity to
submit a reply.
On April 4, 1988, a resolution was rendered with the following dispositive portion:
WHEREFORE, in the light of the foregoing premises, this petition is, as it is hereby
ordered DISMISSED. If there are still individual members of the herein petitioner
eligible to join a labor organization, it is hereby directed that all should be
included/incorporated in the existing bargaining unit.
Parties are further directed/enjoined to device a mechanism for the implementation
of the matter herein treated. (Rollo, pp. 29-30)
KASAMA KO appealed to the Bureau of Labor Relations (BLR) On September 5, 1988 the BLR reversed
the resolution of the Med-Arbiter. A motion for reconsideration was denied in an order dated October
10, 1988.
Page 12 of 39
As prayed for by the petitioner, a temporary restraining order was issued by this Court on November
7, 1988 restraining the BLR from enforcing and/or carrying out the decision dated September 5, 1988
and the order dated October 10, 1988.
The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the
rank and file groups. Thus, Art. 212 (k) of the Code provides:
xxx xxx xxx
(k) Managerial employee' is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees, or to effectively recommend such
managerial actions. All employees not falling within this definition are considered
rank and file employees for purposes of this Book.
In implementation of the aforequoted provision of the law, Section 11 of Rule II, Book V of the
Omnibus Rules implementing the Labor Code did away with existing supervisors' unions classifying
the members either as managerial or rank and file employees depending on the work they perform. If
they discharge managerial functions, supervisors are prohibited from forming or joining any labor
organization. If they do not perform managerial work, they may join the rank and file union and if
none exists, they may form one such rank and file organization. This rule was emphasized in the case
of Bulletin Publishing Corp. v. Sanchez, (144 SCRA 628 [1986]).
It, therefore, follows that the members of the KASAMA KO who are professional, technical,
administrative and confidential personnel of PHILTRANCO performing managerial functions are not
qualified to join, much less form a union. This rationalizes the exclusion of managers and confidential
employees exercising managerial functions from the ambit of the collective bargaining unit. As
correctly observed by Med-Arbiter Adap:
... managerial and confidential employees were expressly excluded within the
operational ambit of the bargaining unit for the simple reason that under the law,
managers are disqualified to be members of a labor organization.
On the other hand, confidential workers were not included because either they were
performing managerial functions and/or their duties and responsibilities were
considered or may be categorized as part and parcel of management as the primary
reason for their exclusion in the bargaining unit. The other categorized employees
were likewise not included because parties have agreed on the fact that the
aforementioned group of workers are not qualified to join a labor organization at the
time the agreement was executed and that they were classified as outside the
parameter of the bargaining unit. (Rollo, pp. 28-29)
The respondents, on the other hand, aver that the members of the respondent union are rank and file
employees qualified to form a union. In fact their status as rank and file employees was allegedly
recognized by this Court in the case of Pantranco South Express, Inc. v. NAMAWU, (G.R. No. 67475,
July 30, 1984).
The reliance on the Pantranco South Express, Inc. case is misplaced. The petition filed by Pantranco
South Express Inc. simply asked for a ruling that certain employees were performing managerial
functions. We denied the petition for lack of merit in a minute resolution. There was absolutely no
LABOR 2 - Batch 2
discussion on the recognition of another separate rank and file union in addition to the existing
bargaining unit.
There is no conflict. The employees of Philtranco have been appraised and their functions evaluated.
Managers by any name may not join the rank and file union. On the other hand, those who are rank
and file workers may join the existing bargaining unit instead of organizing another bargaining unit
and compelling the employer to deal with it.
We are constrained to disallow the formation of another union. There is no dispute that there exists a
labor union in the company, herein intervenor, the NAMAWU-MIF which is the collective bargaining
agent of the rank and file employees in PHILTRANCO.
Article 2 of the Collective Bargaining Agreement between PHILTRANCO and NAMAWU-MIF under the
sub-title Appropriate Bargaining Unit provides:
Section 1 -The appropriate bargaining unit covered by this agreement consists of all
regular rank- and file employees of the company. Managerial, confidential, casuals,
temporary, probationary and contractual employees as well as trainees,
apprentices, security personnel and foreman are excluded from the bargaining unit
and therefore, not covered by this AGREEMENT. The job description outside the
bargaining unit are enumerated in the list hereto attached as Annex '1' and made
an integral part hereof (Emphasis supplied; Rollo, p. 27)
We see no need for the formation of another union in PHILTRANCO. The qualified members of the
KASAMA KO may join the NAMAWU-MIF if they want to be union members, and to be consistent with
the one-union, one-company policy of the Department of Labor and Employment, and the laws it
enforces. As held in the case of General Rubber and Footwear Corp. v. Bureau of Labor Relations (155
SCRA 283 [1987]):
... It has been the policy of the Bureau to encourage the formation of an employer
unit 'unless circumstances otherwise require. The proliferation of unions in an
employer unit is discouraged as a matter of policy unless there are compelling
reasons which would deny a certain class of employees the right to self-organization
for purposes of collective bargaining. This case does not fall squarely within the
exception. (Emphasis supplied).
There are no compelling reasons in this case such as a denial to the KASAMA KO group of the right to
join the certified bargaining unit or substantial distinctions warranting the recognition of a separate
group of rank and file workers. Precisely, NAMAWU-MIF intervened to make it clear it has no
objections to qualified rank and file workers joining its union.
It is natural in almost all fairly sized companies to have groups of workers discharging different
functions. No company could possibly have all employees performing exactly the same work. Variety
of tasks is to be expected. It would not be in the interest of sound labor-management relations if each
group of employees assigned to a specialized function or section would decide to break away from
their fellow-workers and form their own separate bargaining unit. We cannot allow one unit for typists
and clerks, one unit for accountants, another unit for messengers and drivers, and so on in needless
profusion. Where shall the line be drawn? The questioned decision of the public respondent can only
lead to confusion, discord and labor strife.
Page 13 of 39
The respondents state that this case is an exception to the general rule considering that substantial
differences exist between the office employees or professional, technical, administrative and
confidential employees vis-a-vis the field workers or drivers, conductors and mechanics of the
petitioner. Against this contention, we find that the "substantial differences" in the terms and
conditions of employment between the private respondent's members and the rest of the company's
rank and file employees are more imagined than real. We agree with the petitioner that the
differences alleged are not substantial or significant enough to merit the formation of another union.

PHILTRANCO is a large bus company engaged in the business of carrying passengers and freight,
servicing Luzon, Visayas and Mindanao. Certainly there is a commonality of interest among filing
clerks, dispatchers, drivers, typists, and field men. They are all interested in the progress of their
company and in each worker sharing in the fruits of their endeavors equitably and generously. Their
functions mesh with one another. One group needs the other in the same way that the company
needs them all. The drivers, mechanics and conductors are necessary for the company but technical,
administrative and office personnel are also needed and equally important for the smooth operation of
the business. There may be differences as to the nature of their individual assignments but the
distinctions are not enough to warrant the formation of separate unions. The private respondent has
not even shown that a separate bargaining unit would be beneficial to the employees concerned.
Office employees also belong to the rank and file. There is an existing employer wide unit in the
company represented by NAMAWU-MIF. And as earlier stated, the fact that NAMAWU-MIF moved to
intervene in the petition for certification election filed by KASAMA KO negates the allegations that
"substantial differences" exist between the employees concerned. We find a commonality of interest
among them. There are no compelling reasons for the formation of another union.
G.R. No. 92357. July 21, 1993.]
We quote with favor Med-Arbiter Adap's rationale, to wit:
PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION AGENCY (PSVSIA), GVM
... It is against the policy of the Department of Labor to dismember the already SECURITY AND INVESTIGATION AGENCY (GVM) and ABAQUIN SECURITY AND DETECTIVE
wide existing bargaining unit because of its well established goal towards a single AGENCY, INC. (ASDA), Petitioners, v. THE HON. SECRETARY OF LABOR RUBEN D. TORRES
employer wide unit which is more to the broader and greater benefit of the and PGA BROTHERHOOD ASSOCIATION-UNION OF FILIPINO WORKERS, Respondents.
employees working force.
The sole issue presented for resolution in this petition for certiorari with prayer for preliminary
injunction is whether or not a single petition for certification election or for recognition as the sole and
The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen
exclusive bargaining agent can validly or legally be filed by a labor union in three (3) corporations
the employees bargaining power with the management. To do otherwise, would be
each of which has a separate and distinct legal personality instead of filing three (3) separate
contrary, inimical and repugnant to the objectives of a strong and dynamic
petitions.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
unionism. Let there be a unified whole rather than a divisive one, let them speak as
one in a clear resonant voice unmarred by dissension towards progressive unionism.
On April 6, 1989, private respondent labor union, PGA Brotherhood Association — Union of Filipino
(Rollo, p. 29)
Workers (UFW), hereinafter referred to as "the Union" filed a petition for Direct
Certification/Certification Election among the rank and file employees of Philippine Scout Veterans
WHEREFORE, the decision of the Bureau of Labor Relations, dated September 5, 1988 and the Order Security and Investigation Agency (PSVSIA), GVM Security and Investigation Agency, Inc. (GVM) and
dated October 10, 1988 are hereby SET ASIDE. The resolution of the Med-Arbiter dated April 4, 1988 Abaquin Security and Detective Agency, Inc. (ASDA). These three agencies were collectively referred
is REINSTATED. The restraining order issued by the Court on November 7, 1988 is made permanent. to by private respondent Union as the "PGA Security Agency," which is actually the first letters of the
SO ORDERED. corporate names of the agencies.

On April 11, 1989, summons was issued to the management of PSVSIA, GVM, ASDA (PGA Security
Agency) at 82 E. Rodriguez Avenue, Quezon City.

On April 26, 1986, petitioners filed a single comment alleging therein that the said three security
agencies have separate and distinct corporate personalities while PGA Security Agency is not a
business or corporate entity and does not possess any personality whatsoever; the petition was
unclear as to whether the rank-and-file employees mentioned therein refer to those of the three
security agencies collectively and if so, the labor union cannot seek a certification election in three
separate bargaining units in one petition; the labor union included in their organization "security
LABOR 2 - Batch 2 Page 14 of 39
supervisors," in violation of R.A. 6715; and though R.A. 6715 is already in effect, there were still no
implementing rules therefor.
On May 4, 1989, the security agencies filed a Consolidated Motion to Dismiss on the grounds that the
721 supporting signatures do not meet the 20% minimum requirement for certification election as the
number of employees totals 2374 and that there are no implementing rules yet of R.A. 6715.
On May 8, 1989, the Union filed an Omnibus Reply to Comment and Motion to Dismiss alleging that it
is clear that it is seeking a certification election in the three agencies; that the apparent separate
personalities of the three agencies were used merely to circumvent the prohibition in R.A. 5847, as
amended by P.D. 11 and P.D. 100, that a security agency must not have more than 1,000 guards in
its employ; that the three security agencies’ administration, management and operations are so
intertwined that they can be deemed to be a single entity; and that the security supervisors cannot
be deemed part of management since they do not meet the definition of "supervisory employees"
found in Article 212(m), Labor Code, as amended by Section 4, R.A. No. 6715.
On May 18, 1989, the security agencies filed a Rejoinder claiming that there is no violation of R.A.
5487, as amended by P.D. 11 and P.D. 100 since the three agencies were incorporated long before
the decrees’ issuance; that mere duplication of incorporators does not prove that the three security
agencies are actually one single entity; and that security guard supervisors, most especially
detachment commanders, fall within the definition of the term "supervisors."cralaw virtua1aw library
On July 6, 1989, Med-Arbiter Rasidali C. Abdullah issued an Order in favor of the labor union finding
that PSVSIA, GVM and ASDA should be deemed as a single entity and bargaining unit for the purpose
of union organizing and the holding of a certification election. The dispositive portion of the Order
reads as follows:jgc:chanrobles.com.ph
"WHEREFORE, premises considered, let a certification election be conducted among the rank and file
security guards of PSVSIA, GVM and ASDA within twenty (20) days from receipt hereof with the usual
pre-election conference of the parties. The list of eligible voters shall be based on the security
agencies’ payroll three (3) months prior to the filing of this petition with the following
choices:chanrob1es virtual 1aw library
a) PGA Brotherhood Association-Union of Filipino Workers (UFW); and
b) No union.
SO ORDERED." 1
On July 21, 1989, the security agencies appealed the Med-Arbiter’s Order to the Secretary of Labor
and employment claiming that said Order was issued with grave abuse of discretion when it ruled that
the three security agencies could be considered as a single bargaining entity for purposes of the
holding of a certification election.
On December 15, 1989, then Labor Secretary Franklin M. Drilon denied the appeal for lack of merit
while at the same time affirming the Med-Arbiter’s Order of July 6, 1989. He also ordered the
immediate conduct of a certification election. The dispositive portion of which reads as
follows:jgc:chanrobles.com.ph
"WHEREFORE, premises considered, the Appeal of respondents Security agencies is hereby denied for
lack of merit and the Order dated 6 July affirmed.
"Let therefore, the pertinent records of this case be immediately forwarded to the Regional Office for
the immediate conduct of the certification election.chanrobles law library : red
LABOR 2 - Batch 2
"SO ORDERED." 2
On January 5, 1990, the three security agencies filed a Motion for Reconsideration arguing that they
were denied their rights to due process and that jurisdiction was not acquired over them by the labor
authorities.
On January 26, 1990, the succeeding Labor Secretary, Ruben D. Torres, likewise denied the Motion
for Reconsideration for lack of merit and reiterated the directive that a certification election be
conducted without further delay.
On March 14, 1990, the instant petition was filed by the three security agencies, raising the following
grounds:chanrob1es virtual 1aw library
"I
"SERIOUS ERRORS IN THE FINDINGS OF FACTS.
"II
"GRAVE ABUSE OF DISCRETION ON THE PART OF THE SECRETARY OF LABOR." 3
Petitioners insist that there are three (3) corporations in this petition, each of which has a separate
and distinct corporate personality of its own with separate registrations with the Securities and
Exchange Commission (SEC) and different Articles of Incorporation and By-Laws; with separate sets
of corporate officers and directors; and no common business address except for GVM and ASDA which
are located at 1957 España corner Craig Streets, Sampaloc, Manila.
Petitioners claim that the facts and circumstances of the case of La Campana Coffee Factory, Inc. v.
Kaisahan Ng Mga Manggagawa sa La Campana 4 which public respondent claims to be on all fours
with the instant case, are very distinct from the facts and circumstance obtaining in the case at bar.
As to form of business organization, in the La Campana case, only one of two (2) businesses was a
corporation i.e., the La Campana Coffee Factory, Inc. and the other, the La Campana Gaugau
Packing, is a "non-entity," being merely a business name. In the case at bar, all three (3) agencies
are incorporated. Moreover, the issue involved in the instant case is one of representation while in the
La Campana case, the issue involved is the validity of a demand for wage increases and other labor
standards benefits.
Petitioners likewise contend that it was error at hold that the three companies should be treated as
one in a single bargaining unit in one petition for certification elections resulting in a violation of the
right to due process of each corporation as no notice of hearing and other legal processes were
served on each of said corporations. Consequently, no jurisdiction was acquired on them by the
Department of Labor and Employment.
Petitioners’ arguments deserve scant consideration. The facts and circumstances extant in the record
indicate that the Med-Arbiter and Secretaries Drilon and Torres were not mistaken in holding that the
three security companies are in reality a single business entity operating as a single company called
the "PGA Security Group" or "PGA Security Services Group." Factual findings of labor officials are
conclusive and binding on the Court when supported by substantial evidence. 5
The public respondent noted the following circumstances in the La Campana case similar to the case
Page 15 of 39
at bar, as indicative of the fact that the La Campana Coffee Factory and La Campana Gaugau Packing
were in reality only one business with two trade names: (1) the two factories occupied the same
address, wherein they had their principal place of business; (2) their signboards, advertisements,
packages of starch, delivery trucks and delivery forms all use one appellation, "La Campana Starch
and Coffee Factory" ; (3) the workers in either company received their pay from a single cashier, and
(4) the workers in one company could easily transfer to the other company, and vice-versa. This
Court held therein that the veil of corporate fiction of the coffee factory may be pierced to thwart the
attempt to consider it apart from the other business owned by the same family. Thus, the fact that
one of the businesses is not incorporated was not the decisive factor that led the Court to consider
the two factories as one. Moreover, we do not find any materiality in the fact that the La Campana
case was instituted to demand wage increases and other labor standard benefits while this case was
filed by the labor union to seek recognition as the sole bargaining agent in the establishment. If
businesses operating under one management are treated as one for bargaining purposes, three is not
much difference in treating such businesses also as one for the preliminary purpose of labor
organizing.
Indeed, the three agencies in the case at bar failed to rebut the fact that they are managed through
the Utilities Management Corporation with all of their employees drawing their salaries and wages
from said entity; that the agencies have common and interlocking incorporators and officers; and that
the PSVSIA, GVM and ASDA employees have a single Mutual Benefit System and followed a single
system of compulsory retirement.
No explanation was also given by petitioners why the security guards of one agency could easily
transfer from one agency to another and then back again by simply filling-up a common pro forma
slip called "Request for Transfer." Records also show that the PSVSIA, GVM and ASDA always hold
joint yearly ceremonies such as the "PGA Annual Awards Ceremony." In emergencies, all PSVSIA
Detachment Commanders were instructed in a memorandum dated November 10, 1988 to get in
touch with the officers not only of PSVSIA but also of GVM and ASDA. All of these goes to show that
the security agencies concerned do not exist and operate separately and distinctly from each other
with different corporate directions and goals. On the contrary, all the cross-linking of the three
agencies’ command, control and communication systems indicate their unitary corporate personality.
Accordingly, the veil of corporate fiction of the three agencies should be lifted for the purpose of
allowing the employees of the three agencies to form a single labor union. As a single bargaining unit,
the employees therein need not file three separate petitions for certification election. All of these
could be covered in a single petition.
Petitioners’ claim of alleged defect in the petition for certification election which although addressed to
the three security agencies merely alleged that there are only 1,000 employees when the total
number of employees in said security agencies is about 2,374 (PSVSIA-1252; GVM-807; and ASDA-
315) thereby failing to comply with the legal requirement that at least twenty percent (20%) of the
employees in the bargaining unit must support the petition, betrays lack of knowledge of the
amendments introduced by R.A. 6715 which became effective on March 21, 1989, prior to the filing of
the petition for certification election on April 6, 1989. Under the amendments, there is no need for the
labor union to prove that at least 20% of the security guards in the three agencies supported the
petition. When a duly organized union files a petition for certification election, the Med-Arbiter has the
duty to automatically conduct an election. He has no discretion on the matter. This is clearly the
mandate of Article 257 of the Labor Code, as amended by Section 24 of R.A. 6715, which now
reads:jgc:chanrobles.com.ph
"ART. 257. Petitions in unorganized establishments. — In any establishment where there is no
certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter
upon the filing of a petition by a legitimate labor organization."cralaw virtua1aw library
The designation of the three agencies collectively as "PGA Security Agency" and the service of
LABOR 2 - Batch 2
summons to the management thereof at 82 E. Rodriguez Avenue, Quezon City did not render the
petition defective. Labor Secretary Franklin Drilon correctly noted the fact that the affidavits executed
separately and under oath by the three managers of the three security agencies indicated their office
address to be at PSVSIA Center II, E. Rodriguez Sr. Blvd., Quezon City. Besides, even if there was
improper service of summons by the Med-Arbiter, the three (3) security agencies voluntarily
submitted themselves to the jurisdiction of the labor authorities. The summons were clearly sent to
and received by their lawyer who filed motions and pleadings on behalf of the three security agencies
and who always appeared as their legal counsel. It puzzles this Court why petitioners, who claim to be
separate entities, continue to be represented by one counsel even in this instant petition.
Finally, except where the employer has to file a petition for certification election pursuant to Article
258 of the Labor Code because of a request to bargain collectively, it has nothing to do with a
certification election which is the sole concern of the workers. Its role in a certification election has
aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, 6 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-Arbiter’s 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.chanrobles.com : virtual law library
This Court’s disapprobation of management interference in certification elections is even more forceful
in Consolidated Farms, Inc. v. Noriel, 7 where we held:jgc:chanrobles.com.ph
"On a matter that should be the exclusive concern of labor, the choice of a collective bargaining
representative, the employer is definitely an intruder. His participation, to say the least, deserves no
encouragement. This Court should be the last agency to lend support to such an attempt at
interference with a purely internal affair of labor."cralaw virtua1aw library
Indeed, the three security agencies should not even be adverse parties in the certification election
itself. We note with disapproval the title given to the petition for certification election of the Union by
the Med-Arbiter and the Secretary of Labor naming the three security agencies as respondents. Such
is clearly an error. While employers may rightfully be notified or informed of petitions of such nature,
they should not, however, be considered parties thereto with concomitant right to oppose it. Sound
policy dictates that they should maintain a strictly hands-off policy.
WHEREFORE, finding no reversible error in the questioned decision of the Secretary of Labor, the
instant petition for certiorari is hereby DISMISSED for utter lack of merit.
SO ORDERED.
Page 16 of 39

G.R. No. 193816, November 21, 2016
ERSON ANG LEE DOING BUSINESS AS "SUPER LAMINATION
SERVICES," Petitioner, v. SAMAHANG MANGGAGAWA NG SUPER LAMINATION (SMSLS-
NAFLU-KMU), Respondent.
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court on the Decision1 and
Resolution2 of the Court of Appeals (CA) affirming the assailed Decision 3 of the Department of Labor
and Employment (DOLE). DOLE allowed the conduct of certification election among the rank-and-file
employees of Super Lamination Services (Super Lamination), Express Lamination Services, Inc.
(Express Lamination), and Express Coat Enterprises, lnc. (Express Coat).
THE ANTECEDENT FACTS
Petitioner Erson Ang Lee (petitioner), through Super Lamination, is a duly registered entity principally
engaged in the business of providing lamination services to the general public. Respondent Samahan
ng mga Manggagawa ng Super Lamination Services (Union A) is a legitimate labor organization,
which is also a local chapter affiliate of the National Federation of Labor Unions - Kilusang Mayo
Uno.4 It appears that Super Lamination is a sole proprietorship under petitioner's name, 5 while
Express Lamination and Express Coat are duly incorporated entities separately registered with the
Securities and Exchange Commission (SEC). 6
On 7 March 2008, Union A filed a Petition for Certification Election 7 to represent all the rank-and-file
employees of Super Lamination.8
Notably, on the same date, Express Lamination Workers' Union (Union B) also filed a Petition for
Certification Election to represent all the rank-and-file employees of Express Lamination. 9
Also on the same date, the Samahan ng mga Manggagawa ng Express Coat Enterprises, Inc. (Union
C) filed a Petition for Certification Election to represent the rank-and-file employees of Express Coat. 10
Super Lamination, Express Lamination, and Express Coat, all represented by one counsel, separately
claimed in their Comments and Motions to Dismiss that the petitions must be dismissed on the same
ground — lack of employer-employee relationship between these establishments and the bargaining
units that Unions A, B, and C seek to represent as well as these unions' respective members. 11 Super
LABOR 2 - Batch 2
Lamination, in its Motion, posited that a majority of the persons who were enumerated in the list of
members and officers of Union A were not its employees, but were employed by either Express
Lamination or Express Coat.12 Interestingly, both Express Lamination and Express Coat, in turn,
maintained the same argument that a majority of those who had assented to the Petition for
Certification Election were not employees of either company, but of one of the two other companies
involved.13
All three Petitions for Certification Election of the Unions were denied. On 21 May 2008, an Order was
issued by DOLE National Capital Region (NCR) Med-Arbiter Michael Angelo Parado denying the
respective petitions of Unions B and C on the ground that there was no existing employer-employee
relationship between the members of the unions and the companies concerned. On 23 May 2008,
DOLE NCR Med-Arbiter Alma Magdaraog-Alba also denied the petition of respondent Union A on the
same ground.14
The three unions filed their respective appeals before the Office of the DOLE Secretary, which
consolidated the appeal because the involved companies alternately referred to one another as the
employer of the members of the bargaining units sought to be represented. 15 The unions argued that
their petitions should have been allowed considering that the companies involved were unorganized,
and that the employers had no concomitant right to oppose the petitions. They also claimed that
while the questioned employees might have been assigned to perform work at the other companies,
they were all under one management's direct control and supervision. 16
DOLE, through Undersecretary Romeo C. Lagman, rendered the assailed Decision, the dispositive
portion of which reads as follows: ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the appeals filed by Express Lamination Workers Union (ELWU-
NAFLU-KMU), Samahang Manggagawa ng Express Coat Enterprises, Inc. (SMEC-NAFLU-KMU) and
Samahang Manggagawa ng Super Lamination Services (SMSLS NAFLU-KMU) are
hereby GRANTED and the Orders dated 21 May 2008 of DOLE-NCR Mediator-Arbiter Michael Angelo
T. Parado are hereby REVERSED and SET ASIDE. The Order dated 23 May 2008 of DOLE NCR
Mediator-Arbiter Alma E. Magdaraog-Alba is likewise REVERSED and SET ASIDE.
Accordingly, let the entire records of this be remanded to the regional office of origin for the
immediate conduct of certification election among the rank-and-file employees of Express Lamination
Services, Inc., Super Lamination Services and Express Coat Enterprises Inc., after the conduct of pre-
election conference/s, with the following as choices;
1. Express Lamination Workers Union-NAFLU-KMU;
2. Samahan ng mga Manggagawa ng Super Lamination Services NAFLU-KMU;
3. Samahang ng mga Manggagawa ng Express Coat Enterprises, Inc.-NAFLU-KMU; and
4. "No Union."
The employer/s and/or contending union(s) are hereby directed to submit to the Regional Office of
origin, within ten (10) days from receipt of this Decision, a certified list of employees in the
bargaining unit or the payrolls covering the members of the bargaining unit for the last three (3)
months prior to the issuance of the Decision.
Page 17 of 39
SO DECIDED.17(Emphases in the original)
DOLE found that Super Lamination, Express Lamination, and Express Coat were sister companies that
had a common human resource department responsible for hiring and disciplining the employees of
the three companies. The same department was found to have also given them daily instructions on
how to go about their work and where to report for work. It also found that the three companies
involved constantly rotated their workers, and that the latter's identification cards had only one
signatory.18
To DOLE, these circumstances showed that the companies were engaged in a work-pooling scheme,
in light of which they might be considered as one and the same entity for the purpose of determining
the appropriate bargaining unit in a certification election. 19 DOLE applied the concept of multi-
employer bargaining under Sections 5 and 6 of DOLE Department Order 40-03, Series of 2003. Under
that concept, the creation of a single bargaining unit for the rank-and-file employees of all three
companies was not implausible and was justified under the given circumstances. 20 Thus, it considered
these rank-and-file employees as one bargaining unit and ordered the conduct of a certification
election as uniformly prayed for by the three unions.
Aggrieved, petitioner instituted an appeal before the CA, which denied his Petition and affirmed the
Decision of DOLE. It sided with DOLE in finding that Super Lamination, Express Lamination, and
Express Coat were sister companies that had adopted a work-pooling scheme. Therefore, it held that
DOLE had correctly applied the concept of multi-employer bargaining in finding that the three
companies could be considered as the same entity, and their rank-and-file employees as comprising
one bargaining unit.21
Petitioner filed a Motion for Reconsideration of the CA Decision, but the motion was
denied.22 Therefore, he now comes to this Court through the present Petition.
ISSUES
From the established facts and arguments, we cull the issues as follows:
1. Whether the application of the doctrine of piercing the corporate veil is warranted
2. Whether the rank-and-file employees of Super Lamination, Express Lamination, and Express
Coat constitute an appropriate bargaining unit
THE COURT'S RULING
We deny the petition.
An application of the doctrine of
piercing the corporate veil is
warranted.
Petitioner argues that separate corporations cannot be treated as a single bargaining unit even if their
businesses are related,23 as these companies are indubitably distinct entities with separate juridical
personalities.24 Hence, the employees of one corporation cannot be allowed to vote in the certification
election of another corporation, lest the abovementioned rule be violated.25cralawred
LABOR 2 - Batch 2
Petitioner's argument, while correct, is a general rule. This Court has time and again disregarded
separate juridical personalities under the doctrine of piercing the corporate veil. It has done so in
cases where a separate legal entity is used to defeat public convenience, justify wrong, protect fraud,
or defend crime, among other grounds.26 In any of these situations, the law will regard it as an
association of persons or, in case of two corporations, merge them into one. 27
A settled formulation of the doctrine of piercing the corporate veil is that when two business
enterprises are owned, conducted, and controlled by the same parties, both law and equity will, when
necessary to protect the rights of third parties, disregard the legal fiction that these two entities are
distinct and treat them as identical or as one and the same. 28
This formulation has been applied by this Court to cases in which the laborer has been put in a
disadvantageous position as a result of the separate juridical personalities of the employers
involved.29 Pursuant to veil-piercing, we have held two corporations jointly and severally liable for an
employee's back wages.30 We also considered a corporation and its separately incorporated branches
as one and the same for purposes of finding the corporation guilty of illegal dismissal. 31 These rulings
were made pursuant to the fundamental doctrine that the corporate fiction should not be used as a
subterfuge to commit injustice and circumvent labor laws. 32
Here, a certification election was ordered to be held for all the rank-and-file employees of Super
Lamination, Express Lamination, and Express Coat. The three companies were supposedly distinct
entities based on the fact that Super Lamination is a sole proprietorship while Express Lamination and
Express Coat were separately registered with the SEC.33 The directive was therefore, in effect, a
piercing of the separate juridical personalities of the corporations involved. We find the piercing to be
proper and in accordance with the law as will be discussed below.
The following established facts show that Super Lamination, Express Lamination, and Express Coat
are under the control and management of the same party — petitioner Ang Lee. In effect, the
employees of these three companies have petitioner as their common employer, as shown by the
following facts:
1. Super Lamination, Express Lamination, and Express Coat were engaged in the same
business of providing lamination services to the public as admitted by petitioner in his
petition.34
2. The three establishments operated and hired employees through a common human resource
department as found by DOLE in a clarificatory hearing.35 Though it was not clear which
company the human resource department was officially attached to, petitioner admits in his
petition that such department was shared by the three companies for purposes of
convenience.36
3. The workers of all three companies were constantly rotated and periodically assigned to
Super Lamination or Express Lamination or Express Coat to perform the same or similar
tasks.37 This finding was further affirmed when petitioner admitted in his petition before us
that the Super Lamination had entered into a work-pooling agreement with the two other
companies and shared a number of their employees.38
4. DOLE found and the CA affirmed that the common human resource department imposed
disciplinary sanctions and directed the daily performance of all the members of Unions A, B,
and C.39
Page 18 of 39
 5. Super Lamination included in its payroll and SSS registration not just its own employees, but
also the supposed employees of Express Lamination and Express Coat. This much was
admitted by petitioner in his Motion to Dismiss 40 which was affirmed by the Med-Arbiter in
the latter's Order.41cralawred
6. Petitioner admitted that Super Lamination had issued and signed the identification cards of
employees who were actually working for Express Lamination and Express Coat. 42
7. Super Lamination, Express Lamination, and Express Coat were represented by the same
counsel who interposed the same arguments in their motions before the Med-Arbiters and
DOLE.43
Further, we discern from the synchronized movements of petitioner and the two other companies an
attempt to frustrate or defeat the workers' right to collectively bargain through the shield of the
corporations' separate juridical personalities. We make this finding on the basis of the motions to
dismiss filed by the three companies. While similarly alleging the absence of an employer-employee
relationship, they alternately referred to one another as the employer of the members of the
bargaining units sought to be represented respectively by the unions. This fact was affirmed by the
Med-Arbiters' Orders finding that indeed, the supposed employees of each establishment were found
to be alternately the employees of either of the two other companies as well. This was precisely the
reason why DOLE consolidated the appeals filed by Unions A, B, and C. 44
Due to the finger-pointing by the three companies at one another, the petitions were dismissed. As a
result, the three unions were not able to proceed with the conduct of the certification election. This
also caused confusion among the employees as to who their real employer is, as Union A claims in its
Comment.45
We hold that if we allow petitioner and the two other companies to continue obstructing the holding of
the election in this manner, their employees and their respective unions will never have a chance to
choose their bargaining representative. We take note that all three establishments were unorganized.
That is, no union therein was ever duly recognized or certified as a bargaining representative. 46
Therefore, it is only proper that, in order to safeguard the right of the workers and Unions A, B, and C
to engage in collective bargaining, the corporate veil of Express Lamination and Express Coat must be
pierced. The separate existence of Super Lamination, Express Lamination, and Express Coat must be
disregarded. In effect, we affirm the lower tribunals in ruling that these companies must be treated as
one and the same unit for purposes of holding a certification election.
Petitioner has cited Diatagon Labor Federation Local v. Ople47 and Indophil Textile Mill Worker Union
v. Calica48 in which this Court refused to treat separate corporations as a single bargaining unit. Those
cases, however, are not substantially identical with this case and would not warrant their application
herein. Unlike in the instant case, the corporations involved were found to be completely independent
or were not involved in any act that frustrated the laborers' rights.
In Diatagon,49 we refused to include the 236 employees of Georgia Pacific International Corporation in
the bargaining unit of the employees of Liangga Bay Logging Co., Inc. This Court's refusal was in light
of the fact that the two corporations were indubitably distinct entities with separate corporate
identities and origins. Moreover, there was no discernible attempt to frustrate any of their labor-
related rights, as the only conflict was over which bargaining unit they belonged to.
LABOR 2 - Batch 2
In Indophil,50 this Court refused to pierce the corporate veil of Indophil Textile Mill and Indophil
Acrylic Manufacturing. We found that the creation of Indophil Acrylic was not a device to evade the
application of the collective bargaining agreement (CBA) between petitioner union and Indophil Textile
Mill. This Court further found that despite the similarity in their business operations, the separate
personalities of the two corporations were maintained and were not used for any of the purposes
specified under the law that would warrant piercing. It is also apparent in this case that the workers'
rights were not being hampered by the employers concerned, as the only issue between them was
the extent of the subject CBA's application.
In this case, not only were Super Lamination, Express Lamination, and Express Coat found to be
under the control of petitioner, but there was also a discernible attempt to disregard the workers' and
unions' right to collective bargaining.
The foregoing considered, we find no error in the CA's affirmance of the DOLE directive. We affirm
DOLE's application by analogy of the concept of multi-employer bargaining to justify its Decision to
treat the three companies as one. While the multi-employer bargaining mechanism is relatively new
and purely optional under Department Order No. 40-03, it illustrates the State's policy to promote the
primacy of free and responsible exercise of the right to collective bargaining. 51 The existence of this
mechanism in our labor laws affirm DOLE's conclusion that its treatment of the employees of the
three companies herein as a single bargaining unit is neither impossible nor prohibited. 52 It is justified
under the circumstances discussed above.
Besides, it is an established rule that factual findings of labor officials, who are deemed to have
acquired expertise in matters within their jurisdiction, are generally accorded by the courts not only
respect but even finality when supported by substantial evidence; i.e., that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion. 53
The bargaining unit of the rank-and
file employees of the three companies
is appropriate.
Petitioner argues that there is no showing that the rank-and-file employees of the three companies
would constitute an appropriate bargaining unit on account of the latter's different geographical
locations.54 This contention lacks merit. The basic test for determining the appropriate bargaining unit
is the application of a standard whereby a unit is deemed appropriate if it affects a grouping of
employees who have substantial, mutual interests in wages, hours, working conditions, and other
subjects of collective bargaining.55 We have ruled that geographical location can be completely
disregarded if the communal or mutual interests of the employees are not sacrificed. 56
In the present case, there was communal interest among the rank-and-file employees of the three
companies based on the finding that they were constantly rotated to all three companies, and that
they performed the same or similar duties whenever rotated. 57 Therefore, aside from geographical
location, their employment status and working conditions were so substantially similar as to justify a
conclusion that they shared a community of interest. This finding is consistent with the policy in favor
of a single-employer unit, unless the circumstances require otherwise. 58 The more solid the employees
are, the stronger is their bargaining capacity.59
As correctly observed by the CA and DOLE, while there is no prohibition on the mere act of engaging
in a work-pooling scheme as sister companies, that act will not be tolerated, and the sister
companies' separate juridical personalities will be disregarded, if they use that scheme to defeat the
workers' right to collective bargaining. The employees' right to collectively bargain with their
Page 19 of 39
employers is necessary to promote harmonious labor-management relations in the interest of sound
and stable industrial peace.60
WHEREFORE, the Petition for Review on Certiorari under Rule 45 is DENIED for lack of merit. The
Court of Appeals Decision61 and Resolution62 in CA-G.R. SP No. 109486 are hereby AFFIRMED.
SO ORDERED. cralawlawlib
G.R. No. 128845. June 1, 2000.]
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), Petitioner, v. HON. LEONARDO
A. QUISUMBING in his capacity as the Secretary of Labor and Employment; HON.
CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor and
Employment; DR. BRIAN MACCAULEY in his capacity as the Superintendent of International
School-Manila; and INTERNATIONAL SCHOOL, INC., Respondents.
Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent
School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid more than their
colleagues in other schools is, of course, beside the point. The point is that employees should be
given equal pay for work of equal value. That is a principle long honored in this jurisdiction. That is a
principle that rests on fundamental notions of justice. That is the principle we uphold today.
Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree
732, is a domestic educational institution established primarily for dependents of foreign diplomatic
personnel and other temporary residents. 1 To enable the School to continue carrying out its
educational program and improve its standard of instruction, Section 2(c) of the same decree
LABOR 2 - Batch 2
authorizes the School to
employ its own teaching and management personnel selected by it either locally or abroad, from
Philippine or other nationalities, such personnel being exempt from otherwise applicable laws and
regulations attending their employment, except laws that have been or will be enacted for the
protection of employees.
Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the
same into two: (1) foreign-hires and (2) local-hires. The School employs four tests to determine
whether a faculty member should be classified as a foreign-hire or a local hire:chanrob1es virtual 1aw
library
a. What is one’s domicile?
b. Where is one’s home economy?
c. To which country does one owe economic allegiance?
d. Was the individual hired abroad specifically to work in the School and was the School responsible
for bringing that individual to the Philippines? 2
Should the answer to any of these queries point to the Philippines, the faculty member is classified as
a local hire; otherwise, he or she is deemed a foreign-hire.chanroblesvirtuallawlibrary
The School grants foreign-hires certain benefits not accorded local- hires. These include housing,
transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a
salary rate twenty-five percent (25%) more than local-hires. The School justifies the difference on
two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation
factor" and (b) limited tenure. The School explains:chanrob1es virtual 1aw library
A foreign-hire would necessarily have to uproot himself from his home country, leave his family and
friends, and take the risk of deviating from a promising career path — all for the purpose of pursuing
his profession as an educator, but this time in a foreign land. The new foreign hire is faced with
economic realities: decent abode for oneself and/or for one’s family, effective means of
transportation, allowance for the education of one’s children, adequate insurance against illness and
death, and of course the primary benefit of a basic salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again with the same economic reality after
his term: that he will eventually and inevitably return to his home country where he will have to
confront the uncertainty of obtaining suitable employment after a long period in a foreign land.
The compensation scheme is simply the School’s adaptive measure to remain competitive on an
international level in terms of attracting competent professionals in the field of international
education. 3
When negotiations for a new collective bargaining agreement were held on June 1995, petitioner
International School Alliance of Educators, "a legitimate labor union and the collective bargaining
representative of all faculty members" 4 of the School, contested the difference in salary rates
between foreign and local-hires. This issue, as well as the question of whether foreign-hires should be
included in the appropriate bargaining unit, eventually caused a deadlock between the parties.
On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and
Mediation Board to bring the parties to a compromise prompted the Department of Labor and
Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting
Page 20 of 39
Secretary, Cresenciano B. Trajano, issued an Order resolving the parity and representation issues in
favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner’s
motion for reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this Court.
Petitioner claims that the point-of-hire classification employed by the School is discriminatory to
Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all,
with nationalities other than Filipino, who have been hired locally and classified as local hires. 5 The
Acting Secretary of Labor found that these non-Filipino local-hires received the same benefits as the
Filipino local-hires:chanrob1es virtual 1aw library
The compensation package given to local-hires has been shown to apply to all, regardless of race.
Truth to tell, there are foreigners who have been hired locally and who are paid equally as Filipino
local hires. 6
The Acting Secretary upheld the point-of-hire classification for the distinction in salary
rates:chanrob1es virtual 1aw library
The principle "equal pay for equal work" does not find application in the present case. The
international character of the School requires the hiring of foreign personnel to deal with different
nationalities and different cultures, among the student population.
We also take cognizance of the existence of a system of salaries and benefits accorded to foreign
hired personnel which system is universally recognized. We agree that certain amenities have to be
provided to these people in order to entice them to render their services in the Philippines and in the
process remain competitive in the international market.
Furthermore, we took note of the fact that foreign hires have limited contract of employment unlike
the local hires who enjoy security of tenure. To apply parity therefore, in wages and other benefits
would also require parity in other terms and conditions of employment which include the employment
contract.chanrobles.com.ph:red
A perusal of the parties’ 1992-1995 CBA points us to the conditions and provisions for salary and
professional compensation wherein the parties agree as follows:chanrob1es virtual 1aw library
All members of the bargaining unit shall be compensated only in accordance with Appendix C hereof
provided that the Superintendent of the School has the discretion to recruit and hire expatriate
teachers from abroad, under terms and conditions that are consistent with accepted international
practice.
Appendix C of said CBA further provides:chanrob1es virtual 1aw library
The new salary schedule is deemed at equity with the Overseas Recruited Staff (OSRS) salary
schedule. The 25% differential is reflective of the agreed value of system displacement and
contracted status of the OSRS as differentiated from the tenured status of Locally Recruited Staff
(LRS).
To our mind, these provisions demonstrate the parties’ recognition of the difference in the status of
two types of employees, hence, the difference in their salaries.
The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an
established principle of constitutional law that the guarantee of equal protection of the laws is not
violated by legislation or private covenants based on reasonable classification. A classification is
LABOR 2 - Batch 2
reasonable if it is based on substantial distinctions and apply to all members of the same class. Verily,
there is a substantial distinction between foreign hires and local hires, the former enjoying only a
limited tenure, having no amenities of their own in the Philippines and have to be given a good
compensation package in order to attract them to join the teaching faculty of the School. 7
We cannot agree.
That public policy abhors inequality and discrimination is beyond contention. Our Constitution and
laws reflect the policy against these evils. The Constitution 8 in the Article on Social Justice and
Human Rights exhorts Congress to "give highest priority to the enactment of measures that protect
and enhance the right of all people to human dignity, reduce social, economic, and political
inequalities." The very broad Article 19 of the Civil Code requires every person, "in the exercise of his
rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith."cralaw virtua1aw library
International law, which springs from general principles of law, 9 likewise proscribes discrimination.
General principles of law include principles of equity, 10 i.e., the general principles of fairness and
justice, based on the test of what is reasonable. 11 The Universal Declaration of Human Rights, 12
the International Covenant on Economic, Social. and Cultural Rights, 13 the International Convention
on the Elimination of All Forms of Racial Discrimination, 14 the Convention against Discrimination in
Education, 15 the Convention (No. 111) Concerning Discrimination in Respect of Employment and
Occupation 16 — all embody the general principle against discrimination, the very antithesis of
fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of
its national laws.
In the workplace, where the relations between capital and labor are often skewed in favor of capital,
inequality and discrimination by the employer are all the more reprehensible.
The Constitution 17 specifically provides that labor is entitled to "humane conditions of work." These
conditions are not restricted to the physical workplace — the factory, the office or the field — but
include as well the manner by which employers treat their employees.
The Constitution 18 also directs the State to promote "equality of employment opportunities for all."
Similarly, the Labor Code 19 provides that the State shall "ensure equal work opportunities regardless
of sex, race or creed." It would be an affront to both the spirit and letter of these provisions if the
State, in spite of its primordial obligation to promote and ensure equal employment opportunities,
closes its eyes to unequal and discriminatory terms and conditions of employment. 20
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for
example, prohibits and penalizes 21 the payment of lesser compensation to a female employee as
against a male employee for work of equal value. Article 248 declares it an unfair labor practice for an
employer to discriminate in regard to wages in order to encourage or discourage membership in any
labor organization.
Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7
thereof, provides:chanrob1es virtual 1aw library
The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just
and favorable conditions of work, which ensure, in particular:chanrob1es virtual 1aw library
a. Remuneration which provides all workers, as a minimum, with:chanrob1es virtual 1aw library
i. Fair wages and equal remuneration for work of equal value without distinction of any kind, in
Page 21 of 39
particular women being guaranteed conditions of work not inferior to those enjoyed by men, with the School of according higher salaries to foreign-hires contravenes public policy and, certainly, does
equal pay for equal work; not deserve the sympathy of this Court.

x       x       x We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-
hires.chanrobles.com : chanrobles.com.ph

The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism
of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort
and responsibility, under similar conditions, should be paid similar salaries. 22 This rule applies to the
School, its "international character" notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires perform work equal to
that of foreign-hires. 23 The Court finds this argument a little cavalier. If an employer accords
employees the same position and rank, the presumption is that these employees perform equal work.
This presumption is borne by logic and human experience. If the employer pays one employee less
than the rest, it is not for that employee to explain why he receives less or why the others receive
more. That would be adding insult to injury. The employer has discriminated against that employee; it
is for the employer to explain why the employee is treated unfairly.
The employer in this case has failed to discharge this burden. There is no evidence here that foreign-
hires perform 25% more efficiently or effectively than the local-hires. Both groups have similar
functions and responsibilities, which they perform under similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the
distinction in salary rates without violating the principle of equal work for equal pay.
"Salary" is defined in Black’s Law Dictionary (5th ed.) as "a reward or recompense for services
performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is the" [c]onsideration
paid at regular intervals for the rendering of services." In Songco v. National Labor Relations
Commission, 24 we said that:jgc:chanrobles.com.ph
"salary" means a recompense or consideration made to a person for his pains or industry in another
man’s business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of the
Roman soldier, it carries with it the fundamental idea of compensation for services rendered.
(Emphasis supplied.)
A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the
entire body of employees, consistent with equity to the employer indicate to be the best suited to
serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the
law." 29 The factors in determining the appropriate collective bargaining unit are (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees’ interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions (Substantial
Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment
status. 30 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. 31
It does not appear that foreign-hires have indicated their intention to be grouped together with local-
hires for purposes of collective bargaining. The collective bargaining history in the School also shows
that these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy
security of tenure. Although foreign-hires perform similar functions under the same working
conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires.
These benefits, such as housing, transportation, shipping costs, taxes, and home leave travel
allowance, are reasonably related to their status as foreign-hires, and justify the exclusion of the
former from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure
either group the exercise of their respective collective bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The
Orders of the Secretary of Labor and Employment dated June 10, 1996 and March 19, 1997, are
hereby REVERSED and SET ASIDE insofar as they uphold the practice of respondent School of
according foreign-hires higher salaries than local hires.
SO ORDERED.

While we recognize the need of the School to attract foreign-hires, salaries should not be used as an
enticement to the prejudice of local- hires. The local-hires perform the same services as foreign-hires
and they ought to be paid the same salaries as the latter. For the same reason, the "dislocation
factor" and the foreign-hires’ limited tenure also cannot serve as valid bases for the distinction in
salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately
compensated by certain benefits accorded them which are not enjoyed by local-hires, such as
housing, transportation, shipping costs, taxes and home leave travel allowances.

The Constitution enjoins the State to "protect the rights of workers and promote their welfare," 25 "to
afford labor full protection." 26 The State, therefore, has the right and duty to regulate the relations
between labor and capital. 27 These relations are not merely contractual but are so impressed with
public interest that labor contracts, collective bargaining agreements included, must yield to the
common good. 28 Should such contracts contain stipulations that are contrary to public policy, courts
will not hesitate to strike down these stipulations.

In this case, we find the point-of-hire classification employed by respondent School to justify the
distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no
reasonable distinction between the services rendered by foreign-hires and local-hires. The practice of
LABOR 2 - Batch 2 Page 22 of 39

G.R. No. 109002             April 12, 2000
DELA SALLE UNIVERSITY, petitioner,
vs.
DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA) and BUENAVENTURA
MAGSALIN, respondents.
x-----------------------x
G.R. No. 110072             April 12, 2000
DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION OF TEACHERS
AND EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner,
vs.
DELA SALLE UNIVERSITY and BUENAVENTURA MAGSALIN, respondents.
Filed with this Court are two petitions for certiorari, 1 the first petition with preliminary injunction
and/or temporary restraining order,2 assailing the decision of voluntary arbitrator Buenaventura
Magsalin, dated January 19, 1993, as having been rendered with grave abuse of discretion amounting
to lack or excess of jurisdiction. These two petitions have been consolidated inasmuch as the factual
antecedents, parties involved and issues raised therein are interrelated. 3
The facts are not disputed and, as summarized by the voluntary arbitrator, are as follows. On
December 1986, Dela Salle University (hereinafter referred to as UNIVERSITY) and Dela Salle
University Employees Association — National Federation of Teachers and Employees Union (DLSUEA-
NAFTEU), which is composed of regular non-academic rank and file employees, 4 (hereinafter referred
to as UNION) entered into a collective bargaining agreement with a life span of three (3) years, that
is, from December 23, 1986 to December 22, 1989.5 During the freedom period, or 60 days before
the expiration of the said collective bargaining agreement, the Union initiated negotiations with the
University for a new collective bargaining agreement 6 which, however, turned out to be unsuccessful,
hence, the Union filed a Notice of Strike with the National Conciliation and Mediation Board, National
Capital Region.7 After several conciliation-mediation meetings, five (5) out of the eleven (11) issues
raised in the Notice of Strike were resolved by the parties. A partial collective bargaining agreement
was thereafter executed by the parties. 8 On March 18, 1991, the parties entered into a Submission
Agreement, identifying the remaining six (6) unresolved issues for arbitration, namely: "(1) scope of
the bargaining unit, (2) union security clause, (3) security of tenure, (4) salary increases for the third
and fourth years [this should properly read second and third years]9 of the collective bargaining
agreement, (5) indefinite union leave, reduction of the union president's workload, special leave, and
finally, (6) duration of the agreement." 10 The parties appointed Buenaventura Magsalin as voluntary
arbitrator. 11 On January 19, 1993, the voluntary arbitrator rendered the assailed decision. 12
In the said decision, the voluntary arbitrator, on the first issue involving the scope of the bargaining
unit, ruled that ". . . the Computer Operators assigned at the CSC [Computer Services Center], just
like any other Computer Operators in other units, [should be] included as members of the bargaining
unit," 13 after finding that "[e]vidently, the Computer Operators are presently doing clerical and
routinary work and had nothing to do with [the] setting of management policies for the University, as
[may be] gleaned from the duties and responsibilities attached to the position and embodied in the
CSC [Computer Services Center] brochure. They may have, as argued by the University, access to
LABOR 2 - Batch 2
vital information regarding the University's operations but they are not necessarily
confidential." 14 Regarding the discipline officers, the voluntary arbitrator ". . . believes that this type
of employees belong (sic) to the rank-and-file on the basis of the nature of their job." 15 With respect
to the employees of the College of St. Benilde, the voluntary arbitrator found that the College of St.
Benilde has a personality separate and distinct from the University and thus, held ". . . that the
employees therein are outside the bargaining unit of the University's rank-and-file employees." 16
On the second issue regarding the propriety of the inclusion of a union shop clause in the collective
bargaining agreement, in addition to the existing maintenance of membership clause, the voluntary
arbitrator opined that a union shop clause ". . . is not a restriction on the employee's right of (sic)
freedom of association but rather a valid form of union security while the CBA is in force and in
accordance with the Constitutional policy to promote unionism and collective bargaining and
negotiations. The parties therefore should incorporate such union shop clause in their CBA." 17
On the third issue with respect to the use of the "last-in-first-out" method in case of retrenchment
and transfer to other schools or units, the voluntary arbitrator upheld the ". . . elementary right and
prerogative of the management of the University to select and/or choose its employees, a right
equally recognized by the Constitution and the law. The employer, in the exercise of this right, can
adopt valid and equitable grounds as basis for lay-off or separation, like performance, qualifications,
competence, etc. Similarly, the right to transfer or reassign an employee is an employer's exclusive
right and prerogative." 18
Regarding the fourth issue concerning salary increases for the second and third years of the collective
bargaining agreement, the voluntary arbitrator opined that the ". . .proposed budget of the University
for SY 1992-93 could not sufficiently cope up with the demand for increases by the Union. . . . . . . .
With the present financial condition of the University, it cannot now be required to grant another
round of increases through collective bargaining without exhausting its coffers for other legitimate
needs of the University as an institution," 19 thus, he ruled that ". . . the University can no longer be
required to grant a second round of increase for the school years under consideration and charge the
same to the incremental proceeds." 20
On the fifth issue as to the Union's demand for a reduction of the workload of the union president,
special leave benefits and indefinite union leave with pay, the voluntary arbitrator rejected the same,
ruling that unionism ". . . is no valid reason for the reduction of the workload of its President," 21 and
that there is ". . . no sufficient justification to grant an indefinite leave." 22 Finding that the Union and
the Faculty Association are not similarly situated, technically and professionally, 23 and that "[w]hile
professional growth is highly encouraged on the part of the rank-and-file employees, this educational
advancement would not serve in the same degree as demanded of the faculty members," 24 the
voluntary arbitrator denied the Union's demand for special leave benefits.
On the last issue regarding the duration of the collective bargaining agreement, the voluntary
arbitrator ruled that ". . . when the parties forged their CBA and signed it on 19 November 1990,
where a provision on duration was explicitly included, the same became a binding agreement between
them. Notwithstanding the Submission Agreement, thereby reopening this issue for resolution, this
Voluntary Arbitrator is constrained to respect the original intention of the parties, the same being not
contrary to law, morals or public policy." 25 As to the economic aspect of the collective bargaining
agreement, the voluntary arbitrator opined that the ". . . economic provisions of the CBA shall be re-
opened after the third year in compliance with the mandate of the Labor Code, as amended." 26
Page 23 of 39
Subsequently, both parties filed their respective motions for reconsideration which, however, were not
entertained by the voluntary arbitrator "pursuant to existing rules and jurisprudence governing
voluntary arbitration cases." 27
On March 5, 1993, the University filed with the Second Division of this Court, a petition
for certiorari with temporary restraining order and/or preliminary injunction assailing the decision of
the voluntary arbitrator, as having been rendered "in excess of jurisdiction and/or with grave abuse of
discretion." 28 Subsequently, on May 24, 1993, the Union also filed a petition for certiorari with the
First Division. 29 Without giving due course to the petition pending before each division, the First and
Second Divisions separately resolved to require the respondents in each petition, including the
Solicitor General on behalf of the voluntary arbitrator, to file their respective Comments. 30 Upon
motion by the Solicitor General dated July 29, 1993, both petitions were consolidated and transferred
to the Second Division. 31
In his consolidated Comment 32 filed on September 9, 1993 on behalf of voluntary arbitrator
Buenaventura C. Magsalin, the Solicitor General agreed with the voluntary arbitrator's assailed
decision on all points except that involving the employees of the College of St. Benilde. According to
the Solicitor General, the employees of the College of St. Benilde should have been included in the
bargaining unit of the rank-and-file employees of the University. 33 The Solicitor General came to this
conclusion after finding ". . . sufficient evidence to justify the Union's proposal to consider the
University and the CSB [College of St. Benilde] as only one entity because the latter is but a mere
integral part of the University," to wit: 34
1. One of the duties and responsibilities of the CSB's Director of Academic Services is to
coordinate with the University's Director of Admissions regarding the admission of freshmen,
shiftees and transferees (Annex "3" of the University's Reply);
2. Some of the duties and responsibilities of the CSB's Administrative Officer are as follows:
A. xxx xxx xxx
4. Recommends and implements personnel policies and guidelines (in accordance with the
Staff Manual) as well as pertinent existing general policies of the university as a whole. . . . .
12. Conducts and establishes liaison with all the offices concerned at the Main Campus as
well (sic) with other government agencies on all administrative-related matters. . . .
B. xxx xxx xxx
7. Handles processing, canvassing and direct purchasing of all requisitions worth more than
P10,000 or less. Coordinates and canvasses with the Main Campus all requisitions worth
more than P10,000. . . .
C. xxx xxx xxx
7. Plans and coordinates with the Security and Safety Committee at the Main Campus the
development of a security and safety program during times of emergency or occurrence of
fire or other natural calamities. . . . (Annex "4" of the University's Reply).
LABOR 2 - Batch 2
3. The significant role which the University assumes in the admission of students at the CSB
is revealed in the following provisions of the CSB's Bulletin for Arts and Business Studies
Department for the schoolyear 1992-1993, thus:
Considered in the process of admission for a (sic) high school graduate applicants are the
following criteria: results of DLSU College Entrance Examination . . . .
Admission requirements for transferees are: . . . and an acceptable score in the DLSU
admission test. . . .
Shiftees from DLSU who are still eligible to enroll may be admitted in accordance with the
DLSU policy on shifting. Considering that there sometimes exist exceptional cases where a
very difficult but temporary situation renders a DLSU student falling under this category a
last chance to be re-admitted provided he meets the cut-off scores required in the qualifying
examination administered by the university. . . .
He may not be remiss in his study obligations nor incur any violation whatsoever, as such
will be taken by the University to be an indication of his loss of initiative to pursue further
studies at DLSU. In sch (sic) a case, he renders himself ineligible to continue studying at
DLSU. DLSU thus reserves the right to the discontinuance of the studies of any enrolee
whose presence is inimical to the objectives of the CSB/DLSU. . . .
As a college within the university, the College of St. Benilde subscribes to the De La Salle
Mission." (Annexes "C-1," "C-2," and "C-3" of the Union's Consolidated Reply and Rejoinder)
4. The academic programs offered at the CSB are likewise presented in the University's
Undergraduate Prospectus for schoolyear 1992-1993 (Annex "D" of the Union's Consolidated
Reply and Rejoinder).
5. The Leave Form Request (Annex "F" of the Union's Position Paper) at the CSB requires
prior permission from the University anent leaves of CSB employees, to wit:
AN EMPLOYEE WHO GOES ON LEAVE WITHOUT PRIOR PERMISSION FROM THE UNIVERSITY
OR WHO OVEREXTENDS THE PERIOD OF HIS APPROVED LEAVE WITHOUT SECURING
AUTHORITY FROM THE UNIVERSITY, OR WHO REFUSE TO BE RECALLED FROM AN
APPROVED LEAVE SHALL BE CONSIDERED ABSENT WITHOUT LEAVE AND SHALL BE
SUBJECT TO DISCIPLINARY ACTION.
6. The University officials themselves claimed during the 1990 University Athletic Association
of the Philippines (UAAP) meet that the CSB athletes represented the University since the
latter and the CSB comprise only one entity.
On February 9, 1994, this Court resolved to give due course to these consolidated petitions and to
require the parties to submit their respective memoranda. 35
In its memorandum filed on April 28, 1994, 36 pursuant to the above-stated Resolution, 37 the
University raised the following issues for the consideration of the Court: 38
I.
Page 24 of 39
 WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
ARBITRATOR WHEN HE INCLUDED, WITHIN THE BARGAINING UNIT COMPRISING THE
UNIVERSITY'S RANK-AND-FILE EMPLOYEES, THE COMPUTER OPERATORS ASSIGNED AT THE
UNIVERSITY'S COMPUTER SERVICES CENTER AND THE UNIVERSITY'S DISCIPLINE
OFFICERS, AND WHEN HE EXCLUDED THE COLLEGE OF SAINT BENILDE EMPLOYEES FROM
THE SAID BARGAINING UNIT.
II.
WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
ARBITRATOR WHEN HE UPHELD THE UNION'S DEMAND FOR THE INCLUSION OF A UNION
SHOP CLAUSE IN THE PARTIES' COLLECTIVE BARGAINING AGREEMENT.
III.
WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
ARBITRATOR WHEN HE DENIED THE UNION'S PROPOSAL FOR THE "LAST-IN-FIRST-OUT"
METHOD OF LAY-OFF IN CASES OF RETRENCHMENT.
IV.
WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
ARBITRATOR WHEN HE RULED THAT THE UNIVERSITY CAN NO LONGER BE REQUIRED TO
GRANT A SECOND ROUND OF WAGE INCREASES FOR THE SCHOOL YEARS 1991-92 AND
1992-93 AND CHARGE THE SAME TO THE INCREMENTAL PROCEEDS.
V.
WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
ARBITRATOR WHEN HE DENIED THE UNION'S PROPOSALS ON THE DELOADING OF THE
UNION PRESIDENT, IMPROVED LEAVE BENEFITS AND INDEFINITE UNION LEAVE WITH PAY.
The Union, on the other hand, raised the following issues, in its memorandum, 39 filed pursuant to
Supreme Court Resolution dated February 9, 1994, 40 to wit; that the voluntary arbitrator committed
grave abuse of discretion in:
(1) FAILING AND/OR REFUSING TO PIERCE THE VEIL OF CORPORATE FICTION OF THE
COLLEGE OF ST. BENILDE-DLSU DESPITE THE PRESENCE OF SUFFICIENT BASIS TO DO SO
AND IN FINDING THAT THE EMPLOYEES THEREAT ARE OUTSIDE OF THE BARGAINING UNIT
OF THE DLSU'S RANK-AND-FILE EMPLOYEES. HE ALSO ERRED IN HIS INTERPRETATION OF
THE APPLICATION OF THE DOCTRINE;
(2) DENYING THE PETITIONER'S PROPOSAL FOR THE "LAST-IN FIRST-OUT" METHOD OF
LAY-OFF IN CASE OF RETRENCHMENT AND IN UPHOLDING THE ALLEGED MANAGEMENT
PREROGATIVE TO SELECT AND CHOOSE ITS EMPLOYEES DISREGARDING THE BASIC
TENETS OF SOCIAL JUSTICE AND EQUITY UPON WHICH THIS PROPOSAL WAS FOUNDED;
LABOR 2 - Batch 2
(3) FINDING THAT THE MULTISECTORAL COMMITTEE IN THE RESPONDENT UNIVERSITY IS
THE LEGITIMATE GROUP WHICH DETERMINES AND SCRUTINIZES ANNUAL SALARY
INCREASES AND FRINGE BENEFITS OF THE EMPLOYEES;
(4) HOLDING THAT THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS IS THE
ONLY SOURCE OF SALARY INCREASES AND FRINGE BENEFITS OF THE EMPLOYEES;
(5) FAILING/REFUSING/DISREGARDING TO CONSIDER THE RESPONDENT UNIVERSITY'S
FINANCIAL STATEMENTS FACTUALLY TO DETERMINE THE FORMER'S CAPABILITY TO GRANT
THE PROPOSED SALARY INCREASES OVER AND ABOVE THE 70% SHARE IN THE
INCREMENTAL TUITION PROCEEDS AND IN GIVING WEIGHT AND CONSIDERATION TO THE
RESPONDENT UNIVERSITY'S PROPOSED BUDGET WHICH IS MERELY AN ESTIMATE.
(6) FAILING TO EQUATE THE POSITION AND RESPONSIBILITIES OF THE UNION PRESIDENT
WITH THOSE OF THE PRESIDENT OF THE FACULTY ASSOCIATION WHICH IS NOT EVEN A
LEGITIMATE LABOR ORGANIZATION AND IN SPECULATING THAT THE PRESIDENT OF THE
FACULTY ASSOCIATION SUFFERS A CORRESPONDING REDUCTION IN SALARY ON THE
ACCOUNT OF THE REDUCTION OF HIS WORKLOAD; IN FAILING TO APPRECIATE THE EQUAL
RIGHTS OF THE MEMBERS OF THE UNION AND OF THE FACULTY FOR PROFESSIONAL
ADVANCEMENT AS WELL AS THE DESIRABLE EFFECTS OF THE INSTITUTIONALIZATION OF
THE SPECIAL LEAVE AND WORKLOAD REDUCTION BENEFITS. 41
The question which now confronts us is whether or not the voluntary arbitrator committed grave
abuse of discretion in rendering the assailed decision, particularly, in resolving the following issues:
(1) whether the computer operators assigned at the University's Computer Services Center and the
University's discipline officers may be considered as confidential employees and should therefore be
excluded from the bargaining unit which is composed of rank and file employees of the University,
and whether the employees of the College of St. Benilde should also be included in the same
bargaining unit; (2) whether a union shop clause should be included in the parties' collective
bargaining agreement, in addition to the existing maintenance of membership clause; (3) whether the
denial of the Union's proposed "last-in-first-out" method of laying-off employees, is proper; (4)
whether the ruling that on the basis of the University's proposed budget, the University can no longer
be required to grant a second round of wage increases for the school years 1991-92 and 1992-93 and
charge the same to the incremental proceeds, is correct; (5) whether the denial of the Union's
proposals on the deloading of the union president, improved leave benefits and indefinite union leave
with pay, is proper; (6) whether the finding that the multi-sectoral committee in the University is the
legitimate group which determines and scrutinizes the annual salary increases and fringe benefits of
the employees of the University, is correct; and (7) whether the ruling that the 70% share in the
incremental tuition proceeds is the only source of salary increases and fringe benefits of the
employees, is proper.
Now, before proceeding to the discussion and resolution of the issues raised in the pending petitions,
certain preliminary matters call for disposition. As we reiterated in the case of Caltex Refinery
Employees Association (CREA) vs. Jose S. Brillantes, 42 the following are the well-settled rules in a
petition for certiorari involving labor cases. "First, the factual findings of quasi-judicial agencies (such
as the Department of Labor and Employment), when supported by substantial evidence, are binding
on this Court and entitled to great respect, considering the expertise of these agencies in their
respective fields. It is well-established that findings of these administrative agencies are generally
accorded not only respect but even finality. 43
Page 25 of 39
Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable
mind will accept as adequate to justify a conclusion. 44
Third, in Flores vs. National Labor Relations Commission, 45 we explained the role and function of Rule
65 as an extraordinary remedy:
are clearly alter egos of management as they perform tasks which are inherent in management [e.g.
enforce discipline, act as peace officers, secure peace and safety of the students inside the campus,
conduct investigations on violations of University regulations, or of existing criminal laws, committed
within the University or by University employees] . . . . . . . " 49 The University also alleges that "the
Discipline Officers are privy to highly confidential information ordinarily accessible only to
management." 50

It should be noted, in the first place, that the instant petition is a special civil action
With regard to the employees of the College of St. Benilde, the Union, supported by the Solicitor
for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is
General at this point, asserts that the veil of corporate fiction should be pierced, thus, according to
available only and restrictively in truly exceptional cases — those wherein the action of an
the Union, the University and the College of St. Benilde should be considered as only one entity
inferior court, board or officer performing judicial or quasi-judicial acts is challenged for
because the latter is but a mere integral part of the University. 51
being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the
correction of errors of jurisdiction including the commission of grave abuse of discretion
amounting to lack or excess of jurisdiction. It does not include correction of public The University's arguments on the first issue fail to impress us. The Court agrees with the Solicitor
respondent NLRC's evaluation of the evidence and factual findings based thereon, which are General that the express exclusion of the computer operators and discipline officers from the
generally accorded not only great respect but even finality. bargaining unit of rank-and-file employees in the 1986 collective bargaining agreement does not bar
any re-negotiation for the future inclusion of the said employees in the bargaining unit. During the
freedom period, the parties may not only renew the existing collective bargaining agreement but may
No question of jurisdiction whatsoever is being raised and/or pleaded in the case at bench.
also propose and discuss modifications or amendments thereto. With regard to the alleged
Instead, what is being sought is a judicial re-evaluation of the adequacy or inadequacy of the
confidential nature of the said employees' functions, after a careful consideration of the pleadings filed
evidence on record, which is certainly beyond the province of the extraordinary writ
before this Court, we rule that the said computer operators and discipline officers are not confidential
of certiorari. Such demand is impermissible for it would involve this Court in determining
employees. As carefully examined by the Solicitor General, the service record of a computer operator
what evidence is entitled to belief and the weight to be assigned it. As we have reiterated
reveals that his duties are basically clerical and non-confidential in nature. 52 As to the discipline
countless times, judicial review by this Court in labor cases does not go so far as to evaluate
officers, we agree with the voluntary arbitrator that based on the nature of their duties, they are not
the sufficiency of the evidence upon which the proper labor officer or office based his or its
confidential employees and should therefore be included in the bargaining unit of rank-and-file
determination but is limited only to issues of jurisdiction or grave abuse of discretion
employees.
amounting to lack of jurisdiction. (emphasis supplied).

With the foregoing rules in mind, we shall now proceed to discuss the merit of these consolidated
petitions.
We affirm in part and modify in part.
On the first issue involving the classification of the computer operators assigned at the University's
Computer Services Center and discipline officers, the University argues that they are confidential
employees and that the Union has already recognized the confidential nature of their functions when
the latter agreed in the parties' 1986 collective bargaining agreement to exclude the said employees
from the bargaining unit of rank-and-file employees. As far as the said computer operators are
concerned, the University contends that ". . . the parties have already previously agreed to exclude all
positions in the University's Computer Services Center (CSC), which include the positions of computer
operators, from the collective bargaining unit. . . . . . . . " 46 The University further contends that ". . .
the nature of the work done by these Computer Operators is enough justification for their exclusion
from the coverage of the bargaining unit of the University's rank-and-file
employees. . . . . . . ." 47 According to the University, the Computer Services Center, where these
computer operators work, ". . . processes data that are needed by management for strategic planning
and evaluation of systems. It also houses the University's confidential records and information [e.g.
student records, faculty records, faculty and staff payroll data, and budget allocation and expenditure
related data] which are contained in computer files and computer-generated reports. . . . . . . .
Moreover, the Computer Operators are in fact the repository of the University's confidential
information and data, including those involving and/or pertinent to labor relations. . . . . . . ." 48
The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St.
Benilde should be excluded from the bargaining unit of the rank-and-file employees of Dela Salle
University, because the two educational institutions have their own separate juridical personality and
no sufficient evidence was shown to justify the piercing of the veil of corporate fiction. 53
On the second issue involving the inclusion of a union shop clause in addition to the existing
maintenance of membership clause in the collective bargaining agreement, the University avers that
". . . it is in the spirit of the exercise of the constitutional right to self-organization that every
individual should be able to freely choose whether to become a member of the Union or not. The right
to join a labor organization should carry with it the corollary right not to join the same. This position
of the University is but in due recognition of the individual's free will and capability for
judgment." 54 The University assails the Union's demand for a union shop clause as ". . . definitely
unjust and amounts to oppression. Moreover, such a demand is repugnant to democratic principles
and the constitutionally guaranteed freedom of individuals to join or not to join an association as well
as their right to security of tenure, particularly, on the part of present employees." 55
The Union, on the other hand, counters that the Labor Code, as amended, recognizes the validity of a
union shop agreement in Article 248 thereof which reads:
Art. 248. Unfair labor practices of employers. —
x x x           x x x          x x x

As to the discipline officers, the University maintains that " . . . they are likewise excluded from the
bargaining unit of the rank-and-file employees under the parties' 1986 CBA. The Discipline Officers
LABOR 2 - Batch 2 Page 26 of 39
 (e) To discriminate in regard to hire or tenure of employment or any term or
condition of employment in order to encourage or discourage membership in any
labor organization. Nothing in this Code or in any other law shall prevent the parties
from requiring membership in a recognized collective bargaining agent as a
condition for employment, except of those employees who are already members of
another union at the time of the signing of the collective bargaining agreement. . . .
. . . ." (emphasis supplied)
We affirm the ruling of the voluntary arbitrator for the inclusion of a union shop provision in
addition to the existing maintenance of membership clause in the collective bargaining
agreement. As the Solicitor General asserted in his consolidated Comment, the University's
reliance on the case of Victoriano vs. Elizalde Rope Workers' Union  56 is clearly misplaced. In
that case, we ruled that ". . . the right to join a union includes the right to abstain from
joining any union. . . . . . . . The right to refrain from joining labor organizations recognized
by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to
such right to refrain from joining 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. . . . . . . ." 57
On the third issue regarding the Union's proposal for the use of the "last-in-first-out" method
in case of lay-off, termination due to retrenchment and transfer of employees, the Union
relies on social justice and equity to support its proposition, and submits that the University's
prerogative to select and/or choose the employees it will hire is limited, either by law or
agreement, especially where the exercise of this prerogative might result in the loss of
employment. 58 The Union further insists that its proposal is ". . . in keeping with the avowed
State policy '(q) To ensure the participation of workers in decision and policy-making
processes affecting their rights, duties and welfare' (Art. 211, Labor Code, as amended)." 59
On the other hand, the University asserts its management prerogative and counters that
"[w]hile it is recognized that this right of employees and workers to 'participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law' has
been enshrined in the Constitution (Article III, [should be Article XIII], Section 3, par. 2),
said participation, however, does not automatically entitle the Union to dictate as to how an
employer should choose the employees to be affected by a retrenchment program. The
employer still retains the prerogative to determine the reasonable basis for selecting such
employees." 60
We agree with the voluntary arbitrator that as an exercise of management prerogative, the
University has the right to adopt valid and equitable grounds as basis for terminating or
transferring employees. As we ruled in the case of Autobus Workers' Union (AWU) and
Ricardo Escanlar vs. National Labor Relations Commission, 61 "[a] valid exercise of
management prerogative is one which, among others, covers: work assignment, working
methods, time, supervision of workers, transfer of employees, work supervision, and the
discipline, dismissal and recall of workers. Except as provided for, or limited by special laws,
an employer is free to regulate, according to his own discretion and judgment, all aspects of
employment." (emphasis supplied)
On the fourth issue involving the voluntary arbitrator's ruling that on the basis of the
University's proposed budget, the University can no longer be required to grant a second
round of wage increases for the school years 1991-92 and 1992-93 and charge the same to
LABOR 2 - Batch 2
the incremental proceeds, we find that the voluntary arbitrator committed grave abuse of
discretion amounting to lack or excess of jurisdiction. As we ruled in the case of Caltex
Refinery Employees Association (CREA) vs. Jose S. Brillantes, 62 ". . . . . . . [w]e believe that
the standard proof of a company's financial standing is its financial statements duly audited
by independent and credible external auditors." 63 Financial statements audited by
independent external auditors constitute the normal method of proof of profit and loss
performance of a company. 64 The financial capability of a company cannot be based on its
proposed budget because a proposed budget does not reflect the true financial condition of a
company, unlike audited financial statements, and more importantly, the use of a proposed
budget as proof of a company's financial condition would be susceptible to abuse by
scheming employers who might be merely feigning dire financial condition in their business
ventures in order to avoid granting salary increases and fringe benefits to their employees.
On the fifth issue involving the Union's proposals on the deloading of the union president,
improved leave benefits and indefinite union leave with pay, we agree with the voluntary
arbitrator's rejection of the said demands, there being no justifiable reason for the granting
of the same.
On the sixth issue regarding the finding that the multi-sectoral committee in the University is
the legitimate group which determines and scrutinizes the annual salary increases and fringe
benefits of the employees of the University, the Court finds that the voluntary arbitrator did
not gravely abuse his discretion on this matter. From our reading of the assailed decision, it
appears that during the parties' negotiations for a new collective bargaining agreement, the
Union demanded for a 25% and 40% salary increase for the second and third years,
respectively, of the collective bargaining agreement. 65 The University's counter-proposal was
for a 10% increase for the third year. 66 After the meeting of the multi-sectoral committee on
budget, which is composed of students, parents, faculty, administration and union, the
University granted across-the-board salary increases of 11.3% and 19% for the second and
third years, respectively. 67 While the voluntary arbitrator found that the said committee ". . .
decided to grant the said increases based on the University's viability which were exclusively
sourced from the tuition fees. . . . . . . .," no finding was made as to the basis of the
committee's decision. Be that as it may, assuming for the sake of argument that the said
committee is the group responsible for determining wage increases and fringe benefits, as
ruled by the voluntary arbitrator, the committee's determination must still be based on duly
audited financial statements following our ruling on the fourth issue.1âwphi1
On the seventh and last issue involving the ruling that the 70% share in the incremental
tuition proceeds is the only source of salary increases and fringe benefits of the employees,
the Court deems that any determination of this alleged error is unnecessary and irrelevant,
in view of our rulings on the fourth and preceding issues and there being no evidence
presented before the voluntary arbitrator that the University held incremental tuition fee
proceeds from which any wage increase or fringe benefit may be satisfied.
WHEREFORE, premises considered, the petitions in these consolidated cases, G.R. No.
109002 and G.R. No. 110072 are partially GRANTED. The assailed decision dated January
19, 1993 of voluntary arbitrator Buenaventura Magsalin is hereby AFFIRMED with the
modification that the issue on salary increases for the second and third years of the collective
bargaining agreement be REMANDED to the voluntary arbitrator for definite resolution within
one month from the finality of this Decision, on the basis of the externally audited financial
statements of the University already submitted by the Union before the voluntary arbitrator
and forming part of the records.1âwphi1.nêt
Page 27 of 39
 SO ORDERED.
G.R. No. 157086, February 18, 2013]
LEPANTO CONSOLIDATED MINING COMPANY, Petitioner, v. THE LEPANTO CAPATAZ
UNION, Respondents.
Capatazes are not rank-and-file employees because they perform supervisory functions for the
management; hence, they may form their own union that is separate and distinct from the labor
organization of rank-and-file employees.
The Case
Lepanto Consolidated Mining Company (Lepanto) assails the Resolution promulgated on December
18, 2002,1 whereby the Court of Appeals (CA) dismissed its petition for certiorari on the ground of its
failure to first file a motion for reconsideration against the decision rendered by the Secretary of the
Department of Labor and Employment (DOLE); and the resolution promulgated on January 31,
2003,2 whereby the CA denied Lepanto’s motion for reconsideration.
LABOR 2 - Batch 2
Antecedents
As a domestic corporation authorized to engage in large-scale mining, Lepanto operated several
mining claims in Mankayan, Benguet. On May 27, 1998, respondent Lepanto Capataz Union (Union), a
labor organization duly registered with DOLE, filed a petition for consent election with the Industrial
Relations Division of the Cordillera Regional Office (CAR) of DOLE, thereby proposing to represent
139 capatazes of Lepanto.3
In due course, Lepanto opposed the petition,4 contending that the Union was in reality seeking a
certification election, not a consent election, and would be thereby competing with the Lepanto
Employees Union (LEU), the current collective bargaining agent. Lepanto pointed out that
the capatazes were already members of LEU, the exclusive representative of all rank-and-file
employees of its Mine Division.
On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect that
the capatazes could form a separate bargaining unit due to their not being rank-and-file
employees,5viz:
xxxx
We agree with petitioner that its members perform a function totally different from the rank-and-file
employees. The word capataz is defined in Webster’s Third International Dictionary, 1986 as “a boss”,
“foreman” and “an overseer”. The employer did not dispute during the hearing that the capatazes
indeed take charge of the implementation of the job orders by supervising and instructing
the miners, mackers and other rank-and-file workers under them, assess and evaluate
their performance, make regular reports and recommends (sic) new systems and
procedure of work, as well as guidelines for the discipline of employees. As testified to by
petitioner’s president, the capatazes are neither rank-and-file nor supervisory and, more or
less, fall in the middle of their rank. In this respect, we can see that indeed the capatazes
differ from the rank-and-file and can by themselves constitute a separate bargaining unit.
While it is claimed by the employer that historically, the capatazes have been considered among the
rank-and-file and that it is only now that they seek a separate bargaining unit such history of
affiliation with the rank-and-file association of LEU cannot totally prevent the capatazes from
disaffiliating and organizing themselves separately. The constitutional right of every worker to self-
organization essentially gives him the freedom to join or not to join an organization of his own
choosing.
The fact that petitioner seeks to represent a separate bargaining unit from the rank-and-file
employees represented by the LEU renders the contract bar rule inapplicable. While the collective
bargaining agreement existing between the LEU and the employer covering the latter’s rank-and-file
employee covers likewise the capatazes, it was testified to and undisputed by the employer that the
capatazes did not anymore participate in the renegotiation and ratification of the new CBA upon
expiration of their old one on 16 November 1998. Their nonparticipation was apparently due to their
formation of the new bargaining unit. Thus, while the instant petition was filed on 27 May 1998, prior
to the freedom period, in the interest of justice and in consonance with the constitutional right of
workers to self-organization, the petition can be deemed to have been filed at the time the 60-day
freedom period set in. After all, the petition was still pending and unresolved during this period.
WHEREFORE, the petition is hereby granted and a certification election among the capataz employees
of the Lepanto Consolidated Mining Company is hereby ordered conducted, subject to the usual pre-
election and inclusion/exclusion proceedings, with the following choices:
1. Lepanto Capataz Union; and
2. No Union.
Page 28 of 39
The employer is directed to submit to this office within ten (10) days from receipt hereof a copy of the
certified list of its capataz employees and the payroll covering the said bargaining unit for the last
three (3) months prior to the issuance hereof.
SO DECIDED. 6
Lepanto appealed to the DOLE Secretary. 7
On July 12, 2000, then DOLE Undersecretary Rosalinda Dimapilis-Baldoz (Baldoz), acting by authority
of the DOLE Secretary, affirmed the ruling of Med-Arbiter Lontoc,8 pertinently stating as follows:
xxxx
The bargaining unit sought to be represented by the appellee are the capataz employees of the
appellant. There is no other labor organization of capatazes within the employer unit except herein
appellant. Thus, appellant is an unorganized establishment in so far as the bargaining unit of
capatazes is concerned. In accordance with the last paragraph of Section 11, Rule XI, Department
Order No. 9 which provides that “in a petition filed by a legitimate labor organization involving an
unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code, automatically
order the conduct of certification election after determining that the petition has complied with all
requirements under Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal
thereof exists”, the order for the conduct of a certification election is proper.
Finally, as to the issue of whether the Med-Arbiter exhibited ignorance of the law when she directed
the conduct of a certification election when appellee prays for the conduct of a consent election, let it
be stressed that appellee seeks to be recognized as the sole and exclusive bargaining representative
of all capataz employees of appellant. There are two modes by which this can be achieved, one is by
voluntary recognition and two, by consent or certification election. Voluntary recognition under Rule
X, Department Order No. 9 is a mode whereby the employer voluntarily recognizes the union as the
bargaining representative of all the members in the bargaining unit sought to be represented.
Consent and certification election under Rules XI and XII of Department Order No. 9 is a mode
whereby the members of the bargaining unit decide whether they want a bargaining representative
and if so, who they want it to be. The difference between a consent election and a certification
election is that the conduct of a consent election is agreed upon by the parties to the petition while
the conduct of a certification election is ordered by the Med-Arbiter. In this case, the appellant
withdrew its consent and opposed the conduct of the election. Therefore, the petition necessarily
becomes one of a petition for certification election and the Med-Arbiter was correct in granting the
same.9
xxxx
In the ensuing certification election held on November 28, 2000, the Union garnered 109 of the 111
total valid votes cast.10
On the day of the certification election, however, Lepanto presented an opposition/protest. 11 Hence,
on February 8, 2001, a hearing was held on Lepanto’s opposition/protest. Although the parties were
required in that hearing to submit their respective position papers, Lepanto later opted not to submit
its position paper,12 and contended that the issues identified during the hearing did not pose any legal
issue to be addressed in a position paper.13
On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered a decision
certifying the Union as the sole and exclusive bargaining agent of all capatazes of Lepanto.14
On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-Ulep to the DOLE Secretary.
LABOR 2 - Batch 2
By her Resolution dated September 17, 2002,15 DOLE Secretary Patricia A. Sto. Tomas affirmed the
decision dated April 26, 2001, holding and disposing thus:
Appellant accused Med-Arbiter Ulep of grave abuse of discretion amounting to lack of jurisdiction
based on her failure to resolve appellant’s motion to modify order to submit position papers and on
rendering judgment on the basis only of appellee’s position paper.
We deny.
Section 5, Rule XXV of Department Order No. 9, otherwise known as the New Rules Implementing
Book V of the Labor Code, states that “in all proceedings at all levels, incidental motions shall not be
given due course, but shall remain as part of the records for whatever they may be worth when the
case is decided on the merits”.
Further, the motion to modify order to submit position papers filed by appellant is without merit.
Appellant claimed that the issues over which Med-Arbiter Ulep directed the submission of position
papers were:  (1) failure to challenge properly; (2) failure (especially of LEU) to participate actively in
the proceedings before the decision calling for the conduct of certification election; and (3) validity of
earlier arguments.  According to appellant, the first issue was for appellee LCU to reply to in its
position paper, the second issue was for the LEU and the third issue for appellant company to explain
in their respective position paper.  It was the position of appellant company that unless the parties
filed their position paper on each of their respective issues, the other parties cannot discuss the issues
they did not raise in the same position papers and have to await receipt of the others’ position paper
for their appropriate reply.
Section 9, Rule XI of Department Order No. 9, which is applied with equal force in the disposition of
protests on the conduct of election, states that “the Med-Arbiter shall in the same hearing direct all
concerned parties, including the employer, to simultaneously submit their respective position papers
within a non-extendible period of ten days”.  The issues as recorded in the minutes of 28 February
2001 hearing before the Med-Arbiter are clear.  The parties, including appellant company were
required to submit their respective positions on whether there was proper challenge of the voters,
whether LEU failed to participate in the proceedings, if so, whether it should be allowed to participate
at this belated stage and whether the arguments raised during the pre-election conferences and in
the protests are valid. The parties, including appellant company were apprised of these issues and
they agreed thereto.  The minutes of the hearing even contained the statement that “no order will
issue” and that “the parties are informed accordingly”.  If there is any matter that had to be clarified,
appellant should have clarified the same during the said hearing and refused to file its position paper
simultaneously with LCU and LEU.  It appears that appellant did not do so and acquiesced to the filing
of its position paper within fifteen days from the date of said hearing.
Neither is there merit in appellant’s contention that the Med-Arbiter resolved the protest based solely
on appellee LCU’s position paper. Not only did the Med-Arbiter discuss the demerits of appellant’s
motion to modify order to submit position papers but likewise the demerits of its protest. We do not,
however, agree with the Med-Arbiter that the protest should be dismissed due to appellant’s failure to
challenge the individual voters during the election. We take note of the minutes of the pre-election
conference on 10 November 2000, thus:
“It was also agreed upon (by union and management’s legal officer) that all those listed will be
allowed to vote during the certification election subject to challenge by management on ground
that none of them belongs to the bargaining unit”. (Underscoring supplied)
Page 29 of 39
It is therefore, not correct to say that there was no proper challenge made by appellant company. The
challenge was already manifested during the pre-election conference, specifying that all listed voters
were being challenged because they do not belong to the bargaining unit of capatazes. Likewise, the
formal protest filed by appellant company on the day of the election showed its protest to the conduct
of the election on the grounds that (1) none of the names submitted and included (with pay bracket 8
and 9) to vote qualifies as capataz under the five-point characterization made in 02 May 2000
decision calling for the conduct of certification election; (2) the characterization made in the 02 May
2000 decision pertains to shift bosses who constitutes another union, the Lepanto Local Staff Union;
and (3) the names listed in the voters’ list are members of another union, the Lepanto Employees
Union. This constitutes proper challenge to the eligibility of all the voters named in the list which
includes all those who cast their votes. The election officer should have not canvassed the ballots and
allowed the Med-Arbiter to first determine their eligibility.
Notwithstanding the premature canvass of the votes, we note that appellant company failed to
support its grounds for challenge with sufficient evidence for us to determine the validity of its claim.
No job description of the challenged voters was submitted by appellant from which we can verify
whether the said voters are indeed disqualified from the alleged five-point characterization made in
the 02 May 2000 decision, either before the Med-Arbiter or on appeal. Neither was the job description
of the shift bosses whom appellant company claims pertain to the alleged five-point characterization
submitted for our perusal. The challenge must perforce fail for lack of evidence.
As to the alleged membership of appellee LCU’s member with another union LEU, the issue has been
resolved in the 02 May 2000 decision of Med-Arbiter Lontoc which we affirmed on 12 July 2000.
WHEREFORE, the appeal is hereby DENIED for lack of merit and the decision of the Med-Arbiter
dated 26 April 2001, certifying Lepanto Capataz Union as the sole and exclusive bargaining agent of
all capataz workers of Lepanto Consolidated Mining Company, is AFFIRMED.
SO RESOLVED.16
Ruling of the CA
Still dissatisfied with the result, but without first filing a motion for reconsideration, Lepanto
challenged in the CA the foregoing decision of the DOLE Secretary through a petition for certiorari.
On December 18, 2002, the CA dismissed Lepanto’s petition for certiorari, stating in its first assailed
resolution:
Considering that the petitioner failed to file a prior motion for reconsideration of the Decision of the
public respondent before instituting the present petition as mandated by Section 1 of Rule 65 of the
1997 Rules of Civil Procedure, as amended, the instant “Petition for Certiorari Under Rule 65 with
Prayer for Temporary Restraining Order and Injunction” is hereby DISMISSED.
Well-settled is the rule that the “filing of a petition for certiorari under Rule 65 without first moving
for reconsideration of the assailed resolution generally warrants the petition’s outright dismissal. As
we consistently held in numerous cases, a motion for reconsideration by a concerned party is
indispensable for it affords the NLRC an opportunity to rectify errors or mistakes it might have
committed before resort to the courts can be had.
It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate
remedy in the ordinary course of law against acts of public respondents. Here, the plain and adequate
remedy expressly provided by law was a motion for reconsideration of the impugned resolution,
based on palpable or patent errors, to be made under oath and filed within ten (10) days from receipt
of the questioned resolution of the NLRC, a procedure which is jurisdictional. Further, it should be
LABOR 2 - Batch 2
stressed that without a motion for reconsideration seasonably filed within the ten-day reglementary
period, the questioned order, resolution or decision of NLRC, becomes final and executory after ten
(10) calendar days from receipt thereof.” (Association of Trade Unions (ATU), Rodolfo
Monteclaro and Edgar Juesan v. Hon. Commissioners Oscar N. Abella, Musib N. Buat, Leon
Gonzaga, Jr., Algon Engineering Construction Corp., Alex Gonzales and Editha Yap. 323
SCRA 50).
SO ORDERED.17
Lepanto moved to reconsider the dismissal, but the CA denied its motion for reconsideration through
the second assailed resolution.18
Issues
Hence, this appeal by Lepanto based on the following errors, namely:
I
THE COURT OF APPEALS ERRED IN SUMMARILY DISMISSING THE PETITION FOR CERTIORARI ON
THE GROUND THAT NO PRIOR MOTION FOR RECONSIDERATION WAS FILED. THE DECISION OF THE
SECRETARY BEING FINAL AND EXECUTORY, A MOTION FOR RECONSIDERATION WAS NOT AN
AVAILABLE REMEDY FOR PETITIONER.
II
ON THE MERITS, THE SECRETARY OF LABOR ACTED WITHOUT OR IN EXCESS OF JURISDICTION,
[O]R WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
ISSUNG THE DECISION DATED SEPTEMBER 17, 2002, WHEN SHE DELIBERATELY IGNORED THE
FACTS AND RULED IN FAVOR OF THE RESPONDENT UNION, DESPITE HER OWN FINDING THAT
THERE HAD BEEN A PREMATURE CANVASS OF VOTES. 19
Lepanto argues that a motion for reconsideration was not an available remedy due to the decision of
the DOLE Secretary being already classified as final and executory under Section 15, Rule XI, Book V
of Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 9, series of
1997;20 that the Union’s petition for consent election was really a certification election; that the Union
failed to give a definite description of the bargaining unit sought to be represented; and that
the capatazes should be considered as rank-and-file employees.
The issues to be resolved are, firstly, whether a motion for reconsideration was a pre-requisite in the
filing of its petition for certiorari; and, secondly, whether the capatazes could form their own union
independently of the rank-and-file employees.
Ruling
The petition for review has no merit.
I.
The filing of the motion for reconsideration
is a pre-requisite to the filing of a petition for
certiorari to assail the decision of the DOLE Secretary
We hold to be untenable and not well taken Lepanto’s submissions that: (1) a motion for
Page 30 of 39
reconsideration was not an available remedy from the decision of the DOLE Secretary because of
Section 15, Rule XI, Book V of the Omnibus Rules Implementing the Labor Code, as amended; and
(2) the ruling in National Federation of Labor v. Laguesma21 (recognizing the remedy of certiorari
against the decision of the DOLE Secretary to be filed initially in the CA) actually affirms its position
that an immediate recourse to the CA on certiorari is proper even without the prior filing of a motion
for reconsideration.
To start with,  the requirement of the timely filing of a motion for reconsideration as a precondition to
the filing of a petition for certiorari accords with the principle of exhausting administrative remedies
as a means to afford every opportunity to the respondent agency to resolve the matter and correct
itself if need be.22
And, secondly, the ruling in National Federation of Labor v. Laguesma reiterates St. Martin’s Funeral
Home v. National Labor Relations Commission,23 where the Court has pronounced that the special civil
action of certiorari is the appropriate remedy from the decision of the National Labor Relations
Commission (NLRC) in view of the lack of any appellate remedy provided by the Labor Code to a party
aggrieved by the decision of the NLRC. Accordingly, any decision, resolution or ruling of the DOLE
Secretary from which the Labor Code affords no remedy to the aggrieved party may be reviewed
through a petition for certiorari initiated only in the CA in deference to the principle of the hierarchy
of courts.
Yet, it is also significant to note that National Federation of Labor v. Laguesma also reaffirmed the
dictum issued in St. Martin’s Funeral Homes v. National Labor Relations Commission to the effect that
“the remedy of the aggrieved party is to timely file a motion for reconsideration as a precondition for
any further or subsequent remedy, and then seasonably avail of the special civil action
of certiorari under Rule 65 x x x.”24
Indeed, the Court has consistently stressed the importance of the seasonable filing of a motion for
reconsideration prior to filing the certiorari petition. In SMC Quarry 2 Workers Union-February Six
Movement (FSM) Local Chapter No. 1564 v. Titan Megabags Industrial Corporation 25 and Manila Pearl
Corporation v. Manila Pearl Independent Workers Union,26 the Court has even warned that a failure to
file the motion for reconsideration would be fatal to the cause of the petitioner. 27 Due to its
extraordinary nature as a remedy, certiorari is to be availed of only when there is no appeal, or any
plain, speedy or adequate remedy in the ordinary course of law. 28 There is no question that a motion
for reconsideration timely filed by Lepanto was an adequate remedy in the ordinary course of law in
view of the possibility of the Secretary of Justice reconsidering her disposition of the matter, thereby
according the relief Lepanto was seeking.
Under the circumstances, Lepanto’s failure to timely file a motion for reconsideration prior to filing its
petition for certiorari in the CA rendered the September 17, 2002 resolution of the DOLE Secretary
beyond challenge.
II.
Capatazes are not rank-and-file employees;
hence, they could form their own union
Anent the second issue, we note that Med-Arbiter Lontoc found in her Decision issued on May 2, 2000
that the capatazes were performing functions totally different from those performed by the rank-and-
file employees, and that the capatazes were “supervising and instructing the miners, mackers and
other rank-and-file workers under them, assess[ing] and evaluat[ing] their performance, mak[ing]
regular reports and recommend[ing] new systems and procedure of work, as well as guidelines for
the discipline of employees.”29  Hence, Med-Arbiter Lontoc concluded, the capatazes “differ[ed] from
the rank-and-file and [could] by themselves constitute a separate bargaining unit.” 30
LABOR 2 - Batch 2
Agreeing with Med-Arbiter Lontoc’s findings, then DOLE Undersecretary Baldoz, acting by authority of
the DOLE Secretary, observed in the resolution dated July 12, 2000, thus: 31
The bargaining unit sought to be represented by the appellee are the capataz employees of the
appellant. There is no other labor organization of capatazes within the employer unit except herein
appellant. Thus, appellant is an unorganized establishment in so far as the bargaining unit of
capatazes is concerned. In accordance with the last paragraph of Section 11, Rule XI, Department
Order No. 9 which provides that “in a petition filed by a legitimate labor organization involving an
unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code, automatically
order the conduct of certification election after determining that the petition has complied with all
requirements under Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal
thereof exists”, the order for the conduct of a certification election is proper. 32
We cannot undo the affirmance by the DOLE Secretary of the correct findings of her subordinates in
the DOLE, an office that was undeniably possessed of the requisite expertise on the matter in issue.
In dealing with the matter, her subordinates in the DOLE fairly and objectively resolved whether the
Union could lawfully seek to be the exclusive representative of the bargaining unit of capatazes in the
company. Their factual findings, being supported by substantial evidence, are hereby accorded great
respect and finality. Such findings cannot be made the subject of our judicial review by petition under
Rule 45 of the Rules of Court, because:
x x x [T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires
that it shall raise only questions of law. The factual findings by quasi-judicial agencies, such as the
Department of Labor and Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective field. Judicial review of labor cases does not go
far as to evaluate the sufficiency of evidence on which the labor official’s findings rest. It is not our
function to assess and evaluate all over again the evidence, testimonial and documentary, adduced by
the parties to an appeal, particularly where the findings of both the trial court (here, the DOLE
Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule limits that
function of the Court to review or revision of errors of law and not to a second analysis of the
evidence. Here, petitioners would have us re-calibrate all over again the factual basis and the
probative value of the pieces of evidence submitted by the Company to the DOLE, contrary to the
provisions of Rule 45. Thus, absent any showing of whimsical or capricious exercise of judgment, and
unless lack of any basis for the conclusions made by the appellate court may be amply demonstrated,
we may not disturb such factual findings. 33
In any event, we affirm that capatazes or foremen are not rank-and-file employees because they are
an extension of the management, and as such they may influence the rank-and-file workers under
them to engage in slowdowns or similar activities detrimental to the policies, interests or business
objectives of the employers.34
WHEREFORE, the Court DENIES the petition for review for lack of merit, and AFFIRMS the
resolutions the Court of Appeals promulgated on December 18, 2002 and January 31, 2003.
Petitioner to pay the costs of suit.
SO ORDERED.
Page 31 of 39

G.R. No. 183810               January 21, 2010
FARLEY FULACHE, MANOLO JABONERO, DAVID CASTILLO, JEFFREY LAGUNZAD,
MAGDALENA MALIG-ON BIGNO, FRANCISCO CABAS, JR., HARVEY PONCE and ALAN C.
ALMENDRAS, Petitioners,
vs.
ABS-CBN BROADCASTING CORPORATION, Respondent.
The petition for review on certiorari1 now before us seeks to set aside the decision 2 and resolution3 of
the Court of Appeals, Nineteenth Division (CA) promulgated on March 25, 2008 and July 8, 2008,
respectively, in CA- G.R. SP No. 01838.4
The Antecedents
The Regularization Case.
In June 2001, petitioners Farley Fulache, Manolo Jabonero, David Castillo, Jeffrey Lagunzad,
Magdalena Malig-on Bigno, Francisco Cabas, Jr., Harvey Ponce and Alan C. Almendras (petitioners)
and Cresente Atinen (Atinen) filed two separate complaints for regularization, unfair labor practice
and several money claims (regularization case) against ABS-CBN Broadcasting Corporation-Cebu
(ABS-CBN). Fulache and Castillo were drivers/cameramen; Atinen, Lagunzad and Jabonero were
drivers; Ponce and Almendras were cameramen/editors; Bigno was a PA/Teleprompter Operator-
Editing, and Cabas was a VTR man/editor. The complaints (RAB VII Case Nos. 06-1100-01 and 06-
1176-01) were consolidated and were assigned to Labor Arbiter Julie C. Rendoque.
The petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN Rank-and-File
Employees Union (Union) executed a collective bargaining agreement (CBA) effective December 11,
1999 to December 10, 2002; they only became aware of the CBA when they obtained copies of the
agreement; they learned that they had been excluded from its coverage as ABS-CBN considered them
LABOR 2 - Batch 2
temporary and not regular employees, in violation of the Labor Code. They claimed they had already
rendered more than a year of service in the company and, therefore, should have been recognized as
regular employees entitled to security of tenure and to the privileges and benefits enjoyed by regular
employees. They asked that they be paid overtime, night shift differential, holiday, rest day and
service incentive leave pay. They also prayed for an award of moral damages and attorney’s fees.
ABS-CBN explained the nature of the petitioners’ employment within the framework of its operations.
It claimed that: it operates in several divisions, one of which is the Regional Network Group (RNG).
The RNG exercises control and supervision over all the ABS-CBN local stations to ensure that ABS-
CBN programs are extended to the provinces. A local station, like the Cebu station, can resort to cost-
effective and cost-saving measures to remain viable; local stations produced shows and programs
that were constantly changing because of the competitive nature of the industry, the changing public
demand or preference, and the seasonal nature of media broadcasting programs. ABS-CBN claimed,
too, that the production of programs per se is not necessary or desirable in its business because it
could generate profits by selling airtime to block-timers or through advertising.
ABS-CBN further claimed that to cope with fluctuating business conditions, it contracts on a case-to-
case basis the services of persons who possess the necessary talent, skills, training, expertise or
qualifications to meet the requirements of its programs and productions. These contracted persons
are called "talents" and are considered independent contractors who offer their services to
broadcasting companies.
Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged consideration called
"talent fee" taken from the budget of a particular program and subject to a ten percent (10%)
withholding tax. Talents do not undergo probation. Their services are engaged for a specific program
or production, or a segment thereof. Their contracts are terminated once the program, production or
segment is completed.
ABS-CBN alleged that the petitioners’ services were contracted on various dates by its Cebu station as
independent contractors/off camera talents, and they were not entitled to regularization in these
capacities.
On January 17, 2002, Labor Arbiter Rendoque rendered his decision 5 holding that the petitioners were
regular employees of ABS-CBN, not independent contractors, and are entitled to the benefits and
privileges of regular employees.
ABS-CBN appealed the ruling to the National Labor Relations Commission (NLRC) Fourth Division,
mainly contending that the petitioners were independent contractors, not regular employees. 6
The Illegal Dismissal Case.
While the appeal of the regularization case was pending, ABS-CBN dismissed Fulache, Jabonero,
Castillo, Lagunzad and Atinen (all drivers) for their refusal to sign up contracts of employment with
service contractor Able Services. The four drivers and Atinen responded by filing a complaint for
illegal dismissal (illegal dismissal case). The case (RAB VII Case No. 07-1300-2002) was likewise
handled by Labor Arbiter Rendoque.
In defense, ABS-CBN alleged that even before the labor arbiter rendered his decision of January 17,
2002 in the regularization case, it had already undertaken a comprehensive review of its existing
organizational structure to address its operational requirements. It then decided to course through
Page 32 of 39
legitimate service contractors all driving, messengerial, janitorial, utility, make-up, wardrobe and
security services for both the Metro Manila and provincial stations, to improve its operations and to
make them more economically viable. Fulache, Jabonero, Castillo, Lagunzad and Atinen were not
singled out for dismissal; as drivers, they were dismissed because they belonged to a job category
that had already been contracted out. It argued that even if the petitioners had been found to have
been illegally dismissed, their reinstatement had become a physical impossibility because their
employer-employee relationships had been strained and that Atinen had executed a quitclaim and
release.
In her April 21, 2003 decision in the illegal dismissal case, 7 Labor Arbiter Rendoque upheld the validity
of ABS-CBN's contracting out of certain work or services in its operations. The labor arbiter found that
petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been dismissed due to redundancy,
an authorized cause under the law.8 He awarded them separation pay of one (1) month’s salary for
every year of service.
Again, ABS-CBN appealed to the NLRC which rendered on December 15, 2004 a joint decision on the
regularization and illegal dismissal cases.9 The NLRC ruled that there was an employer-employee
relationship between the petitioners and ABS-CBN as the company exercised control over the
petitioners in the performance of their work; the petitioners were regular employees because they
were engaged to perform activities usually necessary or desirable in ABS-CBN's trade or business;
they cannot be considered contractual employees since they were not paid for the result of their
work, but on a monthly basis and were required to do their work in accordance with the company’s
schedule. The NLRC thus affirmed with modification the labor arbiter's regularization decision of
January 17, 2002, additionally granting the petitioners CBA benefits and privileges.
The NLRC reversed the labor arbiter’s ruling in the illegal dismissal case; it found that petitioners
Fulache, Jabonero, Castillo, Lagunzad and Atinen had been illegally dismissed and awarded them
backwages and separation pay in lieu of reinstatement. Under both cases, the petitioners were
awarded CBA benefits and privileges from the time they became regular employees up to the time of
their dismissal.
The petitioners moved for reconsideration, contending that Fulache, Jabonero, Castillo and Lagunzad
are entitled to reinstatement and full backwages, salary increases and other CBA benefits as well as
13th month pay, cash conversion of sick and vacation leaves, medical and dental allowances,
educational benefits and service awards. Atinen appeared to have been excluded from the motion and
there was no showing that he sought reconsideration on his own.
ABS-CBN likewise moved for the reconsideration of the decision, reiterating that Fulache, Jabonero,
Castillo and Lagunzad were independent contractors, whose services had been terminated due to
redundancy; thus, no backwages should have been awarded. It further argued that the petitioners
were not entitled to the CBA benefits because they never claimed these benefits in their position
paper before the labor arbiter while the NLRC failed to make a clear and positive finding that that they
were part of the bargaining unit; neither was there evidence to support this finding.
The NLRC resolved the motions for reconsideration on March 24, 2006 10 by reinstating the two
separate decisions of the labor arbiter dated January 17, 2002,11 and April 21, 2003,12 respectively.
Thus, on the regularization issue, the NLRC stood by the ruling that the petitioners were regular
employees entitled to the benefits and privileges of regular employees. On the illegal dismissal case,
the petitioners, while recognized as regular employees, were declared dismissed due to redundancy.
The NLRC denied the petitioners’ second motion for reconsideration in its order of May 31, 2006 for
being a prohibited pleading. 13
LABOR 2 - Batch 2
The CA Petition and Decision
The petitioners went to the CA through a petition for certiorari under Rule 65 of the Rules of
Court.14 They charged the NLRC with grave abuse of discretion in: (1) denying them the benefits
under the CBA; (2) finding no evidence that they are part of the company’s bargaining unit; (3) not
reinstating and awarding backwages to Fulache, Jabonero, Castillo and Lagunzad; and (4) ruling that
they are not entitled to damages and attorney’s fees.
ABS-CBN, on the other hand, questioned the propriety of the petitioners’ use of a certiorari petition. It
argued that the proper remedy for the petitioners was an appeal from the reinstated decisions of the
labor arbiter.
In its decision of March 25, 2008,15 the appellate court brushed aside ABS-CBN’s procedural question,
holding that the petition was justified because there is no plain, speedy or adequate remedy from a
final decision, order or resolution of the NLRC; the reinstatement of the labor arbiter’s decisions did
not mean that the proceedings reverted back to the level of the arbiter. It likewise affirmed the NLRC
ruling that the petitioners’ second motion for reconsideration is a prohibited pleading under the NLRC
rules.16
On the merits of the case, the CA ruled that the petitioners failed to prove their claim to CBA benefits
since they never raised the issue in the compulsory arbitration proceedings, and did not appeal the
labor arbiter’s decision which was silent on their entitlement to CBA benefits. The CA found that the
petitioners failed to show with specificity how Section 1 (Appropriate Bargaining Unit) and the other
provisions of the CBA applied to them.
On the illegal dismissal issue, the CA upheld the NLRC decision reinstating the labor arbiter’s April 21,
2003 ruling.17 Thus, the drivers – Fulache, Jabonero, Castillo and Lagunzad – were not illegally
dismissed as their separation from the service was due to redundancy; they had not presented any
evidence that ABS-CBN abused its prerogative in contracting out the services of drivers. Except for
separation pay, the CA denied the petitioners’ claim for backwages, moral and exemplary damages,
and attorney’s fees.
The petitioners moved for reconsideration, but the CA denied the motion in a resolution promulgated
on July 8, 2008.18 Hence, the present petition.
The Petition
The petitioners challenge the CA ruling on both procedural and substantive grounds. As procedural
questions, they submit that the CA erred in: (1) affirming the NLRC resolution which reversed its own
decision; (2) sustaining the NLRC ruling that their second motion for reconsideration is a prohibited
pleading; (3) not ruling that ABS-CBN admitted in its position paper before the labor arbiter that they
were members of the bargaining unit as the matter was not raised in its appeal to the NLRC; and, (4)
not ruling that notwithstanding their failure to appeal from the first decision of the Labor Arbiter, they
can still participate in the appeal filed by ABS-CBN regarding their employment status.
On the substantive aspect, the petitioners contend that the CA gravely erred in: (1) not considering
the evidence submitted to the NLRC on appeal to bolster their claim that they were members of the
bargaining unit and therefore entitled to the CBA benefits; (2) not ordering ABS-CBN to pay the
petitioners’ salaries, allowances and CBA benefits after the NLRC has declared that they were regular
employees of ABS-CBN; (3) not ruling that under existing jurisprudence, the position of driver cannot
Page 33 of 39
be declared redundant, and that the petitioners-drivers were illegally dismissed; and, (4) not ruling
that the petitioners were entitled to damages and attorney’s fees.
The petitioners argue that the NLRC resolution of March 24, 2006 19 which set aside its joint decision of
December 15, 200420 and reinstated the twin decisions of the labor arbiter,21 had the effect of
promulgating a new decision based on issues that were not raised in ABS-CBN’s partial appeal to the
NLRC. They submit that the NLRC should have allowed their second motion for reconsideration so that
it may be able to equitably evaluate the parties’ "conflicting versions of the facts" instead of denying
the motion on a mere technicality.
On the question of their CBA coverage, the petitioners contend that the CA erred in not considering
that ABS-CBN admitted their membership in the bargaining unit, for nowhere in its partial appeal
from the labor arbiter’s decision in the regularization case did it allege that the petitioners failed to
prove that they are members of the bargaining unit; instead, the company stood by its position that
the petitioners were not entitled to the CBA benefits since they were independent
contractors/program employees.
The petitioners submit that while they did not appeal the labor arbiter’s decision in the regularization
case, ABS-CBN raised the employment status issue in its own appeal to the NLRC; this appeal laid this
issue open for review. They argue that they could still participate in the appeal proceedings at the
NLRC; pursue their position on the issue; and introduce evidence as they did in their reply to the
company’s appeal.22 They bewail the appellate court’s failure to consider the evidence they presented
to the NLRC (consisting of documents and sworn statements enumerating the activities they are
performing) clearly indicating that they are part of the rank-and-file bargaining unit at ABS-CBN.
The petitioners then proceeded to describe the work they render for the company. Collectively, they
claim that they work as assistants in the production of the Cebuano news program broadcast daily
over ABS-CBN Channel 3, as follows: Fulache, Jabonero, Castillo and Lagunzad as production
assistants to drive the news team; Ponce and Almendras, to shoot scenes and events with the use of
cameras owned by ABS-CBN; Malig-on Bigno, as studio production assistant and assistant
editor/teleprompter operator; and Cabas, Jr., as production assistant for video editing and operating
the VTR machine recorder. As production assistants, the petitioners submit that they are rank-and-file
employees (citing in support of their position the Court’s ruling in ABS-CBN Broadcasting Corp. v.
Nazareno23) who are entitled to salary increases and other benefits under the CBA. Relying on the
Court’s ruling in New Pacific Timber and Supply Company, Inc. v. NLRC,24 they posit that to exclude
them from the CBA "would constitute undue discrimination and would deprive them of monetary
benefits they would otherwise be entitled to."
As their final point, the petitioners argue that even if they were not able to prove that they were
members of the bargaining unit, the CA should not have dismissed their petition. When the CA
affirmed the rulings of both the labor arbiter and the NLRC that they are regular employees, the CA
should have ordered ABS-CBN to recognize their regular employee status and to give them the
salaries, allowances and other benefits and privileges under the CBA.1avvphi1
On the dismissal of Fulache, Jabonero, Castillo and Lagunzad, the petitioners impute bad faith on
ABS-CBN when it abolished the positions of drivers claiming that the company failed to comply with
the requisites of a valid redundancy action. They maintain that ABS-CBN did not present any evidence
on the new staffing pattern as approved by the management of the company, and did not even
bother to show why it considered the positions of drivers superfluous and unnecessary; it is not true
that the positions of drivers no longer existed because these positions were contracted out to an
agency that, in turn, recruited four drivers to take the place of Fulache, Jabonero, Castillo and
LABOR 2 - Batch 2
Lagunzad. As further indication that the redundancy action against the four drivers was done in bad
faith, the petitioners call attention to ABS-CBN’s abolition of the position of drivers after the labor
arbiter rendered her decision declaring Fulache, Jabonero, Castillo and Lagunzad regular company
employees. The petitioners object to the dismissal of the four drivers when they refused to sign
resignation letters and join Able Services, a contracting agency, contending that the four had no
reason to resign after the labor arbiter declared them regular company employees.
Since their dismissal was illegal and attended by bad faith, the petitioners insist that they should be
reinstated with backwages, and should likewise be awarded moral and exemplary damages, and
attorney's fees.
The Case for ABS-CBN
In its Comment filed on January 28, 2009,25 ABS-CBN presents several grounds which may be
synthesized as follows:
1. The petition raises questions of fact and not of law.
2. The CA committed no error in affirming the resolution of the NLRC reinstating the
decisions of the labor arbiter.
ABS-CBN submits that the petition should be dismissed for having raised questions of fact and not of
law in violation of Rule 45 of the Rules of Court. It argues that the question of whether the petitioners
were covered by the CBA (and therefore entitled to the CBA benefits) and whether the petitioners
were illegally dismissed because of redundancy, are factual questions that cannot be reviewed
on certiorari because the Court is not a trier of facts.
ABS-CBN dismisses the petitioners’ issues and arguments as mere rehash of what they raised in their
pleadings with the CA and as grounds that do not warrant further consideration. It further contends
that because the petitioners did not appeal the labor arbiter decisions, these decisions had lapsed to
finality and could no longer be the subject of a petition for certiorari; the petitioners cannot obtain
from the appellate court affirmative relief other than those granted in the appealed decision. It also
argues that the NLRC did not commit any grave abuse of discretion in reinstating the twin decisions of
the labor arbiter, thereby affirming that no CBA benefits can be awarded to the petitioners; in the
absence of any illegal dismissal, the petitioners were not entitled to reinstatement, backwages,
damages, and attorney's fees.
The Court's Ruling
We first resolve the parties’ procedural questions.
ABS-CBN wants the petition to be dismissed outright for its alleged failure to comply with the
requirement of Rule 45 of the Rules of Court that the petition raises only questions of law. 26
We find no impropriety in the petition from the standpoint of Rule 45. The petitioners do not question
the findings of facts of the assailed decisions. They question the misapplication of the law and
jurisprudence on the facts recognized by the decisions. For example, they question as contrary to law
their exclusion from the CBA after they were recognized as regular rank-and-file employees of ABS-
CBN. They also question the basis in law of the dismissal of the four drivers and the legal propriety of
Page 34 of 39
the redundancy action taken against. To reiterate the established distinctions between questions of
law and questions of fact, we quote hereunder our ruling in New Rural Bank of Guimba (N.E.) Inc. v.
Fermina S. Abad and Rafael Susan:27
We reiterate the distinction between a question of law and a question of fact. A question of
law exists when the doubt or controversy concerns the correct application of law or
jurisprudence to a certain set of facts; or when the issue does not call for an examination
of the probative value of the evidence presented, the truth or falsehood of the facts being
admitted. A question of fact exists when a doubt or difference arises as to the truth or
falsehood of facts or when the query invites calibration of the whole evidence considering
mainly the credibility of the witnesses, the existence and relevancy of specific surrounding
circumstances, as well as their relation to each other and to the whole, and the probability
of the situation.
We also find no error in the CA’s affirmation of the denial of the petitioners’ second motion for
reconsideration of the March 24, 2006 resolution of the NLRC reinstating the labor arbiter’s twin
decisions. The petitioners’ second motion for reconsideration was a prohibited pleading under the
NLRC rules of procedure.28
The parties’ other procedural questions directly bear on the merits of their positions and are discussed
and resolved below, together with the core substantive issues of: (1) whether the petitioners, as
regular employees, are members of the bargaining unit entitled to CBA benefits; and (2) whether
petitioners Fulache, Jabonero, Castillo and Lagunzad were illegally dismissed.
The Claim for CBA Benefits
We find merit in the petitioners’ positions.
As regular employees, the petitioners fall within the coverage of the bargaining unit and are therefore
entitled to CBA benefits as a matter of law and contract. In the root decision (the labor arbiter’s
decision of January 17, 2002) that the NLRC and CA affirmed, the labor arbiter declared:
WHEREFORE, IN THE LIGHT OF THE FOREGOING, taking into account the factual scenario and
the evidence adduced by both parties, it is declared that complainants in these cases are REGULAR
EMPLOYEES of respondent ABS-CBN and not INDEPENDENT CONTRACTORS and thus henceforth
they are entitled to the benefits and privileges attached to regular status of their employment.
This declaration unequivocally settled the petitioners’ employment status: they are ABS-CBN’s regular
employees entitled to the benefits and privileges of regular employees. These benefits and privileges
arise from entitlements under the law (specifically, the Labor Code and its related laws), and from
their employment contract as regular ABS-CBN employees, part of which is the CBA if they fall within
the coverage of this agreement. Thus, what only needs to be resolved as an issue for purposes of
implementation of the decision is whether the petitioners fall within CBA coverage.
The parties’ 1999-2002 CBA provided in its Article I (Scope of the Agreement) that: 29
Section 1. APPROPRIATE BARGAINING UNIT. – The parties agree that the appropriate bargaining unit
shall be regular rank-and-file employees of ABS-CBN BROADCASTING CORPORATION but shall
not include:
LABOR 2 - Batch 2
a) Personnel classified as Supervisor and Confidential employees;
b) Personnel who are on "casual" or "probationary" status as defined in Section 2 hereof;
c) Personnel who are on "contract" status or who are paid for specified units of work such as
writer-producers, talent-artists, and singers.
The inclusion or exclusion of new job classifications into the bargaining unit shall be subject of
discussion between the COMPANY and the UNION. [emphasis supplied]
Under these terms, the petitioners are members of the appropriate bargaining unit because they are
regular rank-and-file employees and do not belong to any of the excluded categories. Specifically,
nothing in the records shows that they are supervisory or confidential employees; neither are they
casual nor probationary employees. Most importantly, the labor arbiter’s decision of January 17, 2002
– affirmed all the way up to the CA level – ruled against ABS-CBN’s submission that they are
independent contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage
under the CBA’s express terms and are entitled to its benefits.
We see no merit in ABS-CBN’s arguments that the petitioners are not entitled to CBA benefits
because: (1) they did not claim these benefits in their position paper; (2) the NLRC did not
categorically rule that the petitioners were members of the bargaining unit; and (3) there was no
evidence of this membership. To further clarify what we stated above, CBA coverage is not only a
question of fact, but of law and contract. The factual issue is whether the petitioners are regular rank-
and-file employees of ABS-CBN. The tribunals below uniformly answered this question in the
affirmative. From this factual finding flows legal effects touching on the terms and conditions of the
petitioners’ regular employment. This was what the labor arbiter meant when he stated in his decision
that "henceforth they are entitled to the benefits and privileges attached to regular status of their
employment." Significantly, ABS-CBN itself posited before this Court that "the Court of Appeals did
not gravely err nor gravely abuse its discretion when it affirmed the resolution of the NLRC dated
March 24, 2006 reinstating and adopting in toto the decision of the Labor Arbiter dated January 17,
2002 x x x."30 This representation alone fully resolves all the objections – procedural or otherwise –
ABS-CBN raised on the regularization issue.
The Dismissal of Fulache, Jabonero,
Castillo and Lagunzad
The termination of employment of the four drivers occurred under highly questionable circumstances
and with plain and unadulterated bad faith.
The records show that the regularization case was in fact the root of the resulting bad faith as this
case gave rise and led to the dismissal case. First, the regularization case was filed leading to the
labor arbiter’s decision31 declaring the petitioners, including Fulache, Jabonero, Castillo and Lagunzad,
to be regular employees. ABS-CBN appealed the decision and maintained its position that the
petitioners were independent contractors.
In the course of this appeal, ABS-CBN took matters into its own hands and terminated the petitioners’
services, clearly disregarding its own appeal then pending with the NLRC. Notably, this appeal posited
that the petitioners were not employees (whose services therefore could be terminated through
dismissal under the Labor Code); they were independent contractors whose services could be
terminated at will, subject only to the terms of their contracts. To justify the termination of service,
Page 35 of 39
the company cited redundancy as its authorized cause but offered no justificatory supporting
evidence. It merely claimed that it was contracting out the petitioners’ activities in the exercise of its
management prerogative.
ABS-CBN’s intent, of course, based on the records, was to transfer the petitioners and their activities
to a service contractor without paying any attention to the requirements of our labor laws; hence,
ABS-CBN dismissed the petitioners when they refused to sign up with the service contractor. 32 In this
manner, ABS-CBN fell into a downward spiral of irreconcilable legal positions, all undertaken in the
hope of saving itself from the decision declaring its "talents" to be regular employees.
By doing all these, ABS-CBN forgot labor law and its realities.
It forgot that by claiming redundancy as authorized cause for dismissal, it impliedly admitted that the
petitioners were regular employees whose services, by law, can only be terminated for the just and
authorized causes defined under the Labor Code.
Likewise ABS-CBN forgot that it had an existing CBA with a union, which agreement must be
respected in any move affecting the security of tenure of affected employees; otherwise, it ran the
risk of committing unfair labor practice – both a criminal and an administrative offense. 33 It similarly
forgot that an exercise of management prerogative can be valid only if it is undertaken in good faith
and with no intent to defeat or circumvent the rights of its employees under the laws or under valid
agreements.34
Lastly, it forgot that there was a standing labor arbiter’s decision that, while not yet final because of
its own pending appeal, cannot simply be disregarded. By implementing the dismissal action at the
time the labor arbiter’s ruling was under review, the company unilaterally negated the effects of the
labor arbiter’s ruling while at the same time appealling the same ruling to the NLRC. This unilateral
move is a direct affront to the NLRC’s authority and an abuse of the appeal process.
All these go to show that ABS-CBN acted with patent bad faith. A close parallel we can draw to
characterize this bad faith is the prohibition against forum-shopping under the Rules of Court. In
forum-shopping, the Rules characterize as bad faith the act of filing similar and repetitive actions for
the same cause with the intent of somehow finding a favorable ruling in one of the actions
filed.35 ABS-CBN’s actions in the two cases, as described above, are of the same character, since its
obvious intent was to defeat and render useless, in a roundabout way and other than through the
appeal it had taken, the labor arbiter’s decision in the regularization case. Forum-shopping is
penalized by the dismissal of the actions involved. The penalty against ABS-CBN for its bad faith in
the present case should be no less.
The errors and omissions do not belong to ABS-CBN alone. The labor arbiter himself who handled
both cases did not see the totality of the company’s actions for what they were. He appeared to have
blindly allowed what he granted the petitioners with his left hand, to be taken away with his right
hand, unmindful that the company already exhibited a badge of bad faith in seeking to terminate the
services of the petitioners whose regular status had just been recognized. He should have recognized
the bad faith from the timing alone of ABS-CBN’s conscious and purposeful moves to secure the
ultimate aim of avoiding the regularization of its so-called "talents."
The NLRC, for its part, initially recognized the presence of bad faith when it originally ruled that:
LABOR 2 - Batch 2
While notice has been made to the employees whose positions were declared redundant, the element
of good faith in abolishing the positions of the complainants appear to be wanting. In fact, it remains
undisputed that herein complainants were terminated when they refused to sign an employment
contract with Able Services which would make them appear as employees of the agency and not of
ABS-CBN. Such act by itself clearly demonstrates bad faith on the part of the respondent in carrying
out the company’s redundancy program x x x.36
On motion for reconsideration by both parties, the NLRC reiterated its "pronouncement that
complainants were illegally terminated as extensively discussed in our Joint Decision dated December
15, 2004."37 Yet, in an inexplicable turnaround, it reconsidered its joint decision and reinstated not
only the labor arbiter’s decision of January 17, 2002 in the regularization case, but also his illegal
dismissal decision of April 21, 2003.38 Thus, the NLRC joined the labor arbiter in his error that we
cannot but characterize as grave abuse of discretion.
The Court cannot leave unchecked the labor tribunals’ patent grave abuse of discretion that resulted,
without doubt, in a grave injustice to the petitioners who were claiming regular employment status
and were unceremoniously deprived of their employment soon after their regular status was
recognized. Unfortunately, the CA failed to detect the labor tribunals’ gross errors in the disposition of
the dismissal issue. Thus, the CA itself joined the same errors the labor tribunals committed.
The injustice committed on the petitioners/drivers requires rectification. Their dismissal was not only
unjust and in bad faith as the above discussions abundantly show. The bad faith in ABS-CBN’s move
toward its illegitimate goal was not even hidden; it dismissed the petitioners – already recognized as
regular employees – for refusing to sign up with its service contractor. Thus, from every perspective,
the petitioners were illegally dismissed.
By law,39 illegally dismissed employees are entitled to reinstatement without loss of seniority rights
and other privileges and to full backwages, inclusive of allowances, and to other benefits or their
monetary equivalent from the time their compensation was withheld from them up to the time of their
actual reinstatement. The four dismissed drivers deserve no less.
Moreover, they are also entitled to moral damages since their dismissal was attended by bad
faith.40 For having been compelled to litigate and to incur expenses to protect their rights and interest,
the petitioners are likewise entitled to attorney’s fees. 41
WHEREFORE, premises considered, we hereby GRANT the petition. The decision dated March 25,
2008 and the resolution dated July 8, 2008 of the Court of Appeals in CA-G.R. SP No. 01838 are
hereby REVERSED and SET ASIDE. Accordingly, judgment is hereby rendered as follows:
1. Confirming that petitioners FARLEY FULACHE, MANOLO JABONERO, DAVID CASTILLO,
JEFFREY LAGUNZAD, MAGDALENA MALIG-ON BIGNO, FRANCISCO CABAS, JR., HARVEY
PONCE and ALAN C. ALMENDRAS are regular employees of ABS-CBN BROADCASTING
CORPORATION, and declaring them entitled to all the rights, benefits and privileges,
including CBA benefits, from the time they became regular employees in accordance with
existing company practice and the Labor Code;
2. Declaring illegal the dismissal of Fulache, Jabonero, Castillo and Lagunzad, and ordering
ABS-CBN to immediately reinstate them to their former positions without loss of seniority
rights with full backwages and all other monetary benefits, from the time they were
dismissed up to the date of their actual reinstatement;
Page 36 of 39
 3. Awarding moral damages of ₱100,000.00 each to Fulache, Jabonero, Castillo and
Lagunzad; and,
4. Awarding attorney’s fees of 10% of the total monetary award decreed in this Decision.
Costs against the respondent. SO ORDERED.
G.R. No. 193798, September 09, 2015
COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner, v. ILOCOS PROFESSIONAL AND
TECHNICAL EMPLOYEES UNION (IPTEU), Respondent.
This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure (Rules) seeks
to reverse and set aside the March 17, 2010 Decision 1 and September 16, 2010 Resolution2 of the
Court of Appeals (CA) in CA-G.R. SP No. 104043, which affirmed the May 6, 2008 Resolution 3 of the
Secretary of Labor and Employment (SOLE) dismissing petitioner's appeal that assailed the Decision
(On the Challenged Voters)4 and Proclamation of the Winner,5 both dated October 22, 2007, of the
Mediator-Arbiter.
Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic corporation duly organized and
operating under the Philippine laws. It is primarily engaged in the beverage business, which includes
the manufacture of carbonated soft drinks. On the other hand, respondent Ilocos Professional and
Technical Employees Union (IPTEU) is a registered independent labor organization with address at
CCBPI Ilocos Plant in Barangay Catuguing, San Nicolas, Ilocos Norte.
On July 9, 2007, IPTEU filed a verified Petition6 for certification election seeking to represent a
bargaining unit consisting of approximately twenty-two (22) rank-and-file professional and technical
LABOR 2 - Batch 2
employees of CCBPI Ilocos Norte Plant. CCBPI prayed for the denial and dismissal of the petition,
arguing that the Sales Logistics Coordinator and Maintenance Foreman are supervisory employees,
while the eight (8) Financial Analysts, five (5) Quality Assurance Specialists, Maintenance Manager
Secretary, Trade Promotions and Merchandising Assistant (TPMA), Trade Asset Controller and
Maintenance Coordinator (TACMC), Sales Information Analyst (SIA), Sales Logistics Assistant, Product
Supply Coordinator, Buyer, Inventory Planner, and Inventory Analyst are confidential
employees;7 hence, ineligible for inclusion as members of IPTEU. It also sought to cancel and revoke
the registration of IPTEU for failure to comply with the twenty percent (20%) membership
requirement based on all the supposed employees in the bargaining unit it seeks to operate.
A preliminary hearing of the petition was scheduled and held on July 19, 2007. The possibility of
voluntary recognition or consent election was not acceded to by CCBPI.
Convinced that the union members are rank-and-file employees and not occupying positions that are
supervisory or confidential in nature, Mediator-Arbiter Florence Marie A. Gacad-Ulep granted IPTEU'S
petition. The dispositive portion of the August 23, 2007 Decision 8 ordered:
WHEREFORE, premises considered, the Petition is GRANTED. The bargaining unit shall be all the
rank-and-file Exempt (Professional and Technical) Workers of CCBPI who are now excluded from the
existing bargaining units of the Coca-Cola Bottlers Philippines, Inc. - Ilocos Plant. The choices in the
election shall be:
ILOCOS PROFESSIONAL AND TECHNICAL [EMPLOYEES] UNION (IPTEU)
No Union
The Labor Relations Division of this office is hereby directed to conduct the Pre-election Conference(s)
within the periods set by law. The CCBPI is hereby ordered to submit, not later than the date of the
first pre-election conference, its Certified List of Exempt (Professional and Technical) rank-and-file
workers, or in its absence, the employee payrolls from May to June 2007. In case Management fails
or refuses to submit the same, the Union's list shall be allowed, as provided for under the Rules.
SO ORDERED9
On September 3, 2007, CCBPI filed an appeal before the SOLE.10 The Mediator-Arbiter acknowledged
having received the Memorandum of Appeal but informed that, pursuant to the Implementing Rules
and Regulations of the Labor Code, as amended, "[the] order granting the conduct of a certification
election in an unorganized establishment shall not be subject to appeal. Any issue arising therefrom
may be raised by means of protest on the conduct and results of the certification election."11 On
September 5, 2007, CCBPI then filed an Urgent Motion to Suspend Proceedings, 12 alleging that the
notice issued by the Assistant Regional Director for the conduct of pre-election conference is
premature since the decision of the Mediator-Arbiter is not yet final and executory and that the
Mediator-Arbiter already lost jurisdiction over the case with the filing of an appeal. Two days after,
CCBPI filed a Manifestation,13 stating that its participation in the pre-election conference, certification
election, and other proceedings is not a waiver, withdrawal or abandonment of the pending appeal
and motion to suspend proceedings.
In the Pre-election Conference held on September 10, 2007, CCBPI and IPTEU mutually agreed to
conduct the certification election on September 21, 2007. On election day, only sixteen (16) of the
twenty-two (22) employees in the IPTEU list voted. However, no votes were canvassed. CCBPI filed
and registered a Protest14 questioning the conduct and mechanics of the election and a Challenge to
Votes15 on the ground that the voters are supervisory and confidential employees.
By agreement, the parties met on September 26, 2007 for the opening and counting of the
challenged votes. On said date, CCBPI filed a motion for inhibition, which the Mediator-Arbiter
verbally denied on the grounds that it was not verified and would cause undue delay on the
Page 37 of 39
proceedings as there are no other Mediators-Arbiters in the Region. The parties were informed that
their agreement to have the ballots opened could not bind the Mediator-Arbiter. Instead, they were
directed to submit additional evidence that would aid in the resolution of the challenged votes.
On October 22, 2007, the Mediator-Arbiter denied CCBPI's challenge to the 16 votes. She found that
the voters are rank-and-file employees holding positions that are not confidential in nature, and who
are not, or used to be, members of Ilocos Monthlies Union (IMU) due to the reclassification of their
positions by CCBPI and have been excluded from the CBA entered into by IMU and CCBPI from 1997
to 2005. Consequently, the challenged votes were opened and canvassed. After garnering 14 out of
the 16 votes cast, IPTEU was proclaimed as the sole and exclusive bargaining agent of the rank-and-
file exempt workers in CCBPI Ilocos Norte Plant.
CCBPI elevated the case to the SOLE, raising the following grounds:
1. The Honorable public [appellee] erred in disregarding the fact that there is already an
existing bargaining representative of the rank-and-file professional and technical employees
at the Ilocos Plant of appellant, namely, the Ilocos Monthlies Union (IMU) [to] which the
sixteen (16) challenged voters should be members as long as they are not disqualified by law
[for] being confidential employees.
2. The Honorable public appellee erred in denying the challenge to the sixteen (16) actual
voters, and subsequently declaring that private aippellee is the sole and exclusive
[bargaining] agent of the rank-and-file exempt employees.
3. The Honorable public appellee erred in disregarding the fact that there is a pending earlier
appeal filed by appellant with the Honorable Secretary of Labor, and so the Regional Office
No. 1 of the Department of Labor and Employment lost jurisdiction over the case including
the certification election conducted by the Election Officer.
4. The Honorable public appellee erred in disregarding the fact that there is a pending Motion to
Suspend Proceedings filed by appellant with the Department of Labor and Employment,
Regional Office No. 1, San Fernando City, La Union[,] due to the pendency of its appeal with
the Honorable Secretary of Labor, and the same is not yet resolved.
5. The Honorable public appellee erred in disregarding the fact that there is a need to suspend
the conduct of election and other proceedings to await for the final result of the earlier
appeal made by herein appellant.
6. The Honorable public appellee erred in not declaring the certification election on September
21, 2007 null and void.16
On May 6, 2008, the appeal of CCBP1 was denied. The SOLE held that, as shown by the certification
of the IMU President and the CBAs forged between CCBPI and IMU from 1997 to 2007, the 22
employees sought to be represented by IPTEU are not part of IMU and are excluded from its CBA
coverage; that even if the 16 challenged voters may have access to information which are confidential
from the business standpoint, the exercise of their right to self-organization could not be defeated
because their common functions do not show that there exist a confidential relationship within the
realm of labor relations; and that the order granting the certification election and sustaining its
validity despite the pendency of appeal and motion to suspend is proper in view of Section 17, Rule
VIII of Department Order No. 40, Series of 2003, which states that the order granting the conduct of
a certification election in an unorganized establishment is not subject to appeal and that any issue
arising therefrom may be raised by means of protest on the conduct and results of the certification
election.
LABOR 2 - Batch 2
Confronted with an adverse ruling, CCBPI filed before the CA a petition for certiorari with prayer for
temporary restraining order and writ of preliminary injunction. 17 It reiterated that:
a. There is already an existing and incumbent sole and exclusive bargaining agent in the
bargaining unit which respondent IPTEU seeks to represent, namely, the Ilocos Monthlies
Union (IMU). The bargaining unit which IPTEU seeks to represent is rank-and-file
professional and technical employees which the incumbent union, the IMU, presently
represents.
b. Respondent IPTEU never sought to represent the alleged rank-and-file Exempt employees
because it is clearly indicated in its petition for certification election that it seeks to represent
rank-and-file professional and technical employees only. Its Constitution and by laws
includes solely and only professional and technical employees of CCBPI-ILOCOS PLANT to its
membership, and nothing more.
c. The sixteen (16) voters are not eligible for Union membership because they are confidential
employees occupying confidential positions.
d. The bargaining unit is organized due to the presence of the IMU, the sole and exclusive
bargaining unit of the rank-and-file professional and technical employees at the Ilocos Plant
of petitioner, and so the appeal of the earlier decision of the respondent Med-Arbiter dated
August 23, 2007 is in order, proper, valid and should have been given due course in
accordance with Sec. 17, Rule [VIII] of the Rules Implementing Book V of the Labor Code.
e. The earlier appeal x x x together with the motion for suspension of the proceedings x x x
filed by petitioner on September 5, 2007 remain unresolved to date, and there is a need to
await for their final resolution before any further action including the certification election
could validly proceed.18
On March 17, 2010, the Court of Appeals denied the petition. CCBPI filed a motion for
reconsideration,19 which was also denied in the September 16, 2010 Resolution; hence, this petition.
CCBPI contends that the CA Decision and Resolution are based on misapprehension of facts relative to
the proceedings before the Mediator-Arbiter and that its pronouncement consists of inferences which
are manifestly mistaken and without factual/legal basis. It is argued that a petition for certiorari was
filed before the CA because the orders of the SOLE and Mediator-Arbiter were issued in patent
disregard of established facts and existing jurisprudence, thus, tainted with grave abuse of discretion
-
1) In considering respondent IPTEU as the sole and exclusive bargaining agent of the purported rank-
and-file exempt employees in the Ilocos Plant;ChanRoblesVirtualawlibrary
2) In not declaring the certification election held on September 21, 2007 improper and
void;ChanRoblesVirtualawlibrary
3) In disregarding the fact that the Ilocos Monthlies Union (IMU) is the existing sole bargaining agent
of the rank-and-[file] professional and technical employees at the Ilocos Plant, to which the sixteen
(16) challenged voters should be members, if allowed by law[;] and
4) [In] ruling that the concerned employees should not be prohibited by joining any union. 20
The petition is unmeritorious.
As proven by the certification of the IMU President as well as the CBAs executed between IMU and
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CCBPI, the 22 employees sought to be represented by IPTEU are not IMU members and are not
included in the CBAs due to reclassification of their positions. If these documents were false, the IMU
should have manifested its vigorous opposition. In fact, the Mediator-Arbiter noted:
The most tenacious resistance to the granting of the Petition as well as the holding of the CE has been
Management. On the other hand, the existing unions at CCBPI, especially the IMU of which most of
the IPTEU members were once part (until they were considered outside the ambit of its existing
bargaining unit) never once opposed the Petition and the Certification election, whether verbally or in
written Opposition.
Between Management and IMU, it is the latter which has more to lose, as the creation of a separate
bargaining unit would reduce the scope of IMU's bargaining unit. Yet through all these proceedings,
we take note of the substantial moral support that has been extended to the Petitioner by the other
Unions of CCBPI, so much so that, until objected to by Management, they were even willing to be
present during the Certification Election of 21 September 2007. 21
As to whether the 16 voters sought to be excluded from the appropriate bargaining unit are
confidential employees,22 such query is a question of fact, which is not a proper issue in a petition for
review under Rule 45 of the Rules.23 This holds more true in the present case in view of the consistent
findings of the Mediator-Arbiter, the SOLE, and the CA.
confidential capacity and obtain confidential information relating to labor relations policies. Exposure
to internal business operations of the company is not per se a ground for the exclusion in the
bargaining unit.26 The Court sees no need to belabor the effects of the unresolved notice of appeal
and motion to suspend proceedings filed by CCBPI in September 2007. Suffice it to say that the
substantial merits of the issues raised in said pleadings are the same as what were already brought to
and passed upon by the Mediator-Arbiter, the SOLE, and the CA.
WHEREFORE, premises considered, the petition is DENIED. The March 17, 2010 Decision and
September 16, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 104043, which affirmed the
May 6, 2008 Resolution of the Secretary of Labor and Employment, dismissing petitioner's appeal that
assailed the Decision (On the Challenged Voters) and Proclamation of the Winner, both dated October
22, 2007, of the Mediator-Arbiter, are hereby AFFIRMED.
SO ORDERED.chanroblesvirtual

We reiterate that:
[T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires that it
shall raise only questions of law. The factual findings by quasi-judicial agencies, such as the
Department of Labor and Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective fields. Judicial review of labor cases does not go
so far as to evaluate the sufficiency of evidence on which the labor official's findings rest. It is not our
function to assess and evaluate all over again the evidence, testimonial and documentary, adduced by
the parties to an appeal, particularly where the findings of both the trial court (here, the DOLE
Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule limits that
function of the Court to the review or revision of errors of law and not to a second analysis of the
evidence, x x x Thus, absent any showing of whimsical or capricious exercise of judgment, and unless
lack of any basis for the conclusions made by the appellate court be amply demonstrated, we may not
disturb such factual findings.24

The determination of factual issues is vested in the Mediator-Arbiter and the Department of Labor and
Employment. Pursuant to the doctrine of primary jurisdiction, the Court should refrain from resolving
such controversies unless the case falls under recognized and well-established exceptions. The
doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to
resolve a controversy the jurisdiction over which is initially lodged with an administrative body of
special competence.25cralawred

In this case, organizational charts, detailed job descriptions, and training programs were presented by
CCBPI before the Mediator-Arbiter, the SOLE, and the CA. Despite these, the Mediator-Arbiter ruled
that employees who encounter or handle trade secrets and financial information are not automatically
classified as confidential employees. It was admitted that the subject employees encounter and
handle financial as well as physical production data and other information which are considered vital
and important from the business operations' standpoint. Nevertheless, it was opined that such
information is not the kind of information that is relevant to collective bargaining negotiations and
settlement of grievances as would classify them as confidential employees. The SOLE, which the CA
affirmed, likewise held that the questioned voters do not have access to confidential labor relations
information.

We defer to the findings of fact of the Mediator-Arbiter, the SOLE, and the CA. Certainly, access to
vital labor information is the imperative consideration. An employee must assist or act in a

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