#51

Divine Word College Of Laoag Vs. Shirley B. Mina,

G.R. No. 195155 April 13, 2016

Facts:
DWCL is a non-stock educational institution offering catholic education to the public. It is run
by the Society of Divine Word (SVD), a congregation of Catholic priests. Then, the Society of
Divine Word Educational Association (DWEA) established a Retirement Plan to provide
retirement benefits for qualified employees of their member institutions. Said retirement plan
contains a clause about the portability of benefits. Mina was first employed in as a high school
teacher, and later on a high school principal, at the Academy of St. Joseph (ASJ), a school run by
the SVD. Then, he transferred to DWCL and was accorded a permanent status after a year of
probationary status. He was subsequently transferred to DWCL’s college department as an
Associate Professor III. Thereafter, Mina was assigned as the College Laboratory Custodian of
the School of Nursing and was divested of his teaching load, subject to automatic termination
and without need for any further notification.
Mina was thereafter offered early retirement but initially declined it. He later received a
Memorandum from the Office of the Dean enumerating specific acts of gross or habitual
negligence, insubordination, and reporting for work under the influence of alcohol. He answered
the allegations but sensing that it was useless, he negotiated for his retirement benefits. Then, it
was made to appear that his services were terminated by reason of redundancy to avoid any tax
implications. Mina was also made to sign a deed of waiver and quitclaim. Mina then filed a case
for illegal dismissal and recovery of separation pay and other monetary claims.

Issues:
Whether or not there was constructive dismissal.

Held:
Yes. The Constitution and the Labor Code mandate that employees be accorded security of
tenure. The right of employees to security of tenure, however, does not give the employees
vested rights to their positions to the extent of depriving management of its prerogative to change
their assignments or to transfer them. In cases of transfer of an employee, the employer is
charged with the burden of proving that its conduct and action are for valid and legitimate
grounds such as genuine business necessity and that the transfer is not unreasonable,
inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of
proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.
#52

Golden Ace Builders and Arnold U. Azul vs. Jose A. Talde,

G.R. No. 187200, May 5, 2010.

FACTS:
Respondent, Jose A. Talde was hired as a carpenter by petitioner Golden Ace Builders owned by
Arnold Azul. He alleged that due to the unavailability of construction projects petitoner stopped
giving work assignments prompting him to file a complaint for illegal dismissal.
The Labor Arbiter ruled in favor of respondent and ordered his immediate reinstatement without
loss of seniority rights and other privileges, and with payment of full backwages. Pending on
appeal to the NLRC, respondent was advised to report for work in the construction site within
10 days from receipt thereof. However, a manifestation was submitted to the Labor Arbiter that
actual animosities existed between him and petitioners and there had been threats to his life and
his family’s safety, hence, he opted for the payment of separation pay. Petitioners denied the
existence of any such animosity.
NLRC dismissed petitioners’ appeal holding that respondent was a regular employee and not a
project employee, and that there was no valid ground for the termination of his services. As
an agreement could not be forged by the parties on the satisfaction of the judgment. Hence, this
petition.

ISSUE:
Whether or not Court of Appeals erred in awarding of separation pay?

RULING:
No. The basis for the payment of backwages is different from that for the award of separation
pay. Separation pay is granted where reinstatement is no longer advisable because of strained
relations between the employee and the employer. Backwages represent compensation that
should have been earned but were not collected because of the unjust dismissal. The basis
for computing backwages is usually the length of the employee’s service while that for
separation pay is the actual period when the employee was unlawfully prevented from working
Article 279 provides, an employee who is dismissed without just cause and without due process
is entitled to backwages and reinstatement or payment of separation pay in lieu thereof. Thus, an
illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two
reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the employer, separation pay is granted.
In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and backwages.
#53

Security Bank Savings Corporation vs. Charles M. Singson,

G.R. No. 214230, February 10, 2016

FACTS:
Respondent was employed by petitioner Security Bank Savings Corporation as messenger until
his promotion to its Quezon Avenue Branch and held the position of Customer Service
Operations Head (CSOH) tasked with the safekeeping of its checkbooks and other bank
forms.
Respondent received a show-cause memorandum charging him of violating the bank's Code of
Conduct when he mishandled various checkbooks under his custody. Pending investigation,
respondent was transferred to SBSC's Pedro Gil Branch. He was again issued a memorandum
directing him to explain his inaccurate reporting of some Returned Checks and Other Cash
Items (RCOCI). Thereafter, respondent was again transferred and reassigned to another
branch in Sampaloc, Manila. Dismayed by his frequent transfer to different branches, respondent
tendered his resignation. However, SBSC rejected the same in view of its decision to terminate
his employment on the ground of habitual neglect of duties.
Consequently, respondent instituted a complaint for illegal dismissal with prayer for backwages,
damages, and attorney's fees against SBSC and its President. Petitioners maintained that
respondent was validly dismissed for cause on the ground of gross negligence in the performance
of his duties. Labor Arbiter dismissed the complaint and declared respondent terminated for a
valid cause, notwithstanding, awarded respondent separation pay by way of financial
assistance. NLRC affirmed the LA decision. CA denied the petition and sustained the award of
separation pay.

ISSUE:
Whether or not the CA erred in upholding the award of separation pay as financial assistance to
respondent despite having been validly dismissed?

RULING:
Separation pay is warranted when the cause for termination is not attributable to the employee's
fault, as provided in Art 298 and 299, as well as in cases of illegal dismissal where
reinstatement is no longer feasible. On the other hand, an employee dismissed for any of the just
causes, under Art 297, being causes attributable to the employee's fault, is not, as a general rule,
entitled to separation pay. The non-grant of such right to separation pay is premised on the
reason that an erring employee should not benefit from their wrongful acts. As an exception, case
law instructs that in certain circumstances, the grant of separation pay or financial assistance to a
legally dismissed employee has been allowed as a measure of social justice or on grounds of
equity.
#54

Zaida R. Inocente vs. St. Vincent Foundation for Children and Aging, Inc.,
G.R. No. 202621, June 22, 2016.

FACTS:
St. Vincent Foundation for Children and Aging, Inc. (St. Vincent) is a non-stock, non-profit
foundation engaged in providing assistance to children and aging people. St. Vincent hired
Zaida Inocente as Program Assistant and later Program Officer. Zaida, then single, met Marlon
D. Inocente. He was then assigned at St. Vincent's Bataan sub-project but later transferred to its
sub-project in Quezon City. They became close and soon were romantically involved with
each other. St. Vincent adopted the CFCA's Non-Fraternization Policy, which discouraged its
employees from engaging in consensual romantic or sexual relationship with any employee or
volunteer of CFCA. Despite the policy, Zaida and Marlon discretely continued their
relationship even after Marlon resigned. Due to severe abdominal pain, Zaida went to the
hospital and was informed that she had suffered miscarriage. She informed St. Vincent of her
situation and was allowed to go on maternity.
The foundation required Zaida to explain in writing why no administrative action should be
taken against her for the violation of the CFCA Non-Fraternization Policy and of the St.
Vincent's Code of Conduct for her relationship with Marlon. She explained that her relationship
with Marlon started long before the foundation adopted the policy; that Marlon was no longer
connected with the foundation; her relationship with Marlon is not immoral as they were both of
legal age and with no impediments to marry and they already planned to get married as soon
as she recovers and their finances improve. The foundation found her explanation unconvincing
and terminated her services.

ISSUE:
Whether or not petioner was validly dismissed?

Held:
No. The Court found Zaida's dismissal illegal for lack of valid cause. St. Vincent failed to
sufficiently prove its charges against Zaida to justify her dismissal for serious misconduct and
loss of trust and confidence. In every dismissal situation, the employer bears the burden of
proving the existence of just or authorized cause for the dismissal and the observance of due
process requirements. Willful breach of trust or loss of confidence and serious misconduct are
just causes for the dismissal of an employee. To justify the employee's dismissal on these
grounds, the employer must show that the employee indeed committed act/s constituting breach
of trust or serious misconduct.
#55

Manila Memorial Park Cemetery, Inc vs. Ezard D. Lluz, et al.,

G.R. No. 208451, February 3, 2016.

FACTS:
Petitioner Manila Memorial entered into a Contract of Services with respondent Ward Trading
and. The Contract of Services provided that Ward Trading, as an independent contractor, will
render interment and exhumation services and other related work to Manila Memorial. Among
those assigned by Ward Trading to perform services were respondents Ezard Lluz, et al.
Respondents filed a Complaint for regularization against Manila Memorial, after which they
amended their complaint to include illegal dismissal, underpayment of 13th month pay, and
payment of attorney’s fees. They alleged that they asked Manila Memorial to consider them as
regular workers within the appropriate bargaining unit established in the collective bargaining
agreement by Manila Memorial and its union, the Manila Memorial Park Free Workers Union
(MMP Union). The request was refused since respondents were employed by Ward Trading.
Thereafter, respondents joined the MMP Union, who on behalf of respondents, sought their
regularization which was again declined. Subsequently, respondents were dismissed.
Meanwhile, Manila Memorial sought the dismissal of the complaint for lack of jurisdiction since
there was no employer-employee relationship. It argued that respondents were the
employees of Ward Trading.
The Labor Arbiter dismissed the complaint for failing to prove the existence of an employer-
employee relationship. On appeal, the NLRC reversed the Labor Arbiter’s findings and
ruled that Ward Trading was a labor- only contractor and an agent of Manila Memorial. Thus,
complainants were regular employees. The CA affirmed the ruling of the NLRC.

ISSUE:
Whether or not an employer-employee relationship exists between Manila Memorial and
respondents for the latter to be entitled to their claim for wages and other benefits?

RULING:
For failing to register as a contractor, a presumption arises that one is engaged in labor-only
contracting unless the contractor overcomes the burden of proving that it has substantial capital,
investment, tools and the like.
In this case, however, Manila Memorial failed to adduce evidence to prove that Ward Trading
had any substantial capital, investment or assets to perform the work contracted for. Thus, the
presumption that Ward Trading is a labor-only contractor stands. Consequently, Manila
Memorial is deemed the employer of respondents. As regular employees of Manila Memorial,
respondents are entitled to their claims for wages and other benefits as awarded by the
NLRC and affirmed by the CA.
#56

ALUMAMAY O. JAMIAS v. NLRC, GR No. 159350, Mar 09, 2016

FACTS:
Respondent Innodata Philippines, Inc. (Innodata), a domestic corporation engaged
in the business of data processing and conversion for foreign clients hired the hired the
petitioners on various dates and under a project based contract for a period of one year.
After their respective contracts expired, the petitioners filed a complaint for illegal
dismissal claiming that Innodata had made it appear that they had been hired as project
employees in order to prevent them from becoming regular employees.
Labor Arbiter rendered his decision dismissing the complaint for lack of merit,
finding that the petitioners had knowingly signed their respective contracts in which the
durations of their engagements were clearly stated; and that their fixed term contracts, being
exceptions to Article 280 of the Labor Code, precluded their claiming regularization. On
appeal, the NLRC affirmed the decision of LA. The CA upheld the NLRC.
ISSUE:
Whether or not the petitioners were regular or project employees of Innodata?
RULING:
A fixed period in a contract of employment does not by itself signify an intention
to circumvent Article 280 of the Labor Code.
A fixed term agreement, to be valid, must strictly conform with the requirements
and conditions provided in Article 280 of the Labor Code. The test to determine whether a
particular employee is engaged as a project or regular employee is whether or not the
employee is assigned to carry out a specific project or undertaking, the duration or scope of
which was specified at the time of his engagement. There must be a determination of, or a
clear agreement on, the completion or termination of the project at the time the employee
is engaged. Otherwise put, the fixed period of employment must be knowingly and
voluntarily agreed upon by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating his consent,
or it must satisfactorily appear that the employer and employee dealt with each other on more
or less equal terms with no moral dominance whatsoever being exercised by the former
on the latter.
There is no indication that the petitioners were made to sign the contracts against
their will. Hence, the petitioners knowingly agreed to the terms of and voluntarily signed their
respective contracts. The fixing by Innodata of the period specified in the contracts of
employment did not also indicate its ill-motive to circumvent the petitioners' security of
tenure. Indeed, the petitioners could not presume that the fixing of the one-year term was
intended to evade or avoid the protection to tenure under Article 280 of the Labor Code in the
absence of other evidence establishing such intention.
The necessity and desirability of the work performed by the employees are not the
determinants in term employment, but rather the "day certain" voluntarily agreed upon by the
parties.
 In fine, the employment of the petitioners who were engaged as project
employees for a fixed term legally ended upon the expiration of their contract. Their complaint
for illegal dismissal was plainly lacking in merit.
#57

Pepsi-Cola Bottling Company vs Hon. Martinez

GR No. L-58877 March 15, 1982

FACTS:
Respondent Abraham Tumala, Jr. was salesman petitioner company in Davao City. In the annual
“Sumakwel” contest conducted by the company, he was declared the winner of the “Lapu-Lapu
Award” for his performance as top salesman of the year, an award which entitled him to a prize
of a house and lot. Petitioner company, despite demands, have unjustly refused to deliver said
prize.
It was alleged that in 1980, petitioner company, in a manner oppressive to labor and without
prior clearance from the Ministry of Labor, arbitrarily and illegally terminated his employment.
Hence, Tumala filed a complaint in the CFI Davao and prayed that petitioner be ordered to
deliver his prize of house and lot or its cash equivalent, and to pay his back salaries and
separation benefits.
Petitioner moved to dismiss the complaint on grounds of lack of jurisdiction. Respondent Tumala
maintains that the controversy is triable exclusively by the court of general jurisdiction

Issue: Whether it is the court of general jurisdiction and not the Labor Arbiter that has exclusive
jurisdiction over the recovery of unpaid salaries, separation and damages

HELD: NO
SC ruled that the Labor Arbiter has exclusive jurisdiction over the case. Jurisdiction over the
subject matter is conferred by the sovereign authority which organizes the court; and it is given
by law. Jurisdiction is never presumed; it must be conferred by law in words that do not admit of
doubt.

Under the Labor Code, the NLRC has the exclusive jurisdiction over claims, money or
otherwise, arising from ER-EE relations, except those expressly excluded therefrom. The claim
for the said prize unquestionable arose from an ER-EE relation and, therefore, falls within the
coverage of P.D. 1691, which speaks of “all claims arising from ER-EE relations, unless
expressly excluded by this Code. To hold that Tumala’s claim for the prize should be passed
upon by the regular courts of justice would be to sanction split jurisdiction and multiplicity of
suits which are prejudicial to the orderly of administration of justice.

#58

PMI-FACULTY AND EMPLOYEES UNION vs. PMI COLLEGES BOHOL, G.R. No. 211526,
June 29, 2016.

FACTS:
 Respondent PMI Colleges Bohol (respondent) is an educational institution that
offers maritime and customs administration courses to the public. Petitioner PMI-Faculty and
Employees Union (Union) is the collective bargaining representative of the respondent's rank-
and-file faculty members and administrative staff.

The Union filed a notice of strike against the respondent, on grounds of gross
violation of their collective bargaining agreement (CBA). The Department of Labor and
Employment (DOLE) certified the dispute to the National Labor Relations Commission
(NLRC) for compulsory arbitration.

The Union filed a second notice of strike allegedly over the same CBA violation.
The respondent filed a Motion to Strike Out Notice of Strike and to Refer the Dispute to
Voluntary Arbitration, claiming that the Union failed to exhaust administrative remedies
before resorting to a 2nd notice of strike. The respondent filed a Motion for Joinder of Issues
under the 2nd notice of strike with those of the 1st notice.

The Union submitted its strike vote. It alleged that while waiting for the
expiration of the 15-day cooling-off period and/or the completion of the 7-day strike vote
period, its members religiously reported for duty but they were allegedly not allowed entry to
the school premises. In protest of what it considered a lock-out by the respondent, the Union
staged a strike on the same day. The respondent reacted with a Petition to Declare the Strike
Illegal, also filed on the same day. DOLE assumed jurisdiction over the dispute and
directed the strikers to return rework, and the school to resume operations.
The Labor Arbiter dismissed the petition for lack of merit, declaring that the
petitioner substantially complied with all the requirements of a valid strike, except for
staging the strike a day earlier.

ISSUE:
Whether or not the strike is illegal?

RULING:
No. The declaration of the strike a day before the completion of the cooling-off
and strike vote periods was but a reaction to the respondent's locking out the officers and
members of the Union.

We find the statements credible. While they are Union members, they are first and
foremost teachers who were reporting for duty on that day. The same thing can be said of
the Union officers who were also refused entry by the guards. We likewise find no reason
for the officers to throw away all their preparations for a lawful strike on the very last day, had
they not been pushed to act by the respondent's closing of the gates.

#59
DIVINE WORD COLLEGE OF LAOAG vs. SHIRLEY B. MINA, as heir-substitute of the late
DELFIN A. MINA,
G.R. No. 195155, April 13, 2016.

FACTS:

DWCL is a non-stock educational institution offering catholic education to the

public. It is run by the Society of Divine Word (SVD), a congregation of Catholic priests.
Mina was first employed as a high school teacher and later on a high school
principal. He transferred to DWCL and was accorded a permanent status. He was subsequently
transferred to DWCL’s college department as an Associate Professor III. Thereafter, Mina
was assigned as the College Laboratory Custodian of the School of Nursing and was
divested of his teaching load, subject to automatic termination and without need for any further
notification. He was the only one among several teachers transferred to the college
department who was divested of teaching load.
Mina was offered early retirement. He initially declined the offer. He later
received a Memorandum enumerating specific acts of gross or habitual negligence,
insubordination, and reporting for work under the influence of alcohol. Sensing that it was
pointless to continue employment with DWCL, he requested that his retirement date be
adjusted to enable him to avail better benefits which were denied. Instead, he was paid
retirement pay. It was made to appear that his services were terminated by reason of
redundancy to avoid any tax implications. Mina was also made to sign a deed of waiver and
quitclaim.
Mina filed a case for illegal dismissal and recovery of separation pay and other
monetary claims. Pending resolution of his case, Mina passed away.
LA ruled that the actuation of DWCL is not constitutive of constructive dismissal.
However, his retirement pay based on redundancy is illegal; hence, it was modified. NLRC
ruled that Mina was constructively dismissed. CA sustained the NLRC’s ruling that Mina was
indeed constructively dismissed from work.

ISSUE:
Whether or not the transfer of Mina amounted to constructive dismissal?

RULING:
Yes, Mina was constructively dismissed. His appointment as laboratory custodian
was a demotion.
Constructive dismissal is a dismissal in disguise. There is cessation of work in
constructive dismissal because ‘"continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay’ and
other benefits. To be considered as such, an act must be a display of utter discrimination or
insensibility on the part of the employer so intense that it becomes unbearable for the employee
to continue with his employment. The law recognizes and resolves this situation in favor of
employees in order to protect their rights and interests from the coercive acts of the employer.
In this case, Mina’s transfer clearly amounted to a constructive dismissal. For
almost 22 years, he was a high school teacher enjoying a permanent status in DWCL’s
high school department. In 2002, he was appointed as an associate professor at the college
department but shortly thereafter, or on June 1, 2003, he was appointed as a college
laboratory custodian, which is a clear relegation from his previous position. Not only that. He
was also divested of his teaching load. His appointment even became contractual in nature
and was subject to automatic termination after one year "without any further notification." Aside
from this, Mina was the only one among the high school teachers transferred to the college
department who was divested of teaching load. More importantly, DWCL failed to show any
reason for Mina’s transfer and that it was not unreasonable, inconvenient, or prejudicial to him.
There is demotion when an employee occupying a highly technical position
requiring the use of one’s mental faculty is transferred to another position, where the
employee performed mere mechanical work – virtually a transfer from a position of dignity
to a servile or menial job.
Mina’s transfer amounted to a demotion that is, from an associate college
professor, he was made a keeper and inventory-taker of laboratory materials. Clearly, Mina’s
new duties as laboratory custodian were merely perfunctory and a far cry from his previous
teaching job, which involved the use of his mental faculties. And while there was no proof
adduced showing that his salaries and benefits were diminished, there was clearly a demotion in
rank.
Given the finding of constructive dismissal, Mina, therefore, is entitled to
reinstatement without loss of seniority rights, and payment of backwages and full compulsory
retirement pay.

#60

GSIS vs. Kapisanan ng mga Manggagawa sa GSIS

G.R. No. 170132, December 6, 2006

Facts: This case has its genesis when the manager of GSIS issued a memorandum directing a
number of its employees who are union members to show cause why they should not be charged
administratively for their participation in the October 4 to October 7, 2004 mass action. The
union’s counsel sought reconsideration of said directive on the ground, among others, that the
subject employees resumed work in obedience to the return-to-work order thus issued. The plea
for reconsideration was, however, effectively denied by the filing, of administrative charges
against some 110 union members for grave misconduct and conduct prejudicial to the best
interest of the service.

The union then filed with the CA a petition for prohibition against the GSIS on the ground that
its members should not be made to explain why they supported their union’s cause since the
Civil Service Resolution No. 021316, otherwise known as the Guidelines for Prohibited Mass
Action, Section 10 of which exhorts government agencies to “harness all means within their
capacity to accord due regard and attention to employees’ grievances and facilitate their speedy
and amicable disposition through the use of grievance machinery or any other modes of
settlement sanctioned by law and existing civil service rules.” It argued that the organized
demonstrating employees did nothing more than air their grievances in the exercise of their
“broader rights of free expression” and are, therefore, not amenable to administrative sanctions.
On the other hand, petitioners assert that the filing of the formal charges are but a natural
consequence of the service-disrupting rallies and demonstrations staged during office hours by
the absenting GSIS employees, there being appropriate issuances outlawing such kinds of mass
action.

The CA ruled in favor of the union and held that the filing of administrative charges against the
union members is tantamount to grave abuse of discretion which may be the proper subject of the
writ of prohibition.

Issue: Whether or not the mass action staged by or participated in by said GSIS employees
partook of a strike or prohibited concerted mass action.

Ruling: The SC held that the mass action staged by or participated in by said GSIS employees
partook of a strike or prohibited concerted mass action. It may be that the freedom of expression
and assembly and the right to petition the government for a redress of grievances stand on a level
higher than economic and other liberties. Any suggestion, however, about these rights as
including the right on the part of government personnel to strike ought to be, as it has been,
trashed.

The Constitution itself qualifies its exercise with the provision “in accordance with law.” This is
a clear manifestation that the state may, by law, regulate the use of this right, or even deny
certain sectors such right. Executive Order 180 which provides guidelines for the exercise of the
right of government workers to organize, for instance, implicitly endorsed an earlier CSC
circular which “enjoins under pain of administrative sanctions, all government officers and
employees from staging strikes, demonstrations, mass leaves, walkouts and other forms of mass
action which will result in temporary stoppage or disruption of public service” by stating that the
Civil Service law and rules governing concerted activities and strikes in government service shall
be observed.

The settled rule in this jurisdiction is that employees in the public service may not engage in
strikes, mass leaves, walkouts, and other forms of mass action that will lead in the temporary
stoppage or disruption of public service. The right of government employees to organize is
limited to the formation of unions or associations only, without including the right to strike,
adding that public employees going on disruptive unauthorized absences to join concerted mass
actions may be held liable for conduct prejudicial to the best interest of the service.

#61

Dong Seung Inc., vs. Bureau of Labor Relations

G.R. No. 162356, April 14, 2008

Facts: Petitioner filed with the Department of Labor and Employment (DOLE), Region IV a
Petition for cancellation of the union registration of respondent union on the grounds that the List
of Officers and Constitution and By-laws which the respondent union attached to its application
for union registration contain the union secretary's certification but the same is not under oath,
contrary to Section 1, Rule VI of the Implementing Rules of Book V of the Labor Code, as
amended by Department Order No. 9, series of 1997; and that, as shown in a Sinumpaang
Petisyon, 148 out of approximately 200 employees-members have since denounced respondent
union for employing deceit in obtaining signatures to support its registration application.

DOLE (Region IV) Regional Director Ricardo Martinez, Sr. delisted from the roster of
legitimate labor organization the Charter Certificate [of] NAMAWU-Local 188. Respondent
union appealed to the Bureau of Labor Relations BLR gave due course to the appeal and granted
the same, it ordered that NAMAWU-Local 188, shall remain in the roster of legitimate labor
organizations.

After its motion for reconsideration was denied by the BLR, petitioner filed with the CA a
Petition for Certiorari, insisting that the BLR acted with grave abuse of discretion in giving due
course to respondent union’s appeal despite its having been filed out of time. The CA dismissed
the petition and the motion for reconsideration which was subsequently filed by the petitioner.

Issue: Whether or not the CA erred in sustaining the BLR when it declared respondent’s union
registration valid.

Ruling: The BLR found respondent union’s appeal tardy yet gave due course to it on account of
its inherent merit. The CA found respondent union’s appeal to have “substantially complied with
the requirements provided by law.

The requirement that the union secretary certify under oath all documents and papers filed in
support of an application for union registration is imposed by Article 235 of the Labor Code, to
wit:

Art. 235. Action on application. The Bureau shall act on all applications for registration within
thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer
of the organization, as the case may be, and attested to by its president.

#62

SMC Employees Union-PTGWO vs. San Miguel Packaging Products Employees Union
G.R. No. 171153, Sept. 12, 2007

Facts: Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the
regular monthly-paid rank and file employees of the three divisions of San Miguel Corporation
(SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing
Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all offices and plants of
SMC, including the Metal Closure and Lithography Plant in Laguna. It had been the certified
bargaining agent for 20 years – from 1987 to 1997.

Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP).

PDMP issued Charter Certificate No. 112 to respondent on 15 June 1999.5 In compliance with
registration requirements, respondent submitted the requisite documents to the BLR for the
purpose of acquiring legal personality. Upon submission of its charter certificate and other
documents, respondent was issued Certificate of Creation of Local or Chapter PDMP-01 by the
BLR on 6 July 1999. Thereafter, respondent filed with the Med-Arbiter of the DOLE Regional
Officer in the National Capital Region (DOLE-NCR), three separate petitions for certification
election to represent SMPP, SMCSU, and SMBP.8 All three petitions were dismissed, on the
ground that the separate petitions fragmented a single bargaining unit.9

On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of
respondent's registration and its dropping from the rolls of legitimate labor organizations. In its
petition, petitioner accused respondent of committing fraud and falsification, and non-
compliance with registration requirements in obtaining its certificate of registration. It raised
allegations that respondent violated Articles 239(a), (b) and (c) and 234(c) of the Labor Code.
Moreover, petitioner claimed that PDMP is not a legitimate labor organization, but a trade union
center, hence, it cannot directly create a local or chapter.

On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the
allegations of fraud and misrepresentation, and irregularity in the submission of documents by
respondent. Regional Director Lim further ruled that respondent is allowed to directly create a
local or chapter. However, he found that respondent did not comply with the 20% membership
requirement and, thus, ordered the cancellation of its certificate of registration and removal from
the rolls of legitimate labor organizations.
Respondent appealed to the BLR.

While the BLR agreed with the findings of the DOLE Regional Director dismissing the
allegations of fraud and misrepresentation, and in upholding that PDMP can directly create a
local or a chapter, it reversed the Regional Director's ruling that the 20% membership is a
requirement for respondent to attain legal personality as a labor organization.

Invoking the power of the appellate court to review decisions of quasi-judicial agencies,
petitioner filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the 1997
Rules of Civil Procedure.

The Court of Appeals, in a Decision dated 9 March 2005, dismissed the petition and affirmed the
Decision of the BLR Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of
Court.

Issues:
1. Whether or not the private respondent is required to submit the number of employees and
names of all its members comprising at least 20% of the employees in the bargaining unit where
it seeks to operate
2. Whether or not PDMP as a trade union center is a legitimate labor organization and has the
power to create a local or chapter

Ruling: There is merit in petitioner's contentions.

A legitimate labor organization is defined as "any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof."The mandate
of the Labor Code is to ensure strict compliance with the requirements on registration because a
legitimate labor organization is entitled to specific rights under the Labor Code, and are involved
in activities directly affecting matters of public interest. Registration requirements are intended
to afford a measure of protection to unsuspecting employees who may be lured into joining
unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor
organization for illegitimate ends.Legitimate labor organizations have exclusive rights under the
law which cannot be exercised by non-legitimate unions, one of which is the right to be certified
as the exclusive representative of all the employees in an appropriate collective bargaining unit
for purposes of collective bargaining. The acquisition of rights by any union or labor
organization, particularly the right to file a petition for certification election, first and foremost,
depends on whether or not the labor organization has attained the status of a legitimate labor
organization.
#63

Del Pilar Academy et al., vs. Del Pilar Academy Employees Union
G.R. No. 170112, April 30, 2008

Facts: Respondent Del Pilar Academy Employees Union (the UNION) is the certified collective
bargaining representative of teaching and non-teaching personnel of petitioner Del Pilar
Academy (DEL PILAR), an educational institution operating in Imus, Cavite.

On September 15, 1994, the UNION and DEL PILAR entered into a Collective Bargaining
Agreement (CBA) granting salary increase and other benefits to the teaching and non-teaching
staff.

The UNION then assessed agency fees from non-union employees, and requested DEL PILAR
to deduct said assessment from the employees’ salaries and wages. DEL PILAR, however,
refused to effect deductions claiming that the non-union employees were not amenable to it.

Traversing the complaint, DEL PILAR denied committing unfair labor practices against the
UNION. It justified the non-deduction of the agency fees by the absence of individual check off
authorization from the non-union employees. As regards the proposal to amend the provision on
summer vacation leave with pay, DEL PILAR alleged that the proposal cannot be considered
unfair for it was done to make the provision of the CBA conformable to the DECS’ Manual of
Regulations for Private Schools.

The Labor Arbiter ruled in favor of the union that DEL PILAR should have deducted the union
fees from the non-union employees citing article 248 of the Labor Code. On appeal, the National
Labor Relations Commission (NLRC) affirmed the Arbiter’s ruling. In gist, it upheld the
UNION’s right to agency fee, but did not consider DEL PILAR’s failure to deduct the same an
unfair labor practice. The UNION’s motion for reconsideration having been denied, it then went
to the CA via certiorari. On July 19, 2005, the CA rendered the assailed decision, affirming with
modification the resolutions of the NLRC.
Like the Arbiter and the NLRC, the CA upheld the UNION’s right to collect agency fees from
non-union employees, but did not adjudge DEL PILAR liable for unfair labor practice. However,
it ordered DEL PILAR to deduct agency fees from the salaries of non-union employees.

Issue: Whether or not the UNION is entitled to collect agency fees from non-union members,
and if so, whether an individual written authorization is necessary for a valid check off.

Ruling: The collection of agency fees in an amount equivalent to union dues and fees, from
employees who are not union members, is recognized by Article 248(e) of the Labor Code.
When so stipulated in a collective bargaining agreement or authorized in writing by the
employees concerned, the Labor Code and its Implementing Rules recognize it to be the duty of
the employer to deduct the sum equivalent to the amount of union dues, as agency fees, from the
employees' wages for direct remittance to the union. The system is referred to as check off. No
requirement of written authorization from the non-union employees is necessary if the non-union
employees accept the benefits resulting from the CBA.

#64

S.S. Ventures International Inc., vs. SS Ventures Labor Union

G.R. No. 161690, July 23, 2008

Facts: Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA-registered export firm with
principal place of business at Phase I-PEZA-Bataan Export Zone, Mariveles, Bataan, is in the
business of manufacturing sports shoes. Respondent S.S. Ventures Labor Union (Union), on the
other hand, is a labor organization registered with the Department of Labor and Employment
(DOLE).

On March 21, 2000, the Union filed with DOLE-Region III a petition for certification election in
behalf of the rank-and-file employees of Ventures. Five hundred forty two (542) signatures, 82
of which belong to terminated Ventures employees, appeared on the basic documents supporting
the petition.

On August 21, 2000, Ventures filed a Petition to cancel the Unions certificate of registration
invoking the grounds set forth in Article 239(a) of the Labor Code, the petition alleged the
following:
(1) The Union deliberately and maliciously included the names of more or less 82 former
employees no longer connected with Ventures in its list of members who attended the
organizational meeting and in the adoption/ratification of its constitution and by-laws held on
January 9, 2000 in Mariveles, Bataan; and the Union forged the signatures of these 82 former
employees to make it appear they took part in the organizational meeting and adoption and
ratification of the constitution;
(2) The Union maliciously twice entered the signatures of three persons namely: Mara Santos,
Raymond Balangbang, and Karen Agunos;
(3) No organizational meeting and ratification actually took place; and
(4) The Unions application for registration was not supported by at least 20% of the rank-and-file
employees of Ventures, or 418 of the total 2,197-employee complement. Since more or less 82 of
the 500[3] signatures were forged or invalid, then the remaining valid signatures would only be
418, which is very much short of the 439 minimum (2197 total employees x 20% = 439.4)
required by the Labor Code.

Issue: Whether or not there was fraud or misrepresentation on the part of the Union sufficient to
justify cancellation of its registration.

Ruling: The petition lacks merit.

The right to form, join, or assist a union is specifically protected by Art. XIII, Section 3 of the
Constitution and such right, according to Art. III, Sec. 8 of the Constitution and Art. 246 of the
Labor Code, shall not be abridged. Once registered with the DOLE, a union is considered a
legitimate labor organization endowed with the right and privileges granted by law to such
organization. While a certificate of registration confers a union with legitimacy with the
concomitant right to participate in or ask for certification election in a bargaining unit, the
registration may be canceled or the union may be decertified as the bargaining unit, in which
case the union is divested of the status of a legitimate labor organization. Among the grounds for
cancellation is the commission of any of the acts enumerated in Art. 239(a) of the Labor Code,
such as fraud and misrepresentation in connection with the adoption or ratification of the unions
constitution and like documents. The Court, has in previous cases, said that to decertify a union,
it is not enough to show that the union includes ineligible employees in its membership. It must
also be shown that there was misrepresentation, false statement, or fraud in connection with the
application for registration and the supporting documents, such as the adoption or ratification of
the constitution and by-laws or amendments thereto and the minutes of ratification of the
constitution or by-laws, among other documents.

#65

Inguillo et al, vs. First Phil Scales Inc., et al.

GR No. 165407, June 5, 2009

Facts: First Philippine Scales, Inc. (FPSI), a domestic corporation engaged in the manufacturing
of weighing scales, employed Bergante and Inguillo as assemblers. In 1991, FPSI and First
Philippine Scales Industries Labor Union (FPSILU) entered into a Collective Bargaining
Agreement, the duration of which was for a period of 5 years starting September 12, 1991 until
September 12, 1996. On September 19, 1991, the members of FPSILU ratified the CBA in a
document entitled RATIPIKASYON NG KASUNDUAN. Bergante and Inguillo, who were
members of FPSILU, signed the said document.

During the lifetime of the CBA, Bergante, Inguillo and several FPSI employees joined another
union, the Nagkakaisang Lakas ng Manggagawa (NLM), which was affiliated with a federation
called KATIPUNAN (NLM-KATIPUNAN, for brevity). Subsequently, NLM-KATIPUNAN
filed with the Department of Labor and Employment (DOLE) an intra-union dispute against
FPSILU and FPSI. In said case, the Med-Arbiter decided in favor of FPSILU. It also ordered the
officers and members of NLM-KATIPUNAN to return to FPSILU the amount of P90,000.00
pertaining to the union dues erroneously collected from the employees. Upon finality of the
Med-Arbiter's Decision, a Writ of Execution was issued to collect the adjudged amount from
NLM-KATIPUNAN. However, as no amount was recovered, notices of garnishment were issued
to United Coconut Planters Bank and to FPSI for the latter to hold for FPSILU the earnings of
Domingo Grutas, Jr. (Grutas) and Inguillo, formerly FPSILU's President and Secretary for
Finance, respectively.

The executive board and members of the FPSILU addressed a document denominated as
"Petisyon"to FPSI's general manager, Amparo Policarpio (Policarpio), seeking the termination of
the services of the following employees, namely: Grutas, Yolanda Tapang, Shirley Tapang,
Gerry Trinidad, Gilbert Lucero, Inguillo, Bergante, and Vicente Go, on the following grounds:
(1) disloyalty to the Union by separating from it and affiliating with a rival Union, the NLM-
KATIPUNAN; (2) dereliction of duty by failing to call periodic membership meetings and to
give financial reports; (3) depositing Union funds in the names of Grutas and former Vice-
President Yolanda Tapang, instead of in the name of FPSILU, care of the President; (4) causing
damage to FPSI by deliberately slowing down production, preventing the Union to even attempt
to ask for an increase in benefits from the former; and (5) poisoning the minds of the rest of the
members of the Union so that they would be enticed to join the rival union.
Inguillo filed with the NLRC a complaint against FPSI and/or Policarpio (respondents) for
illegal withholding of salary and damages. On May 16, 1996, respondents terminated the
services of the employees mentioned in the "Petisyon."

The following day, two (2) separate complaints for illegal dismissal, reinstatement and damages
were filed against respondents by: (1) NLM-KATIPUNAN, Grutas, Trinidad, Bergante, Yolanda
Tapang, Go, Shirley Tapang and Lucero (Grutas complaint, for brevity); and (2) Inguillo
(Inguillo complaint). Both complaints were consolidated with Inguillo's prior complaint for
illegal withholding of salary, which was pending before Labor Arbiter Manuel Manansala. Some
of the complainants agreed to amicably settle their cases. Bergante and Inguillo, the remaining
complainants, were directed to submit their respective position papers, after which their
complaints were submitted for resolution.

The Labor Arbiter dismissed the remaining complaints of Bergante and Inguillo and held that
they were not illegally dismissed. He explained that the two clearly violated the Union Security
Clause of the CBA when they joined NLM-KATIPUNAN and committed acts detrimental to the
interests of FPSILU and respondents. Affirmed by NLRC and when elevated the case to CA, the
latter also affirmed the decision of NLRC.

Issue: Whether or not the enforcement of the aforesaid Union Security Clause justified herein
petitioners' dismissal from the service.

Ruling: Yes, the enforcement justified petitioner’s dismissal.

Essentially, the Labor Code of the Philippines has several provisions under which an employee
may be validly terminated, namely: (1) just causes under Article 282; (2) authorized causes
under Article 283; (3) termination due to disease under Article 284; and (4) termination by the
employee or resignation under Article 285. While the said provisions did not mention as ground
the enforcement of the Union Security Clause in the CBA, the dismissal from employment based
on the same is recognized and accepted in our jurisdiction.

#66

Sta Lucia East Commercial Corp., vs. SOLE et al.

GR No. 162355, August 14, 2009

Facts: On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of
its chartered local, instituted a petition for certification election among the regular rank-and-file
employees of Sta. Lucia East Commercial Corporation and its Affiliates. The affiliate companies
included in the petition were SLE Commercial, SLE Department Store, SLE Cinema, Robsan
East Trading, Bowling Center, Planet Toys, Home Gallery and Essentials.
On 21 August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to
inappropriateness of the bargaining unit. CLUP-Sta. Lucia East Commercial Corporation and its
Affiliates Workers Union appealed the order of dismissal to this Office on 14 September
2001.On 20 November 2001, CLUP-Sta. Lucia East Commercial Corporation and its Affiliates
Workers Union [CLUP-SLECC and its Affiliates Workers Union]moved for the withdrawal of
the appeal. On 31 January 2002, this Office granted the motion and affirmed the dismissal of the
petition.

In the meantime, on 10 October 2001, [CLUP-SLECC and its Affiliates Workers Union]
reorganized itself and re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers
Association (herein appellant CLUP-SLECCWA), limiting its membership to the rank-and-file
employees of Sta. Lucia East Commercial Corporation. It was issued Certificate of Creation of a
Local Chapter.

On the same date, [CLUP-SLECCWA] filed the instant petition. It alleged that [SLECC]
employs about 115 employees and that more than 20% of employees belonging to the rank-and-
file category are its members.[CLUP-SLECCWA] claimed that no certification election has been
held among them within the last 12 months prior to the filing of the petition, and while there is
another union registered with DOLE-Regional Office No. IV on 22 June 2001 covering the same
employees, namely [SMSLEC], it has not been recognized as the exclusive bargaining agent of
[SLECCs] employees.

On 22 November 2001, SLECC filed a motion to dismiss the petition.It averred that it has
voluntarily recognized [SMSLEC] on 20 July 2001 as the exclusive bargaining agent of its
regular rank-and-file employees, and that collective bargaining negotiations already commenced
between them.

On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was ratified by its rank-and-
file employees and registered with DOLE-Regional Office No. IV on 9 January 2002.

Issue: Whether or not the appellate court committed a reversible error when it affirmed the
Secretary’s finding that SLECCs voluntary recognition of SMSLEC was done while a legitimate
labor organization was in existence in the bargaining unit.
Ruling: The petition has no merit. We see no reason to overturn the rulings of the Secretary and
of the appellate court.

Legitimate Labor Organization

Article 212(g) of the Labor Code defines a labor organization as any union or association of
employees which exists in whole or in part for the purpose of collective bargaining or of dealing
with employers concerning terms and conditions of employment. Upon compliance with all the
documentary requirements, the Regional Office or Bureau shall issue in favor of the applicant
labor organization a certificate indicating that it is included in the roster of legitimate labor
organizations. Any applicant labor organization shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration.

Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but related to,
the concept of a bargaining unit. We explained the concept of a bargaining unit in San Miguel
Corporation v. Laguesma, where we stated that:
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, indicated to be the best
suited to serve the reciprocal rights and duties of the parties under the collective bargaining
provisions of the law.

The fundamental 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.

Contrary to petitioners 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.

However, employees in two corporations cannot be treated as a single bargaining unit even if the
businesses of the two corporations are related.

A Legitimate Labor Organization Representing an Inappropriate Bargaining Unit

CLUP-SLECC and its Affiliates Workers Unions initial problem was that they constituted a
legitimate labor organization representing a non-appropriate bargaining unit. However, CLUP-
SLECC and its Affiliates Workers Union subsequently re-registered as CLUP-SLECCWA,
limiting its members to the rank-and-file of SLECC.SLECC cannot ignore that CLUP-SLECC
and its Affiliates Workers Union was a legitimate labor organization at the time of SLECCs
voluntary recognition of SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether
CLUP-SLECC and its Affiliates Workers Union represented an appropriate bargaining unit.
The inclusion in the union of disqualified employees is not among the grounds for cancellation
of registration, unless such inclusion is due to misrepresentation, false statement or fraud under
the circumstances enumerated in Sections (a) to (c) of Article 239 of the Labor Code. Thus,
CLUP-SLECC and its Affiliates Workers Union, having been validly issued a certificate of
registration, should be considered as having acquired juridical personality which may not be
attacked collaterally. The proper procedure for SLECC is to file a petition for cancellation of
certificate of registrationof CLUP-SLECC and its Affiliates Workers Union and not to
immediately commence voluntary recognition proceedings with SMSLEC.

#67

Mariwasa Siam Ceramics Inc. vs. Secretary of DOLE, et al.

G.R. No. 183317, December 21, 2009

Facts: On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam

Ceramics, Inc. (SMMSC-Independent) was issued a Certificate of Registration as a legitimate
labor organization by the Department of Labor and Employment (DOLE), Region IV-A.

On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of
Union Registration against respondent, claiming that the latter violated Article 234 of the Labor
Code for not complying with the 20% requirement, and that it committed massive fraud and
misrepresentation in violation of Article 239 of the same code.

On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the petition,
revoking the registration of respondent, and delisting it from the roster of active labor unions.

Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).

In a Decision dated June 14, 2006, the BLR granted respondent’s appeal. Petitioner filed a
Motion for Reconsideration but the BLR denied it in a Resolution dated February 2, 2007.
Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari; but
the CA denied the petition for lack of merit. Petitioner’s motion for reconsideration of the CA
Decision was likewise denied, hence, this petition based on the following grounds—

Issues:
Whether or not private respondent union complied with the 20% membership requirement

Ruling: The petition should be denied.

The petitioner insists that respondent failed to comply with the 20% union membership
requirement for its registration as a legitimate labor organization because of the disaffiliation
from the total number of union members of 102 employees who executed affidavits recanting
their union membership.

It is, thus, imperative that we peruse the affidavits appearing to have been executed by thes
affiants.
Evidently, the affidavits were written and prepared in advance, and the pro forma affidavits were
ready to be filled out with the employees’ names and signatures.
It is worthy to note, however, that the affidavit does not mention the identity of the people who
allegedly forced and deceived the affiant into joining the union, much less the circumstances that
constituted such force and deceit. Indeed, not only was this allegation couched in very general
terms and sweeping in nature, but more importantly, it was not supported by any evidence
whatsoever.

In appreciating affidavits of recantation such as these, our ruling in La Suerte Cigar and Cigarette
Factory v. Director of the Bureau of Labor Relations11 is enlightening, viz.—
On the second issue—whether or not the withdrawal of 31 union members from NATU affected
the petition for certification election insofar as the 30% requirement is concerned, We reserve the
Order of the respondent Director of the Bureau of Labor Relations, it appearing undisputably that
the 31 union members had withdrawn their support to the petition before the filing of said
petition. It would be otherwise if the withdrawal was made after the filing of the petition for it
would then be presumed that the withdrawal was not free and voluntary. The presumption would
arise that the withdrawal was procured through duress, coercion or for valuable consideration. In
other words, the distinction must be that withdrawals made before the filing of the petition are
presumed voluntary unless there is convincing proof to the contrary, whereas withdrawals made
after the filing of the petition are deemed involuntary.

The reason for such distinction is that if the withdrawal or retraction is made before the filing of
the petition, the names of employees supporting the petition are supposed to be held secret to the
opposite party. Logically, any such withdrawal or retraction shows voluntariness in the absence
of proof to the contrary. Moreover, it becomes apparent that such employees had not given
consent to the filing of the petition, hence the subscription requirement has not been met.

When the withdrawal or retraction is made after the petition is filed, the employees who are
supporting the petition become known to the opposite party since their names are attached to the
petition at the time of filing. Therefore, it would not be unexpected that the opposite party would
use foul means for the subject employees to withdraw their support.

In the instant case, the affidavits of recantation were executed after the identities of the union
members became public, i.e., after the union filed a petition for certification election on May 23,
2005, since the names of the members were attached to the petition. The purported withdrawal of
support for the registration of the union was made after the documents were submitted to the
DOLE, Region IV-A. The logical conclusion, therefore, following jurisprudence, is that the
employees were not totally free from the employer’s pressure, and so the voluntariness of the
employees’ execution of the affidavits becomes suspect.

#68

General Milling Corp vs. Casio et al.

GR No. 149552, March 10, 2010
Facts: The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 Chapter (Local 31) was
the sole and exclusive bargaining agent of the rank and file employees of GMC in Lapu-Lapu
City. On November 30, 1991, IBM-Local 31, through its officers and board members, namely,
respondents Virgilio Pino, Paulino Cabreros, Ma. Luna P. Jumaoas, Dominador Booc, Bartolome
Auman, Remegio Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto Mendoza and Antonio
Panilag (Pino, et al.), entered into a Collective Bargaining Agreement (CBA) with GMC. The
effectivity of the said CBA was retroactive to August 1, 1991.

The CBA contained the following union security provisions:

Section 3. MAINTENANCE OF MEMBERSHIP – All employees/workers employed by the
Company with the exception of those who are specifically excluded by law and by the terms of
this Agreement must be members in good standing of the Union within thirty (30) days upon the
signing of this agreement and shall maintain such membership in good standing thereof as a
condition of their employment or continued employment.
Section 6. The Company, upon written request of the Union, shall terminate the services of any
employee/worker who fails to fulfill the conditions set forth in Sections 3 and 4 thereof, subject
however, to the provisions of the Labor Laws of the Philippines and their Implementing Rules
and Regulations. The Union shall absolve the Company from any and all liabilities, pecuniary or
otherwise, and responsibilities to any employee or worker who is dismissed or terminated in
pursuant thereof.

Casio, et al. were regular employees of GMC with daily earnings ranging from P173.75 to
P201.50, and length of service varying from eight to 25 years. Casio was elected IBM-Local 31
President for a three-year term in June 1991, while his co-respondents were union shop stewards.

In a letter dated February 24, 1992, Rodolfo Gabiana (Gabiana), the IBM Regional Director for
Visayas and Mindanao, furnished Casio, et al. with copies of the Affidavits of GMC employees
Basilio Inoc and Juan Potot, charging Casio, et al. with “acts inimical to the interest of the
union.” Through the same letter, Gabiana gave Casio, et al. three days from receipt thereof
within which to file their answers or counter-affidavits. However, Casio, et al. refused to
acknowledge receipt of Gabiana’s letter.

Subsequently, on February 29, 1992, Pino, et al., as officers and members of the IBM-Local 31,
issued a Resolution expelling Casio, et al. from the union. Gabiana then wrote a letter dated
March 10, 1992, addressed to Eduardo Cabahug (Cabahug), GMC Vice-President for
Engineering and Plant Administration, informing the company of the expulsion of Casio, et al.
from the union pursuant to the Resolution dated February 29, 1992 of IBM-Local 31 officers and
board members. Gabiana likewise requested that Casio, et al. “be immediately dismissed from
their work for the interest of industrial peace in the plant.”

Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to Gabiana’s
request to terminate the employment of Casio, et al. GMC issued a Memorandum dated March
24, 1992 terminating the employment of Casio, et al. effective April 24, 1992 and placing the
latter under preventive suspension for the meantime.
Casio, et al. next sought recourse from the National Labor Relations Commission (NLRC)
Regional Arbitration Branch VII by filing on August 3, 1992 a Complaint against GMC and
Pino, et al. for unfair labor practice, particularly, the termination of legitimate union officers,
illegal suspension, illegal dismissal, and moral and exemplary damages.

Issue: Whether Casio, et al. were illegally dismissed without any valid?

Ruling: In this case, the Voluntary Arbitrator was convinced that Casio, et al. were legally
dismissed; while the Court of Appeals believed the opposite, because even though the dismissal
of Casio, et al. was made by GMC pursuant to a valid closed shop provision in the CBA, the
company still failed to observe the elementary rules of due process. The Court is therefore
constrained to take a second look at the evidence on record considering that the factual findings
of the Voluntary Arbitrator and the Court of Appeals are contradictory.

There are two aspects which characterize the concept of due process under the Labor Code: one
is substantive – whether the termination of employment was based on the provision of the Labor
Code or in accordance with the prevailing jurisprudence; the other is procedural – the manner in
which the dismissal was effected. After a thorough review of the records, the Court agrees with
the Court of Appeals. The dismissal of Casio, et al. was indeed illegal, having been done
without just cause and the observance of procedural due process.

In Alabang Country Club, Inc. v. National Labor Relations Commission, the Court laid down the
grounds for which an employee may be validly terminated, thus:
Under the Labor Code, an employee may be validly terminated on the following grounds: (1) just
causes under Art. 282; (2) authorized causes under Art.283; (3) termination due to disease under
Art.284, and (4) termination by the employee or resignation under Art. 285.

Another cause for termination is dismissal from employment due to the enforcement of the union
security clause in the CBA. x x x.
“Union security” is a generic term, which is applied to and comprehends “closed shop,” “union
shop,” “maintenance of membership,” or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment. There is union shop when all new regular employees are required to join the union
within a certain period as a condition for their continued employment. There is maintenance of
membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a condition
for continued employment until they are promoted or transferred out of the bargaining unit or the
agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in
which, by agreement between the employer and his employees or their representatives, no person
may be employed in any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good standing of a union
entirely comprised of or of which the employees in interest are a part.

Union security clauses are recognized and explicitly allowed under Article 248(e) of the Labor
Code, which provides that:
Art. 248. Unfair Labor Practices of Employers. x x x
 xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization. Nothing
in this Code or in any other law shall stop the parties from requiring membership in a recognized
collective bargaining agent as a condition for employment, except those employees who are
already members of another union at the time of the signing of the collective bargaining
agreement.

It is State policy to promote unionism to enable workers to negotiate with management on an

even playing field and with more persuasiveness than if they were to individually and separately
bargain with the employer. For this reason, the law has allowed stipulations for “union shop”
and “closed shop” as means of encouraging workers to join and support the union of their choice
in the protection of their rights and interest vis-à-vis the employer.

Moreover, a stipulation in the CBA authorizing the dismissal of employees are of equal import as
the statutory provisions on dismissal under the Labor Code, since “a CBA is the law between the
company and the union and compliance therewith is mandated by the express policy to give
protection to labor.”

In terminating the employment of an employee by enforcing the union security clause, the
employer needs only to determine and prove that: (1) the union security clause is applicable; (2)
the union is requesting for the enforcement of the union security provision in the CBA; and (3)
there is sufficient evidence to support the decision of the union to expel the employee from the
union. These requisites constitute just cause for terminating an employee based on the union
security provision of the CBA.

There is no question that in the present case, the CBA between GMC and IBM-Local 31
included a maintenance of membership and closed shop clause as can be gleaned from Sections 3
and 6 of Article II. IBM-Local 31, by written request, can ask GMC to terminate the
employment of the employee/worker who failed to maintain its good standing as a union
member.

It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for
Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to
terminate the employment of Casio, et al. as a necessary consequence of their expulsion from the
union.

It is the third requisite – that there is sufficient evidence to support the decision of IBM-Local 31
to expel Casio, et al. – which appears to be lacking in this case.
The failure of GMC to make a determination of the sufficiency of evidence supporting the
decision of IBM-Local 31 to expel Casio, et al. is a direct consequence of the non-observance by
GMC of procedural due process in the dismissal of employees.

As a defense, GMC contends that as an employer, its only duty was to ascertain that IBM-Local
31 accorded Casio, et al. due process; and, it is the finding of the company that IBM-Local 31
did give Casio, et al. the opportunity to answer the charges against them, but they refused to avail
themselves of such opportunity.

This argument is without basis. The Court has stressed time and again that allegations must be
proven by sufficient evidence because mere allegation is definitely not evidence. The records of
this case are absolutely bereft of any supporting evidence to substantiate the bare allegation of
GMC that Casio, et al. were accorded due process by IBM-Local 31. There is nothing on record
that would indicate that IBM-Local 31 actually notified Casio, et al. of the charges against them
or that they were given the chance to explain their side. All that was stated in the IBM-Local 31
Resolution dated February 29, 1992, expelling Casio, et al. from the union, was that “a copy of
the said letter complaint [dated February 24, 1992] was dropped or left in front of E. Casio.” It
was not established that said letter-complaint charging Casio, et al. with acts inimical to the
interest of the union was properly served upon Casio, that Casio willfully refused to accept the
said letter-notice, or that Casio had the authority to receive the same letter-notice on behalf of the
other employees similarly accused. It’s worthy to note that Casio, et al. were expelled only five
days after the issuance of the letter-complaint against them. The Court cannot find proof on
record when the three-day period, within which Casio, et al. was supposed to file their answer or
counter-affidavits, started to run and had expired. The Court is likewise unconvinced that the
said three-day period was sufficient for Casio, et al. to prepare their defenses and evidence to
refute the serious charges against them.

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

The twin requirements of notice and hearing constitute the essential elements of procedural due
process. The law requires the employer to furnish the employee sought to be dismissed with two
written notices before termination of employment can be legally effected: (1) a written notice
apprising the employee of the particular acts or omissions for which his dismissal is sought in
order to afford him an opportunity to be heard and to defend himself with the assistance of
counsel, if he desires, and (2) a subsequent notice informing the employee of the employer’s
decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with
illegality.

#69

The Heritage Hotel Manila vs. Natl Union of Workers in Hotel etc.
GR No. 178296, January 12, 2011

Facts: On October 11, 1995, respondent filed with the Department of Labor and Employment-
National Capital Region (DOLE-NCR) a petition for certification election. The Med-Arbiter
granted the petition on February 14, 1996 and ordered the holding of a certification election. On
appeal, the DOLE Secretary, in a Resolution dated August 15, 1996, affirmed the Med-Arbiter's
order and remanded the case to the Med-Arbiter for the holding of a pre-election conference on
February 26, 1997. Petitioner filed a motion for reconsideration, but it was denied on September
23, 1996.

The pre-election conference was not held as initially scheduled; it was held a year later, or on
February 20, 1998. Petitioner moved to archive or to dismiss the petition due to alleged repeated
non-appearance of respondent. The latter agreed to suspend proceedings until further notice. The
pre-election conference resumed on January 29, 2000.

Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of Labor
Relations (BLR) its annual financial report for several years and the list of its members since it
filed its registration papers in 1995. Consequently, on May 19, 2000, petitioner filed a Petition
for Cancellation of Registration of respondent, on the ground of the non-submission of the said
documents. Petitioner prayed that respondent's Certificate of Creation of Local/Chapter be
cancelled and its name be deleted from the list of legitimate labor organizations. It further
requested the suspension of the certification election proceedings.

Issue: Whether or not the non-submission of financial reports warrant the cancellation of the
respondent’s registration

Ruling: No. The respondent's registration as a legitimate labor union should not be cancelled.
The Regional Director has ample discretion in dealing with a petition for cancellation of a
union's registration, particularly, determining whether the union still meets the requirements
prescribed by law. It is sufficient to give the Regional Director license to treat the late filing of
required documents as sufficient compliance with the requirements of the law. After all, the law
requires the labor organization to submit the annual financial report and list of members in order
to verify if it is still viable and financially sustainable as an organization so as to protect the
employer and employees from fraudulent or fly-by-night unions. With the submission of the
required documents by respondent, the purpose of the law has been achieved, though belatedly.

We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in
denying the petition for cancellation of respondent's registration. The union members and, in
fact, all the employees belonging to the appropriate bargaining unit should not be deprived of a
bargaining agent, merely because of the negligence of the union officers who were responsible
for the submission of the documents to the BLR.

#70

Legend International Resorts Ltd., vs. Kilusang Manggagawa ng Legenda

G.R. No. 169754, Feb. 23, 2011

Facts: June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando,
Pampanga, a petition for certification election. KML alleged that it is a legitimate labor
organization of the rank and file employees of Legend. It was issued its Certification of
Registration by DOLE on May 18, 2001.
Legend moved to dismiss the petition on the grounds that it is not a legitimate labor organization
because its membership is a mixture of rank and file employees and supervisory employees.
KML also committed acts of fraud and misrepresentation when it made it appear that certain
employees attended its general membership meeting on April 5, 2001 when in reality some of
them were either at work, have already resigned, or were abroad.

KML argued that even if the supervisory employees were excluded from membership, the
certification election could still proceed because the required number of total rank and file
employees necessary is still sustained. It also claimed that its legitimacy as a labor union cannot
be attacked collaterally.

Med Arbiter judgment September 20, 2001: dismissed KML’s petition for certification election.
Since its membership included supervisory employees, it was not a legitimate labor organization.
KML was also guilty of fraud and misrepresentation; 70 employees who were claimed to be
among those who attended its organizational meeting were either at work or elsewhere.

Office of the Secretary of DOLE May 22, 2002 decision: reversed Med- Arbiter’s decision.
KML’s legitimacy as a union cannot be attacked collaterally. The presence of supervisory
employees does not ipso facto render the existence of a labor organization illegal. Mixed
membership is not one of the grounds for dismissal of a petition for certification election.
Ordered the immediate conduct of the certification election.

Legend filed a Motion for Reconsideration. It also alleged that it filed a petition for cancellation
of union registration of KML which was granted by the DOLE Regional Office, November 7,
2001. MFR was denied in a resolution dated August 20, 2002: a final order of cancellation is
required before a petition for certification of election may be dismissed on the ground of lack of
legal personality, and that the November 7, 2001 decision was reversed by the BLR March 26,
2002.

CA: held that the issue on the legitimacy of KML as a labor organization has already been settled
with finality. The March 26, 2002 decision upholding the legitimacy had long become final and
executor for failure of Legend to appeal.KML being a legitimate labor org, it could properly file
a petition for certification election. Legend filed MFR stating that it has appealed to the CA the
March 26, 2002 decision and is still pending. CA denied MFR.

Issues:
1. Whether Legend has timely appealed the March 26, 2002 decision (re: cancellation of union
registration)
2.Whether the cancellation of KML’s certificate of registration should retroact to the time of its
issuance (it was cancelled in the November 7, 2001 decision)
3. Whether the legitimacy of the legal personality of KML can be collaterally attacked in a
petition for certification election

Ruling:
1.Yes. The March 26, 2002 decision has not yet attained finality considering that it has timely
appealed to the CA and which at that time is still pending resolution. Legend timely filed on Sept
6, 2002 a petition for certiorari before the CA assailing the March 26, 2002 decision.

On June 30, 2005, CA reversed the March 26, 2002 decision of the BLR and reinstated the
November 7, 2001 decision cancelling the certificate of registration of KML. KML’s MRF was
denied. KML filed a petition for certiorari before the SC which was denied. KML moved for
reconsideration but it was denied with finality. The decision to cancel KML’s certificate of
registration became final and executory and entry of judgment was made on July 18, 2006.

#71

Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Phils for Empowerment
and Reforms (SMCC-SUPER) et al., vs. Charter Chemical and Coating Corp.
G.R. No. 169717, March 16, 2011

Facts: On June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando,
Pampanga, a Petition for Certification Election docketed as Case No. RO300-0106-RU-001.
KML alleged that it is a legitimate labor organization of the rank and file employees of Legend
International Resorts Limited (LEGEND). KML claimed that it was issued its Certificate of
Registration No. RO300-0105-UR-002 by the DOLE on May 18, 2001.

LEGEND moved to dismiss the petition alleging that KML is not a legitimate labor organization
because its membership is a mixture of rank and file and supervisory employees in violation of
Article 245 of the Labor Code. LEGEND also claimed that KML committed acts of fraud and
misrepresentation when it made it appear that certain employees attended its general membership
meeting on April 5, 2001 when in reality some of them were either at work; have already
resigned as of March 2001 or were abroad.

Issues:
1. Whether or not the cancellation of KML’s certificate of registration should retroact to the time
of its issuance
2. Whether or not the legitimacy of the legal personality of KML can be collaterally attacked in a
petition for certification election

Ruling:
1. The cancellation of KML’s certificate of registration should not retroact to the time of its
issuance.
Notwithstanding the finality of the Decision cancelling the certificate of registration of KML, we
cannot subscribe to LEGEND's proposition that the cancellation of KML's certificate of
registration should retroact to the time of its issuance.
At any rate, the Court applies the established rule correctly followed by the public respondent
that an order to hold a certification election is proper despite the pendency of the petition for
cancellation of the registration certificate of the respondent union. The rationale for this is that at
the time the respondent union filed its petition, it still had the legal personality to perform such
act absent an order directing the cancellation. In Capitol Medical Center, Inc. v. Hon. Trajano,
we also held that "the pendency of a petition for cancellation of union registration does not
preclude collective bargaining." In Association of Court of Appeals Employees v. Ferrer-Calleja,
this Court was tasked to resolve the issue of whether "the certification proceedings should be
suspended pending [the petitioner's] petition for the cancellation of union registration of the
UCECA." The Court resolved the issue in the negative holding that "an order to hold a
certification election is proper despite the pendency of the petition for cancellation of the
registration certificate of the respondent union. The rationale for this is that at the time the
respondent union filed its petition, it still had the legal personality to perform such act absent an
order directing a cancellation."

Based on the foregoing jurisprudence, it is clear that a certification election may be conducted
during the pendency of the cancellation proceedings. This is because at the time the petition for
certification was filed, the petitioning union is presumed to possess the legal personality to file
the same. There is therefore no basis for LEGEND's assertion that the cancellation of KML's
certificate of registration should retroact to the time of its issuance or that it effectively nullified
all of KML's activities, including its filing of the petition for certification election and its demand
to collectively bargain.

#72

BPI vs. BPI Employees Union-Davao Chapter

GR No. 164301, October 19, 2011 Reso on the Decision of Aug. 18, 2010

Facts: On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of Merger
executed on January 20, 2000 by and between BPI, herein petitioner, and FEBTC. This Article
and Plan of Merger was approved by the Securities and Exchange Commission on April 7, 2000.

Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were
transferred to and absorbed by BPI as the surviving corporation. FEBTC employees, including
those in its different branches across the country, were hired by petitioner as its own employees,
with their status and tenure recognized and salaries and benefits maintained.

Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI Unibank

(hereinafter the "Union," for brevity) is the exclusive bargaining agent of BPI’s rank and file
employees in Davao City. The former FEBTC rank-and-file employees in Davao City did not
belong to any labor union at the time of the merger. Prior to the effectivity of the merger, or on
March 31, 2000, respondent Union invited said FEBTC employees to a meeting regarding the
Union Shop Clause (Article II, Section 2) of the existing CBA between petitioner BPI and
respondent Union.

The parties both advert to certain provisions of the existing CBA, which includes:
Section 2. Union Shop - New employees falling within the bargaining unit as defined in Article I
of this Agreement, who may hereafter be regularly employed by the Bank shall, within thirty
(30) days after they become regular employees, join the Union as a condition of their continued
employment. It is understood that membership in good standing in the Union is a condition of
their continued employment with the Bank.

After the meeting called by the Union, some of the former FEBTC employees joined the Union,
while others refused. Later, however, some of those who initially joined retracted their
membership.

Respondent Union then sent notices to the former FEBTC employees who refused to join, as
well as those who retracted their membership, and called them to a hearing regarding the matter.
When these former FEBTC employees refused to attend the hearing, the president of the Union
requested BPI to implement the Union Shop Clause of the CBA and to terminate their
employment pursuant thereto.

Issue: Whether or not the former FEBTC employees that were absorbed by petitioner upon the
merger between FEBTC and BPI should be covered by the Union Shop Clause found in the
existing CBA between petitioner and respondent Union.

Ruling:
Yes. They are covered by the Union Shop Clause.
"Union security" is a generic term which is applied to and comprehends "closed shop," "union
shop," "maintenance of membership" or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment. There is union shop when all new regular employees are required to join the union
within a certain period for their continued employment. There is maintenance of membership
shop when employees, who are union members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the agreement is
terminated. A closed-shop, on the other hand, may be defined as an enterprise in which, by
agreement between the employer and his employees or their representatives, no person may be
employed in any or certain agreed departments of the enterprise unless he or she is, becomes,
and, for the duration of the agreement, remains a member in good standing of a union entirely
comprised of or of which the employees in interest are a part.

#73

Octavio vs. Phil Long Distance Telephone Company

G.R. No. 175492, Feb. 27, 2013
Facts: On May 28, 1999, PLDT and Gabay ng Unyon sa Telekominaksyon ng mga Superbisor
(GUTS) entered into a CBA covering the period January 1, 1999 to December 31, 2001 (CBA of
1999-2001). Article VI, Section I thereof provides:
Section 1. The COMPANY agrees to grant the following across-the-board salary increase during
the three years covered by this Agreement to all employees covered by the bargaining unit as of
the given dates:
Effective January 1, 1999 10% of basic wage or P2,000.00 whichever is higher;
Effective January 1, 2000 11% of basic wage or P2,250.00 whichever is higher;
Effective January 1, 2001 12% of basic wage or P2,500.00 whichever is higher.

On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary status. He
became a member of GUTS. When Octavio was regularized on January 1, 2001, he was
receiving a monthly basic salary of P10,000.00. On February 1, 2002, he was promoted to the
position of Sales System Analyst 2 and his salary was increased to P13,730.00.

On May 31, 2002, PLDT and GUTS entered into another CBA covering the period January 1,
2002 to December 31, 2004 (CBA of 2002-2004) which provided for the following salary
increases: 8% of basic wage or P2,000.00 whichever is higher for the first year (2002); 10% of
basic wage or P2,700.00 whichever is higher for the second year (2003); and, 10% of basic wage
or P2,400.00 whichever is higher for the third year (2004).

Claiming that he was not given the salary increases of P2,500.00 effective January 1, 2001 and
P2,000.00 effective January 1, 2002, Octavio wrote the President of GUTS, Adolfo Fajardo
(Fajardo). Acting thereon and on similar grievances from other GUTS members, Fajardo wrote
the PLDT Human Resource Head to inform management of the GUTS members claim for
entitlement to the across-the-board salary increases.

Accordingly, the Grievance Committee convened on October 7, 2002 consisting of

representatives from PLDT and GUTS. The Grievance Committee, however, failed to reach an
agreement. In effect, it denied Octavios demand for salary increases. Aggrieved, Octavio filed
before the Arbitration Branch of the NLRC a Complaint for payment of said salary increases.
The Labor Arbiter dismissed the Complaint of Octavio and upheld the Committee Resolution.

Upon Octavios appeal, the NLRC, in its September 30, 2005 Resolution, affirmed the Labor
Arbiters Decision. Octavios Motion for Reconsideration was likewise dismissed by the NLRC in
its November 21, 2005 Resolution.

Octavio thus filed a Petition for Certiorari which the CA found to be without merit. In its August
31, 2006 Decision, the CA declared the Committee Resolution to be binding on Octavio, he
being a member of GUTS, and because he failed to question its validity and enforceability.

In his Motion for Reconsideration, Octavio disclaimed his alleged failure to question the
Committee Resolution by emphasizing that he filed a Complaint before the NLRC against
PLDT. However, the CA denied Octavios Motion for Reconsideration.
Issue: Did Octavio properly raise the issues to the court despite remedies stated in the grievance
machineriy in the CBA?

Ruling: The Petition has no merit.

Under Article 260 of the Labor Code, grievances arising from the interpretation or
implementation of the parties CBA should be resolved in accordance with the grievance
procedure embodied therein. It also provides that all unsettled grievances shall be automatically
referred for voluntary arbitration as prescribed in the CBA.
It is settled that when parties have validly agreed on a procedure for resolving grievances and to
submit a dispute to voluntary arbitration then that procedure should be strictly observed.
Moreover, we have held time and again that before a party is allowed to seek the intervention of
the court, it is a precondition that he should have availed of all the means of administrative
processes afforded him. Hence, if a remedy within the administrative machinery can still be
resorted to by giving the administrative officer concerned every opportunity to decide on a
matter that comes within his jurisdiction, then such remedy should be exhausted first before the
courts judicial power can be sought.

#74

National Union of bank Employees vs. Philnabank Employees Association

G.R. No. 174287, Aug. 12, 2013

Facts: Respondent Philippine National Bank (PNB) used to be a government-owned and

controlled banking institution established under Public Act 2612, as amended by Executive
Order No. 80 dated December 3, 1986 (otherwise known as The 1986 Revised Charter of the
Philippine National Bank). Its rank-and-file employees, being government personnel, were
represented for collective negotiation by the Philnabank Employees Association (PEMA), a
public sector union.

In 1996, the Securities and Exchange Commission approved PNB’s new Articles of
Incorporation and By-laws and its changed status as a private corporation. PEMA affiliated with
petitioner National Union of Bank Employees (NUBE), which is a labor federation composed of
unions in the banking industry, adopting the name NUBE-PNB Employees Chapter (NUBE-
PEC). Later, NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB
rank-and-file employees. A collective bargaining agreement (CBA) was subsequently signed
between NUBE-PEC and PNB covering the period of January 1, 1997 to December 31, 2001.

Following the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-
FFW) filed on January 2, 2002 a petition for certification election among the rank-and-file
employees of PNB. The petition sought the conduct of a certification election to be participated
in by PEMA-FFW and NUBE-PEC.

While the petition for certification election was still pending, two significant events transpired –
the independent union registration of NUBE- PEC and its disaffiliation with NUBE.
PEMA sent a letter to the PNB management informing its disaffiliation from NUBE and
requesting to stop, effective immediately, the check-off of the P15.00 due for NUBE. Acting
thereon, on July 4, 2003, PNB informed NUBE of PEMA’s letter and its decision to continue the
deduction of the P15.00 fees, but stop its remittance to NUBE effective July 2003. PNB also
notified NUBE that the amounts collected would be held in a trust account pending the
resolution of the issue on PEMA’s disaffiliation.

Alleging unfair labor practice (ULP) for non-implementation of the grievance machinery and
procedure, NUBE brought the matter to the National Conciliation and Mediation Board (NCMB)
for preventive mediation.

Issue: Whether PEMA validly disaffiliated itself from NUBE, the resolution of which, in turn,
inevitably affects the latter’s right to collect the union dues held in trust by PNB.

Ruling: The right of the local members to withdraw from the federation and to form a new local
union depends upon the provisions of the union's constitution, by-laws and charter and, in the
absence of enforceable provisions in the federation's constitution preventing disaffiliation of a
local union, a local may sever its relationship with its parent.

In the case at bar, there is nothing shown in the records nor is it claimed by NUBE that PEMA
was expressly forbidden to disaffiliate from the federation nor were there any conditions
imposed for a valid breakaway. This being so, PEMA is not precluded to disaffiliate from NUBE
after acquiring the status of an independent labor organization duly registered before the DOLE.

Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously bound
the two entities was completely severed. As NUBE was divested of any and all power to act in
representation of PEMA, any act performed by the former that affects the interests and affairs of
the latter, including the supposed expulsion of Serrana et al., is rendered without force and effect.

#75

Samahan ng Manggagawa sa Hanjin Shipyard vs. BLR, et al

GR No. 211145, Oct. 14, 2015

Doctrine: The right to self-organization is not limited to unionism. Workers may also form or
join an association for mutual aid and protection and for other legitimate purposes.

Facts: On February 16, 2010, Samahan filed an application for registration of its name "Samahan
ng Mga Manggagawa sa Hanjin Shipyard" with the DOLE. On February 26, 2010, the DOLE
Regional Office No. 3, City of San Fernando, Pampanga (DOLE-Pampanga), issued the
corresponding certificate of registration in favor of Samahan.
On March 15, 2010, respondent filed a petition with DOLE-Pampanga praying for the
cancellation of registration of Samahan's association. DOLE Regional Director Ernesto Bihis
ruled in favor of Hanjin.

Aggrieved, Samahan filed an appeal before the BLR. The BLR granted Samahan's appeal and
reversed the ruling of the Regional Director. It stated that the law clearly afforded the right to
self-organization to all workers including those without definite employers but directed Samahan
to remove the words "Hanjin Shipyard" from its name.

The CA rendered its decision, holding that the registration of Samahan as a legitimate workers'
association was contrary to the provisions of Article 243 of the Labor Code. It stressed that only
57 out of the 120 members were actually working in Hanjin. The CA was of the view that
dropping the words "Hanjin Shipyard" from the association name would not prejudice or impair
its right to self-organization because it could adopt other appropriate names.

Issues:
WoN The court of appeals seriously erred in finding that samahan cannot form a workers'
association of employees in hanjin and instead should have formed a union, hence their
registration as a workers' association should be cancelled.

Ruling:
1. Right to self-organization includes right to form a union, workers' association and labor
management councils
Section 3, Article XIII of the 1987 Constitution states:

Section 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all. It
shall guarantee the rights of all workers to self-organization,

And Section 8, Article III of the 1987 Constitution also states:

Section 8. The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for purposes not contrary to law shall not be abridged.

As Article 246 (now 252) of the Labor Code provides, the right to self-organization includes the
right to form, join or assist labor organizations for the purpose of collective bargaining through
representatives of their own choosing and to engage in lawful concerted activities for the same
purpose for their mutual aid and protection.

The right to form a union or association or to self-organization comprehends two notions, to wit:
(a) the liberty or freedom, that is, the absence of restraint which guarantees that the employee
may act for himself without being prevented by law; and (b) the power, by virtue of which an
employee may, as he pleases, join or refrain from joining an association.

#76
HSBC Employees Union vs. NLRC
GR No. 156635, Jan. 11, 2016

Facts: In the period material to this case, petitioner Hongkong & Shanghai Banking Corporation
Employees Union (Union) was the duly recognized collective bargaining agent of the rank-and-
file employees of respondent Hongkong & Shanghai Banking Corporation (HSBC). A collective
bargaining agreement (CBA) governed the relations between the Union and its members, on one
hand, and HSBC effective April 1, 1990 until March 31, 1993 for the non-representational
(economic) aspect, and effective April 1, 1990 until March 31, 1995 for the representational
aspect.5 The CBA included a salary structure of the employees comprising of grade levels, entry
level pay rates and the individual pays depending on the length of service.

On January 18, 1993, HSBC announced its implementation of a job evaluation program (JEP)
retroactive to January 1, 1993. The JEP consisted of a job designation per grade level with the
accompanying salary scale providing for the minimum and maximum pay the employee could
receive per salary level.

On December 22, 1993, at around 12:30 p.m., the Union's officers and members walked out and
gathered outside the premises of HSBC's offices on Ayala Avenue, Makati and Ortigas Center,
Pasig.17 According to HSBC, the Union members blocked the entry and exit points of the bank
premises, preventing the bank officers, including the chief executive officer, from entering
and/or leaving the premises.18 This prompted HSBC to resort to a petition for habeas corpus on
behalf of its officials and employees thus prevented from leaving the premises, whom it airlifted
on December 24, 1993 to enable them to leave the bank premises.

On December 24, 1993, HSBC filed its complaint to declare the strike illegal.
In the meantime, HSBC issued return-to-work notices to the striking employees on December
22, 1993. Only 25 employees complied and returned to work. Due to the continuing concerted
actions, HSBC terminated the individual petitioners on December 27, 1993.23 The latter,
undeterred, and angered by their separation from work, continued their concerted activities. not
dismissal

Issues:
1. Whether the strike commenced on December 22, 1993 was lawfully conducted

Ruling:
Non-compliance with Article 263 of the Labor Code renders a labor strike illegal.
The right to strike is a constitutional and legal right of all workers because the strike, which
seeks to advance their right to improve the terms and conditions of their employment, is
recognized as an effective weapon of labor in their struggle for a decent existence. However, the
right to strike as a means for the attainment of social justice is never meant to oppress or destroy
the employers. Thus, the law prescribes limits on the exercise of the right to strike.

#77
Hijo Resources Corp.vs. Mejares
GR No. 208986, Jan. 13, 2016

Doctrine:
The ruling in a certification election case on the existence or non-existence of an employer-
employee relationship does not operate as res judicata in the illegal dismissal case filed before
the NLRC.

Facts: Respondents Mejares, Baluran, Saycon, and Cucharo were among the complainants,
represented by their labor union named "Nagkahiusang Mamumuo ng Bit, Djevon, at Raquilla
Farms sa Hijo Resources Corporation" (NAMABDJERA-HRC), who filed with the NLRC an
illegal dismissal case against petitioner Hijo Resources Corporation (HRC). They alleged that
HRC, formerly known as Hijo Plantation Incorporated (HPI), is the owner of agricultural lands
in Madum, Tagum, Davao del Norte, which were planted primarily with Cavendish bananas. In
2000, HPI was renamed as HRC. In December 2003, HRC's application for the conversion of its
agricultural lands into agri-industrial use was approved. The machineries and equipment
formerly used by HPI continued to be utilized by HRC.

In 2001, complainants were absorbed by HRC, but they were working under the contractor-
growers: Buenaventura Tano (Bit Farm); Djerame Pausa (Djevon Farm); and Ramon Q.
Laurente (Raquilla Farm). Complainants asserted that these contractor-growers received
compensation from HRC and were under the control of HRC. They further alleged that the
contractor-growers did not have their own capitalization, farm machineries, and equipment.
When the complainants formed a union named NAMABDJERA-HRC, and filed a petition for
certification election before the DOLE, the 3 contractor-growers filed with the DOLE a notice of
cessation of business operations. In September 2007, they were terminated. So they, filed a case
for unfair labor practices, illegal dismissal, and illegal deductions with prayer for moral and
exemplary damages and attorney's fees before the NLRC, represented by NAMABDJERA-HRC.

On November 19 2007, the Med-Arbiter issued an Order dismissing the certification election
case because of lack of employer-employee relationship between HRC and the complainants.
Such order was issued after the complainants were terminated from their employment in
September 2007, which led to the filing of the illegal dismissal case before the NLRC on 19
September 2007. Considering their termination from work, it would have been futile for the
members of the respondent union to appeal the Med-Arbiter' s order in the certification election
case to the DOLE Secretary. Instead, they pursued the illegal dismissal case filed before the
NLRC.

Issue: WON the Labor Arbiter, in the illegal dismissal case, is bound by the ruling of the Med-
Arbiter regarding the existence or non-existence of employer-employee relationship between the
parties in the certification election case?

Ruling:
No. There is no question that the Med-Arbiter has the authority to determine the existence of an
employer-employee relationship between the parties in a petition for certification election. Under
Article 226 of the Labor Code, as amended, the Bureau of Labor Relations (BLR), the Bureau of
Labor Relations and the Labor Relations Divisions in the regional offices of the Department of
Labor shall have original and exclusive authority to act, at their own initiative or upon request of
either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or
problems arising from or affecting labor-management relations in all workplaces whether
agricultural or non-agricultural, except those arising from the implementation or interpretation of
collective bargaining agreements which shall be the subject of grievance procedure and/or
voluntary arbitration.
Apropos to the present case, once there is a determination as to the existence of such a
relationship, the med-arbiter can then decide the certification election case. As the authority to
determine the employer-employee relationship is necessary and indispensable in the exercise of
jurisdiction by the med-arbiter, his finding thereon may only be reviewed and reversed by the
Secretary of Labor who exercises appellate jurisdiction under Article 259 of the Labor Code

#78

Ramirez et al., vs. Polyson Industries Inc.

GR No. 207898, Oct. 19, 2016

Facts:
The instant case arose from a labor dispute, between herein petitioners and Respondent
Corporation, which was certified by the Secretary of the Department of Labor and Employment
(DOLE) to the NLRC for compulsory arbitration. Polyson alleged that: on April 28, 2011, it
received a notice of hearing from the DOLE with respect to the petition for certification election
filed by Obrero; on May 31, 2011, Polyson, through counsel and management representative,
met with the officers of Obrero, led by the union president, herein petitioner Ramirez; Obrero
asked that it be voluntarily recognized by Polyson as the exclusive bargaining agent of the rank-
and-file employees of Polyson, but the latter refused and opted for a certification election;
furious at such refusal, the Obrero officers threatened the management that the union will show
its collective strength in the coming days.

Polyson received a rush order from one of its clients for the production of 100,000 pieces of
plastic bags; the management of Polyson informed the operators of its Cutting Section that they
would be needing workers to work overtime because of the said order. The supervisors then
requested that the operators set aside their time for the following day to work beyond their
regular shift; on June 8, 2011, five (5) operators indicated their desire to work overtime;
however, after their regular shift, three of the five workers did not work overtime which resulted
in the delay in delivery of the client's order and eventually resulted in the cancellation of the said
order by reason of such delay.

When management asked the workers, who initially manifested their desire to work overtime,
two of the three workers, namely, Leuland Visca (Visca) and Samuel Tuting (Tuting) gave the
same reason, to wit: "Ayaw nila/ng iba na mag-OT [overtime] ako"; the management then
conducted an investigation and a hearing where Visca affirmed his previous claim that
petitioners were the ones who pressured him to desist from rendering overtime work. The
management informed petitioners that it has decided to terminate petitioners' employment on the
ground that they instigated an illegal concerted activity resulting in losses to the company.|

Issue: Whether or not petitioner’s dismissal from employment is valid.

Ruling:
Due process under the Labor Code involves two aspects: first is substantive, which refers to the
valid and authorized causes of termination of employment under the Labor Code; and second is
procedural, which points to the manner of dismissal.

As a complementary principle, the employer has the onus of proving with clear, accurate,
consistent, and convincing evidence the validity of the dismissal. The evidence on record clearly
establishes that herein [petitioners] resorted to an illicit activity. The act of inducing and/or
threatening workers not to render overtime work, given the circumstances surrounding the
instant case, was undoubtedly a calculated effort amounting to 'overtime boycott' or 'work
slowdown.' [Petitioners], in their apparent attempt to make a statement — as a response to
[Polyson's] refusal to voluntarily recognize Obrero Pilipino — Polyson Industries Chapter as the
sole and exclusive bargaining representative of the rank-and-file employees, unduly caused
[Polyson] significant losses in the aggregate amount of Two Hundred Ninety Thousand Pesos
(PhP290,000.00). The Court finds no cogent reason to depart from the above findings, which
were affirmed by the CA.|||

#79

Erson Ang Lee Doing Business as Super Lamination Services vs. Samahang Manggagawa ng
Super Lamination
GR No. 193816, Nov. 21, 2016

Facts: Three Labor Unions (Union A— Samahan ng mga Manggagawa ng Super Lamination
Services; Union B—Express Lamination Workers’ Union; and Union C—Samahan ng mga
Manggagawa ng Express Coat Enterprises, Inc) filed a Petition for Certification Election to
represent all the rank-and-file employees of Express Super Lamination, Express Lamination and
Express Coat, respectively.

These companies were companies allegedly owned by one, Ang Lee (petitioner). The three
companies filed a Motion to Dismiss for lack of employer-employee relationship between the
establishments and the bargaining units. The common defense was that these employees were not
their employees but the employees of the other two companies. 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.

DOLE found that these sister companies had one common human resource department
responsible for hiring and disciplining the employees of the three companies. To DOLE, these
circumstances showed that the companies were engaged in a work-pooling scheme, which they
might be considered as one and the same entity for determining the appropriate bargaining unit
in a certification election. DOLE then applied the concept of multi-employer bargaining for the
creation of a single bargaining unit for the rank-and-file employees of all three companies.

Issue: WON the rank and file employees of the 3 companies constitute an appropriate bargaining
unit

Ruling:
Yes. 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.

Geographical location can be completely disregarded if the communal or mutual interests of the
employees are not sacrificed. In the present case, there was communal interest among the rank-
and- le employees of the three companies. 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 employers is necessary to promote harmonious labor-management relations in the
interest of sound and stable industrial peace.

#80

Peninsula Employees Union vs. Esquivel

GR No. 218454, Dec. 1, 2016

Facts: On December 13, 2007, Peninsula Employees Union’ (PEU) Board of Directors passed
Local Board Resolution No. 12, series of 20078 authorizing, among others, the affiliation of PEU
with NUWHRAIN, and the direct membership of its individual members thereto. On the same
day, the said act was submitted to the general membership, and was duly ratified by 223 PEU
members. Beginning January 1, 2009, PEU-NUWHRAIN sought to increase the union
dues/agency fees from one percent (1%) to two percent (2%) of the rank and file employees’
monthly salaries, brought about by PEU’s affiliation with NUWHRAIN, which supposedly
requires its affiliates to remit to it two percent (2%) of their monthly salaries.

The non-PEU members objected to the assessment of increased agency fees arguing that: (a) the
new CBA is unenforceable since no written CBA has been formally signed and executed by
PEU-NUWHRAIN and the Hotel; (b) the 2% agency fee is exorbitant and unreasonable; and (c)
PEU-NUWHRAIN failed to comply with the mandatory requirements for such increase.

Issues:
Whether PEU-NUWHRAIN has right to collect the increased agency fees.
Ruling:
Yes. The recognized collective bargaining union which successfully negotiated the CBA with the
employer is given the right to collect a reasonable fee called “agency fee” from non-union
members who are employees of the appropriate bargaining unit, in an amount equivalent to the
dues and other fees paid by union members, in case they accept the benefits under the CBA.
While the collection of agency fees is recognized by Article 259 (formerly Article 248) of the
Labor Code, as amended, the legal basis of the union’s right to agency fees is neither contractual
nor statutory, but quasi-contractual, deriving from the established principle that non-union
employees may not unjustly enrich themselves by benefiting from employment conditions
negotiated by the bargaining union. In the present case, PEU-NUWHRAIN’s right to collect
agency fees is not disputed.