LABOR RELATIONS – 1ST EXAM industrial and agricultural enterprises and in religious,

charitable, medical, or educational institutions, whether

Xandredg Sumpt L. Latog operating for profit or not, shall have the right to self-
organization and to form, join, or assist labor organizations of
their own choosing for purposes of collective bargaining.
I Ambulant, intermittent and itinerant workers, self-employed
RIGHT TO SELF-ORGANIZATION people, rural workers and those without any definite employers
may form labor organizations for their mutual aid and
protection.
The Right to Self-Organization includes:
ART. 255. [245] Ineligibility of Managerial
a. The right to form, join, or assist labor organizations Employees to Join any Labor Organization; Right of
of their own choosing for purposes of collective Supervisory Employees. Managerial employees are not eligible
bargaining; to join, assist or form any labor organization. Supervisory
b. The right not to join any union; employees shall not be eligible for membership in the collective
c. The right to vote by 2/3 majority of its general bargaining unit of the rank-and-file employees but may join,
membership to cancel registration of its union in a assist or form separate collective bargaining units and/or
legitimate labor organizations of their own. The rank-and-file
meeting called for the purpose;
union and the supervisors' union operating within the same
d. The right to file a petition for cancellation of union establishment may join the same federation or national union.
registration and/or de-certification of the union on
grounds provided for by law. 2. Government Employees

A. CONSTITUTIONAL PROVISIONS a. Constitutional Bases

1. Right to Self-Organization in the Private Sector
a. Constitutional Bases
Article II, Section 18 provides:
SECTION 18. The State affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
Article III, Section 8 also provides:
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.
Lastly, Article XIII, Section 3 provides:
SECTION 3. The State shall afford full protection to
labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law.
XXX
b. Labor Code Bases
Article 292(c) provides:
Article IX-B, Section 2(5) provides:
(5) The right to self-organization shall not be denied
to government employees.
Article XI, Section 1 also provides:
SECTION 1. Public office is a public trust. Public
officers and employees must at all times be accountable to the
people, serve them with utmost responsibility, integrity, loyalty,
and efficiency, act with patriotism and justice, and lead modest
lives.
b. Labor Code Bases
Article 254 and Article 291 provide:
ART. 254. [244] Right of Employees in the Public
Service. Employees of government corporations established
under the Corporation Code shall have the right to organize
and to bargain collectively with their respective employers. All
other employees in the civil service shall have the right to form
associations for purposes not contrary to law.
ART. 291. [276] Government Employees. The terms
and conditions of employment of all government employees,
including employees of government-owned and controlled
corporations, shall be governed by the Civil Service Law, rules
and regulations. Their salaries shall be standardized by the
National Assembly as provided for in the New Constitution.
However, there shall be no reduction of existing wages, benefits
and other terms and conditions of employment being enjoyed by
them at the time of the adoption of this Code.
Right to Self-Organization vs. Freedom of Association

(c) Any employee, whether employed for a definite Right to Self- Freedom of
period or not, shall, beginning on his first day of service, be Organization Association
considered as an employee for purposes of membership in Basis Statutory: Labor Constitutional: Bill of
any labor union. Code Rights
Purpose “in whole or in part” Any lawful purpose
An exception to Article 292(c) is when the position is not for the purpose of
collective bargaining
covered by the union and when there is qualification in the union
Right involved Economic right; Privileged right
itself. protected right
Articles 253 and 255 also provide: Juridical Carries with it the Does not carry with it
personality creation of a separate the right to have a
ART. 253. [243] Coverage and Employees' Right to and distinct separate and distinct
Self-Organization. All persons employed in commercial, personality by virtue personality
of registration
Page 1 of 28
 E-Er Relationship Must exist Need not exist There is no prohibition in the law or in the implementing
Abridgement by Can be abridged and Cannot be abridged rules regarding the right of supervisory employees to organize a
State regulated labor organization or workers’ association of their own. They are,
Who can exercise Private sector Private and
employees only government however, not allowed to become members of a labor union
employees composed of rank-and-file employees. This is clear under Article
What it is called Labor Workers 255 of the Labor Code. In case there is mixed membership of
Organization/Union Association/Union in supervisors and rank-and-file employees in one union, the new rule
under the Labor Code General enunciated in Article 256 of the Labor Code, unlike in the old law,
is that it cannot be invoked as a ground for the cancellation of the
B. WHO MAY JOIN, FORM, OR ASSIST A LABOR registration of the union. The employees so improperly included
ORGANIZATION FOR COLLECTIVE BARGAINING are automatically deemed removed from the list of members of said
PURPOSES union. In other words, their removal from the said list is by
operation of law.
1. Labor Organization and Its Purpose
Article 219(g) of the Labor Code provides: e. Alien employees;
(g) "Labor organization" means any union or
Article. 284. [269] Prohibition Against Aliens; Exceptions. -
association of employees which exists in whole or in part for the
All aliens, natural or juridical, as well as foreign organizations are
purpose of collective bargaining or of dealing with employers
strictly prohibited from engaging directly or indirectly in all forms of
concerning terms and conditions of employment.
trade union activities without prejudice to normal contacts between
Philippine labor unions and recognized international labor centers:
2. In the Private Sector Provided, however, That aliens working in the country with valid
permits issued by the Department of Labor and Employment, may
Article 253. [243] Coverage and Employees' Right to Self- exercise the right to self-organization and join or assist labor
Organization. All persons employed in commercial, industrial and organizations of their own choosing for purposes of collective
agricultural enterprises and in religious, charitable, medical, or bargaining: Provided, further, That said aliens are nationals of a
educational institutions, whether operating for profit or not, shall have country which grants the same or similar rights to Filipino workers.
the right to self-organization and to form, join, or assist labor
organizations of their own choosing for purposes of collective As a general rule, all aliens, natural or juridical, as well
bargaining. Ambulant, intermittent and itinerant workers, self-
as foreign organizations are strictly prohibited from engaging
employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and directly or indirectly in all forms of trade union activities without
protection. prejudice to normal contacts between Philippine labor unions and
recognized international labor centers.
Article 254. [244] Right of Employees in the Public Service.
For an alien employee to exercise his right to self-
Employees of government corporations established under the organize, the following requisites should be complied with:
Corporation Code shall have the right to organize and to bargain
collectively with their respective employers. All other employees in the (i) He should have a valid working permit issued
civil service shall have the right to form associations for purposes not by the DOLE; and
contrary to law. (ii) He is a national of a country which grants the
same or similar rights to Filipino workers or
Article 255. [245] Ineligibility of Managerial Employees to which has ratified either ILO Convention No.
Join any Labor Organization; Right of Supervisory Employees. 87 or ILO Convention No. 98, as certified by
Managerial employees are not eligible to join, assist or form any labor the Philippine Department of Foreign Affairs.
organization. Supervisory employees shall not be eligible for
membership in the collective bargaining unit of the rank-and-file
f. Working children;
employees but may join, assist or form separate collective bargaining
units and/or legitimate labor organizations of their own. The rank and Working children have the same freedom as adults to
file union and the supervisors' union operating within the same join the collective bargaining union of their own choosing in
establishment may join the same federation or national union. accordance with existing law. Under PD 603, it is clearly provided
that neither management nor any collective bargaining union shall
The following are eligible to join, form or assist a labor threaten or coerce working children to join, continue or withdraw
organization in the private sector: as members of such union.
However, children cannot be officers of a union or labor
a. All persons employed in commercial, organization.
industrial and agricultural enterprises;
g. Homeworkers;
b. Employees of government-owned and/or Homeworkers have the right to form, join or assist
controlled corporations without original organizations of their own choosing in accordance with law. The
charters established under the Corporation registration of homeworkers’ organizations or associations
Code; following the requirements prescribed by law will vest legal
personality thereto.
c. Employees of religious, charitable, medical Household workers or domestic workers are excluded.
or educational institutions, whether
operating for profit or not; Homeworkers Household workers
Place of work Home of employee Home of the
employer
d. Front-line managers, commonly known as Classification Industrial worker Non-industrial
supervisory employees; History Product of Industrial Antedates Industrial
Revolution Revolution

Page 2 of 28
 DOLE Inspection Subject to Not subject to
and Visitorial
Powers
Right to self- Yes No
organization
h. Employees of cooperatives;
Members of a cooperative have no right to form or join
labor organizations for purposes of collective bargaining for being
themselves co-owners of the cooperative. This prohibition covers
employees of the cooperative who are at the same time members
thereof [Cooperative Rural Bank v. Ferrer-Calleja]. However,
insofar as the cooperative’s employees who are not members or co-
owners thereof are concerned, they are entitled to exercise their
right to self-organization and collective bargaining as guaranteed in
the Constitution and existing laws. It is the fact of ownership of the
cooperative and not involvement in the management thereof which
disqualifies a member from joining any labor organization within
the cooperative. But employee-members of a cooperative may
withdraw as members of the cooperative for purposes of joining a
labor union [Central negros Electric Corporation v. Secretary of
Labor].
i. Employees of legitimate contractors – not
with the principals but with the
contractors.
An employee of a legitimate job contractor is entitled to
all the rights and privileges due a regular employee as provided in
the Labor Code, such as the right to self-organization, collective
bargaining and peaceful concerted activities, including the right to
strike. But this right cannot be exercised and invoked against the
principal but only against the independent contractor which
employed them, except if there is labor-only contracting.
j. Employees of GOCCs without original
charters established under the Corporation
Code; Charter Test
Under the present state of the law, the test in determining
whether a government–owned or controlled corporation is subject
to the Civil Service Law is the manner of its creation such that
government corporations created by special charter are subject to
its provisions while those incorporated under the general
Corporation Law are not within its coverage.
However, the Philippine Society for Prevention of
Cruelty to Animals, GOCCs with original charters severally liable
under Article 106 and 107 of the Labor Code, and the Philippine
National Red Cross are within the coverage of the Labor Code,
despite having original charters.
Philippine Society for Prevention of Cruelty to Animals v.
Commission on Audit
Held: The petitioner is correct in stating that the charter test is
predicated, at best, on the legal regime established by the 1935
Constitution, Section 7, Article XIII, which states:
Sec. 7.  The National Assembly shall not, except by general law,
provide for the formation, organization, or regulation of private
corporations, unless such corporations are owned or controlled by the
Government or any subdivision or instrumentality thereof.
The foregoing proscription has been carried over to the 1973
and the 1987 Constitutions.  Section 16 of Article XII of the present
Constitution provides:
Sec. 16.  The Congress shall not, except by general law, provide
for the formation, organization, or regulation of private corporations.  government.  This was evident in Executive Order No. 63, issued by then
Government-owned or controlled corporations may be created or
established by special charters in the interest of the common good and
subject to the test of economic viability.
Page 3 of 28
Section 16 is essentially a re-enactment of Section 7 of Article
XVI of the 1935 Constitution and Section 4 of Article XIV of the 1973
Constitution.
During the formulation of the 1935 Constitution, the Committee
on Franchises recommended the foregoing proscription to prevent the
pressure of special interests upon the lawmaking body in the creation of
corporations or in the regulation of the same. To permit the lawmaking
body by special law to provide for the organization, formation, or
regulation of private corporations would be in effect to offer to it the
temptation in many cases to favor certain groups, to the prejudice of others
or to the prejudice of the interests of the country.
And since the underpinnings of the charter test had been
introduced by the 1935 Constitution and not earlier, it follows that the test
cannot apply to the petitioner, which was incorporated by virtue of Act No.
1285, enacted on January 19, 1905. Settled is the rule that laws in general
have no retroactive effect, unless the contrary is provided. All statutes are
to be construed as having only a prospective operation, unless the purpose
and intention of the legislature to give them a retrospective effect is
expressly declared or is necessarily implied from the language used. In case
of doubt, the doubt must be resolved against the retrospective effect.
There are a few exceptions.  Statutes can be given retroactive
effect in the following cases: (1) when the law itself so expressly provides;
(2) in case of remedial statutes; (3) in case of curative statutes; (4) in case
of laws interpreting others; and (5) in case of laws creating new rights.
None of the exceptions is present in the instant case.
The general principle of prospectivity of the law likewise
applies to Act No. 1459, otherwise known as the Corporation Law, which
had been enacted by virtue of the plenary powers of the Philippine
Commission on March 1, 1906, a little over a year after January 19, 1905,
the time the petitioner emerged as a juridical entity.  Even the Corporation
Law respects the rights and powers of juridical entities organized
beforehand, viz:
SEC. 75.  Any corporation or sociedad anonima formed,
organized, and existing under the laws  of the  Philippine  Islands and  
lawfully  transacting business   in   the Philippine Islands on the date of the
passage of this Act, shall be subject to the provisions hereof so far as such
provisions  may  be applicable  and  shall be entitled   at  its option either
to continue business as such corporation or to reform and organize under
and by virtue of the provisions of this Act, transferring all corporate
interests to the new corporation which, if a stock corporation, is authorized
to issue its shares of stock at par to the stockholders or members of the old
corporation according to their interests.  (Emphasis supplied).
As pointed out by the OSG, both the 1935 and 1987
Constitutions contain transitory provisions maintaining all laws issued not
inconsistent therewith until amended, modified or repealed.
In a legal regime where the charter test doctrine cannot be
applied, the mere fact that a corporation has been created by virtue of a
special law does not necessarily qualify it as a public corporation.
What then is the nature of the petitioner as a corporate entity? 
What legal regime governs its rights, powers, and duties?
As stated, at the time the petitioner was formed, the applicable
law was the Philippine Bill of 1902, and, emphatically, as also stated above,
no proscription similar to the charter test can be found therein.
The textual foundation of the charter test, which placed a
limitation on the power of the legislature, first appeared in the 1935
Constitution.  However, the petitioner was incorporated in 1905 by virtue of
Act No. 1258, a law antedating the Corporation Law (Act No. 1459) by a
year, and the 1935 Constitution, by thirty years.  There being neither a
general law on the formation and organization of private corporations nor a
restriction on the legislature to create private corporations by direct
legislation, the Philippine Commission at that moment in history was well
within its powers in 1905 to constitute the petitioner as a private juridical
entity.
Time and again the Court must caution even the most brilliant
scholars of the law and all constitutional historians on the danger of
imposing legal concepts of a later date on facts of an earlier date.
The amendments introduced by C.A. No. 148 made it clear that
the petitioner was a private corporation and not an agency of the
President of the Philippines Manuel L. Quezon, declaring that the
revocation of the powers of the petitioner to appoint agents with powers of
arrest "corrected a serious defect" in one of the laws existing in the statute
books.
 3. In the Public Sector
In the public sector, all rank-and-file employees of all
branches, subdivisions, instrumentalities, and agencies of
government, including government-owned and/or controlled
corporations with original charters, can form, join or assist labor
organizations called “employees organizations” of their own
choosing.
As to collective bargaining, it is the legislature or, in
proper cases, the administrative heads of government and not the
collective bargaining process nor the concessions wrung by labor
unions from management that determine how much the workers in
government-owned or controlled corporations may receive in terms
of salaries, 13th-month pay, and other conditions or terms of
employment. There are government institutions which can afford to
pay two weeks, three weeks, or even 13th-month salaries to their
personnel from their budgetary appropriations. However, these
payments must be pursuant to law or regulation [Alliance of
Government Workers v. Minister of Labor].
The general rule in the past and up to the present is that
"the terms and conditions of employment in the Government,
including any political subdivision or instrumentality thereof are
governed by law" (Section 11, the Industrial Peace Act, R.A. No.
875, as amended and Article 277, the Labor Code, P.D. No. 442, as
amended). Since the terms and conditions of government
employment are fixed by law, government workers cannot use the
same weapons employed by workers in the private sector to secure
concessions from their employers. The principle behind labor
unionism in private industry is that industrial peace cannot be
secured through compulsion by law. Relations between private
employers and their employees rest on an essentially voluntary
basis. Subject to the minimum requirements of wage laws and
other labor and welfare legislation, the terms and conditions of
employment in the unionized private sector are settled through the
process of collective bargaining. In government employment,
however, it is the legislature and, where properly given delegated
power, the administrative heads of government which fix the terms
and conditions of employment. And this is effected through statutes
or administrative circulars, rules, and regulations, not through
collective bargaining agreements [Ibid].
As such, the following cannot form, join, or assist labor
organizations:
(a) High-level employees whose functions are normally
considered as policy-making or managerial or
whose duties are of a highly confidential nature;
(b) Members of the Armed Forces of the Philippines,
Police Officers, Policemen, Firemen, and Jail
Guards; and
(c) Employees of international organizations or
institutions.
C. INELIGIBILITY OF MANAGERIAL EMPLOYEES;
RIGHT OF SUPERVISORY EMPLOYEES
Article 255. [245] Ineligibility of Managerial Employees to
Join any Labor Organization; Right of Supervisory Employees.
Managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in the collective bargaining unit of the rank-and-file
employees but may join, assist or form separate collective bargaining
units and/or legitimate labor organizations of their own. The rank-and-
file union and the supervisors' union operating within the same
establishment may join the same federation or national union.
Article 219(m) provides:
(m) "Managerial employee" is one who is vested
with the powers or prerogatives to lay down and execute
Page 4 of 28
management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees. Supervisory
employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not
falling within any of the above definitions are considered rank-
and-file employees for purposes of this Book
Article 255 is constitutional
Although the definition of "supervisory employees"
seems to have been unduly restricted to the last phrase of the
definition in the Industrial Peace Act, the legal significance given
to the phrase "effectively recommends" remains the same. In fact,
the distinction between top and middle managers, who set
management policy, and front-line supervisors, who are merely
responsible for ensuring that such policies are carried out by the
rank and file, is articulated in the present definition. When read in
relation to this definition in Art. 212(m), it will be seen that Art.
245 faithfully carries out the intent of the Constitutional
Commission in framing Art. III, 8 of the fundamental law [United
Pepsi-Cola v. Laguesma].
Nor is the guarantee of organizational right in Art. III, 8
infringed by a ban against managerial employees forming a union. 
The right guaranteed in Art. III, 8 " is subject to the condition that
its exercise should be for purposes not contrary to law." 
Rational Basis of prohibiting managerial employees
In the case of Art. 245, there is a rational basis for
prohibiting managerial employees from forming or joining labor
organizations. 
As Justice Davide, Jr., himself a constitutional
commissioner, said in his ponencia in Philips Industrial
Development, Inc. v. NLRC: 
In the first place, all these employees, with the exception
of the service engineers and the sales force personnel, are confidential
employees. Their classification as such is not seriously disputed by
PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW
explicitly considered them as confidential employees. By the very
nature of their functions, they assist and act in a confidential capacity
to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. As such, the
rationale behind the ineligibility of managerial employees to form,
assist or joint a labor union equally applies to them.
In Bulletin Publishing
Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this
rationale, thus:
. . . The rationale for this inhibition has been stated to
be, because if these managerial employees would belong to or
be affiliated with a Union, the latter might not be assured of
their loyalty to the Union in view of evident conflict of interests.
The Union can also become company-dominated with the
presence of managerial employees in Union membership.  
To be sure, the Court in Philips Industrial was
dealing with the right of confidential employees to organize. But
the same reason for denying them the right to organize justifies
even more the ban on managerial employees from forming
unions. After all, those who qualify as top or middle managers
are executives who receive from their employers information
that not only is confidential but also is not generally available to
the public, or to their competitors, or to other employees. It is
hardly necessary to point out that to say that the first sentence of
Art. 245 is unconstitutional would be to contradict the decision
in that case.
1. Types of Managerial Employees
 There are three (3) types of managerial employees for
purposes of determining whether they could exercise their right to
self-organization.
a. Top Management
Top management is composed of a comparatively small
group of executives. It is responsible for the overall management of
the organization. It establishes operating policies and guides the
organization’s interactions with its environment. Typical titles of
top managers are CEO, President, or Senior VP. Actual titles vary
from one organization to another and are not always a reliable
guide to membership in the management classification.
b. Middle Management
Middle management refers to more than one level in an
organization. Middle managers direct the activities of other
managers and sometimes also those of operating employees. The
middle managers’ principal responsibilities are to direct the
activities that implement their organization’s policies and to
balance the demands of their superiors with the capacities of their
subordinates. A plant manager in an electronic firm is an example
of a middle manager.
c. First-Line Management
First-line management is the lowest level in an
organization at which individuals are responsible for the work of
others. First-line managers direct operating employees only; they
do not supervise other managers. Examples are the “foreman” or
production supervisor in a manufacturing plant, the technical
supervisor in a research department, and the clerical supervisor in a
large office. First-level managers are often called supervisors.
2. Supervisory Employee Rule
Supervisors may organize their own union but are
prohibited from joining the rank-and-file union. The reason for the
segregation of supervisory and rank-and-file employees with
respect to the exercise of their right to self-organization is the
difference in interests. Supervisory employees are more closely
identified with the employer than with the rank-and-file employees.
If supervisory and rank-and-file employees in a company are
allowed to form a single union, the conflicting interests of these
groups impair their relationship and adversely affect discipline,
collective bargaining, and strikes. These consequences can obtain
not only in cases where supervisory and rank-and-file employees in
the same company belonging to a single union but also where
unions formed independently by supervisory and rank-and-file
employees of a company are allowed to affiliate with the same
national federation [La Salle University v. Laguesma].
Managerial Employees vs. Supervisory Employees
Managerial Supervisory
Have the power to decide and do Have the power only to
managerial acts recommend managerial acts such
as laying down policy, hiring, and
dismissal of employees and the
like
Not allowed to join any labor Allowed to join a supervisory
organization union but not the union of rank-
and-file employees and vice versa
Under Labor Standards, a supervisory employee is a
managerial employee. In Labor Relations, however, a managerial
employee is not a supervisory employee in the sense that he cannot
join any labor organization because supervisory employees can join
unions different from rank-and-file employees.
Page 5 of 28
PMTI v. Ferrer-Calleja
Held: Members of the union are rank and file and not
managerial employees notwithstanding their title or nomenclature in
position because:
They do not have the power to lay down and execute
management policies as they are given ready policies merely to execute and
standard practices to observe;
They do not have the power to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees but only to recommend for
such actions as the power rests upon the personnel manager; and
They do not have the power to effectively recommend any
managerial actions as their recommendations have to pass through the
department manager for review, the personnel manager for attestation and
general manager/president for final actions.
The recent amendments to the Labor Code contain separate
definitions for managerial and supervisory employees. Section 4 of
Republic Act No. 6715 states that:
"Managerial Employee"- is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees.
“Supervisory Employees”- are those who, in the interest of the
employer, effectively recommend such management actions if the exercise
of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment.
All employees not falling within any of the above definitions are
considered rank and file employees for purposes of this Book. Section 18
retains the provision on the ineligibility of managerial employees to join
any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their own.
United Pepsi Cola v. Laguesma
Held: The Court with the finding of the Secretary of Labor that
the route managers are managerial employees as this is supported by
substantial evidence
The Court now finds that the job evaluation made by the
Secretary of Labor is indeed supported by substantial evidence. The nature
of the job of route managers is given in a four-page pamphlet, prepared by
the company, called "Route Manager Position Description.
The route managers as compared to the supervisors in this case
Unlike supervisors who basically merely direct operating
employees in line with set tasks assigned to them, route managers are
responsible for the success of the company's main line of business through
management of their respective sales teams. Such management necessarily
involves the planning, direction, operation and evaluation of their
individual teams and areas which the work of supervisors does not entail.
The route managers cannot thus possibly be classified as mere
supervisors because their work does not only involve, but goes far beyond,
the simple direction or supervision of operating employees to accomplish
objectives set by those above them. They are not mere functionaries with
simple oversight functions but business administrators in their own right.
Thus, the route managers in this case are managerial employees.
3. Confidential Employee Rule
Within the context of labor relations, confidential
employees are those who meet the following criteria:
a. They assist or act in a confidential capacity;
b. To persons or officers who formulate, determine,
and effectuate management policies specifically in
the field of labor relations.
The two (2) criteria are cumulative and both must be met
if an employee is to be considered a confidential employee that
would deprive him of his right to form, join, or assist a labor
organization [TPMAB v. Asia Brewery].
A confidential employee may be a rank-and-file or
supervisory employee but because in the normal course of his
duties, he becomes aware of management policies relating to labor
relations, he is not allowed to assist, form or join a rank-and-file
union or supervisory union, as the case may be. To allow him to
join a union would give rise to a potential conflict of interest.
Management should not be required to handle labor relations
matters through employees who are represented by the union with
which the company is required to deal and who, in the normal
performance of their duties, may obtain advance information on the
company’sn position with regard to collective bargaining
negotiations, the disposition of grievances, or other labor relations
matter [San Miguel Supervisors and Exempt Employees Union v.
Laguesma].
However, the mere access of an employee to confidential
labor relations information which is merely incidental to his duties
and, therefore, knowledge thereof is not necessary in the
performance of said duties, does not make such employee a
confidential employee. If access to confidential labor relations
information is to be a factor in the determination of an employee’s
confidential status, such information must relate to the employer’s
labor relations policies. Therefore, access to information which is
regarded by the employer to be confidential from the business
standpoint, such as financial information or technical trade secrets,
will not render an employee a confidential employee under this
rule. An employee may not be excluded from an appropriate
bargaining unit merely because he has access to confidential
information concerning the employer’s internal business operations
which is not related to the field of labor relations [NATU-Republic
Planters Bank Supervisors v. Secretary].
Sugbuanon Rural Bank v. Laguesma
Held: Petitioner contends that it has only 5 officers running its
day-to-day affairs. They assist in confidential capacities and have complete
access to the bank's confidential data. They form the core of the bank's
management team. Petitioner explains that:
"...Specifically: (1) the Head or the Loans Department initially
approves the loan applications before they are passed on to the Board for
confirmation. As such, no loan application is even considered by the Board
and approved by petitioner without his stamp of approval based upon his
interview of the applicant and determination of his (applicant's) credit
standing and financial capacity. The same holds true with respect to
renewals or restructuring of loan accounts. He himself determines what
account should be collected, whether extrajudicially or judicially, and
settles the problem or complaints of borrowers regarding their accounts;
"(2) the Cashier is one of the approving officers and authorized
signatories of petitioner. He approves the opening of accounts, withdrawals
and encashment, and acceptance of check deposits, He deals with other
banks and, in the absence of the regular Manager, manages the entire office
or branch and approves disbursements of funds for expenses; and
"(3) the Accountant, who heads the Accounting Department, is
also one of the authorized signatories of petitioner and, in the absence of
the Manager or Cashier, acts as substitute approving officer and assumes
the management of the entire office. She handles the financial reports and
reviews the debit/credit tickets submitted by the other departments."
Petitioner's explanation, however, does not state who among the
employees has access to information specifically relating to its labor
relations policies. Even Cashier Patricia Maluya, who serves as the
secretary of the bank's Board of Directors may not be so classified. True,
the board of directors is responsible for corporate policies, the exercise of
corporate powers, and the general management of the business and affairs
of the corporation. As secretary of the bank's governing body, Patricia
Maluya serves the bank's management, but could not be deemed to have
access to confidential information specifically relating to SRBI's labor
relations policies, absent a clear showing on this matter. Thus, while
petitioner's explanation confirms the regular duties of the concerned
employees, it shows nothing about any duties specifically connected to
labor relations.
Southern Philippines Federation of Labor v. Ferrer-
Calleja
Held: As regards the employees in the confidential payroll,
the petitioner has not shown that the nature of their jobs is classified as
managerial except for its allegation that they are considered by management
as occupying managerial positions and highly confidential.  Neither can
Page 6 of 28
payment or non-payment of union dues be the determining factor of
whether the challenged employees should be excluded from the bargaining
unit since the union shop provision in the CBA applies only to newly hired
employees but not to members of the bargaining unit who were not
members of the union at the time of the signing of the CBA.  It is, therefore,
not impossible for employees to be members of the bargaining unit even
though they are non-union members or not paying union dues.
Filoil Refinery v. Filoil Supervisory & Confidential
Employees Association
Held: The other principal ground of petitioner's appeal
questioning the confidential employees' inclusion in the supervisors'
bargaining unit is equally untenable.  Respondent court correctly held that
since the confidential employees are very few in number and are by practice
and tradition identified with the supervisors in their role as representatives
of management vis-a-vis the rank and file employees, such identity of
interest has allowed their inclusion in the bargaining unit of supervisors-
managers for purposes of collective bargaining in turn as employees in
relation to the company as their employer.
No arbitrariness or grave abuse of discretion can be attributed
against respondent court's allowing the inclusion of the confidential
employees in the supervisors' association for as admitted by petitioner
itself, supra, the supervisors and confidential employees enjoy its trust and
confidence.  This identity of interest logically calls for their inclusion in the
same bargaining unit and at the same time fulfills the law's objective of
insuring to them the full benefit of their right to self-organization and to
collective bargaining, which could hardly be accomplished if the
respondent association's membership were to be broken up into five
separate ineffective tiny units, as urged by petitioner.
Doctrine of Necessary Implication
The doctrine of necessary implication is the legal basis
for the ineligibility of a confidential employee to join a union. The
disqualification of managerial and confidential employees from
joining a bargaining unit of rank-and-file employees or supervisory
employees is already well-entrenched in jurisprudence. While
Article 255 of the Labor Code limits the ineligibility to join, assist,
or form a labor organization to managerial employees,
jurisprudence has extended this prohibition to confidential
employees or those who, by reason of their positions or nature of
work, are required to assist or act in a fiduciary manner to
managerial employees, and, therefore, are likewise privy to
sensitive and highly confidential records [Standard Chartered
Bank Employees Union v. Standard Chartered Bank].
Article 255 of the Labor Code does not directly prohibit
confidential employees from engaging in union activities. Their
disqualification proceeds merely from the application of this
doctrine because what Article 255 singles out as ineligible to join,
assist or form any labor organization are managerial employees. By
necessary implication, confidential employees are similarly
disqualified. This doctrine states that what is implied in a statute is
as much a part thereof as that which is expressed [Chua v. Civil
Service Commission].
NATU-Republic Planters Bank Supervisors v.
Secretary
Held: As regards the other claim of respondent Bank that
Branch Managers/OICs, Cashiers and Controllers are confidential
employees, having control, custody and/or access to confidential matters,
e.g., the branch's cash position, statements of financial condition, vault
combination, cash codes for telegraphic transfers, demand drafts and other
negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank Manual
regarding joint custody, this claim is not even disputed by petitioner. A
confidential employee is one entrusted with confidence on delicate matters,
or with the custody, handling, or care and protection of the employer's
property. While Art. 245 of the Labor Code singles out managerial
employees as ineligible to join, assist or form any labor organization, under
the doctrine of necessary implication, confidential employees are similarly
disqualified. This doctrine states that what is implied in a statute is as much
a part thereof as that which is expressed, as elucidated in several cases the
latest of which is Chua v. Civil Service Commission where we said:
No statute can be enacted that can provide all the details
involved in its application. There is always an omission that may not meet a
particular situation. What is thought, at the time of enactment, to be an all-
embracing legislation may be inadequate to provide for the unfolding
events of the future. So-called gaps in the law develop as the law is
enforced. One of the rules of statutory construction used to fill in the gap is
the doctrine of necessary implication x x x x Every statute is understood, by
implication, to contain all such provisions as may be necessary to effectuate
its object and purpose, or to make effective rights, powers, privileges or
jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its
terms. Ex necessitate legis x x x x
In applying the doctrine of necessary implication, we took into
consideration the rationale behind the disqualification of managerial
employees expressed in Bulletin Publishing Corporation v. Sanchez thus:
"x x x if these managerial employees would belong to or be affiliated with a
Union, the latter might not be assured of their loyalty to the Union in view
of evident conflict of interests. The Union can also become company-
dominated with the presence of managerial employees in Union
membership." Stated differently, in the collective bargaining process,
managerial employees are supposed to be on the side of the employer, to
act as its representatives, and to see to it that its interests are well protected.
The employer is not assured of such protection if these employees
themselves are union members. Collective bargaining in such a situation
can become one-sided. It is the same reason that impelled this Court to
consider the position of confidential employees as included in the
disqualification found in Art. 245 as if the disqualification of confidential
employees were written in the provision. If confidential employees could
unionize in order to bargain for advantages for themselves, then they could
be governed by their own motives rather than the interest of the employers.
Moreover, unionization of confidential employees for the purpose of
collective bargaining would mean the extension of the law to persons or
individuals who are supposed to act "in the interest of" the employers. It is
not farfetched that in the course of collective bargaining, they might
jeopardize that interest which they are duty-bound to protect. Along the
same line of reasoning we held in Golden Farms, Inc. v. Ferrer-
Calleja reiterated in Philips Industrial Development, Inc. v. NLRC, that
"confidential employees such as accounting personnel, radio and telegraph
operators who, having access to confidential information, may become the
source of undue advantage. Said employee(s) may act as spy or spies of
either party to a collective bargaining agreement."
In fine, only the Branch Managers/OICs, Cashiers and
Controllers of respondent Bank, being confidential employees, are
disqualified from joining or assisting petitioner Union, or joining, assisting
or forming any other labor organization. But this ruling should be
understood to apply only to the present case based on the evidence of the
parties, as well as to those similarly situated. It should not be understood in
any way to apply to banks in general.
4. Separation of Unions Doctrine
RA 9481 amended Article 255 by adding the phrase:
“The rank-and-file union and the supervisors’ union operating
within the same establishment may join the same federation or
national union.” By reason of this amendment, the so-called
“separation of unions doctrine” enunciated in Atlas Litographic
Services v. Laguesma, and in other related cases no longer applies.
This doctrine prohibits the situation where the supervisory union
and the rank-and-file union operating within the same
establishment are both affiliated with one and the same federation
because of the possible conflict of interest which may arise in the
areas, inter alia, of discipline, collective bargaining and strike.
Thus, if the intent of the law is to avoid a situation where
supervisors would merge with the rank-and-file or where the
supervisors’ labor union would represent conflicting interests, then
a local supervisors’ union should not be allowed to affiliate with
the federation with which the rank-and-file union is also affiliated
and where the federation actively participates in the union activities
in the company. The intent of the law is clear especially where the
supervisors will be co-mingling with the rank-and-file employees
Page 7 of 28
whom they directly supervise in their own bargaining unit [Pepsi
Cola v. Secretary of Labor].
The law now explicitly allows the more extreme situation
of a rank-and-file union and a supervisors’ union operating within
the same establishment joining one and the same federation or
national union as affiliates thereof.
5. Effect of Inclusion as Members of Employees
Outside Bargaining Unit
Article 256. [245-A] Effect of Inclusion as Members of
Employees Outside the Bargaining Unit. - The inclusion as union
members of employees outside the bargaining unit shall not be a
ground for the cancellation of the registration of the union. Said
employees are automatically deemed removed from the list of
membership of said union.
The inclusion in a union of disqualified employees is not
among the grounds for cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under the circumstances
enumerated in Sections (a) and (c) of Article 247 of the Labor
Code [Air Philippines v. Bureau of Labor Relations].
Clearly then, for the purpose of de-certifying a union, it
is not enough to establish that the rank-and-file union includes
ineligible employees in its membership. Pursuant to Article 247 (a)
and (c) of the Labor Code, it must be shown that there was
misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, or in connection
with the election of officers, minutes of the election of officers, the
list of voters, or failure to submit these documents together with the
list of the newly elected-appointed officers and their postal
addresses to the BLR [Ibid].
6. Managerial Employees in the Public Sector
Executive Order No. 180
Sec. 1. This Executive Order applies to all employees of all
branches, subdivisions, instrumentalities, and agencies, of the Government,
including government-owned or controlled corporations with original
charters. For this purpose, employees, covered by this Executive Order
shall be referred to as "government employees".
Sec. 2. All government employees can form, join or assist
employees' organizations of their own choosing for the furtherance and
protection of their interests. They can also form, in conjunction with
appropriate government authorities, labor-management committees, works
councils and other forms of workers' participation schemes to achieve the
same objectives.
Sec. 3. High-level employees whose functions are normally
considered as policy-making or managerial or whose duties are of a highly
confidential nature shall not be eligible to join the organization of rank-and-
file government employees.
Sec. 4. The Executive Order shall not apply to the members of
the Armed Forces of the Philippines, including police officers, policemen,
firemen and jail guards.
Sec. 15. A Public Sector Labor Management Council,
hereinafter referred to as the Council, is hereby constituted to be composed
of the following:
1) Chairman, Civil Service Commission Chairman
2) Secretary, Department of Labor and Employment Vice
Chairman
3) Secretary, Department of Finance Member
4) Secretary, Department of Justice Member
5) Secretary, Department of Budget and Management Member
The Council shall implement and administer the provisions of
this Executive Order. For this purpose, the Council shall promulgate the
necessary rules and regulations to implement this Executive Order.
Sec. 16. The Civil Service and labor laws and procedures,
whenever applicable, shall be followed in the resolution of complaints,
grievances and cases involving government employees. In case any dispute
remains unresolved after exhausting all the available remedies under
existing laws and procedures, the parties may jointly refer the dispute to the
Council, for appropriate action.
Jurisdiction over Intra-Union Disputes
Article 232. [226] Bureau of Labor Relations. - 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.
The Bureau shall have fifteen (15) working days to act on
labor cases before it, subject to extension by agreement of the parties.
In Bautista v. Court of Appeals, it was held that:
A. DEFINITION OF TERMS
1. Union
"Company union" means any labor organization whose
formation, function or administration has been assisted by any act
defined as unfair labor practice by this Code [Article 219].
“Union” refers to any labor organization in the private
sector organized for collective bargaining and for other legitimate
purposes [IRR].
2. Labor Organization
"Labor organization" means 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 [Article 219].
"Labor organization" means any union or association of
employees in the private sector which exists in whole or in part for
the purpose of collective bargaining, mutual aid, interest,
cooperation, protection, or other lawful purposes [IRR].

It is quite clear from this provision that BLR has the 3. Legitimate Labor Organization (LLO)
original and exclusive jurisdiction on all inter-union and intra- "Legitimate labor organization" means any labor
union conflicts.
organization duly registered with the Department of Labor and
An intra-union conflict would refer to a conflict
within or inside a labor union, and an inter-union controversy or Employment, and includes any branch or local thereof. [Article
dispute, one occurring or carried on between or among unions. 219].
The subject of the case at bar, which is the election "Legitimate labor organization" means any labor
of the officers and members of the board of KMKK-MWSS, is, organization in the private sector registered or reported with the
clearly, an intra-union conflict, being within or inside a labor Department of Labor and Employment [IRR].
union. It is well within the powers of the BLR to act upon.
Executive Order No. 180 (1987), particularly Section 4. Workers’ Association
16 thereof, is completely lucid as to the settlement of disputes
“Workers’ Association” refers to an association of
involving government employees, viz:
SEC. 16. The Civil Service and labor laws and workers organized for the mutual aid and protection of its members
procedures, whenever applicable, shall be followed in the or for any other purpose other than collective bargaining [IRR].
resolution of complaints, grievances and cases involving
government employees. 5. Legitimate Workers’ Association
Since Article 226 of the Labor Code has declared “Legitimate Workers’ Association” refers to an
that the BLR shall have original and exclusive authority to act association of workers organized for the mutual aid and protection
on all inter-union and intra-union conflicts, then there should be of its members or for any other purpose other than collective
no more doubt as to its jurisdiction.
bargaining registered with the Department [IRR].
D. WHO MAY JOIN, FORM, OR ASSIST A LABOR
Labor Organization vs. Workers’ Association
ORGANIZATION ONLY FOR MUTUAL AID AND
PROTECTION AND NOT FOR COLLECTIVE
As to Labor Workers’
BARGAINING PURPOSES
Organization Association
Existence of Er-E Necessary Not necessary
Article 253. [243] Coverage and Employees' Right to Self- Relationship
Organization. All persons employed in commercial, industrial and Purpose In whole or in part, For mutual aid and
agricultural enterprises and in religious, charitable, medical, or for collective protection
educational institutions, whether operating for profit or not, shall have bargaining
the right to self-organization and to form, join, or assist labor Formation or Can be registered as Registration is
organizations of their own choosing for purposes of collective registration an independent union provided under the
bargaining. Ambulant, intermittent and itinerant workers, self- or become a IRR
employed people, rural workers and those without any definite chartered local under
employers may form labor organizations for their mutual aid and the Labor Code
protection. Right to file a Can file Cannot file
Petition for
Certification
This refers to the right to engage in group action, Election
provided it is peaceful, to support the organization's objective Basis Right to Self- Constitutional right
which is not necessarily collective bargaining but, simply, to aid Organization of Freedom of
Association
and protect its members. But this kind of group action must be
differentiated from strike which, because it is work stoppage, must
B. CLASSIFICATIONS
observe certain regulations; otherwise, the strike may be declared
illegal and its leaders may be thrown out of their jobs.
1. As to How Formed
II
a. Independent Union
LABOR ORGANIZATION
This refers to a labor organization operating at the
enterprise level that acquired legal personality through independent
Page 8 of 28
registration via issuance of Certificate of Registration [Article
240].
b. Chartered Local
This refers to a labor organization in the private sector
operating at the enterprise level that acquired legal personality
through the issuance of a charter certificate by a duly registered
federation or national union, and reported to the national office
[IRR].
c. Affiliate
This refers to (1) an independent union affiliated with a
federation, national union or (2) a chartered local which was
subsequently granted independent registration but did not
disaffiliate from its federation, reported to the Regional Office and
the Bureau [IRR].
2. As to Components
a. Federation
A group of legitimate labor unions in a private
establishment organized for collective bargaining or for dealing
with employers concerning terms and conditions of employment
for their member unions registered with the BLR.
b. National Union (Labor Center)
A group of legitimate labor unions in a private
establishment organized not for collective bargaining but for
participating in the formulation of social and employment policies,
standards and programs, registered with the BLR.
c. Trade Union Center
Any group registered national unions or federations
organized for mutual aid and protection of its members, assisting in
such collective bargaining or participating in the formulation of
social and employment policies, standards and programs, duly
registered with the DOLE.
C. REGISTRATION
1. Requirements
Article 240. [234] Requirements of Registration. - A
federation, national union or industry or trade union center or an
independent union shall acquire legal personality and shall be entitled
to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on
the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal
address of the labor organization, the minutes of the organizational
meetings and the list of the workers who participated in such meetings;
(c) In case the applicant is an independent union, the names
of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or
more years, copies of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the
applicant union, minutes of its adoption or ratification, and the list of
the members who participated in it.
The certification and attestation requirements are
preventive measures against the commission of fraud. They
likewise 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 to use the union for
dubious ends [Progressive Development Corporation v. Secretary].
Page 9 of 28
2. Effect of Registration
Rule IV, Section 8 of the IRR provides:
Section 8. Effect of Registration. – The labor union
or workers’ association shall be deemed registered and vested
with legal personality on the date of the issuance of its
certificate of registration or certificate of creation of chartered
local.
Such legal personality may be questioned only
through an independent petition for cancellation of union
registration in accordance with Rule XIV of these Rules, and not
by way of collateral attack in petition for certification election
proceedings under Rule VIII.
After a certificate of registration is issued to a union, its
legal personality cannot be subject to collateral attack. It may be
questioned only in an independent petition for cancellation The
inclusion in a union of disqualified employees is not among the
grounds for cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under the
circumstances enumerated [Tagaytay Highlands v. Tagaytay
Highlands Employees Union].
Registration under the Corporation Code
A labor organization may be organized under the
Corporation Law as a nonstock corporation and issued a certificate
of incorporation by the Securities and Exchange Commission. But
such incorporation has only the effect of giving to it juridical
personality before regular courts of justice. Such incorporation
does not grant the rights and privileges of a legitimate labor
organization.
Cebu Seamen’s Association, Inc. v. Ferrer-Calleja
Held: The determinative issue in this case is who is entitled to
the collection and custody of the union dues? Cebu Seamen's Association
headed by Gabayoyo or Seamen's Association of the Philippines headed by
Nacua.
As stated in the findings of fact in the questioned resolution of
Director Pura Ferrer-Calleja on October 23, 1950, a group of deck officers
organized the Cebu Seamen's Association, Inc., (CSAI), a non-stock
corporation and registered it with the Securities and Exchange Commission
(SEC). The same group registered the organization with the Bureau of
Labor Relations (BLR) as Seamen's Association of the Philippines (SAPI).
It is the registration of the organization with the BLR and not with the SEC
which made it a legitimate labor organization with rights and privileges
granted under the Labor Code.
We gathered from the records that CSAI, the corporation was
already inoperational before the controversy in this case arose. In fact, on
August 24, 1984, the SEC ordered the CSAI to show cause why its
certificate of registration should not be revoked for continuous inoperation
(p. 343, Rollo). There is nothing in the records which would show that
CSAI answered said show-cause order.
Also, before the controversy, private respondent Dominica
Nacua was elected president of the labor union, SAPI. It had an existing
CBA with Aboitiz Shipping Corporation. Before the end of the term of
private respondent Nacua, some members of the union which included
Domingo Machacon and petitioner Manuel Gabayoyo showed signs of
discontentment with the leadership of Nacua. This break-away group
revived the moribund corporation and issued an undated resolution
expelling Nacua from the association (pp. 58-59, Rollo). Sometime in
February, 1987, it held its own election of officers supervised by the
Securities and Exchange Commission. It also filed a case of estafa against
Nacua sometime in May, 1986 (p. 52, Rollo).
The expulsion of Nacua from the corporation, of which she
denied being a member, has however, not affected her membership with the
labor union. In fact, in the elections of officers for 1987-1989, she was re-
elected as the president of the labor union. In this connection, We cannot
agree with the contention of Gabayoyo that Nacua was already expelled
from the union. Whatever acts their group had done in the corporation do
not bind the labor union. Moreover, Gabayoyo cannot claim leadership of
the labor group by virtue of his having been elected as a president of the
dormant corporation CSAI.
Under the principles of administrative law in force in this
jurisdiction, decisions of administrative officers shall not be disturbed by
courts, except when the former acted without or in excess of their
jurisdiction or with grave abuse of discretion.
Public respondent Bureau of Labor Relations correctly ruled on
the basis of the evidence presented by the parties that SAPI, the legitimate
labor union, registered with its office, is not the same association as CSAI,
the corporation, insofar as their rights under the Labor Code are concerned.
Hence, the former and not the latter association is entitled to the release and
custody of union fees with Aboitiz Shipping and other shipping companies
with whom it had an existing CBA. As correctly held by public respondent:
"It is undisputed from the records that the election of the so
called set of officers headed by Manuel Gabayoyo was conducted under the
supervision of the SEC, presumably in accordance with its constitution and
by-laws as well as the articles of incorporation of respondent CSAI, and the
Corporation Code. That had been so precisely on the honest belief of the
participants therein that they were acting in their capacity as members of
the said corporation. That being the case, the aforementioned set of officers
is of the respondent corporation and not of the complainant union.
It follows, then, that any proceedings and actions taken by said set of
officers can not, in any manner, affect the union and its members.
"On the other hand, we rule and so hold that the other set of
officers headed by Dominica C. Nacua is the lawful set of officers of SAPI
and therefore, is entitled to the release and custody of the union dues as
well as the agency fees, if any, there be. A record check with the Labor
Organizations (LOD), this Bureau, shows that SAPI has submitted to it for
file the list of this new set of officers, in compliance with the second
paragraph of Article 242 (c) of the Labor Code. This list sufficiently
sustains the view that said officers were lawfully elected, in the absence of
clear and convincing proof to the contrary." (pp. 9-10, Rollo)
3. Where to File Registration
Applications for registration of independent labor unions,
chartered locals, workers’ associations shall be filed with the
Regional Office where the applicant principally operates. It shall be
processed by the Labor Relations Division at the Regional Office.
Applications for registration of federations, national
unions, or workers’ associations operating in more than one region
shall be filed with the Bureau or the Regional offices, but shall be
processed by the Bureau.
4. Requirements for Registration for Independent
Labor Unions
The application for registration of an independent labor
union shall be accompanied by the following documents:
a. The name of the applicant labor union, the
principal address, the name of its officers and
their respective addresses, approximate number of
employees in the bargaining unit where it seeks to
operate, with a statement that it is not reported as
a chartered local of any federation or national
union;
b. The minutes of the organizational meeting(s) and
the list of employees who participated in the said
meeting(s);
c. The name of all its members comprising at lease
20% of the employees in the bargaining unit;
d. The annual financial reports if the applicant has
been in existence for one or more years, unless it
has not collected any amount from the members,
in which case a statement to this effect shall be
included in the application;
e. The applicant’s constitution and by-laws, minutes
of its adoption or ratification, and the list of the
members who participated in it. The list of
ratifying members shall be dispensed with where
the constitution and by-laws was ratified or
adopted during the organizational meeting. In
such a case, the factual circumstances of the
Page 10 of 28
ratification shall be recorded in the minutes of the
organizational meeting(s).
5. Requirements for Federations and National
Unions
The application or registration of federations and national
unions shall be accompanied by the following documents:
a. A statement indicating the name of the applicant
labor union, its principal address, the name of its
officers and their respective addresses;
b. The minutes of the organizational meeting(s) and
the list of employees who participated in the said
meeting(s);
c. The annual financial reports if the applicant has
been in existence for one or more years, unless it has
not collected any amount from the members, in
which case a statement to this effect shall be
included in the application;
d. The applicant’s constitution and by-laws, minutes of
its adoption or ratification, and the list of the
members who participated in it. The list of ratifying
members shall be dispensed with where the
constitution and by-laws was ratified or adopted
during the organizational meeting. In such a case,
the factual circumstances of the ratification shall be
recorded in the minutes of the organizational
meeting(s);
e. The resolution of affiliation at least ten (10)
legitimate labor organizations, whether independent
unions or chartered locals, each of which must be a
duly certified or recognized bargaining agent in the
establishment where it seeks to operate; and
f. The name and addresses of the companies where the
affiliates operate and the list of all the members in
each company involved.
6. Approval
It cannot be over-emphasized that the registration or the
recognition of a labor union after it has submitted the
corresponding papers is not ministerial on the part of the BLR. Far
from it. After a labor organization has filed the necessary
registration documents, it becomes mandatory for the BLR to
check if the requirements under Article 240 of the Labor Code
have been sedulously complied with. If the union's application is
infected by falsification and like serious irregularities, especial
those appearing on the face of the application and its attachments, a
union should be denied recognition as a legitimate labor
organization [S.S. Ventures International, Inc. v. S.S. Ventures
Labor Union].
7. Registration of Chartered Local
Article 241. [234-A] Chartering and Creation of a Local
Chapter. - A duly registered federation or national union may directly
create a local chapter by issuing a charter certificate indicating the
establishment of the local chapter. The chapter shall acquire legal
personality only for purposes of filing a petition for certification
election from the date it was issued a charter certificate.
The chapter shall be entitled to all other rights and
privileges of a legitimate labor organization only upon the submission
of the following documents in addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and
the principal office of the chapter; and
(b) The chapter's constitution and by-laws: Provided, That
where the chapter's constitution and by-laws are the same as that of
the federation or the national union, this fact shall be indicated
accordingly.
The additional supporting requirements shall be certified
under oath by the secretary or treasurer of the chapter and attested by
its president.

Chartered locals have two types of personalities. First, it
has provisional personality if it only has a charter certificate. The
chartered local is considered an LLO only for the purpose of filing
a Petition for Certification Election. Second, it has full personality
if it submits all other documents for registration. It will be
considered as an LLO for all purposes (i.e., to file cases for its
members, to purchase property in its name, etc.) and possesses full
powers of a LLO.
A local or chapter need not be independently registered
to acquire legal personality [Laguna Autoparts v. Office of the
Secretary]. A chapter acquires legal personality on "the date it was
issued a charter certificate" by its mother federation or national
union. The acquisition of legal personality seems to happen
automatically, but "only for purposes of filing a petition for a
certification election."
Not required to acquire independent registration in order
to have legal personality
Ordinarily, a labor organization attains the status of
legitimacy only upon the issuance in its name of a Certificate of
Registration by the Bureau of Labor Relations pursuant to Articles
241 and 242of the Labor Code. However, the procedure is not the
only way by which a labor union may become legitimate,
however.  When an unregistered union becomes a branch, local or
chapter of a federation, some of the aforementioned requirements
for registration are no longer require [San Miguel Foods v.
Laguesma].
Distinguished from other unions
Federation, national union, Chartered local
industry or trade union or
independent union
Acquisition of legal personality Acquisition of legal personality
under Article 240 in relation to under Article 241 in relation to
IRR IRR
Acquires legal personality upon Acquires legal personality in 2
the issuance of a certificate of stages (provisional/partial and
registration full)
More stringent because it requires Easier because it only requires
Certificate of Registration charter certificate
(notarized)
8. Action on and Denial of Application for
Registration
Article 242. [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.
Article 243. [236] Denial of Registration; Appeal. - The
decision of the Labor Relations Division in the regional office denying
registration may be appealed by the applicant union to the Bureau
within ten (10) days from receipt of notice thereof.
D. AFFILIATE
An affiliate is (a) an independent union affiliated with a
federation or national union; or (b) a chartered local which was
subsequently granted independent registration but did not
disaffiliate from its federation.
In relation to an affiliate, the federation or national union
is commonly known as the mother union. The mother union, acting
for and in behalf of its affiliate, has the status of an agent while the
affiliate or local chapter or chartered local remains the principal –
Page 11 of 28
the basic unit of the association free to serve the common interest
of all its members, subject only to the restraints imposed by the
constitution and by-laws of the association [Progressive
Development Corporation v. Secretary].
1. Requirements of Affiliation.
The report of affiliation of an independently registered
labor union with a federation or national union shall be filed with
the Regional Office that issued the certificate of registration [IRR].
Moreover, the report of affiliation of independently
registered labor unions with a federation or national union shall be
accompanied by the following documents:
(a) Resolution of the labor union’s board of directors
approving the affiliation;
(b) Minutes of the general membership meeting
approving the affiliation;
(c) The total number of members comprising the labor
union and the names of members who approved the
affiliation;
(d) The certificate of affiliation issued by the federation
in favor of the independently registered labor union;
and
(e) Written notice to the employer concerned if the
affiliating union is the incumbent bargaining agent.
2. Effects of Affiliation
The following are the effects of affiliation:
(a) The mother union becomes the agent, and the
affiliate union, the principal.
(b) The affiliate union becomes subject to the rules of
the mother union
(c) The appendage of the acronym of the mother union
after the name of the affiliate union does not mean
that the affiliate cannot independently stand on its
own [THFEU-CGW vs. Tropical Hut].
(d) Affiliation does not give the mother union the
license to act independently of the affiliate union.
However, if the mother union negotiated the CBA,
the affiliate union cannot negotiate the renewal of
the CBA without the consent and participation of
the mother union [Abaria v. NLRC].
(e) The affiliate union and not the mother union has the
power to administer and enforce the CBA with the
employer [NAFLU v. Noriel].
(f) In case of illegal strike, the affiliate union, not the
mother union, is liable for damages [Filipino Pipe v.
NLRC].
3. Significance of Affiliation
Legal significance of affiliation is that the mother union,
acting for and in behalf of its affiliate, has the status of an agent
while the local union remains the basic unit of association free to
serve the common interest of all its members subject only to the
restraints imposed by the constitution and by-laws of the
association [Pambansang Kapatiran v. Secretary].
E. DISAFFILIATION
The right to disaffiliate by the local union from its
mother federation or national union is a constitutionally-guaranteed
right which may be invoked by the former at any time. It is
axiomatic that an affiliate union is a separate and voluntary
association free to serve the interest of all its members – consistent
with the freedom of association guaranteed in the Constitution
[Volkschel Labor Union v. BLR].
 It is not an act of disloyalty on the part of the local union
nor is it a violation of the union security clause in the CBA.
Disaffiliation should always carry the will of the
majority. It cannot be effected by a mere minority group of union
members [Villar v. Inciong].
The right of a local union to disaffiliate from its mother
federation is not a novel thesis unillumined by case law.  In the
landmark case of Liberty Cotton Mills Workers Union vs. Liberty
Cotton Mills, Inc. we upheld the right of local unions to separate
from their mother federation on the ground that as separate and
voluntary associations, local unions do not owe their creation and
existence to the national federation to which they are affiliated but,
instead, to the will of their members.  The sole essence of
affiliation is to increase, by collective action, the common
bargaining power of local unions for the effective enhancement and
protection of their interests.   Admittedly, there are times when
without succor and support local unions may find it hard, unaided
by other support groups, to secure justice for themselves. Yet the
local unions remain the basic units of association, free to serve
their own interests subject to the restraints imposed by the
constitution and by-laws of the national federation, and free also to
renounce the affiliation upon the terms laid down in the agreement
which brought such affiliation into existence [Philippine
Skylanders v. NLRC].
Liberty Cotton Mills Workers’ Union v. Liberty
Cotton Mills
Held: Likewise, the records show that the disaffiliation of the
local union members from the PAFLU was caused by the alleged
negligence of PAFLU and its lack of concern over the problems of the local
union and its members, particularly its neglect in not providing the local
union with a good lawyer who would attend to their ULP case against the
company.  This apparent laxity or negligence of PAFLU invites suspicion.
The records also show that the local union members were
dissatisfied with the way PAFLU negotiated the Collective Bargaining
Agreement with the company because it did not fight for their demands and
instead accepted the proposals of the company.   Held: This brings Us to the question of the legality of the
And furthermore, PAFLU expelled only six (6) union members,
because PAFLU erroneously contends that their disaffiliation and their
refusal to retract amounted to disloyalty.  It was not disloyalty; it was their
dissatisfaction with PAFLU that compelled them to disaffiliate.  The
constitutional guarantee of security of tenure of the worker and his freedom
of association - to join or not to join a union - are paramount and should
prevail over a contractual condition for continued union membership and
over whimsical or arbitrary termination of his employment.
Respondent PAFLU also overlooked the fact that only sixteen
(16) out of the original thirty-two (32) signatories retracted their
disaffiliation.  PAFLU should have also expelled the remaining sixteen
members who did not retract, instead of only the six members, if indeed
their unretracted disaffiliation were an act of disloyalty instead of
dissatisfaction with the PAFLU's failure to promote and defend their
interests.
It is also worth considering here the fact that of the six members
expelled by PAFLU and subsequently dismissed by the company, four (4)
were officers of the local union and two were ordinary members.
The company also failed to notice this fact and proceeded
immediately to grant the request of PAFLU by dismissing the petitioner
workers without giving them the opportunity to be heard.
These facts and circumstances on record further underscore the
existence of conspiracy or connivance between the company and PAFLU in
the dismissal of the petitioner workers.  Respondent company is therefore a
party to the illegal dismissal of the petitioner workers.  Under such a
situation, the respondent company should be jointly and severally liable
with the respondent PAFLU for the payment of backwages to the petitioner
workers.
Philippine Skylanders v. NLRC
Held: Upon an application of the aforecited principle to the issue
at hand, the impropriety of the questioned Decisions becomes clearly
apparent.  There is nothing shown in the records nor is it claimed by
Page 12 of 28
PAFLU that the local union was expressly forbidden to disaffiliate from the
federation nor were there any conditions imposed for a valid breakaway. 
As such, the pendency of an election protest involving both the mother
federation and the local union did not constitute a bar to a valid
disaffiliation.  Neither was it disputed by PAFLU that 111 signatories out of
the 120 members of the local union, or an equivalent of 92.5% of the total
union membership supported the claim of disaffiliation and had in fact
disauthorized PAFLU from instituting any complaint in their behalf. 
Surely, this is not a case where one (1) or two (2) members of the local
union decided to disaffiliate from the mother federation, but it is a case
where almost all local union members decided to disaffiliate.
It was entirely reasonable then for PSI to enter into a collective
bargaining agreement with PSEA-NCW.  As PSEA had validly severed
itself from PAFLU, there would be no restrictions which could validly
hinder it from subsequently affiliating with NCW and entering into a
collective bargaining agreement in behalf of its members.
There is a further consideration that likewise argues for the
granting of the petitions.   It stands unchallenged that PAFLU instituted the
complaint for unfair labor practice against the wishes of workers whose
interests it was supposedly protecting.  The mere act of disaffiliation did not
divest PSEA of its own personality; neither did it give PAFLU the license
to act independently of the local union.  Recreant to its mission, PAFLU
cannot simply ignore the demands of the local chapter and decide for its
welfare.  PAFLU might have forgotten that as an agent it could only act in
representation of and in accordance with the interests of the local union. 
The complaint then for unfair labor practice lodged by PAFLU against PSI,
PSEA and their respective officers, having been filed by a party which has
no legal personality to institute the complaint, should have been dismissed
at the first instance for failure to state a cause of action.
Policy considerations dictate that in weighing the claims of a
local union as against those of a national federation, those of the former
must be preferred.  Parenthetically though, the desires of the mother
federation to protect its locals are not altogether to be shunned.  It will
however be to err greatly against the Constitution if the desires of the
federation would be favored over those of its members.  That, at any rate, is
the policy of the law.  For if it were otherwise, instead of protection, there
would be disregard and neglect of the lowly workingmen.
Tropical Hut Employees Union v. Tropical Hut
dismissal meted to petitioner employees. In the celebrated case of Liberty
Cotton Mills Workers Union v. Liberty Cotton Mills, L-33187, September
4, 1975, 66 SCRA 512, We held that the validity of the dismissals pursuant
to the union security clause in the collective bargaining agreement hinges
on the validity of the disaffiliation of the local union from the federation.
The right of a local union to disaffiliate from its mother
federation is well-settled. A local union, being a separate and voluntary
association, is free to serve the interest of all its members including the
freedom to disaffiliate when circumstances warrant. This right is consistent
with the constitutional guarantee of freedom of association (Volkschel
Labor Union v. Bureau of Labor Relations,  No. L-45824, June 19,1985,
137 SCRA 42).
All employees enjoy the right to self organization and to form
and join labor organizations of their own choosing for the purpose of
collective bargaining and to engage in concerted activities for their mutual
aid or protection. This is a fundamental right of labor that derives its
existence from the Constitution. In interpreting the protection to labor and
social justice provisions of the Constitution and the labor laws or rules or
regulations, We have always adopted the liberal approach which favors the
exercise of labor rights.
Relevant on this point is the basic principle We have repeatedly
affirmed in many rulings: 
"x x x The locals are separate and distinct units primarily
designed to secure and maintain an equality of bargaining power between
the employer and their employee-members in the economic struggle for the
fruits of the joint productive effort of labor and capital; and the association
of the locals into the national union (PAFLU) was in furtherance of the
same end. These associations are consensual entities capable of entering
into such legal relations with their members. The essential purpose was the
affiliation of the local unions into a common enterprise to increase by
collective action the common bargaining power in respect of the terms and
conditions of labor. Yet the locals remained the basic units of association,
free to serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws of the Association, and
free also to renounce the affiliation for mutual welfare upon the terms laid
down in the agreement which brought it into existence.'" (Adamson &
Adamson, Inc. v. CIR, No. L-35120, January 31, 1984, 127 SCRA
268; Elisco-Elirol Labor Union (NAFLU) v. Noriel, No. L-41955,
December 29, 1977, 80 SCRA 681; Liberty Cotton Mills Workers Union v.
Liberty Cotton Mills, Inc., supra).
The inclusion of the word NATU after the name of the local
union THEU in the registration with the Department of Labor is merely to
stress that the THEU is NATU's affiliate at the time of the registration. It
does not mean that the said local union cannot stand on its own. Neither can
it be interpreted to mean that it cannot pursue its own interests
independently of the federation. A local union owes its creation and
continued existence to the will of its members and not to the federation to
which it belongs.
When the local union withdrew from the old federation to join a
new federation, it was merely exercising its primary right to labor
organization for the effective enhancement and protection of common
interests. 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 (People's Industrial and Commercial Employees
and Workers Organization (FFW) v. People's Industrial and Commercial
Corporation, No-37687, March 15, 1982, 112 SCRA 440).
There is nothing in the constitution of the NATU or in the
constitution of the THEU-NATU that the THEU was expressly forbidden to
disaffiliate from the federation (pp. 62, 281, Rollo). The alleged non-
compliance of the local union with the provision in the NATU Constitution
requiring the service of three months notice of intention to withdraw did not
produce the effect of nullifying the disaffiliation for the following grounds:
firstly, NATU was not even a legitimate labor organization, it appearing
that it was not registered at that time with the Department of Labor, and
therefore did not possess and acquire, in the first place, the legal personality
to enforce its constitution and laws, much less the right and privilege under
the Labor Code to organize and affiliate chapters or locals within its group,
and secondly, the act of non-compliance with the procedure on withdrawal
is premised on purely technical grounds which cannot rise above the
fundamental right of self-organization.
Respondent Secretary of Labor, in affirming the decision of the
respondent Commission, concluded that the supposed decision to
disaffiliate was not the subject of a free and open discussion and decision
on the part f the THEU-NATU general membership (p. 305, Rollo). This,
however, is contradicted by the evidence on record. Moreover, We are
inclined to believe Arbitrator Villatuya's findings to the contrary, as
follows:  Public respondents further submit that several employees who
"x x x. However, the complainants refute this allegation by
submitting the following: a) Letter dated December 20, 1973 signed by 142
members (Exhs. 'B to B-5'); b) resolution dated January 12, 1974, signed by
140 members (Exhs. 'H to H-6'); c) letter dated February 26, 1974 to the
Department of Labor signed by 165 members (Exhs. 'I to 1-10'); d) letter
dated January 30, 1974 to the Secretary of the National Defense signed by
144 members (Exhs. '0 to 0-5') and; e) letter dated March 6,1974 signed by
146 members addressed to the President of the Philippines (Exhs. 'HH to
HH-5'), to show that in several instances, the members of the THEU-NATU
have acknowledged their disaffiliation from NATU. The letters of the
complainants also indicate that an overwhelming majority have freely and
voluntarily signed their union's disaffiliation from NATU, otherwise, if
there was really deception employed in securing their signatures as claimed
by NATU/Dilag, it could not be possible to get their signatures in five
different documents." (p. 144, Rollo)
We are aware of the time-honored doctrine that the findings of
the NLRC and the Secretary of Labor are binding on this Court if supported
by substantial evidence. However, in the same way that the findings of facts
unsupported by sustantial and credible evidence do not bind this Court,
neither will We uphold erroneous conclusions of the NLRC and the
Secretary of Labor when We find that the latter committed grave abuse of
discretion in reversing the decision of the labor arbiter (San Miguel
Corporation v. NLRC, L-50321, March 13, 1984, 128 SCRA 180). In the
instant case, the factual findings of the arbitrator were correct against that
of public respondents.
Further, there is no merit in the contention of the respondents
that the act of disaffiliation violated the union security clause of the CBA
and that their dismissal as a consequence thereof is valid. A perusal of the
collective bargaining agreements shows that the THEU-NATU, and not the
NATU federation, was recognized as the sole and exclusive collective
bargaining agent for all its workers and employees in all matters concerning
Page 13 of 28
wages, hours of work and other terms and conditions of employment (pp.
667-706, Rollo). Although NATU was designated as the sole bargaining
agent in the check-off authorization form attached to the CBA, this simply
means it was acting only for and in behalf of its affiliate. The NATU
possessed the status of an agent while the local union remained the basic
principal union which entered into contract with the respondent company.
When the THEU disaffiliated from its mother federation, the former did not
lose its legal personality as the bargaining union under the CBA. Moreover,
the union security clause embodied in the agreements cannot be used to
justify the dismissals meted to petitioners since it is not applicable to the
circumstances obtaining in this case. The CBA imposes dismissal only in
case an employee is expelled from the union for joining another federation
or for forming another union or who fails or refuses to maintain
membership therein. The case at bar does not involve the withdrawal of
merely some employees from the union but of the whole THEU itself from
its federation. Clearly, since there is no violation of the union security
provision in the CBA, there was no sufficient ground to terminate the
employment of petitioners.
Public respondents considered the existence of Arturo Dilag's
group as the remaining true and valid union. We, however, are inclined to
agree instead with the Arbitrator's findings when he declared: 
"x x x. Much more, the so called THEU-NATU under Dilag's
group which assumes to be the original THEU-NATU has a very doubtful
and questionable existence not to mention that the alleged president is
performing supervisory functions and not qualified to be a bona fide 
member of the rank and file union." (p. 146, Rollo)
Records show that Arturo Dilag had resigned in the past as
President of THEU-NATU because of his promotion to a managerial or
supervisory position as Assistant Unit Manager of respondent Company.
Petitioner Jose Encinas replaced Dilag as President and continued to hold
such position at the time of the disaffiliation of the union from the
federation. It is therefore improper and contrary to law for Dilag to
reassume the leadership of the remaining group which was alleged to be the
true union since he belonged to the managerial personnel who could not be
expected to work for the betterment of the rank and file employees.
Besides, managers and supervisors are prohibited from joining a rank and
file union (Binalbagan Isabela Sugar Co., Inc. (BISCOM) v. Philippine
Association of Free Labor Unions (PAFLU), et al., L-18782, August 29,
1963, 8 SCRA 700). Correspondingly, if a manager or supervisor organizes
or joins a rank and file union, he will be required to resign
therefrom (Magalit, et al. v. Court of Industrial Relations, et al., L-20448,
May 25, 1965, 14 SCRA 72).
disaffiliated their union from the NATU subsequently retracted and
reaffirmed their membership with the THEU-NATU. In the decision which
was affirmed by respondent Secretary of Labor, the respondent
Commission stated that: 
"x x x out of the alleged one hundred and seventy-one (171)
members of the THEU-CGW whose signatures appeared in the ‘Analysis of
Various Documents Signed by Majority Members of the THEU-CGW,
(Annex 'T', Complainants), which incidentally was relied upon by
Arbitrator Villatuya in holding that complainant THEU-CGW commanded
the majority of employees in respondent company, ninety?three (93) of the
alleged signatories reaffirmed their membership with the THEU-NATU and
reanounced whatever connection they may have had with other labor
unions, (meaning the complainant THEU-CGW) either through resolution
or membership application forms they have unwittingly signed.’ ” (p.
306, Rollo)
Granting arguendo, that the fact of retraction is true, the
evidence on record shows that the letters of retraction were executed on
various dates beginning January 11, 1974 to March 8, 1974 (pp. 278-
280, Rollo). This shows that the retractions were made more or less after
the suspension pending dismissal on January 11, 1974 of Jose Encinas,
formerly THEU-NATU President, who became THEU-CGW President,
and the suspension pending their dismissal of the other elected officers and
members of the THEU-CGW on January 15, 1974. It is also clear that some
of the retractions occurred after the suspension of the first set of workers
numbering about twenty-four (24) on March 5, 1974. There is no use in
saying that the retractions obliterated the act of disaffiliation as there are
doubts that they were freely and voluntarily done especially during such
time when their own union officers and co-workers were already suspended
pending their dismissal.
 Disaffiliation of independently-registered union and Cancellation proceedings refer to the legal process
local chapter, distinguished leading to the revocation of the legitimate status of a union or
The disaffiliation of an independently-registered union workers’ association [IRR].
does nto affect its legitimate status as a labor organization.
However, the same thing may not be said of a union which is not 1. Grounds for Cancellation
independently-registered (Local chapter). Once a local chapter
disaffiliates from the federation, it ceases to be entitled to the rights Article 247. [239] Grounds for Cancellation of Union
and privileges granted to a legitimate labor organization. Thus, it Registration. - The following may constitute grounds for cancellation of
can no longer file a petition for certification election [Villar v. union registration:
Incion]. (a) Misrepresentation, false statement or fraud in connection
with the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, and the list of
1. Effects of Disaffiliation members who took part in the ratification;
The following are the effects of disaffiliation: (b) Misrepresentation, false statements or fraud in
connection with the election of officers, minutes of the election of
(a) It terminates the right to check-off federation dues; officers, and the list of voters;
(b) It does not affect the CBA, it does not amend or (c) Voluntary dissolution by the members.
change the administration of the contract;
(c) Once the fact of disaffiliation has been manifested
hile a certificate of registration confers a union with
beyond doubt, a certification election is the most
expeditious way of determining which labor legitimacy with the concomitant right to participate in or ask for
organization is to be treated as the exclusive certification election in a bargaining unit, the registration may be
bargaining agent. 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
2. When Allowed to Disaffiliate organization.[15] Among the grounds for cancellation is the
A member can only disaffiliate during the 60-day commission of any of the acts enumerated in Art. 239(a) [16] of the
freedom period. Labor Code, such as fraud and misrepresentation in connection
However, the local can disaffiliate at any time even if the with the adoption or ratification of the union's constitution and like
constitution and by-laws of the CBA constitutes that the local can documents. The Court, has in previous cases, said that to decertify
disaffiliate during the 60-day freedom period because the a union, it is not enough to show that the union includes ineligible
federation is merely an agent of the local. employees in its membership. It must also be shown that there was
misrepresentation, false statement, or fraud in connection with the
E. PRIVATE SECTOR VS. PUBLIC SECTOR application for registration and the supporting documents, such as
the adoption or ratification of the constitution and by-laws or
Private Sector Public Sector amendments thereto and the minutes of ratification of the
Bargaining unit Organizational unit constitution or by-laws, among other documents [SS Ventures v. SS
Scope of collective bargaining Scope of collective negotiation Ventures Labor Union]. 
covers all terms and conditions of covers only those that are not
work and it must be higher than fixed by law.
that provided by law 2. Where to File
Labor organization – if not Employee’s organization – not Subject to the requirements of notice and due process, the
registered registered registration of any legitimate independent labor union, local
Legitimate labor organization – if Legitimate Employees’ chapter and workers’ association may be cancelled by the Regional
registered with the DOLE organization/Registered Director upon the filing of a petition for cancellation for union
employees’ organization – if
Bargaining representative – registered with the CSC and
registration, or application by the organization itself for voluntary
natural person if LLO DOLE (BLR) [registration and dissolution.
cancellation must be with both] The petition for cancellation or application for voluntary
Exclusive bargaining Accredited employees’ dissolution shall be filed in the Regional Office which issued its
agent/collective bargaining organization/Sole and Exclusive certificate of registration or creation.
agent/certified collective Representative – if LEO has
bargaining agent – is the LLO as a majority of employees or LEO
In the case of federation, national or industry unions and
juridical entity who emerges as emerges as the winner in a trade union centers, the Bureau Director may cancel the registration
the winner in a certification certification election and who can upon the filing of a petition for cancellation or application for
election and who can sit in the sit in the negotiating table. voluntary dissolution in the Bureau of Labor Relations [IRR].
bargaining table

Exclusive 3. Who may File

Representative/Exclusive
Bargaining Representative – the
natural person if LLO is the EBA
Executive Order No. 180 states that certificates of
registration of the legitimate employee representatives must be
jointly approved by the CSC Chairman and the DOLE Secretary.
Executive Order No. 180 is not too helpful in determining whose
opinion shall prevail if the CSC Chairman and the DOLE Secretary
arrive at different conclusions. At any rate, we shall deal with that
problem when it occurs. [ACAE v. Ferrer-Calleja].
F. CANCELLATION PROCEEDINGS
Any party-in-interest may commence a petition for
cancellation of registration, except in actions involving violations
of Article 250 which can only be commenced by members in the
labor organization concerned [IRR].
 
4. Effect of a Petition for Cancellation
Article 246. [238-A] Effect of a Petition for Cancellation of
Registration. - A petition for cancellation of union registration shall not
suspend the proceedings for certification election nor shall it prevent
the filing of a petition for certification election.
In case of cancellation, nothing herein shall restrict the right
of the union to seek just and equitable remedies in the appropriate
courts.

Page 14 of 28
 Cancellation of registration does not affect the litigation.
The litigation continues because the union is a mere representative
party. The real parties in interest are the individual employees
concerned.
The labor organization may still be a party to the case but
the decision is binding only to those who did not withdraw from
the case before its trial and decision on the merits.
If some members in the meantime execute a quit-claim or
waiver because they have been paid in advance, such members are
no longer covered by the decision.
The non-renewal of registration permit does not dismiss
the cause because the court already acquired jurisdiction thereof.
5. Voluntary Cancellation
Article 248. [239-A] Voluntary Cancellation of Registration. -
The registration of a legitimate labor organization may be cancelled by
the organization itself: Provided, That at least two-thirds of its general
membership votes, in a meeting duly called for that purpose to dissolve
the organization: Provided, further, That an application to cancel
registration is thereafter submitted by the board of the organization,
attested to by the president thereof.
III
LEGITIMATE LABOR ORGANIZATION
A. RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS
Article 251. [242] Rights of Legitimate Labor Organizations. -
A legitimate labor organization shall have the right:
(a) To act as the representative of its members for the
purpose of collective bargaining;
(b) To be certified as the exclusive representative of all the
employees in an appropriate bargaining unit for purposes of collective
bargaining;
(c) To be furnished by the employer, upon written request,
with its annual audited financial statements, including the balance
sheet and the profit and loss statement, within thirty (30) calendar days
from the date of receipt of the request, after the union has been duly
recognized by the employer or certified as the sole and exclusive
bargaining representative of the employees in the bargaining unit, or
within sixty (60) calendar days before the expiration of the existing
collective bargaining agreement, or during the collective bargaining
negotiation;
(d) To own property, real or personal, for the use and
benefit of the labor organization and its members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the
organization and its members, including cooperative, housing, welfare
and other projects not contrary to law.
Notwithstanding any provision of a general or special law to
the contrary, the income and the properties of legitimate labor
organizations, including grants, endowments, gifts, donations and
contributions they may receive from fraternal and similar
organizations, local or foreign, which are actually, directly and
exclusively used for their lawful purposes, shall be free from taxes,
duties and other assessments. The exemptions provided herein may be
withdrawn only by a special law expressly repealing this provision.
The first three rights mentioned in this article do not
pertain to just about any union but only to the union that has been
selected as the bargaining representative of the employees in the
bargaining unit.
1. Right to Act as Representative
In order to act as a representative for purposes of
collective bargaining, the LLO must generally be the exclusive
bargaining agent.
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The union whose demand for collective bargaining was
rebuffed by the employer, because the union was not the certified
bargaining agent, has no right to stage a strike. The strike is illegal.
Such illegality is reason enough for the NLRC to declare that the
union officers have lost their employment status [Philippine
Diamond Hotel v. Manila Diamond Hotel Employees Union].
Although the union has every right to represent its
members in the negotiation regarding the terms and conditions of
their employment, it cannot negate their wishes on matters which
are purely personal and individual to them. In this case, the forty
employees freely opted to be covered by the Old Plan; their
decision should be respected. The company gave them every
opportunity to choose, and they voluntarily exercised their choice.
The union cannot pretend to know better; it cannot impose its will
on them [Caltex Refinery Employees Association v. Brillantes].
2. Right to be Certified as Exclusive Bargaining
Agent
In order to represent its members in collective
bargaining, it is an LLO’s inherent right that it be allowed to file a
Petition for Certification Election.
3. Right to Request for Audited Financial
Statement
In order to request for the Employer’s Audited Financial
Statement, the LLO must generally be an Exclusive Bargaining
Agent. This right includes the right to the notes and other
documents in support thereof.
To better equip the union in preparing for or in
negotiating with the employer, the law gives it the right to be
furnished with the employer's audited financial statements. There
are four points in time when the union may ask in writing for these
statements:
(a) after the union has been recognized by the employer
as sole bargaining representative of the employees in the
bargaining unit; or
(b) after the union is certified by DOLE as such sole
bargaining representative; or
(c) within the last 60 days of the life of a CBA; or
(d) during the collective bargaining negotiation.
The audited financial statements, including the balance
sheet and the profit and loss statement, should be provided by the
employer within 30 calendar days after receipt of the union's
request.
Standard Chartered Bank Employees Union v. Confesor
Held: We, likewise, find that the Union failed to substantiate its
claim that the Bank refused to furnish the information it needed.
While the refusal to furnish requested information is in itself an
unfair labor practice, and also supports the inference of surface
bargaining, in the case at bar, Umali, in a meeting dated May 18, 1993,
requested the Bank to validate its guestimates on the data of the rank and
file. However, Umali failed to put his request in writing as provided for in
Article 242(c) of the Labor Code:
Article 242. Rights of Legitimate Labor Organization…
(c) To be furnished by the employer, upon written request, with
the annual audited financial statements, including the balance sheet and the
profit and loss statement, within thirty (30) calendar days from the date of
receipt of the request, after the union has been duly recognized by the
employer or certified as the sole and exclusive bargaining representatives of
the employees in the bargaining unit, or within sixty (60) calendar days
before the expiration of the existing collective bargaining agreement, or
during the collective negotiation;
The Union, did not, as the Labor Code requires, send a written
request for the issuance of a copy of the data about the Bank’s rank and file
employees. Moreover, as alleged by the Union, the fact that the Bank made
use of the aforesaid guestimates, amounts to a validation of the data it had
used in its presentation.
4. Right to Own Property
As a consequence of having a separate personality, LLOs
can acquire personal and real property under its name.
5. Right to Sue and be Sued in its Registered Name
It is the function of a labor union to represent its
members against the employer's unfair labor practices. It can file an
action in their behalf without the cumbersome procedure of joining
each and every member as a separate party [Davao Free Workers
v. CIR].
The union and its attorney should be allowed to
participate in making compromise settlements with employees who
are union members. In one case, the company was adjudged to
have acted with evident bad faith and malice when it secured the 53
quitclaim agreements individually with the complainant workers
without the intervention of court and without involving the union.
This subterfuge is tantamount to a sabotage of the interest of the
association. Needless to say, the means employed by the employer
in dealing with the workers individually, instead of collectively
through the union and its counsel, violates good morals as they
undermine the unity of the union and fuels industrial disputes,
contrary to the declared policy in the Industrial Peace Act
[Pampanga Sugar v. CIR].
LAKAS v. Marcelo Enterprises
Held: In NARIC Workers' Union vs. CIR, We ruled that, "(a)
labor union would go beyond the limits of its legitimate purposes if it is
given the unrestrained liberty to prosecute any case even for employees
who are not members of any union at all. A suit brought by another in
representation of a real party in interest is defective." Under the
uncontroverted facts obtaining herein, the aforestated ruling is applicable,
the only difference being that, here, a labor federation seeks to represent
members of a registered local union never affiliated with it and members of
registered local unions which, in the course of the proceedings before the
industrial court, disaffiliated from it.
This is not to say that the complaining employees were without
any venue for redress. Under the aforestated considerations, the respondent
court should have directed the amendment of the complaint by dropping
LAKAS as the complainant and allowing the suit to be further prosecuted
in the individual names of those who had grievances. A class suit under
Rule 3, Section 12 of the Rules of Court is authorized and should suffice for
the purpose.
Money Claims
The rule in this jurisdiction is that money claims due to
laborers cannot be the object of settlement or compromise effected
by the union, union officers or counsel without the specific
individual consent of each laborer concerned. This is so because
the aggrieved parties are the individual complainants themselves.
Their representative can only assist but not decide for them. In the
light of the categorical denial by the employees that Peran was
authorized to enter into an amicable settlement as regards their
claims, the Court holds that public respondent Secretary of
labor ruled correctly in upholding the Regional Director's rejection
of the agreement [Marquez v. Secretary of Labor].
For a waiver thereof to be legally effective, the individual
consent or ratification of the workers or employees involved must
be shown.  Neither the officers nor the majority of the union had
any authority to waive the accrued rights pertaining to the
dissenting minority members, even under a collective bargaining
agreement which provided for a "union shop." [General Rubber v.
Drilon]
The authority of a union under Article 251 to act as
representative of its members for the purposes of collective
bargaining includes the power to represent its members for the
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purpose of enforcing the provisions of the CBA. When a union
files a case "for and in behalf of its members," a member or several
members of that union will not be permitted to file in the same case
a complaint-in-intervention even if it alleges that the union was not
pursuing the case diligently. Such complaint, together with the
motion for intervention, will have to be denied upon a finding that
those members are already well represented by their union. The
intervention may be allowed, however, when there is a suggestion
of fraud or collusion or that the representative will not act in good
faith for the protection of all interests represented by [the union]. In
this case the members who desire to intervene have not shown
fraud, collusion, or lack of good faith on the part of their union
[Acedera v. International Container Terminal Services].
Negotiation Phase vs. Administration Phase
While in the negotiation phase, the union is the EBA for
the purpose of collective bargaining. Thus, the employee can
compel representation.
However, during the administration proceedings (i.e.,
filing complaints arising from the CBA), the union is no longer the
EBA because any group of employees or a single employee can
bring a grievance to management. Hence, the employee cannot
compel representation. He can do so by himself.
6. Right to Undertake all other Activities not
Contrary to Law
This is the right to undertake all other activities designed
to benefit the organization and its members, including cooperative,
housing, welfare and other projects not contrary to law.
7. Right to Tax Exemption
Notwithstanding any provision of a general or special
law to the contrary, the income and the properties of legitimate
labor organizations, including grants, endowments, gifts, donations
and contributions they may receive from fraternal and similar
organizations, local or foreign, which are actually, directly and
exclusively used for their lawful purposes, shall be free from
taxes, duties and other assessments. The exemptions provided
herein may be withdrawn only by a special law expressly repealing
this provision.
B. RIGHTS AND CONDITIONS OF MEMBERSHIP
Article 250. [241] Rights and Conditions of Membership in a
Labor Organization. - The following are the rights and conditions of
membership in a labor organization:
(a) No arbitrary or excessive initiation fees shall be required
of the members of a legitimate labor organization nor shall arbitrary,
excessive or oppressive fine and forfeiture be imposed;
(b) The members shall be entitled to full and detailed reports
from their officers and representatives of all financial transactions as
provided for in the constitution and by-laws of the organization;
(c) The members shall directly elect their officers in the local
union, as well as their national officers in the national union or
federation to which they or their local union is affiliated, by secret
ballot at intervals of five (5) years. No qualification requirement for
candidacy to any position shall be imposed other than membership in
good standing in subject labor organization. The secretary or any other
responsible union officer shall furnish the Secretary of Labor and
Employment with a list of the newly-elected officers, together with the
appointive officers or agents who are entrusted with the handling of
funds within thirty (30) calendar days after the election of officers or
from the occurrence of any change in the list of officers of the labor
organization;
(d) The members shall determine by secret ballot, after due
deliberation, any question of major policy affecting the entire
membership of the organization, unless the nature of the organization
or force majeure renders such secret ballot impractical, in which case,
the board of directors of the organization may make the decision in
behalf of the general membership;
(e) No labor organization shall knowingly admit as members
or continue in membership any individual who belongs to a subversive
organization or who is engaged directly or indirectly in any subversive
activity;
(f) No person who has been convicted of a crime involving
moral turpitude shall be eligible for election as a union officer or for
appointment to any position in the union;
(g) No officer, agent or member of a labor organization shall
collect any fees, dues, or other contributions in its behalf or make any
disbursement of its money or funds unless he is duly authorized
pursuant to its constitution and by-laws;
(h) Every payment of fees, dues or other contributions by a
member shall be evidenced by a receipt signed by the officer or agent
making the collection and entered into the record of the organization to
be kept and maintained for the purpose;
(i) The funds of the organization shall not be applied for any
purpose or object other than those expressly provided by its
constitution and by-laws or those expressly authorized by written
resolution adopted by the majority of the members at a general
meeting duly called for the purpose;
(j) Every income or revenue of the organization shall be
evidenced by a record showing its source, and every expenditure of its
funds shall be evidenced by a receipt from the person to whom the
payment is made, which shall state the date, place and purpose of such
payment. Such record or receipt shall form part of the financial
records of the organization.
Any action involving the funds of the organization shall
prescribe after three (3) years from the date of submission of the
annual financial report to the Department of Labor and Employment
or from the date the same should have been submitted as required by
law, whichever comes earlier: Provided, That this provision shall apply
only to a legitimate labor organization which has submitted the
financial report requirements under this Code: Provided, further, That
failure of any labor organization to comply with the periodic financial
reports required by law and such rules and regulations promulgated
thereunder six (6) months after the effectivity of this Act shall
automatically result in the cancellation of union registration of such
labor organization;
(k) The officers of any labor organization shall not be paid
any compensation other than the salaries and expenses due to their
positions as specifically provided for in its constitution and by-laws, or
in a written resolution duly authorized by a majority of all the
members at a general membership meeting duly called for the purpose.
The minutes of the meeting and the list of participants and ballots cast
shall be subject to inspection by the Secretary of Labor or his duly
authorized representatives. Any irregularities in the approval of the
resolutions shall be a ground for impeachment or expulsion from the
organization;
(l) The treasurer of any labor organization and every officer
thereof who is responsible for the account of such organization or for
the collection, management, disbursement, custody or control of the
funds, moneys and other properties of the organization, shall render to
the organization and to its members a true and correct account of all
moneys received and paid by him since he assumed office or since the
last day on which he rendered such account, and of all bonds, securities
and other properties of the organization entrusted to his custody or
under his control. The rendering of such account shall be made:
(1) At least once a year within thirty (30) days after the close
of its fiscal year;
(2) At such other times as may be required by a resolution of
the majority of the members of the organization; and
(3) Upon vacating his office.
The account shall be duly audited and verified by affidavit
and a copy thereof shall be furnished the Secretary of Labor.
(m) The books of accounts and other records of the financial
activities of any labor organization shall be open to inspection by any
officer or member thereof during office hours;
(n) No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless authorized by a
written resolution of a majority of all the members in a general
membership meeting duly called for the purpose. The secretary of the
organization shall record the minutes of the meeting including the list
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of all members present, the votes cast, the purpose of the special
assessment or fees and the recipient of such assessment or fees. The
record shall be attested to by the president.
(o) Other than for mandatory activities under the Code, no
special assessments, from any amount due to an employee without an
individual written authorization duly signed by the employee. The
authorization should specifically state the amount, purpose and
beneficiary of the deduction; and
(p) It shall be the duty of any labor organization and its
officers to inform its members on the provisions of its constitution and
by-laws, collective bargaining agreement, the prevailing labor relations
system and all their rights and obligations under existing labor laws.
For this purpose, registered labor organizations may assess
reasonable dues to finance labor relations seminars and other labor
education activities.
Any violation of the above rights and conditions of
membership shall be a ground for cancellation of union registration or
expulsion of officers from office, whichever is appropriate. At least
thirty percent (30%) of the members of a union or any member or
members specially concerned may report such violation to the Bureau.
The Bureau shall have the power to hear and decide any reported
violation to mete the appropriate penalty.
Criminal and civil liabilities arising from violations of above
rights and conditions of membership shall continue to be under the
jurisdiction of ordinary courts.
1. Rights of Membership
a. Right against arbitrary or excessive
initiation fees, fines, and forfeiture
No arbitrary or excessive initiation fees shall be required
of the members of a legitimate labor organization nor shall
arbitrary, excessive or oppressive fine and forfeiture be imposed.
Article 292 (a) provides:
(a) All unions are authorized to collect reasonable
membership fees, union dues, assessments and fines and other
contributions for labor education and research, mutual death and
hospitalization benefits, welfare fund, strike fund and credit and
cooperative undertakings
b. Right to full and detailed reports
The members shall be entitled to full and detailed reports
from their officers and representatives of all financial transactions
as provided for in the constitution and by-laws of the organization
such as financial statements, balanced sheet, and income
statements.
c. Right to election of officers by secret ballot
The members shall directly elect their officers in the
local union, as well as their national officers in the national union
or federation to which they or their local union is affiliated at
intervals of five (5) years.
No qualification requirement for candidacy to any
position shall be imposed other than membership in good standing
in subject labor organization.
The secretary or any other responsible union officer shall
furnish the Secretary of Labor and Employment with a list of the
newly-elected officers, together with the appointive officers or
agents who are entrusted with the handling of funds within thirty
(30) calendar days after the election officers or form the occurrence
of any change in the list of officers of the labor organization.
Only members of the union can participate in the election
of union officers. The question of eligibility to vote may be
determined through the use of the applicable payroll period and
employee's status during the applicable payroll period. The payroll
of the month next preceding the labor dispute in case of regular
employees and the payroll period at or near the peak of operations
in case of employees in seasonal industries [Tancinco v. Ferrer-
Calleja].
d. Right to vote in determination of major
policies by secret ballot
The members shall determine by secr3et ballot, after due
deliberation, any question of major policy affecting the entire
membership of the organization, unless the nature of the
organization or force majeure renders such secret ballot
impractical, in which case, the Board of Directors of the
organization may make the decision on behalf of the general
membership.
e. Right to a receipt of any payment to the
union
Every payment of fees, dues, or other contributions by a
member shall be evidenced by a receipt signed by the officer or
agent making the collection and entered into the record of the
organization to be kept and maintained for that purpose.
f. Right against unauthorized expenditures
The funds of the organization shall not be applied for any
purpose or object other than (a) those expressly provided by its
constitution and by-laws or (b) those expressly authorized by
written resolution adopted by the majority of the members at a
general meeting duly called for the purpose.
For this purpose, registered labor organizations may
assess reasonable dues to finance labor relations seminars and other
labor education activities.
g. Right to report from the treasurer or other
responsible officer to render an account
The treasurer of any labor organization and every officer
thereof who is responsible for the account of such organization or
for the collection, management, disbursement, custody or control
of the funds, monies, and other properties of the organization, shall
render to the organization and to its members a true and correct
account of all moneys received and paid by him since he assumed
office or since the last day on which he rendered such account, and
of all bonds, securities and other properties of the organization
entrusted to his custody or under his control. The rendering of such
account shall be made:
(1) At least once a year within thirty (30) days after the
close of its fiscal year;
(2) At such other times as may be required by a
resolution of the majority of the members of the organization; and
(3) Upon vacating his office.
The account shall be duly audited and verified by
affidavit and a copy thereof shall be furnished the Secretary of
Labor.
h. Right to inspect financial records during
office hours
The books of accounts and other records of the financial
activities of any labor organization shall be open to inspection by
any officer or member thereof during office hours.
i. Right against unauthorized assessment or
fees
No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless authorized
by a written resolution of a majority of all the members in a general
membership meeting duly called for the purpose.
j. Right against unauthorized deductions
from salary
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Other than mandatory activities under the Code, no
special assessments, attorney’s fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due to an
employee without an individual written authorization duly signed
by the employee. The authorization should specifically state the
amount, purpose and beneficiary of the deduction.
It is very clear from the above-quoted provision that
attorney's fees may not be deducted or checked off from any
amount due to an employee without his written consent except for
mandatory activities under the Code.  A mandatory activity has
been defined as a judicial process of settling dispute laid down by
the law.  In the instant case, the amicable settlement entered into by
the management and the union cannot be considered as a
mandatory activity under the Code.  It is true that the union filed a
claim for emergency cost of living allowance and other benefits
before the Ministry of Labor.  But this case never reached its
conclusion in view of the parties’ agreement.  It is not also shown
from the records that Atty. Benjamin Sebastian was instrumental in
forging the said agreement on behalf of the union members
[Vengco v. Trajano].
For special assessment, attorney’s fees, negotiation fees,
and other extraordinary fees, automatic check-offs require (1)
written resolution of the majority of all the members at a general
membership meeting called for the purpose; and (2) individual
written authorization for check-off duly signed by the employee
concerned.
Article 228 provides:
Article 228. [222] Appearances and Fees. - (a) Non-
lawyers may appear before the Commission or any Labor
Arbiter only:
1. If they represent themselves; or
2. If they represent their organization or members
thereof.
(b) No attorney’s fees, negotiation fees or similar
charges of any kind arising from any collective bargaining
agreement shall be imposed on any individual charged against
union funds in an amount to be agreed upon by the parties. Any
contract, agreement or arrangement of any sort to the contrary
shall be null and void.
When individual authorization not required
i. Assessment from non-members of the
bargaining agent of “Agency Fees;”
ii. Deductions for fees for mandatory activities;
iii. Check-off for union service fees authorized by
law;
iv. Deductions for withholding tax (NIRC);
v. Deductions for withholding of wages because
of employee’s deb to the employer which is
already due;
vi. Deductions made pursuant to a judgment
against the worker under circumstances where
the wages may be subject to attachment or
execution but only for debts incurred for food,
clothing, shelter, and medical attendance;
vii. Deductions from wages ordered by the court;
viii. Deductions authorized by law such as
premiums for PhilHealth, SSS, Pag-IBIG, ECC
and the like.
Agency Fee
Article 259(e) provides:
(e) x x x. Employees of an appropriate bargaining
unit who are not members of the recognized collective
bargaining agent may be assessed a reasonable fee equivalent to
the dues and other fees paid by members of the recognized
 collective bargaining agent, if such non-union members accept relations system and all their rights and obligations under existing
the benefits under the collective bargaining agreement: labor laws.
Provided, That the individual authorization required under
Article 250, paragraph (o) of this Code shall not apply to the
2. Conditions of Membership
non-members of the recognized collective bargaining agent;

a. Individuals belonging to subversive

Agency Fee means a fee deducted by an employer from
organization or engaged in subversive
the salary or wages of an employee who is not a member of an
activity
employee organization, which is paid to the employee organization
No labor organization shall knowingly admit as members
that is the exclusive bargaining agent for the bargaining unit of the
or continue in membership any individual who belongs to a
employee [IRR].
subversive organization or who is engaged directly or indirectly in
This fee is collected when the bargaining agent
any subversive activity.
successfully negotiates a CBA with the employer. It is imposed on
non-members who are employees covered by the bargaining unit
b. Persons convicted of a crime involving
being represented by the bargaining agent – in case they accept the
moral turpitude
benefits under the CBA.
No person who has been convicted of a crime involving
The fact that the non-member is also paying union dues
moral turpitude shall be eligible for election as a union officer or
to their own unions does not free them from their obligations to pay
for appointment to any position in the union.
the agency fee, and vice versa. Thus they are required to pay (a)
union dues and special assessments of their own union; and (b)
c. Collection or disbursement of funds
agency fee to the bargaining agent.
No officer, agent or member of a labor organization shall
It is neither contractual nor statutory but quasi-
collect any fees, dues, or other contributions in its behalf or make
contractual. Payment of agency fee to the bargaining union/agent
any disbursement of its money or funds unless he is duly
which negotiated the CBA is but a reasonable requirement
authorized pursuant to its constitution and by-laws.
recognized by law, to prevent non-union members from enriching
themselves at the expense of union members [Holy Cross of Davao
d. Action involving funds
v. Joaquin]. The non-member does not become a member when he
Any action involving the funds of the organization shall
pays the agency fee.
prescribe after three (3) years from the date of submission of the
annual financial report to the Department of Labor and
Check-Off
Employment or from the date the same should have been submitted
Check-off is a method of deducting by the employer
as required by law, whichever comes earlier: Provided, That this
from the employee’s pay at prescribed periods, any amount due for
provision shall apply only to a legitimate labor organization which
fees, fines or assessments [AL Ammen Transportation v. Bicol
has submitted the financial report requirements under this Code:
Transportation Employees]. Strictly speaking, it is a process or
Provided, further, That failure of any labor organization to comply
device whereby the employer, on agreement with the union
with the periodic financial reports required by law and such rules
certified as the SEBA, or on prior authorization from its
and regulations promulgated thereunder six (6) months after the
employees, deducts union dues or agency fees from the latter’s
effectivity of this Act shall automatically result in the cancellation
wages and remits them directly to the union [Gabriel v. Secretary
of union registration of such labor organization;
of Labor].
This only applies to the SEBA and not to the minority
Who can file a complaint
union.
If it is a general complaint, the complaint must be under
Check-off may refer to two (2) things:
oath with written consent of at least 20% of the total membership
of the labor organization, or it may be exercised by the Secretary of
i. Collection of union dues, special assessments
DOLE motu proprio.
and fees (such as attorney’s fees, negotiation
The Regional or Bureau Director may inquire into the
fees or any other extraordinary fees by the
financial activities of any legitimate labor organization and
SEBA from its members; and
examine their books of accounts and other records to determine
ii. Collection of agency fees from non-members
compliance with the law and the organization’s constitution and
of the SEBA but covered by and included in
by-laws. Such examination shall be made upon the filing of a
the collective bargaining unit (CBU) who
request or complaint for the conduct of an accounts examination by
accept the benefits provided in the Collective
any member of the labor organization, supported by the written
Bargaining Agreement (CBA).
consent of at least 20% of its total membership [IRR].
If it is a specific complaint and it involves the member
The first kind mentioned requires for its validity, the
only, there is no need for the written consent of 20% of the
execution by the employees of individual written authorization
members. If it involves the entire membership, it must be supported
which should specifically state the amount, purpose, beneficiary of
by the written consent of 30% of the total membership.
the deduction; but the second kind does not require any such
Any complaint or petition with allegations of
authorization since the law itself recognizes and allows it upon the
mishandling, misappropriation, or non-accounting of funds in
non-SEBA member’s acceptance of benefits resulting from the
violation of Article 250 shall be treated as an intra-union dispute. It
CBA [Holy Cross v. Joaquin].
shall be heard and resolved by the Mediator-Arbiter pursuant to the
To effect the check-off of agency fees, no individual
provisions or Rule XI [IRR].
authorization is necessary unlike members under Article 250(o).
Where the issue involves the entire membership of the
labor organization, the complaint or petition shall be supported by
k. Right to information
at least 30% of its members [IRR].
It shall be the duty of any labor organization and its
officers to inform its members on the provisions of its constitution
e. Compensation of officers
and by-laws, collective bargaining agreement, the prevailing labor
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 Any action involving the funds of the organization shall
prescribe after three (3) years from the date of submission of the
annual financial report to the Department of Labor and
Employment or from the date the same should have been submitted
as required by law, whichever comes earlier: Provided, That this
provision shall apply only to a legitimate labor organization which
has submitted the financial report requirements under this Code:
Provided, further, That failure of any labor organization to comply
with the periodic financial reports required by law and such rules
and regulations promulgated thereunder six (6) months after the
effectivity of this Act shall automatically result in the cancellation
of union registration of such labor organization;
3. Effect of Violation of Rights and Conditions of
Membership
Any violation of the above rights and conditions of
membership shall be a ground for cancellation of union registration
or expulsion of officers from office, whichever is appropriate. At
least thirty percent (30%) of the members of a union or any
member or members specially concerned may report such violation
to the Bureau. The Bureau shall have the power to hear and decide
any reported violation to mete the appropriate penalty. Criminal
and civil liabilities arising from violations of above rights and
conditions of membership shall continue to be under the
jurisdiction of ordinary courts.
IV
BARGAINING UNIT
As defined in Department Order No. 40-03 which is now
the revised Book V of the Rules Implementing the Labor Code,
"bargaining unit" refers to a group of employees sharing mutual
interests within a given employer unit, comprised of all or less than
all of the entire body of employees in the employer unit or any
specific occupational or geographical grouping within such
employer unit.
It may also refer to a group of employees of a given
employer, comprise of all or less than all of the entire body of
employees, which the collective interests of all the employees,
consistent with equity to the employer, indicated to be best suited
to serve reciprocal rights and duties of the parties under the
collective bargaining provisions of the law [Belyca Corporation v.
Ferrer-Calleja].
An employee does not become a member of a bargaining
unit. He becomes a member of the union. His position falls under
the positions covered by the bargaining unit being represented by
the union. If the employee does not belong to that community of
interest represented by the bargaining unit, the union has the
freedom to reject him. The union may, however, accept him but he
is not covered by the benefits of the CBA.
There is no hard and fast rule in how the Med-Arbiter
should determine an appropriate ( not most appropriate) bargaining
unit. The test whether the designation of a bargaining unit is
appropriate is whether it will best assure to all employees the
exercise of their collective bargaining rights. There should be a
community of interest which should be reflected in groups having
substantial similarity of work and duties or similarity of
compensation and working conditions, among other criteria
[Democratic Labor Association v. Cebu Stevedoring].
In International School Alliance of Educators v.
Quisumbing, there are certain tests which may be used in
determining the appropriate collective bargaining unit, to wit:
a. Community or mutuality of interest doctrine;
b. Globe doctrine;
c. Collective bargaining history doctrine; and
Page 20 of 28
d. Employment status doctrine
Inclusion of excluded employees
In DLSU v. DLSU Employees Association, it was held:
The Court agrees with the Solicitor General that the
express exclusion of the computer operators and discipline officers
from the bargaining unit of rank-and-file employees in the 1986
collective bargaining agreement does not bar any re-negotiation for
the future inclusion of the said employees in the bargaining unit.
During the freedom period, the parties may not only renew the
existing collective bargaining agreement but may also propose and
discuss modifications or amendments thereto. With regard to the
alleged confidential nature of the said employees’ functions, after a
careful consideration of the pleadings filed before this Court, we rule
that the said computer operators and discipline officers are not
confidential employees. As carefully examined by the Solicitor
General, the service record of a computer operator reveals that his
duties are basically clerical and non-confidential in nature. As to the
discipline officers, we agree with the voluntary arbitrator that based
on the nature of their duties, they are not confidential employees and
should therefore be included in the bargaining unit of rank-and-file
employees.
The Court also affirms the findings of the voluntary
arbitrator that the employees of the College of St. Benilde should be
excluded from the bargaining unit of the rank-and-file employees of
Dela Salle University, because the two educational institutions have
their own separate juridical personality and no sufficient evidence was
shown to justify the piercing of the veil of corporate fiction.
A. SUBSTANTIAL MUTUAL INTERESTS RULE
Under this doctrine, the employees sought to be
represented by the collective bargaining agent must have
community or mutuality of interest in terms of employment and
working conditions as evinced by the type of work they perform. It
is characterized by similarity of employment status, same duties
and responsibilities and substantially similar compensation and
working conditions [San Miguel Corporation Employees Union v.
Confesor].
In San Miguel Corporation v. Laguesma, the Supreme
Court applied this principle in the petition of the union which seeks
to represent the sales personnel in the various Magnolia sales office
in Northern Luzon. Petitioner took the position that each sales
office should constitute one bargaining unit. In disagreeing this
proposition of petitioner, the Court said: “What greatly militates
against this position is the meager number of sales personnel in
each of the Magnolia sales office in Northern Luzon. Even the
bargaining unit sought to be represented by respondent union in the
entire Northern Luzon sales area consists only of approximately 55
employees. Surely, it would not be for the best interest of these
employees if they would further be fractionalized. The adage ‘there
is strength in number’ is the very rationale underlying the
formation of a labor union.”
In San Miguel Corporation Supervisors and Exempt
Employees Union v. Laguesma, the fact that the 3 plants
comprising the bargaining unit are located in 3 different places was
declared immaterial. Geographical location can be completely
disregarded if the communal or mutual interests of the employees
are not sacrificed. The distance among the 3 plants is not
productive of insurmountable difficulties in the administration of
union affairs. Neither are there regional differences that are likely
to impede the operations of a single bargaining representative.
In University of the Philippines v. Ferrer-Calleja, all
non-academic rank-and-file employees of UP Diliman, Quezon
City, Padre Faura, Manila, Los Banos, Laguna and the Visayas
were allowed to participate in a certification election as one
bargaining unit.
San Miguel Corporation Employees Union v. Confesor
 Held: With respect to the second issue, there is, likewise, no
merit in petitioner-union’s assertion that the employees of Magnolia and
SMFI should still be considered part of the bargaining unit of SMC.
Magnolia and SMFI were spun-off to operate as distinct
companies on October 1, 1991.  Management saw the need for these
transformations in keeping with its vision and long term strategy as it
explained in its letter addressed to the employees dated August 13, 1991:
x x x As early as 1986, we announced the decentralization
program and spoke of the need for structures that can react fast to
competition, a changing environment, shorter product life cycles and shifts
in consumer preference.  We further stated in the 1987 Annual Report to
Stockholders that San Miguel’s businesses will be more autonomous and
self sufficient so as to better acquire and master new technologies, cope
with a labor force with different expertises and expectations, and master
and satisfy the changing needs of our customers and end-consumers.  As
subsidiaries, Magnolia and FLD will gain better industry focus and
flexibility, greater awareness of operating results, and speedier, more
responsive decision making.
xxx
We only have to look at the experience of Coca-Cola Bottlers
Philippines, Inc., since this company was organized about ten years ago, to
see the benefits that arise from restructuring a division of San Miguel into a
more competitive organization.  As a stand-alone enterprise, CCBPI
engineered a dramatic turnaround and has sustained its sales and market
share leadership ever since.
We are confident that history will repeat itself, and the
transformation of Magnolia and FLD will be successful as that of CCBPI.
[17]
Undeniably, the transformation of the companies was a
management prerogative and business judgment which the courts can not
look into unless it is contrary to law, public policy or morals.  Neither can
we impute any bad faith on the part of SMC so as to justify the application
of the doctrine of piercing the corporate veil. [18] Ever mindful of the
employees’ interests, management has assured the concerned employees
that they will be absorbed by the new corporations without loss of tenure
and retaining their present pay and benefits according to the existing CBAs.
[19]
 They were advised that upon the expiration of the CBAs, new
agreements will be negotiated between the management of the new
corporations and the bargaining representatives of the employees
concerned.  As a result of the spin-offs:
1. Each of the companies are run by, supervised and controlled
by different management teams including separate human
resource/personnel managers.
2. Each Company enforces its own administrative and
operational rules and policies and are not dependent on each other in their
operations.
3. Each entity maintains separate financial statements and are
audited separately from each other.
Indubitably, therefore, Magnolia and SMFI became distinct
entities with separate juridical personalities.  Thus, they can not belong to a
single bargaining unit as held in the case of Diatagon Labor Federation
Local 110 of the ULGWP v. Ople. We elucidate:
The fact that their businesses are related and that the 236
employees of Georgia Pacific International Corporation were originally
employees of Lianga Bay Logging Co., Inc. is not a justification for
disregarding their separate personalities.  Hence, the 236 employees, who
are now attached to Georgia Pacific International Corporation, should not
be allowed to vote in the certification election at the Lianga Bay Logging
Co., Inc.  They should vote at a separate certification election to determine
the collective bargaining representative of the employees of Georgia Pacific
International Corporation.
Petitioner-union’s attempt to include the employees of Magnolia
and SMFI in the SMC bargaining unit so as to have a bigger mass base of
employees has, therefore, no more valid ground.
Moreover, in determining an appropriate bargaining unit, the
test of grouping is mutuality or commonality of interests.  The employees
sought to be represented by the collective bargaining agent must have
substantial mutual interests in terms of employment and working conditions
as evinced by the type of work they performed. [22] Considering the spin-
offs, the companies would consequently have their respective and
distinctive concerns in terms of the nature of work, wages, hours of work
and other conditions of employment.  Interests of employees in the different
companies perforce differ.  SMC is engaged in the business of beer
manufacturing.  Magnolia is involved in the manufacturing and processing
Page 21 of 28
of dairy products[23] while SMFI is involved in the production of feeds and
the processing of chicken.[24] The nature of their products and scales of
business may require different skills which must necessarily be
commensurated by different compensation packages.  The different
companies may have different volumes of work and different working
conditions.  For such reason, the employees of the different companies see
the need to group themselves together and organize themselves into
distinctive and different groups.  It would then be best to have separate
bargaining units for the different companies where the employees can
bargain separately according to their needs and according to their own
working conditions.
We reiterate what we have explained in the case of University of the
Philippines v. Ferrer-Calleja that:
[T]here are various factors which must be satisfied and
considered in determining the proper constituency of a bargaining unit.  No
one particular factor is itself decisive of the determination.  The weight
accorded to any particular factor varies in accordance with the particular
question or questions that may arise in a given case.  What are these
factors?  Rothenberg mentions a good number, but the most pertinent to our
case are: (1) will of the employees (Globe Doctrine); (2) affinity and unit of
employees’ interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions; (3) prior collective
bargaining history; and (4) employment status, such as temporary, seasonal
and probationary employees x x.
xxx
An enlightening appraisal of the problem of defining an
appropriate bargaining unit is given in the 10th Annual Report of the
National Labor Relations Board wherein it is emphasized that the factors
which said board may consider and weigh in fixing appropriate units are:
the history, extent and type of organization of employees; the history of
their collective bargaining; the history, extent and type of organization of
employees in other plants of the same employer, or other employers in the
same industry; the skill wages, work, and working conditions of the
employees; the desires of the employees; the eligibility of the employees
for membership in the union or unions involved; and the relationship
between the unit or units proposed and the employer’s organization,
management, and operation x x.
x x In said report, it is likewise emphasized that the basic test in
determining the appropriate bargaining unit is that a unit, to be appropriate,
must affect a grouping of employees who have substantial, mutual interests
in wages, hours, working conditions and other subjects of collective
bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws,
162) x x.
Finally, we take note of the fact that the separate interests of the
employees of Magnolia and SMFI from those of SMC has been recognized
in the case of Daniel Borbon v. Laguesma.[26] We quote:
Even assuming in gratia argumenti that at the time of the
election they were regular employees of San Miguel, nonetheless, these
workers are no longer connected with San Miguel Corporation in any
manner because Magnolia has ceased to be a division of San Miguel
Corporation and has been formed into a separate corporation with a
personality of its own (p. 305, Rollo).  This development, which was
brought to our attention by private respondents, necessarily renders moot
and academic any further discourse on the propriety of the elections which
petitioners impugn via the present recourse (p. 319, Rollo).
University of the Philippines v. Ferrer-Calleja
Held: When first confronted with the task of determining the
proper collective bargaining unit in a particular controversy, the Court had
perforce to rely on American jurisprudence. In Democratic Labor
Association vs. Cebu Stevedoring Company, Inc., decided on February 28,
1958, the Court observed that "the issue of how to determine the proper
collective bargaining unit and what unit would be appropriate to be the
collective bargaining agency" * * * "is novel in this jurisdiction; however,
American precedents on the matter abound ** (to which resort may be had)
considering that our present Magna Carta has been patterned after the
American law on the subject." Said the Court:
" * * Under these precedents, there are various factors which
must be satisfied and considered in determining the proper constituency of
a bargaining unit. No one particular factor is itself decisive of the
determination. The weight accorded to any particular factor varies in
accordance with the particular question or questions that may arise in a
given case. What are these factors? Rothenberg mentions a good number,
but the most pertinent to our case are: (1) will of the employees (Globe
Doctrine); (2) affinity and unit of employees' interest, such as substantial
similarity of work and duties, or similarity of compensation and working
conditions; (3) prior collective bargaining history; and (4) employment
status, such as temporary, seasonal and probationary employees. * *.
" * * * * * *
"An enlightening appraisal of the problem of defining an
appropriate bargaining unit is given in the 10th Annual Report of the
National Labor Relations Board wherein it is emphasized that the factors
which said board may consider and weigh in fixing appropriate units are:
the history, extent and type of organization of employees; the history of
their collective bargaining; the history, extent and type of organization of
employees in other plants of the same employer, or other employers in the
same industry; the skill, wages, work, and working conditions of the
employees; the desires of the employees; the eligibility of the employees
for membership in the union or unions involved; and the relationship
between the unit or units proposed and the employer's organization,
management, and operation. * *.
" * * In said report, it is likewise emphasized that the basic test
in determining the appropriate bargaining unit is that a unit, to be
appropriate, must affect a grouping of employees who have substantial,
mutual interests in wages, hours, working conditions and other subjects of
collective bargaining (citing Smith on Labor Laws, 316-317; Francisco,
Labor Laws, 162). * *. "
The Court further explained that "(t)he test of the grouping is
community or mutuality of interests. And this is so because ‘the basic test
of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights’ (Rothenberg on Labor
Relations, 490)." Hence, in that case, the Court upheld the trial court's
conclusion that two separate bargaining units should be formed, one
consisting of regular and permanent employees and another consisting of
casual laborers or stevedores.
Since then, the "community or mutuality of interests" test has
provided the standard in determining the proper constituency of a collective
bargaining unit. In Alhambra Cigar & Cigarette Manufacturing Company,
et al. vs. Alhambra Employees' Association (PAFLU), 107 Phil. 23, the
Court, noting that the employees in the administrative, sales and dispensary
departments of a cigar and cigarette manufacturing firm perform work
which have nothing to do with production and maintenance, unlike those in
the raw lead (malalasi), cigar, cigarette, packing (precintera) and
engineering and garage departments, authorized the formation of the former
set of employees into a separate collective bargaining unit. The ruling in
the Democratic Labor Association case, supra, was reiterated in Philippine
Land-Air-Sea Labor Union vs. Court of Industrial Relations, 110 Phil. 176,
where casual employees were barred from joining the union of the
permanent and regular employees.
Applying the same "community or mutuality of interests" test,
but resulting in the formation of only one collective bargaining unit is the
case of National Association of Free Trade Unions vs. Mainit Lumber
Development Company Workers Union-United Lumber and General
Workers of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA
598. In said case, the Court ordered the formation of a single bargaining
unit consisting of the Sawmill Division in Butuan City and the Logging
Division in Zapanta Valley, Kitcharao, Agusan Norte of the Mainit Lumber
Development Company. The Court reasoned:
"Certainly, there is a mutuality of interest among the employees
of the Sawmill Division and the Logging Division. Their functions mesh
with one another. One group needs the other in the same way that the
company needs them both. There may be difference as to the nature of their
individual assignments but the distinctions are not enough to warrant the
formation of a separate bargaining unit."
In the case at bar, the University employees may, as already
suggested, quite easily be categorized into two general classes: one, the
group composed of employees whose functions are non-academic, i.e.,
janitors, messengers, typists, clerks, receptionists, carpenters, electricians,
grounds-keepers, chauffeurs, mechanics, plumbers; and two, the group
made up of those performing academic functions, i.e., full professors,
associate professors, assistant professors, instructors -- who may be judges
or government executives -- and research, extension and professorial
staff. Not much reflection is needed to perceive that the community or
mutuality of interests which justifies the formation of a single collective
bargaining unit is wanting between the academic and non-academic
personnel of the university. It would seem obvious that teachers would find
Page 22 of 28
very little in common with the University clerks and other non-academic
employees as regards responsibilities and functions, working conditions,
compensation rates, social life and interests, skills and intellectual pursuits,
cultural activities, etc. On the contrary, the dichotomy of interests, the
dissimilarity in the nature of the work and duties as well as in the
compensation and working conditions of the academic and non-academic
personnel dictate the separation of these two categories of employees for
purposes of collective bargaining. The formation of two separate bargaining
units, the first consisting of the rank-and-file non-academic personnel, and
the second, of the rank-and-file academic employees, is the set-up that will
best assure to all the employees the exercise of their collective bargaining
rights. These special circumstances, i.e., the dichotomy of interests and
concerns as well as the dissimilarity in the nature and conditions of work,
wages and compensation between the academic and non-academic
personnel, bring the case at bar within the exception contemplated in
Section 9 of Executive Order No. 180. It was grave abuse of discretion on
the part of the Labor Relations Director to have ruled otherwise, ignoring
plain and patent realities.
Belyca Corporation v. Ferrer-Calleja
Held: Hence, still later following the substantial-mutual interest
test, the Court ruled that there is a substantial difference between the work
performed by musicians and that of other persons who participate in the
production of a film which suffice to show that they constitute a proper
bargaining unit. (LVN Pictures, Inc. v. Philippine Musicians Guild 1 SCRA
132 (1961]).
Coming back to the case at bar, it is beyond question that the
employees of the livestock and agro division of petitioner corporation
perform work entirely different from those performed by employees in the
supermarts and cinema. Among others, the noted difference are: their
working conditions, hours of work, rates of pay, including the categories of
their positions and employment status. As stated by petitioner corporation
in its position paper, due to the nature of the business in which its livestock-
agro division is engaged very few of its employees in the division are
permanent, the overwhelming majority of which are seasonal and casual
and not regular employees (Rollo, p. 26). Definitely, they have very little in
common with the employees of the supermarts and cinemas. To lump all
the employees of petitioner in its integrated business concerns cannot result
in an efficacious bargaining unit comprised of constituents enjoying a
community or mutuality of interest. Undeniably, the rank and file
employees of the livestock-agro division fully constitute a bargaining unit
that satisfies both requirements of classification according to employment
status and of the substantial, similarity of work and duties which will
ultimately assure its members the exercise of their collective bargaining
rights.
B. GLOBE DOCTRINE
This principle is based on the will of the employees. It is
called Globe doctrine because this principle was first enunciated in
the United States case of Globe Machine and Stamping Co., where
it was ruled, in defining the appropriate bargaining unit, that in a
case where the company’s production workers can be considered
either as a single bargaining unit appropriate for purposes of
collective bargaining or as three (3) separate and distinct
bargaining units, the determining factor is the desire of the
workers themselves consequently, a certification election should be
held separately to choose which representative union will be
chosen by the workers [Mechanical Department Labor Union v.
CIR].
In International School Alliance of Educators v.
Quisumbing, the High Court ruled that foreign-hired teachers do
not belong to the bargaining unit of the local hires because the
former have not indicated their intention to be grouped with the
latter for purposes of collective bargaining. Moreover, the
collective bargaining history of the school also shows that these
groups were always treated separately.
C. COLLECTIVE BARGAINING HISTORY DOCTRINE
This principle puts premium to the prior collective
bargaining history and affinity of the employees in determining the
appropriate bargaining unit. However, the existence of a prior
collective bargaining history has been held as neither decisive nor
conclusive in the determination of what constitutes an appropriate
bargaining unit [San Miguel Corporation v. Laguesma].
It was ruled in National Association of Free Trade
Unions v. Mainit Lumber Development Company Workers Union
that there is mutuality of interest among the workers in the sawmill
division and logging division as to justify their formation of a
single bargaining unit. This holds true despite the history of said
two divisions being treated as separate units and notwithstanding
their geographical distance from each other.
In San Miguel v. Laguesma, despite the collective
bargaining history of having a separate bargaining unit for each
sales office, the Supreme Court applied the principle of mutuality
or commonality of interests in holding that the appropriate
bargaining unit is comprised of all the sales force in the whole of
Northern Luzon.
D. EMPLOYMENT STATUS DOCTRINE
The determination of the appropriate bargaining unit
based on the employment status of the employees is considered an
acceptable mode. For instance, casual employees and those
employed on a day-to-day basis do not have the mutuality or
community of interest with regular and permanent employees.
Hence, their inclusion in the bargaining unit composed of the latter
is not justified [Philippine Land-Air-Sea Labor Union v. CIR].
International School Alliance of Educators v. Quisumbing
Held: A bargaining unit is "a group of employees of a given
employer, comprised of all or less than all of the entire body of employees,
consistent with equity to the employer indicate to be the best suited to serve
the reciprocal rights and duties of the parties under the collective bargaining
provisions of the law." The factors in determining the appropriate collective
bargaining unit are (1) the will of the employees (Globe Doctrine); (2)
affinity and unity of the employees' interest, such as substantial similarity
of work and duties, or similarity of compensation and working conditions
(Substantial Mutual Interests Rule); (3) prior collective bargaining history;
and (4) similarity of employment status. The basic test of an asserted
bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their
collective bargaining rights.
It does not appear that foreign-hires have indicated their
intention to be grouped together with local-hires for purposes of collective
bargaining. The collective bargaining history in the School also shows that
these groups were always treated separately. Foreign-hires have limited
tenure; local-hires enjoy security of tenure. Although foreign-hires perform
similar functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-hires. These
benefits, such as housing, transportation, shipping costs, taxes, and home
leave travel allowance, are reasonably related to their status as foreign-
hires, and justify the exclusion of the former from the latter. To include
foreign-hires in a bargaining unit with local-hires would not assure either
group the exercise of their respective collective bargaining rights.
V
BARGAINING AGENT
The term sole and exclusive bargaining agent (SEBA)
refers to a legitimate labor union duly certified as the sole and
exclusive bargaining representative or agent of all the employees in
a collective bargaining unit (CBU). A labor union certified as a
SEBA means that it shall remain as such during the existence of the
CBA, to the exclusion of all other labor organizations existing and
operating in the same CBU, and no petition for certification
election (PCE) questioning its majority status shall be entertained
nor shall certification election be conducted outside the 60-day
freedom period immediately before the expiry date of the 5-year
term of the CBA.
Page 23 of 28
Once certified, what is represented by the SEBA are not
only its members but also those who are members of other unions,
called “minority” unions, who are included in the CBU [National
Brewery & Allied Industries Labor Union v. San Miguel Brewery].
An unorganized establishment becomes an “Organized
Establishment” where there exists a recognized or certified sole
and exclusive bargaining agent.
The SEBA of the employees in a CBU may be
determined through any of the following modes:
(a) Request for SEBA certification (which repealed and
replaced “Voluntary Recognition” as a mode of
securing SEBA status);
(b) Certification election;
(c) Consent election;
(d) Run-off election.
A. REQUEST FOR SEBA CERTIFICATION
Before, it was voluntary recognition, which refers to the
free and voluntary act of the employer of extending and conferring
full recognition to a union as the sole and exclusive bargaining
representative of the employees in an appropriate bargaining unit,
for purposes of collective bargaining.
Department Order No. 40-I-15, Series of 2015 has
expressly repealed the entire set of Rules applicable to Voluntary
Recognition in the Labor Code’s Implementing Rules and replaced
it with the freshly-minted mode of securing the status of a SEBA
through a Request for SEBA Certification or simply “Request.”
Any legitimate labor organization may file a Request in
the DOLE Regional Office which issued to it its Certificate of
Registration or Certificate of Creation of Chartered Local, as the
case may be [IRR].
B. CERTIFICATION ELECTION
Certification election refers to the process of determining
through secret ballot the SEBA of the employees in an appropriate
CBU for purposes of collective bargaining with the employer. A
certification election is conducted only upon the order of the Med-
Arbiter of the BLR [IRR].
Pendency of a petition for cancellation
The pendency of a petition for cancellation of union
registration does not preclude certification election or collective
bargaining.
1. Nature of Certification Election
Certification election is the most democratic method of
determining the choice of the employees of their bargaining
representative [PAL Employees’ Association v. Ferrer-Calleja]. It
is held to ensure that the employees are properly represented in the
exercise of their right to collective bargaining with their employer
[FOITAF v. Noriel]. No obstacle must be placed to the holding of a
certification election for it is the statutory policy that it should not
be circumvented [Trade Unions of the Philippines v. Laguesma]. It
is not a litigation proceeding in a sense in which this term is
commonly understood. It is a mere investigation of a non-adversary
fact-finding character in which the DOLE plays the part of a
disinterested investigator seeking merely to ascertain the desires of
the employees as to the matter of determining which labor
organization will represent the employees in their collective
bargaining with the employer [The Heritage Hotel v. Secretary of
Labor]. It is not therefore bound by the technical rules of evidence
[Associated Labor Unions v. Ferrer-Calleja]. In case of doubt, the
PCE should be resolved in favor of the holding of a certification
election [National Federation of Labor v. Secretary of Labor].
 The facts sought to be determined in a certification
election are: first, whether the Bargaining Unit wants
representation; and second, who will represent them if they want
representation.
A certification election proceeding directly involves two
(2) issues, namely: (a) the proper composition and constituency of
the bargaining unit; and (b) the validity of majority representation
claims. It is therefore incumbent upon the Med-Arbiter to rule on
the appropriateness of the bargaining unit once its composition and
constituency is questioned [Holy Child v. Sto. Tomas].
2. Who may File
A petition for certification election may be filed by:
a. A legitimate labor organization, including: (i) a
national union or federation that has issued a charter
certificate to its local chapter/chartered local. The
former is filing the PCE for and on behalf of the
latter; or (ii) the local chapter/chartered local itself
which has been issued a charter certificate by the
national union or federation; or (iii) an
independently registered union;
b. An employer, when requested to bargain
collectively in a bargaining unit where no registered
CBA exists and the status of the union is in doubt.
Role of Employer in Certification Election
Article 271. [258-A] Employer as Bystander. - In all cases,
whether the petition for certification election is filed by an employer or
a legitimate labor organization, the employer shall not be considered a
party thereto with a concomitant right to oppose a in such proceedings
shall be limited to: (1) being notified or informed of petitions of such
nature; and (2) submitting the list of employees during the pre-election
conference should the Med-Arbiter act favorably on the petition.
In issues as to the appropriateness of employees in a
bargaining unit, the employer has a proper role. He can object to
the appropriateness of the bargaining unit through a motion or a
manifestation. Once the bargaining unit is already established,
neither the employer nor the employees can change its
configuration.
3. When to File the Petition for Certification
Election
In the absence of a CBA duly registered in accordance
with Article 237, a petition for certification lection may be filed at
any time.
However, no certification lection may be held under the
following rules:
(a) Certification year-bar rule;
(b) Negotiations-bar rule;
(c) Bargaining deadlock-bar rule; or
(d) Contract-bar rule.
a. Certification Year Bar Rule
Although the Labor Code does not contain any provision
on when the CBA negotiation process should start after a union is
duly certified as the SEBA of the employees it seeks to represent in
a given bargaining unit, there is, however, this provision in the
Rules when the Med-Arbiter may dismiss the PCE if the same is
filed within one (1) year reckoned and counted:
(i) From the date the SEBA certification is issued
by the DOLE Regional Director in cases of
Request for SEBA Certification filed in an
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unorganized establishment with only one (1)
legitimate labor organization; or
(ii) From the date of issuance of certification as
SEBA and not from the date of the conduct of
valid certification, consent, run-off or re-run
election [IRR].
In the first instance, the period is counted from the
issuance of the SEBA certification which shall have the effect of
barring the filing of a PCE by any labor organization. It is only
upon the expiration of this 1-year period that any legitimate labor
organization may file a PCE in the same collective bargaining unit
(CBU) represented by the certified SEBA, unless a CBA between
the employer and the certified SEBA was executed and registered
with the DOLE Regional Office [IRR].
In the second, there must be a distinction made between
the reckoning of the 1-year statutory bar and the 1-year
certification year bar. The 1-year period in the former should be
counted from the date of election; while the 1-year period in the
latter should be from the date of certification of the SEBA. The
union will be deprived of its entitlement to the critical one (1) year
as a certified SEBA if this period is reckoned from the actual date
when the certification, consent, run-off or re-run election was
conducted. The union is certainly entitled to a full 12 months as
SEBA. Until certification is made in its favor, its status as SEBA is
not definite.
Where an appeal has been filed from the order of the
Med-Arbiter certifying the results of the election, the running of
the one (1) year period is deemed suspended until the decision on
the appeal has become final and executory [IRR].
If the SEBA fails to commence the collective bargaining
process within said period, its being the SEBA may be questioned
by another union through the filing of a new PCE. This is best
illustrated by the case of KAMPIL-KATIPUNAN v. Trajano, where
the SEBA failed to initiate the collective bargaining process within
a period of more than 4 years thereby enabling another union to file
a new petition for certification election.
b. Negotiations Bar Rule
Under the negotiations bar rule, a certification election
petition may not be filed while the SEBA and employer have
commenced and sustained negotiations in good faith in accordance
with Article 261 within one (1) year from the date of entry of
SEBA certification, or from the date of a valid certification,
consent, or run-off election or from the date of issuance of the
SEBA certification by the DOLE Regional Director in cases of
Request for SEBA Certification.
Once the CBA negotiations have commenced and while
the parties are engaged in this process, no challenging union is
allowed file a PCE that would disturb the negotiation process and
unduly delay, preempt or forestall the prompt and timely
conclusion thereof.
It must be noted that there is no law or rule that imposes
a time limitation or caps as to when the parties should negotiate
and conclude a CBA. The parties have all the freedom and leeway
to negotiate the CBA’s terms and conditions without being
constrained by any time restriction. In other words, the negotiation
process may last for days, weeks, months, even years, and during
the entire duration thereof, no PCE may be filed by any challenging
union.
c. Bargaining Deadlock Bar Rule
Collective bargaining deadlock refers to a situation
where there is failure in the collective bargaining negotiations
between the SEBA and the employer resulting in an impasse or
stalemate [San Miguel Corporation v. NLRC]. This happens when,
despite their efforts at bargaining in good faith, the parties have
failed to resolve the issues and it appears that there are no other
definite options or plans in sight to break the standoff. Simply
stated, there is a deadlock when there is a complete blocking or
stoppage in the negotiation resulting from the action of equal and
opposing forces [Capitol Medical Center Alliance of Concerned
Employees v. Laguesma].
Under this rule, a certification election petition may not
be filed when a bargaining deadlock to which an incumbent SEBA
is a party has been submitted to conciliation, compulsory or
voluntary arbitration or has become the subject of a valid notice of
strike or lockout [IRR].
CMCEA-AFW v. Laguesma
Held: Was there a bargaining deadlock between CMC and
respondent union, before the filing of petitioner of a petition for
certification election, which had been submitted to conciliation or had
become the subject of a valid notice of strike or lockout?
In the case of Divine Word University of Tacloban v. Secretary
of Labor and Employment, we had the occasion to define what a deadlock
is, viz:
"A 'deadlock' is xxx the counteraction of things producing entire
stoppage; xxx There is a deadlock when there is a complete blocking or
stoppage resulting from the action of equal and opposed forces xxx. The
word is synonymous with the word impasse, which xxx 'presupposes
reasonable effort at good faith bargaining which, despite noble intentions,
does not conclude in agreement between the parties. ' "
Although there is no "deadlock" in its strict sense as there is no
"counteraction" of forces present in this case nor "reasonable effort at good
faith bargaining, "such can be attributed to CMC's fault as the bargaining
proposals of respondent union were never answered by CMC. In fact, what
happened in this case is worse than a bargaining deadlock for CMC
employed all legal means to block the certification of respondent union as
the bargaining agent of the rank-and-file; and use it as its leverage for its
failure to bargain with respondent union. Thus, we can only conclude that
CMC was unwilling to negotiate and reach an agreement with respondent
union. CMC has not at any instance shown willingness to discuss the
economic proposals given by respondent union.
As correctly ratiocinated by public respondent, to wit:
"For herein petitioner to capitalize on the ensuing delay which
was caused by the hospital and which resulted in the non-conclusion of a
CBA within the certification year, would be to negate and render a mockery
of the proceedings undertaken before this Department and to put an
unjustified premium on the failure of the respondent hospital to perform its
duty to bargain collectively as mandated in Article 252 of the Labor Code,
as amended, which states."
"Article 252. Meaning of duty to bargain collectively - the duty
to bargain collectively means the performance of a mutual obligation to
meet and convene promptly and expeditiously in good faith for the purpose
of negotiating an agreement with respect to wages, hours of work and all
other terms and conditions of employment including proposals for adjusting
any grievance or questions arising under such agreement and executing a
contract incorporating such agreements if requested by either party but such
duty does not compel any party to agree to a proposal or to make any
concession."
The duly certified bargaining agent, CMCEA - AFW, should not
be made to further bear the brunt flowing from the respondent hospital's
reluctance and thinly disguised refusal to bargain."
If the law proscribes the conduct of a certification election when
there is a bargaining deadlock submitted to conciliation or arbitration, with
more reason should it not be conducted if, despite attempts to bring an
employer to the negotiation table by the certified bargaining agent, there
was "no reasonable effort in good faith" on the employer to bargain
collectively.
In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano,
201 SCRA 453 (1991), penned by Chief Justice Andres R. Narvasa, the
factual milieu of which is similar to this case, this Court allowed the
holding of a certification election and ruled that the one year period known
as the "certification year" has long since expired. We also ruled, that:
  "xxx prior to the filing of the petition for election in this case,
there was no such 'bargaining deadlock xx (which) had been submitted to
conciliation or arbitration or had become the subject of a valid notice of
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strike or lockout.' To be sure, there are in the record assertions by NAFLU
that its attempts to bring VIRON to the negotiation table had been
unsuccessful because of the latter's recalcitrance, and unfulfilled promises
to bargain collectively; but there is no proof that it had taken any action to
legally coerce VIRON to comply with its statutory duty to bargain
collectively. It could have charged VIRON with unfair labor practice; but it
did not. It could have gone on a legitimate strike in protest against VIRON's
refusal to bargain collectively and compel it to do so; but it did not. There
are assertions by NAFLU, too, that its attempts to bargain collectively had
been delayed by continuing challenges to the resolution pronouncing it the
sole bargaining representative in VIRON; but there is no adequate
substantiation thereof , or of how it did in fact prevent initiation of the
bargaining process between it and VIRON."
Although the statements pertinent to this case are merely obiter,
still the fact remains that in the Kaisahan case, NAFLU was counselled by
this Court on the steps that it should have undertaken to protect its interest,
but which it failed to do so.
This is what is strikingly different between the Kaisahan case
and the case at bench for in the latter case, there was proof that the certified
bargaining agent, respondent union, had taken an action to legally coerce
the employer to comply with its statutory duty to bargain collectively, i. e.,
charging the employer with unfair labor practice and conducting a strike in
protest against the employer's refusal to bargain. [25] It is only just and
equitable that the circumstances in this case should be considered as similar
in nature to a "bargaining deadlock" when no certification election could be
held. This is also to make sure that no floodgates will be opened for the
circumvention of the law by unscrupulous employers to prevent any
certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule
V, Book V of the Implement Rules should be interpreted liberally so as to
include a circumstance, e. g. where a CBA could not be concluded due to
the failure of one party to willingly perform its duty to bargain collectively.
d. Contract Bar Rule
Under this rule, the existence of the CBA, the contract
referred to therein, bars the filing of a PCE. Once a CBA is duly
registered and validly subsisting, no PCE or any other action
should be entertained that may disturb the administration of the
duly registered existing CBA [IRR]. Neither party should terminate
nor modify such agreement during its lifetime. Inter-union electoral
contests are therefore not allowed [Foamtex Labor Union v.
Noriel].
For the entire 5-year lifetime of the CBA, no PCE
questioning the majority status of the incumbent SEBA shall be
entertained and no certification election shall be conducted by the
DOLE outside of the 60-day freedom period immediately before
the date of expiry of such five-year term of the CBA.
Exceptions
The contract bar rule admits of several exceptions where
a PCE may be validly filed:
(i) During the 60-day freedom period immediately
prior to the expiry date of a CBA.
(ii) When the CBA is not registered with the BLR
or any of the DOLE Regional Offices.
(iii) When the CBA, although registered, contains
provisions lower than the standards fixed by
law or illegal per se clauses.
(iv) When the documents supporting the CBA’s
registration are falsified, fraudulent or tainted
with misrepresentation.
(v) When the CBA is not complete as it does not
contain any of the mandatory provisions which
the law requires. Such kind of agreement
cannot promote industrial peace as it leaves out
matters which the parties should have
stipulated [Buklod ng Saulog Transit v.
Casalla].
 (vi) When the CBA was extended during its term as
when it was negotiated and entered into prior to
the 60-day freedom period. The agreement in
this case is deemed hastily entered into in order
to frustrate the will of the employees in
choosing their bargaining representative
[Associated Trade Union v. Noriel].
(vii) When there is a schism in the union resulting in
an industrial dispute wherein the CBA can no
longer foster industrial peace. The conduct of a
certification election in such a situation
becomes imperative to clear any doubt as to the
real and legitimate representative of the
employees [Firestone Tire and Rubber
Company Employees Union v. Estrella].
(viii) When there is an automatic renewal provision
in the CBA but prior to the date when such
automatic renewal became effective, the
employer seasonably filed a manifestation with
the BLR of its intention to terminate the said
agreement if and when it is established that the
SEBA does not represent anymore the majority
of the workers in the bargaining unit [PLDT
Employees’ Union v. PLDT].
60-Day Freedom Period
The 60-day freedom period is superior to all other rules.
During this period, a petition for certification election and a motion
or intervention can be filed. Outside of this, the petition should be
dismissed outright.
During this period, the union security clause is not
effective and the employees are free to form or join another union
without fear of getting fired. However, they are not free from
paying union dues and agency fees because the EBA representation
status is still conclusive up to the expiration of the CBA term.
Upon the expiration of the period, the employer should
continue to recognize the majority status of the incumbent EBA
where no petition for certification election challenging such
majority status is filed by any other union.
Schism
Excepted from the contract bar rule are certain types of
contracts which do not foster industrial stability, such as contracts
where the identity of the representative is in doubt. Any stability
derived from such contracts must be subordinated to the
employees’ freedom of choice because it does not establish the
type of industrial peace contemplated by law. Where, therefore, the
fact of disaffiliation has been demonstrated beyond doubt, a
certification election is the most expeditious way of determining
which labor organization is to be the exclusive bargaining
representative [Firestone Tire and Rubber Company Employees
Union v. Estrella].
Associated Workers Union-PTGWO v. NLRC
Held: While it is true that AWUM as a local union, being an
entity separate and distinct from AWU, is free to serve the interest of all its
members and enjoys the freedom to disaffiliate, such right to disaffiliate
may be exercised, and is thus considered a protected labor activity, only
when warranted by circumstances.  Generally, a labor union may
disaffiliate from the mother union to form a local or independent union only
during the 60-day freedom period immediately preceding the expiration of
the CBA. Even before the onset of the freedom period (and despite the
closed-shop provision in the CBA between the mother union and
management) disaffiliation may still be carried out, but such disaffiliation
must be effected by a majority of the members in the bargaining unit. This
happens when there is a substantial shift in allegiance on the part of the
majority of the members of the union.  In such a case, however, the CBA
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continues to bind the members of the new or disaffiliated and independent
union up to the CBA's expiration date.
Substitutionary Doctrine
Under this doctrine, employees are allowed to change
their SEBA, but the CBA continues to bind them up to its
expiration date. They may bargain however for the shortening of
said expriation date.
Thus, the new SEBA cannot negotiate a new CBA, it can
only administer the old CBA, but the new SEBA is not bound by
the personal obligations imposed by the old CBA such as the “no
strike, no lockout rule.”
Benguet Consolidated v. BCI Employees
Held: In support of an affirmative answer to the first question,
BENGUET first invokes the so-called “Doctrine of Substitution" referred to
in General Maritime Stevedore's Union v. South Sea Shipping Lines, L-
14689, July 26, 1960. There it was remarked:
“We also hold that where the bargaining contract is to run for
more than two years, the principle of substitution may well be adopted and
enforced by the CIR to the effect that after two years of the life of a
bargaining agreement, a certification election may be allowed by the
CIR; that if a bargaining agent other than the union or organization that
executed the contract, is elected, said new agent would have to respect said
contract, but that it may bargain with the management for the shortening of
the life of the contract if it considers it too long, or refuse to renew the
contract pursuant to an automatic renewal clause.” (Italics supplied)
The submission utterly fails to persuade Us. The above-quoted
pronouncement was obiter dictum. The only issue in the General Maritime
Stevedores’ Union case was whether a collective bargaining agreement
which had practically run for 5 years constituted a bar to certification
proceedings. We held it did not and accordingly directed the court a quo to
order certification elections. With that, nothing more was necessary for the
disposition of the case. Moreover, the pronouncement adverted to was
rather premature. The possible certification of a union different from that
which signed the bargaining contract was a mere contingency then since the
elections were still to be held. Clearly, the Court was not called upon to rule
on the possible effects of such proceedings on the bargaining agreement
But worse, BENGUET’s reliance upon the Principle of
Substitution is totally misplaced. This principle, formulated by the
NLRB[7] as its initial compromise solution to the problem facing it when
there occurs a shift in employees’ union allegiance after the execution of a
bargaining contract with their employer, merely states that even during the
effectivity of a collective bargaining agreement executed between employer
and employees thru their agent, the employees can change said agent but
the contract continues to bind them up to its expiration date. They may
bargain however for the shortening of said expiration date.
In formulating the “substitutionary” doctrine, the only
consideration involved was the employees’ interest in the existing
bargaining agreement. The agent’s interest never entered the picture. In
fact, the justification for said doctrine was:
". . . that the majority of the employees, as an entity under the
statute, is the true party in interest to the contract, holding rights through the
agency of the union representative. Thus, any exclusive interest claimed by
the agent is defeasible at the will of the principal.. .” (Italics supplied)
Stated otherwise, the “substitutionary” doctrine only provides
that the employees cannot revoke the validly executed collective bargaining
contract with their employer by the simple expedient of changing their
bargaining agent. And it is in the light of this that the phrase “said new
agent would have to respect said contract” must be understood. It only
means that the employees, thru their new bargaining agent, cannot renege
on their collective bargaining contract, except of course to negotiate with
management for the shortening thereof.
The “substitutionary” doctrine, therefore, cannot be invoked to
support the contention that a newly certified collective bargaining agent
automatically assumes all the personal undertakings — like the no-strike
stipulation here — in the collective bargaining agreement made by the
deposed union. When BBWU bound itself and its officers not to strike, it
could not have validly bound also all the other rival unions existing in the
bargaining units in question. BBWU was the agent of the employees, not of
the other unions which possess distinct personalities. To consider UNION
contractually bound to the no-strike stipulation would therefore violate the
legal maxim that res inter alios acta alios nec prodest nec nocet.
Of course, UNION, as the newly certified bargaining agent,
could always voluntarily assume all the personal undertakings made by the
displaced agent. But as the lower court found, there was no showing at all
that, prior to the strike,[11] UNION formally adopted the existing
CONTRACT as its own and assumed all the liabilities imposed by the same
upon BBWU.
4. Conduct of Certification Election
The process of certification election requires the
application of the double majority rule for the following twin
purposes:
(a) To have a valid certification election; and
(b) To declare the winning union that will be certified
as a SEBA.
a. First Majority: To be a valid certification
election, at least a majority of all eligible
voters in the bargaining unit should have
cast their votes
The first majority is essential to validate the certification
election process itself. According to Article 268, in order to have a
valid certification election, it is required that at least a majority of
all eligible voters in the bargaining unit must have cast their votes
[Samahan ng Manggagawa v. Laguesma]. If less than such
majority have cast their votes, the certification election process
itself is not valid and, therefore, not one of the contending unions
therein, even if chosen by the majority of the votes cast, can be
certified as the SEBA to represent the CBU.
b. Second Majority: Majority vote of the valid
votes cast in order to be chosen as the
SEBA
After establishing the validity of the certification election
process itself, the next point to ascertain and establish is whether
the petitioning union, in a single-union contest, or any of the
unions, in a multi-union election, has garnered the majority of the
valid votes cast.
Under the same Article 268, it is required that only “the
labor union receiving the majority of the valid votes cast shall be
certified as the exclusive bargaining agent of all the workers in the
unit” and under Article 267, it is likewise provided that the labor
organization designated or selected by the majority of the
employees in an appropriate CBU is the exclusive representative of
the employees in such unit for purposes of collective bargaining
[Peral v. United Employees Welfare Association].
C. CONSENT ELECTION
Consent election refers to the process, voluntarily and
mutually agreed upon by the contending unions, of determining
through secret ballot the SEBA of the employees in an appropriate
CBU for purposes of collective bargaining with the employer. It is
conducted with or without the intervention of the DOLE [IRR].
Consent Election vs. Certification Election
Consent election is but a form of certification election.
They may be distinguished from each other in the following
manner:
a. The former is held upon the mutual agreement of
the contending unions; while the latter does not
require the mutual consent of the parties as it is
conducted upon the order of the Med-Arbiter [IRR].
b. The former may be conducted with or without the
control and supervision of the DOLE; while the
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latter is always conducted under the control and
supervision of the DOLE [IRR].
c. The former is being conducted as a voluntary mode
of resolving labor dispute; while the latter, although
non-adversarial, is a compulsory method of
adjudicating a labor dispute.
d. The former is given the highest priority; while the
latter is resorted only when the contending unions
fail or refuse to submit their representation dispute
through the former [IRR]. This is so because under
the Implementing Rules, as amended, even in cases
where a PCE is filed, the Med-Arbiter, during the
preliminary conference and hearing thereon, is
tasked to determine the possibility of a consent
election. It is only when the contending unions fail
to agree to the conduct of a consent election during
the preliminary conference that the Med-Arbiter will
proceed with the process of certification election by
conducting as many hearings as he may deem
necessary up to its actual holding. But in no case
shall the conduct of the certification election exceed
15 days from the date of the scheduled preliminary
conference/hearing after which time, the PCE is
considered submitted for decision.
e. The former necessarily involves at least 2 or more
contending unions; while the latter may only
involve 1 petitioner union.
f. The former may be conducted in the course of the
proceeding in the latter or during its pendency.
g. The purpose of the former is only to determine (i)
who has the majority representation of all the
workers in the appropriate collective bargaining
unit; where as the purpose of the latter is to
determine (i) whether the bargaining unit wants
representation; and (ii) who will represent them if
they want representation.
D. RUN-OFF ELECTION
A run-off election refers to an election between the labor
unions receiving the two (2) highest number of votes when a
certification election which provides for three (3) or more choices
result in no choice receiving a majority of the valid votes cast;
provided, that the total number of votes for all contending unions is
at least fifty percent (50%) of the number of votes cast.
Thus, a run-off election may only be conducted under the
following elements:
a. There are three (3) or more unions competing in a
certification or consent election;
b. None of the contending unions garnered the
majority of the valid votes cast;
c. But the total number of votes for all contending
unions, if added, is at least fifty (50%) of the
number of valid votes cast;
d. If the above three (3) elements are present, a run-off
election will be conducted between the labor unions
receiving the two (2) highest number of votes in
such certification election or consent election. The
third union and the others, if any, will no longer be
allowed to participate in such election. And for
obvious reason, the choice of “No Union” should no
longer be included in the run-off election [IRR].
If the above conditions that justify the conduct of a run-
off election are present and there are no objections or challenges
which, if sustained, can materially alter the election results, the
Election Officer should motu proprio conduct a run-off election
within 10 days form the close of the election proceeding between
the labor unions receiving the two highest number of votes [IRR].

E. RE-RUN ELECTION
This mode of choosing the SEBA is not expressly
provided in the Labor Code nor in the rendering of its
implementing rules. It was only in 2015 that an issuance of the
DOLE Secretary has introduced this term for the first time as an
amendment to the Rules to Implement the Labor Code and defines
it as follows:

“‘Re-run election’ refers to an election doncuted to

break a tie between contending unions, including between ‘no
union’ and one of the unions. It shall likewise refer to an
election doncuted after a failure of election has been declared by
the Election Officer and/or affirmed by the Mediator-Arbiter.”

A re-run election is obviously in the nature of a

corrective action meant to cure a seriously defective and distorted
certification election. Consequently, a third ground that may be
cited as would justify the conduct of a fair re-run election is when
the certification, consent or run-off election has been invalidated or
nullified due to certain serious irregularities that have been
committed during the conduct thereof, such as, inter alia,
disenfranchisement of the voters, lack of secrecy in the voting,
fraud or bribery or acts of terrorism, force, threat and intimidation
employed by any of the contending unions or the employer. Such
invalidation would necessitate the conduct of a re-run election
among the contending unions to determine the true will and desire
of the employees-electorate [Confederation of Citizens Labor
Unions v. Noriel].

Re-Run Election vs. Failure of Election

Re-Run Election Failure of Election

There is a valid certification
election but because of certain
circumstances, the election is
nullified and another one is
ordered to truly reflect the will
and sentiment of the electorate-
employees.
There is no valid certification
election because the number of
votes cast is less than the majority
of the number of eligible voters
and there are no challenged votes
that could materially change the
results.

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