1. Atlas Lithographic Services Inc. vs. Laguesma, G.R. No.

96566, January 6, 1992

-The reason for the segregation is the difference in their interests. In the area of collective bargaining, their
interests are not identical.
FACTS: On July 1990, the supervisory, administrative personnel, production, accounting and confidential employees of
Atlas Lithographic Services, Inc (ALSI) affiliated with Kaisahan ng Manggagawang Pilipino, a national labor
organization. These supervisory employees’ name was ALSI-SAPPACEA-KAMPIL (Atlas Lithographic Services, Inc.
Supervisory, Administrative Personnel, Production, Accounting and Confidential Employees Association). Thereafter,
KAMPIL-KATIPUNAN filed a certification election so that it can be the sole bargaining agent of the supervisory
employees. However, Atlas Lithographic Services Inc. opposed the certification election.
ATLAS LITHOGRAPIC SERVICES’s contention: that under the law (art.245 of LC) KAMPIL-KATIPUNAN cannot
represent the supervisory for collective bargaining purposes because they (KAMPIL) also represents the rank-and-file
employees. - A CONFLICT OF INTEREST MAY ARISE in Collective bargaining and strike, and discipline.
KAMPIL’s contention: despite affiliation with a national federation, the local union does not lose its personality which
is separate, and distinct from the national federation. It applies the 1984 Adamson Case – that interprets the right of a
supervisor’s union to affiliate under the Industrial Act. On Sept. 1990, the Med Arbiter ordered the conduct of the
certification election.
ISSUE: Whether under Article 2451 of the Labor Code, a local union of supervisory employees may be allowed to
affiliate with a national federation of labor organizations of rank-and-file employees
HELD: PETITION GRANTED. ALSI-SAPPACEA-KAMPIL is prohibited from affiliating with a national labor union
of rank-and-file employees.
Adamson case not applicable in this case. Because in Adamson the rank-and-file employees are not under the
supervisor’s union as in the case before us. Also, the national union in Adamson case did not actively represent its local
chapters, unlike in this case where KAMPIL even filed for certification election to represent the supervisors.
**PROHIBITION: a local supervisors' union should not be allowed to affiliate with the national federation of union of
rank-and-file employees where that federation actively participates in union activity in the company. The prohibition
extends to a supervisors' local union applying for membership in a national federation the members of which include
local unions of rank-and-file employees. The intent of the law is clear especially where, as in the case at bar, the
supervisors will be co-mingling with those employees whom they directly supervise in their own bargaining unit.
NOTA BENE: The interests of supervisors on the one hand, and the rank-and-file employees on the other, are separate
and distinct. The functions of supervisors, being recommendatory in nature, are more identified with the interests of the
employer. The performance of those functions may thus, run counter to the interests of the rank-and-file. Also,
Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rank-and-
file employees
In the area of bargaining, their interests cannot be considered identical. The needs of one are different from those of the
other. Moreover, in the event of a strike, the national federation might influence the supervisors' union to conduct a
sympathy strike on the sole basis of affiliation. **The peculiar role of supervisors is such that while they are not
managers, when they recommend action implementing management policy or ask for the discipline or dismissal of
subordinates, they identify with the interests of the employer and may act contrary to the interests of the rank- and-file.
2. Phil. Phosphate Fertilizer Corp. vs. Torres, G.R. No. L-98050, March 27, 1994
-In the implementation of disciplinary rules or policies, supervisors act contrary to the interests of the rank-
and-file whenever they recommend implementation of management policy or whenever they ask for the
1
Art. 245. Ineligibility of managerial employees to join any labor organization: right of supervisory employees. — Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.
discipline or dismissal of subordinates.
Doctrine: Test to Determine Supervisory Status
Facts: On 7 July 1989, Philphos Movement for progress, Inc. (PMPI), filed with the Department of Labor and
Employment (DOLE) a petition for certification election among the supervisory employees of Philippine Phosphate
Fertilizer Corporation (PHILPHOS), alleging that as a supervisory union duly registered with the DOLE, it was seeking
to represent the supervisory employees of PHILPHOS, herein petitioner.
The PHILPHOS did not oppose such registration but in a position paper it submitted on 11 August 1989, it insisted that
the superintendents who were managerial and not supervisory employees must be exempted as they managed a
division, subdivision or section, and were vested with powers or prerogatives to lay down and execute management
policies. PHILPHOS also asserted that its professional or technical employees were not within the definition of
supervisory employees under the Labor Code as they were immediately under the direction and supervision of its
superintendents and supervisors.
On 13 October 1989, the Mediator-Arbiter issued an order directing the holding of a certification election among the
supervisory employees of petitioner, excluding therefrom the superintendents and the professional and technical
employees. However, On 15 November 1989, PMPI filed an amended petition with the Mediator-Arbiter wherein it
sought to represent not only the supervisory employees of petitioner but also its professional/ technical and confidential
employees in view of the amendment of their Constitution. This was later granted by the Mediator-Arbiter and affirmed
by the DOLE Secretary upon appeal of PHILPHOS. Hence, this petition.
Issue: Whether the professional/technical employees of PHILPHOS are considered as supervisory employees
Ruling: No. A supervisory union cannot represent the professional/technical and confidential employees of petitioner
whose positions are found to be more of the rank and file than supervisory.
Under Article 212, par. (m) [now Art. 219(m)], of the Labor Code, as amended, provides that “(s)upervisory 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.” The definition of
managerial employees is limited to those having authority to hire and fire, while those who only recommend effectively
the hiring or firing or transfer of personnel are considered closer to rank-and-file employees. The exclusion therefore of
midlevel executives from the category of managers has brought about a third classification, the supervisory employees.
The peculiar role of supervisors is such that while they are not managers, when they recommend action implementing
management policy or ask for the discipline or dismissal of subordinates, they identify with the interests of the
employer and may act contrary to the interests of the rank and file.
Consequently, these professional/technical employees are performing non-supervisory functions, hence, they should be
classified as rank-and-file employees. Consequently, they cannot be allowed to join a union composed of supervisors.
Petition GRANTED.
3. De La Salle University Medical Center vs. Laguesma, G.R. No. 102084, August 12, 1998
-If supervisory and rank-and-file employees are allowed to form a single union, the conflicting interests of
these groups will adversely affect discipline, because the supervisors might refuse to carry out disciplinary,
measures against their co-member rank-and-file employees.
FACTS: Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a hospital and
medical school at Dasmariñas, Cavite. Private respondent Federation of Free Workers-De La Salle University Medical
Center and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), 14 on the other hand, is a labor
organization composed of the supervisory employees of petitioner DLSUMCCM. On April 17, 1991, the Federation of
Free Workers (FFW), a national federation of labor unions, issued a certificate to private respondent FFW-
DLSUMCCMSUC recognizing it as a local chapter. On the same day, it filed on behalf of private respondent FFW-
DLSUMCCMSUC a petition for certification election among the supervisory employees of petitioner DLSUMCCM.
Its petition was opposed by petitioner DLSUMCCM on the grounds that several employees who signed the petition for
certification election were managerial employees and that the FFW-DLSUMCCMSUC was composed of both
supervisory and rank-and-file employees in the company. The respondent however denied the petitioner’s allegations
and contended that It is not true that supervisory employees are joining the rank-and-file employees' union. While it is
true that both regular rank-and-file employees and supervisory employees of herein respondent have affiliated with
FFW, yet there are two separate unions organized by FFW. The supervisory employees have a separate charter
certificate issued by FFW.
ISSUE: Whether or not supervisory union and rank-and-file union can affiliate in the same federation
RULING: YES. Supervisory employees have the right to self- organization as do other classes of employees save only
managerial ones. Conformably with the constitutional mandate, Art. 245 of the Labor Code now provides for the right
of supervisory employees to self-organization, subject to the limitation that they cannot join an organization of rank-
and-file employees. The reason for the segregation of supervisory and rank-and-file employees of a company with
respect to the exercise of the right to self-organization is the difference in their interests. 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. 10 These consequences can obtain not
only in cases where supervisory and rank-and-file employees in the same company belong 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. As we explained in the case of Atlas vs. Laguesma, however, such a situation would
obtain only where two conditions concur: First, the rank-and-file employees are directly under the authority of
supervisory employees and second, the national federation is actively involved in union activities in the company.
Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file employees of
petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW, petitioner DLSUMCCM has
not presented any evidence showing that the rank-and-file employees composing the other union are directly under the
authority of the supervisory employees.
4. Meralco vs. Secretary of Labor, G.R. No. 91902, May 20, 1991
-Security guards can form or join a labor organization. They may join the rank-and-file union or the
supervisory union, depending on their rank.
Facts: On November 22, 1988, the Staff and Technical Employees Association of MERALCO, a labor organization of
staff and technical employees of MERALCO, filed a petition for certification election, seeking to represent regular
employees of MERALCO who are: non-managerial employees with Pay Grades VII and above, non-managerial
employees in the Patrol Division, Treasury Security Services Section, Secretaries who are automatically removed from
the bargaining unit; and employees within the rank and file unit who are automatically disqualified from becoming
union members of any organization within the same bargaining unit.
MERALCO moved for the dismissal of the petition on the grounds that the employees sought to be represented by
petitioner are are either managerial who are prohibited by law from forming or joining supervisory union, security
services personnel who are prohibited from joining or assisting the rank-andfile union and secretaries who do not
consent to the petitioner's representation and whom petitioner cannot represent.
Issue: Whether or not managerial employees, Supervisory employees and security guards may join the rank-and-file
union.
Held: Yes. Art. 245 of the Labor Code provides the Ineligibility of managerial employees to join any labor
organization; -Managerial employees are not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join,
assist, or form separate labor organizations of their own. While therefore under the old rules, security guards were
barred from joining a labor organization of the rank and file, under RA 6715, they may now freely join a labor
organization of the rank and file or that of the supervisory union, depending on their rank.
However there are possible consequences in the implementation of the law in allowing security personnel to join labor
unions within the company they serve. The law is apt to produce divided loyalties in the faithful performance of their
duties. Economic reasons would present the employees concerned with the temptation to subordinate their duties to the
allegiance they owe the union of which they are members, aware as they are that it is usually union action that obtains
for them increased pecuniary benefits.
Thus, in the event of a strike declared by their union, security personnel may neglect or outrightly abandon their duties,
such as protection of property of their employer and the persons of its officials and employees, the control of access to
the employer’s premises, and the maintenance of order in the event of emergencies and untoward incidents.

It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to
avoid possible conflict of interest in security personnel. Petition dismissed.

5. Sugbuanon Rural Bank vs. Laguesma, G.R. No. 116194, Feb. 2, 2000
-The following are disqualified to form, join or assist in the formation of a labor organization: (2) confidential
employees who have access to labor relations matters;
FACTS: Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-registered banking institution with principal office in Cebu City and a branch in
Mandaue City. Private respondent SRBI Association of Professional, Supervisory, Office, and Technical Employees Union (APSOTEU) is a legitimate labor
organization affiliated with the Trade Unions Congress of the Philippines (TUCP).

On October 8, 1993, the DOLE Regional Office in Cebu City granted Certificate of Registration No. R0700-9310-UR-0064 to APSOTEU-TUCP, hereafter
referred to as the union.

On October 26, 1993, the union filed a petition for certification election of the supervisory employees of SRBI. It alleged, among others, that: (1) APSOTEU-
TUCP was a labor organization duly-registered with the Labor Department; (2) SRBI employed 5 or more supervisory employees; (3) a majority of these
employees supported the petition: (4) there was no existing collective bargaining agreement (CBA) between any union and SRBI; and (5) no certification
election had been held in SRBI during the past 12 months prior to the petition.

On October 28, 1993, the Med-Arbiter gave due course to the petition. The pre-certification election conference between SRBI and APSOTEU-TUCP was set
for November 15, 1993.

On November 12, 1993, SRBI filed a motion to dismiss the union’s petition. It sought to prevent the holding of a certification election on two grounds. First, that
the members of APSOTEU-TUCP were in fact managerial or confidential employees.

ISSUES:
(1) Whether or not the members of the respondent union are managerial employees and/or highly-placed confidential employees, hence prohibited by law from
joining labor organizations and engaging in union activities.

(2) Whether or not the Med-Arbiter may validly order the holding of a certification election upon the filing of a petition for certification election by a registered
union, despite the petitioner’s appeal pending before the DOLE Secretary against the issuance of the union’s registration.

HELD:
(1) Petitioner’s explanation does not state who among the employees has access to information specifically relating to its labor to relations policies. Even
Cashier Patricia Maluya, who serves as the secretary of the bank’s Board of Directors may not be so classified.

Confidential employees are those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate
management policies [specifically in the field of labor relations].9 The two criteria are cumulative, and both must be met if an employee is to be considered a
confidential employee — that is, the confidential relationship must exist between the employee and his superior officer; and that officer must handle the
prescribed responsibilities relating to labor relations.

Art. 245 of the Labor Code does not directly prohibit confidential employees from engaging in union activities. However, under the doctrine of necessary
implication, the disqualification of managerial employees equally applies to confidential employees. The confidential-employee rule justifies exclusion of
confidential employees because in the normal course of their duties they become aware of management policies relating to labor relations. It must be stressed,
however, that when the employee does not have access to confidential labor relations information, there is no legal prohibition against confidential employees
from forming, assisting, or joining a union.

(2) One of the rights of a legitimate labor organization under Article 242(b) of the Labor Code is the right to be certified as the exclusive representative of all
employees in an appropriate bargaining unit for purposes of collective bargaining. Having complied with the requirements of Art. 234, it is our view that
respondent union is a legitimate labor union. Article 257 of the Labor Code mandates that a certification election shall automatically be conducted by the Med-
Arbiter upon the filing of a petition by a legitimate labor organization.16 Nothing is said therein that prohibits such automatic conduct of the certification election
if the management appeals on the issue of the validity of the union’s registration. On this score, petitioner’s appeal was correctly dismissed.
 6. Cooperative Rural Bank of Davao City vs. Ferrer-Calleja, G.R. No. 77951, Sept, 26, 1988
-(3) Employees-members of cooperatives;
FACTS: Petitioner Cooperative Rural Bank of Davao City, Inc. is a cooperative banking corporation operating in
Davao City. It is owned in part by the Government and its employees are members and co-owners of the same. The
petitioner has around 16 rank-and-file employees and had no existing collective bargaining agreement between the said
employees and the establishment. Private respondent Federation of Free Workers is a labor organization registered with
the Department of Labor and Employment. It is interested in representing the said employees for purposes of collective
bargaining.
August 27, 1986, the private respondent filed with the Davao City Regional Office of the then Ministry of Labor and
Employment a verified Petition for certification election among the rank-and-file employees of the petitioner. The
former then issued an Order granting the Petition for certification election.
The petitioner then argued therein that its employees are disqualified from forming labor organizations for purposes of
collective bargaining because a cooperative is not covered by the Rules governing certification elections in as much as
it is not an institution operating for profit and that two of the alleged rank-and-file employees seeking the certification
election are managerial employees.
Public respondent Bureau of Labor Relations Director Ferrer-Calleja issued a Resolution affirming the Order of the
Med-Arbiter and dismissing the Appeal saying that basic is the right of every worker in any establishment whether
operated for profit or not to organize and engage in concerted activities, mutually beneficial to their interest. That such
right is sacredly enshrined and protected in our fundamental law and subject only to such limitations as may be
provided for by law. Director Ferrer-Calleja also said that being a member of a cooperative organization does not
preclude one from forming or joining a labor union provided that such person or persons are not among those
disqualified by law.
Nowhere was there found any piece of evidence showing that the signatories in the petition are among those
disqualified to form or join a union. There was also no weight to the employer's allegation that two of the signatories
thereof were managerial employees, since no evidence showing such fact can be found from the records.
ISSUE: WON employees of cooperatives who are members and co-owners of the same can form and join labor
organizations for purposes of collective bargaining.
RULING: NO.

Article 243 of the Labor Code says that all persons employed in commercial, industrial and agricultural enterprises and
in religious, charitable, medical or educational institutions whether operating for profit or not are eligible to form, join,
or assist labor organizations for purposes of collective bargaining. The recognized exception to this enumeration is
found in Article 245 - Managerial employees are not eligible to join, assist or form any labor organization.
From the foregoing provisions of law it would appear at first glance that all the rank and file employees of a
cooperative who are not managerial employees are eligible to form, join or assist any labor organization of their own
choosing for the purpose of collective bargaining.
A cooperative is defined to mean "organizations composed primarily of small producers and of consumers who
voluntarily join together to form business enterprises which they themselves own, control, and patronize." A
cooperative, therefore, is by its nature different from an ordinary business concern, being run either by persons,
partnerships, or corporations. Its owners and/or members are the ones who run and operate the business while the
others are its employees and irrespective of the number of shares owned by each member, they are entitled to cast one
vote each in deciding upon the affairs of the cooperative
An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to
collective bargaining for certainly an owner cannot bargain with himself or his co-owners. The opinion of the Solicitor
General correctly declared that employees of cooperatives who are themselves members of the cooperative have no
right to form or join labor organizations for purposes of collective bargaining for being themselves co-owners of the
cooperative.
However, in so far as it involves cooperatives with employees who are NOT members or co-owners thereof, certainly
such employees are entitled to exercise the rights of all workers to organization, collective bargaining, negotiations and
others as are enshrined in the Constitution and existing laws of the country.
The questioned ruling therefore of public respondent Pura Ferrer-Calleja must be upheld insofar as it refers to the
employees of petitioner who are not members or co-owners of petitioner. It cannot extend to the other employees who
are at the same time its members or co-owners.
The Court upholds the findings of said public respondent that no persuasive evidence has been presented to show that
two of the signatories in the petition for certification election are managerial employees who under the law are
disqualified from pursuing union activities.
7. SSSEA vs. CA, G.R. No. 85279, July 28, 1989
-(4) Government employees
FACTS: On June 11,1987, the SSS filed with the RTC of Quezon City a complaint for damages with a prayer for a writ
of preliminary injunction against petitioners, alleging that on June 09 ,1987, the officers and members of SSSEA staged
an illegal strike and barricaded the entrances to the SSS Building; that the strike was reported to the Public Sector
Labor-Management Council, which ordered the strikers to return to work; that the strikers refused to return to work;
and that SSS suffered damages as a result of the strike.
It appears that the SSSEA went to strike after the SSS failed to act on the union demands on certain job related issues
and unfair labor practices. The court a quo, on June 11,1987, issued a temporary restraining order pending resolution of
the application for a writ of preliminary injunction. In the meantime, petitioners filed a motion to dismiss alleging the
trial court’s lack of jurisdiction over the subject matter. The SSS filed an opposition, on July 22,1987, the court a quo
denied the motion to dismiss and converted the restraining order into an injunction upon posting of a bond, after finding
the strike illegal. As petitioners motion for reconsideration of the aforesaid order was also denied on August 14,1988,
petitioners filed petition for certiorari and prohibition with preliminary injunction before the SC, the SC referred the
case to COA.
Upon motion of the SSS on Feb.06,1989, the Court issued a temporary restraining order enjoining the petitioners from
staging another strike or from pursuing the notice of strike they filed with the DOLE on Jan.25,1989 and to maintain
the status quo.
The COA dismiss the petition for certiorari and prohibition with preliminary injunction filed by the petitioners and held
that since the strikers are government employees, they are not allowed to strike, and may be enjoined by the RTC,
which has jurisdiction over the SSS complaint for damages, from continuing with their strike.
Issue: Do the employees of the SSS have the right to strike?
HELD: NO. SSS is one of such GOCC with original charter, having been created under R.A No. 1161, its employees
are part of the civil service and covered by a memorandum prohibiting strikes. This being the case, the strike staged by
the employees of the SSS was illegal. No reversible error having
8. Engineering Equipment Inc. vs. NLRC, G.R. No. L-59221, December 26, 1984
-The managerial status of an employee is determined not by the nomenclature or title of the job but by the
nature of the employee’s functions.
FACTS: Respondent Ricardo Pili was an employee of petitioner Engineering Equipment, Inc. beginning December 11,
1973 until July 18, 1976 when his services were terminated. At that time, he was assigned as foreman in the Central Bank
building construction project of the petitioner at Diliman, Quezon City. As a result of the termination of his services, Pili filed
a complaint for illegal dismissal against the petitioner.

The respondent alleged that he received on a letter protest containing 8 charges by some 40 workers against the
complainant; that upon receipt of said protest-letter, the Labor Relations Supervisor immediately investigated the matter by
asking the alleged signatories thereof; that the said Labor Relations Officer also talked to the complainant and assured him
that he would given opportunity to explain his side in a formal investigation; that the complainant, in an act of reprisal,
allegedly threatened the signatories to the protest-letter so that the complainant had to be dismissed before he could be
formally investigated and given the opportunity to explain in writing his side of the charges made by the workers; that the
charges made by the workers against the complainant constituted gross and habitual neglect of duties; that the immediate
cause of complainant's dismissal was his inefficiency and incompetence.

The respondent Labor Arbiter decided in favor of the complainant and he be entitled to reinstatement without loss of
seniority rights and to his back wages. The decision was affirmed by the NLRC. A close examination of the records of this
case reveals that the company miserably failed to establish and support its claim that complainant's separation from the
service is for cause. It will be observed that while the company insists that forty (40) of its rank-and-file employees signed a
petition/complaint against complainant herein, for various offense, not one ever testified to establish, much more
corroborate, the due execution of such a petition/complaint, if it was really executed.

ISSUE:
1. WON the decision of the respondent Labor Arbiter declaring the private respondent's dismissal illegal is correct.
2. WON Mr. Pili was a managerial employee and, therefore, WON the requirement of prior clearance to terminate was
necessary

RULING:
1. NO. The petitioner terminated the services of respondent Pili not only for the reasons stated in the complaint of the forty
(40) workers but also because he instigated labor unrest when he took reprisal action against its signatories. The records
show that when respondent Pili learned of the letter-complaint and the on-the-spot investigation being conducted by the
labor relations manager of the firm, he threatened the signatories and told them they would be the ones separated from
employment. The workers trooped to the petitioner's personnel department and threatened to file complaints against the
firm with the Ministry of Labor. The unrest was averted when the workers were assured that the investigation of Pili would
continue and that their having written a formal complaint would not be taken against them.

2. YES. Foremen like private respondent are outside the rank-and-file unit and are in fact excluded therefrom by contractual
stipulation and legal mandate. They do not maintain time cards and are exempt from the hours-of-work provision of the
Labor Code, which private respondent conveniently understood to mean that he could sleep during working hours. They
also have the power of "direct hires". They exercise discretionary powers "in distinguishing the skills of workers" under the
supervision for the purpose of determining wages.

In a company with around 3000 workers such as petitioner, it is, of course, logical to expect a departmentalization of
functions for efficient operations. Tt is unnatural to expect foremen in a giant construction firm to actually perform executive
managerial status. In point of law, there could not be any serious dispute that petitioner's foremen cannot and are not in fact
unionized because they are managerial employees under the law.

It is the nature of an employee's functions and not the nomenclature or title given to his job which determines whether he
has rank-and-file or managerial status. Among the characteristics of managerial rank are: (1) He is not subject to the rigid
observance of regular office hours; (2) His work requires the consistent exercise of discretion and judgment in its
performance; (3) the output produced or the result accomplished cannot be standardized in relation to a given period of
time; (4) He manages a customarily recognized department or subdivision of the establishment, customarily and regularly
directing the work of other employees therein; (5) He either has the authority to hire or discharge other employees or his
suggestions and recommendations as to hiring and discharging, advancement and promotion or other change of status of
other employees are given particular weight; and (6) As a rule, he is not paid hourly wages nor subjected to maximum hours
of work.

The petitioner has made out a satisfactory case as to why it did not seek prior clearance but limited itself to making a
belated report. At any rate, the employer has a right to dismiss an employee whose continuance in the service is inimical to
the employer's interest, The law protects the rights of workers but it cannot authorize the oppression or self-destruction of
the employer. The step taken by the employer in this case was a measure of self-protection.

However, we also take into account that it would have been more prudent for the firm to have asked for a prior clearance. In
the light of the foregoing, we hold that the private respondent is entitled to full separation pay but not reinstatement with
back wages.
 9. Pagkakaisa ng mga Manggagawa sa Triumph vs. Ferrer-Calleja, G.R. No. 85915, January 17, 1990
-The point to consider is whether the employee possesses authority to act in the interest of his employer on
his independent judgment.
FACTS: The petitioner is the recognized CB agent of the R&F employees of Triumph International with which the
latter has a valid and existing CBA effective up to September 1989.
In 1987, a petition for CE was filed by the respondent union with the DOLE. A motion to dismiss the petition for
certification election was filed by Triumph International on the grounds that the respondent union cannot lawfully
represent managerial employees and that the petition cannot prosper by virtue of the contract-bar rule.
The LA, however, issued an order granting the petition for CE and directed the holding of it to determine the sole and
exclusive bargaining representative of all monthly-paid administrative, technical, confidential and supervisory
employees of Triumph International.
ISSUE: WON the LA gravely abused its discretion in ordering the immediate holding of a certification election among
the workers sought to be represented by the respondent union.
HELD: Where the supervisory employees sought to be represented by the union are actually not involved in policy
making, and their recommendatory powers are not even instantly effective since they are subject to review by at least
three 3 managers (department, personnel and general manager), then it is evident that these employees does not possess
managerial status.
The fact that their work designations are either managerial or supervisory is of no moment, considering that it is the
nature of their functions and NOT SAID NOMENCLATURES which determines their respective status.
A careful examination of the records of this case reveals no evidence that rules out the commonality or community of
interest among the rank-and-file members of the petitioners, and the herein declared rank-and-file members of the
respondent union. Instead of forming another bargaining unit, the law requires them to be members of the existing one.
The ends of unionism are better served if all the rank-and-file members with substantially the same interests and who
invoke their right to self-organization are part of a single unit so they can deal with their ER with just one and yet
potent voice. The EEs bargaining power with management is strengthened thereby.
In the case at bar, there is no dispute that the petitioner is the exclusive bargaining representative of R&F EEs of
Triumph International. A careful examination of the records of this case reveals no evidence that rules out the
commonality of interests among the rank-and-file members of the petitioner and the herein declared rank-and-file
employees who are members of the respondent union. Instead of forming another bargaining unit, the law
requires them to be members of the existing one. The ends of unionism are better served if all the rank-and-file
employees with substantially the same interests and who invoke their right to self-organization are part of a single
unit so that they can deal with their employer with just one and yet potent voice. The employees’ bargaining
power with management is strengthened thereby. Hence, the circumstances of this case impel us to disallow the
holding of a certification election among the workers sought to be represented by the respondent union for want
of proof that the right of said workers to self-organization is being suppressed.

10. Paper Industries Corporation of the Philippines vs. Laguesma, G.R. No. 101738, April 12, 2000
-Thus, the mere fact that an employee is designated as “manager” does not ipso facto make him one. The
designation should be reconciled with the actual job description of the employee, for it is the job description
that determines the nature of employment.
FACTS: Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of paper and
timber products, with principal place of operations at Tabon, Bislig, Surigao del Sur. It has over 9,000 employees, 944 of
whom are supervisory and technical staff employees. More or less 487 of these supervisory and technical staff employees
are signatory members of the private respondent PICOP-Bislig Supervisory and Technical Staff Employees Union
(PBSTSEU). On August 9, 1989, PBSTSEU instituted a Petition for Certification Election to determine the sole and
exclusive bargaining agent of the supervisory and technical staff employees of PICOP for collective bargaining agreement
(CBA) purposes.

PICOP failed to file any comment or position paper. Meanwhile, private respondents Federation of Free Workers (FFW) and
Associated Labor Union (ALU) filed their respective petitions for intervention. Med-Arbiter Arturo L. Gamolo issued an Order
granting the petitions for interventions of the FFW and ALU and another ordering the holding of a certification election
among PICOP’s supervisory and technical staff employees.

During the pre-election conference PICOP questioned and objected to the inclusion of some section heads and supervisors
in the list of voters whose positions it averred were reclassified as managerial employees in the light of the reorganization
effected by it. Under the Revised Organizational Structure of the PICOP, section heads and supervisors were now called
section managers and unit managers, and head sections and independent units. PICOP advanced the view that considering
the alleged present authority of these section managers and unit managers to hire and fire, they are classified as
managerial employees, and hence, ineligible to form or join any labor organization.

ISSUE: W/N the subject employees are managerial employees as such are prohibited to join unions

HELD: In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, the Court elucidated on the term «managerial
employees.» Managerial employees are ranked as Top Managers, Middle Managers and First Line Managers. Top and
Middle Managers have the authority to devise, implement and control strategic and operational policies while the task of
First-Line Managers is simply to ensure that such policies are carried out by the rank-and- file employees of an
organization. Under this distinction, «managerial employees» therefore fall in two (2) categories, namely, the
«managers» per se composed of Top and Middle Managers, and the «supervisors» composed of First-Line Managers .
Thus, the mere fact that an employee is designated «manager» does not ipso facto make him one. Designation
should be reconciled with the actual job description of the employee, for it is the job description that determines
the nature of employment.

A thorough dissection of the job description of the concerned supervisory employees and section heads indisputably show
that they are not actually managerial but only supervisory employees since they do not lay down company policies. PICOP’s
contention that the subject section heads and unit managers exercise the authority to hire and fire is ambiguous and quite
misleading for the reason that any authority they exercise is not supreme but merely advisory in character . Theirs is not a
final determination of the company policies inasmuch as any action taken by them on matters relative to hiring, promotion,
transfer, suspension and termination of employees is still subject to confirmation and approval by their respective superior.
Thus, where such power, which is in effect recommendatory in character, is subject to evaluation, review and final action by
the department heads and other higher executives of the company, the same, although present, is not effective and not an
exercise of independent judgment as required by law.

Furthermore, considering all the foregoing, the fact that PICOP voiced out its objection to the holding of certification
election, despite numerous opportunities to ventilate the same, only after respondent Undersecretary of Labor affirmed the
holding thereof, simply bolstered the public respondents’ conclusion that PICOP raised the issue merely to prevent and
thwart the concerned section heads and supervisory employees from exercising a right granted them by law. Needless to
stress, no obstacle must be placed to the holding of certification elections, for it is a statutory policy that should not be
circumvented.

11. San Miguel Corporation Supervisors & Exempt Employees Union vs. Laguesma, G.R. No. 110399,
August 15, 1997
-Not all confidential employees are disqualified from forming or joining a labor organization. Only those who
have access to labor relations information are disqualified.
FACTS: Petitioner Union filed before the DOLE a Petition for District Certification or Certification Election among the
supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
The Med-Arbiter issued an Order to conduct certification among the supervisors and exempt employees of the SMC
Magnolia Poultry Plants of Cabuyao, San Fernando and Otis as one bargaining unit.
Respondent SMC filed a Notice of Appeal with Memorandum of Appeal, pointing out, among others, the Med-
Arbiter’s error in grouping together all three (3) separate plants into one bargaining unit, and in including supervisory
levels 3 and above whose positions are confidential in nature since they have access to information which is regarded
by the employer to be confidential from the business standpoint. Laguesma granted respondent company’s appeal and
ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each
employees sought to be included in the appropriate bargaining unit. Upon petitioner’s motion, Laguesma granted the
reconsideration and directed the conduct of separate certification elections among the supervisors ranked as supervisory
levels 1 to 4 and the exempt employees in each of the three plants.
ISSUE:
1. Are supervisory employees and exempt employees of the company considered confidential employees, hence
ineligible to join a union?
2. If they are not confidential employees, do the employees of the three plants constitute an appropriate bargaining
unit?
HELD:
1. NO. It is the contention of SMC that supervisory employees 3 and 4 and the exempt employees come within the
meaning of the term confidential employees primarily because they answered in the affirmative when asked “Do you
handle confidential data or documents?” in Position Questionnaires submitted by the Union. In the same questionnaire,
however, it was also stated that the confidential information handled by questioned employees relate to product
formulation, product standards and product specification which by no means relate to labor relations. Granting
arguendo that an employee has access to confidential labor relations information but such is merely incidental to his
duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the
employee a confidential employee. 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.
2. YES. An appropriate bargaining unit may be defined as a group of employees of a given employer, comprised of all
or less than all of the entire body of employees, which the collective interest of all the employees, consistent with
equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law.
It is readily seen that the employees in the instant case have community or mutuality of interest, which is the standard
in determining the proper constituency of a collective bargaining unit. It is undisputed that they all belong to the
Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants,
they perform work of the same nature, receive the same wages and compensation, and most importantly, share a
common stake in concerted activities.
The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan,
Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if
the communal or mutual interests of the employees are not sacrificed. We rule that the distance among the three plants
is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional
differences that are likely to impede the operations of a single bargaining representative.
REGISTRATION OF LABOR ORGANIZATIONS
12. Cebu Seamen's Association vs. Ferrer-Calleja, G.R. No. 83190, August 4, 1992
-The registration should be with the DOLE. Therefore, even if a union is organized as a corporation, it does
not become a legitimate labor organization.
Topic: Legitimate workers association

FACTS:

1.     On October 23, 1950, a group of deck officers and marine engineers on board vessels plying Cebu and other ports
of the Philippines organized themselves into an association and registered it as a non-stock corporation known as
Cebu Seamen’s Association, Inc (CSAI) with the Securities and Exchange Commission (SEC). Later, the same group
registered its association with the Bureau of Labor Relations as a labor union known as the Seamen’s Association of
the Philippines, Incorporated (SAPI).

2.     SAPI had an existing collective bargaining agreement with Aboitiz Shipping Corporation and had been remitting
checked-off union dues to said union until a group of union members headed by Manuel Gabayoyo, introducing
themselves as the new set of officers elected under the supervision of the SEC, claimed that they are entitled to the
remittance and custody of such union dues.

3.     Subsequently, another group headed by Dominica Nacua, claiming as the duly elected set of officers of the union,
filed a complaint, for and in behalf of the union, against CSAI to restrain them from acting on behalf of the union and
directing Aboitiz to remit the checked-off union dues.

4.     CSAI filed its answer alleging that the union and the former are one and the same and that Nacua has already
been expelled as member/officer of the union through two resolutions of its Board of Directors.

5.     The Med-Arbiter issued an order holding that the set of officers of SAPI headed by Nacua, was the lawful set of
officers entitled to the release and custody of the union dues as well as agency fees of the said association.

6.     On appeal, the Bureau of Labor Relations affirmed the decision of the Med-Arbiter and after the Secretary of
Labor denied CSAI’s appeal/motion for reconsideration for lack of merit, filed a petition with the Supreme Court.

ISSUE: Who is entitled to the collection and custody of the union dues?

RULING: SAPI.

It is the set of officers headed by Dominica Nacua that is the lawful set of officers of SAPI and is, therefore, entitled to
the release and custody of the union dues as well as the as the agency fees. As stated in the findings of fact, CSAI, a
non-stock corporation was registered with the SEC. The same group was registered with the BLR as 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.

The Supreme Court also stated that BLR correctly ruled 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. 

A record check with the BLR shows that SAPI has submitted to it for files the list of this new set of officers, in
compliance with second paragraph of Art 242 (c) of the Labor Code [now Art. 242-A (b)]. This list sufficiently sustains
the view that said officers were lawfully elected, in the absence of clear and convincing proof to the contrary.

DISPOSITIVE: SAPI won. Petition denied

DOCTRINE:  Art. 242-A (b) of the Labor Code

 Art.242-A. Reportorial Requirement – the following are documents to be submitted to the Bureau by the legitimate
labor organization concerned: xxx xxx xxx (b) Its list of officers, minutes of the election of officers and list of voters
within 30 days from election. xxx xxx xxx

Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall
subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty.
 13. Progressive Development Corp - Pizza Hut vs. Laguesma, G.R. No. 115077, April 18, 1997
-Registration affords a measure of protection to unsuspecting employees who may be lured into joining fly-
by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate
ends.
-The law requiring the registration of labor organizations is not unconstitutional. It is a valid exercise of the
police power, considering that the activities in which labor organizations are engaged, directly affects the
public interest.
FACTS: On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent Union) filed a petition for
certification election with the Department of Labor (National Capital Region) in behalf of the rank-and-file employees
of the Progressive Development Corporation (Pizza Hut)

Petitioner filed on August 20, 1993, a verified Motion to Dismiss the petition alleging fraud, falsification and
misrepresentation in the respondent. Union’s registration is void and invalid because: a) respondent Union’s
registration was tainted with false, forged, double or multiple signatures of those who allegedly took part in the
ratification of the respondent Union’s constitution and by-laws and in the election of its officers that there were two
sets of supposed attendees to the alleged organizational meeting that was alleged to have taken place on June 26,
1993; that the alleged chapter is claimed to have been supported by 318 members when in fact the persons who
actually signed their names were much less; and b) while the application for registration of the charter was supposed
to have been approved in the organizational meeting held on June 27, 1993, the charter certification issued by the
federation KATIPUNAN was dated June 26, 1993 or one (1) day prior to the formation of the chapter, thus, there were
serious falsities in the dates of the issuance of the charter certification and the organization meeting of the alleged
chapter.

However, in an Order dated September29, 1993, Med-Arbiter Rasidali C. Abdullah directed the holding of a
certification election among petitioner’s rank and file employees. Appeal to the office of the Secretary of Labor, Labor
Undersecretary Bienvenido E. Laguesma in a Resolution dated December 29, 1993 denied the same. Motion for
reconsideration of the public respondent’s resolution was denied.

ISSUE: whether or not, after the necessary papers and documents have been filed by a labor organization, recognition
by the Bureau of Labor Relations merely becomes a ministerial function.

RULING: NO. Art. 234. Requirements of registration. —Any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: ( a)
Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who participated in such
meetings; (c) The names of all its members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate; (d) If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and (e) Four (4) copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification, and the list of the members who participated in it.

A more than cursory reading of the aforecited provisions clearly indicates that the requirements embodied therein
are intended as preventive measures against the commission of fraud. After a labor organization has filed the
necessary papers and documents for registration, it becomes mandatory for the Bureau of Labor Relations to check if
the requirements under Article 234 have been sedulously complied with. Falsification and serious irregularities,
especially those appearing on the face of the application and the supporting documents, a labor organization should
be denied recognition as a legitimate labor organization. And if a certificate of recognition has been issued, the
propriety of the labor organization’s registration could be assailed directly through cancellation of registration
proceedings in accordance with Articles 238 and 239 of the Labor Code, or indirectly, by challenging its petition for
the issuance of an order for certification election.

Such requirements are a valid exercise of the police power, because the activities in which labor organizations,
associations and unions of workers are engaged directly affect the public interest and should be protected.

The employer needs the assurance that the union it is dealing with is a bona fide organization, one which has not
submitted false statements or misrepresentations to the Bureau.” Clearly, fraud, falsification and misrepresentation in
obtaining recognition as a legitimate labor organization are contrary to the Med-Arbiter’s conclusion, not merely
collateral issues. The invalidity of respondent Union’s registration would negate its legal personality to participate in
certification election.

Once a labor organization attains the status of a legitimate labor organization it begins to possess all of the rights and
privileges granted by law to such organizations.

Inasmuch as the legal personality of respondent Union had been seriously challenged, it would have been more
prudent for the Med-Arbiter and public respondent to have granted petitioner’s request for the suspension of
proceedings in the certification election case, until the issue of the legality of the Union’s registration shall have been
resolved. Failure of the Med-Arbiter and public respondent to heed the request constituted a grave abuse of
discretion.

14. Progressive Development vs. Secretary of Labor, G.R. No. 96425, Feb. 4, 1992
-The registration of a labor organization may be denied on the following grounds: (1) Non-compliance with
the certification and attestation requirements.
FACTS: Pambansang Kilusan ng Paggawa (KILUSAN) TUCP filed with the Department of Labor and Employment
(DOLE) a petition for certification election among the rank-and-file employees of the petitioner alleging that it is a
legitimate labor federation and its local chapter, Progressive Development Employees Union, was issued a charter
certificate. Kilusan claimed that there was no existing collective bargaining agreement and that no other legitimate
labor organization existed in the bargaining unit.
Petitioner PDC filed its motion to dismiss contending that the local union failed to comply with Rule II Section 3, Book
V of the Rules Implementing the Labor Code, as amended, which requires the submission of: (a) the constitution and
by- laws; (b) names, addresses and list of officers and/or members; and (c) books of accounts.
ISSUE: Whether or not a local union needs to be a Legitimate Labor Union before it can file a petition for Certification
Election.
RULING: Yes. But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification
election in an unorganized establishment, it also requires that the petition for certification election must be filed by a
legitimate labor organization. Article 242 enumerates the exclusive rights of a legitimate labor organization among
which is the right to be certified as the exclusive representative of all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining.
Meanwhile, Article 212(h) defines a legitimate labor organization as “any labor organization duly registered with the
DOLE and includes any branch or local thereof.” Rule I, Section 1(j), Book V of the Implementing Rules likewise
defines a legitimate labor organization as “any labor organization duly registered with the DOLE and includes any
branch, local or affiliate thereof.”
It is important to clarify the relationship between the mother union and the local union. In the case of Liberty Cotton
Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975]), the Court held that the mother union, acting
for and in behalf of its affiliate, had the status of an agent while the local union remained 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. Thus, in this case the petition for certification election was filed by the
federation, which is merely an agent, the petition is deemed to be filed by the chapter, the principal, which must be a
legitimate labor organization. The chapter cannot merely rely on the legitimate status of the mother union.
AFFILIATION
15. Villar vs. Inciong, G.R. No. L-50283-84, April 20, 1983
-When a labor union affiliates with a federation, it becomes subject to the constitution and by-laws of the
federation. Under this principle, a federation can investigate and expel members of the local union on the
basis of the federation’s constitution and by-laws.
FACTS: AEU under FUR attempted to have a certification election but due to the opposition of AEU-PAFLU, the
petition was denied by the Med-Arbiter.

AEU-PAFLU then called a special meeting among members and it was there decided that an investigation of certain
people would be held pursuant to the constitution and by-laws of the Federation, of all of the petitioners and one
Felipe Manlapao, for "continuously maligning, libelling and slandering not only the incumbent officers but even the
union itself and the federation;" spreading 'false propaganda' that the union officers were 'merely appointees of the
management', and for causing divisiveness in the union.

A Trial Committee was then formed to investigate the local union's charges against the petitioners for acts of
disloyalty. AEU-PAFLU and the Company concluded a new CBA which, besides granting additional benefits to the
workers, also reincorporated the same provisions of the existing CBA, including the union security clause reading, to
wit:

All members of the UNION as of the signing of this Agreement shall remain members thereof in good standing.
Therefore, any members who shall resign, be expelled, or shall in any manner cease to be a member of the UNION,
shall be dismissed from his employment upon written request of the UNION to the Company.

The petitioners were summoned to appear before the PAFLU Trial Committee for the aforestated investigation of the
charges filed against them but they did not attend and instead requested for a "Bill of Particulars" of the charges
which had been formalized by the AEU-PAFLU officers; they contend that their actions were merely exercise of the
right to freedom of association.

Not recognizing PAFLU's jurisdiction over their case, petitioners again refused to participate in the investigation
rescheduled and conducted. Instead, they merely appeared to file their Answer to the charges and moved for a
dismissal.

Based on the findings and recommendations of the PAFLU trial committee, the PAFLU President found the petitioners
guilty of the charges against them and it was requested that they be terminated in conformity with the security clause
in the CBA. Meanwhile, they were placed under preventive suspension and denied access to the workplace.

Issue:  WON petitioners’ right to form association was violated when they were dismissed due to their disaffiliation
from PAFLU.
Ruling: NO. A mere minority of a local union’s membership cannot disaffiliate their union from its mother union.
Records showed that petitioners numbering ten (10), were among the ninety-six (96) who signed the “Sama-Samang
Kapasyahan,” whereas there are two hundred thirty-four (234) members of the local union. Hence, petitioners
comprised a minority and could not disaffiliate the local union from PAFLU. As a corollary, an unregistered union has
no legal personality and is not entitled to exercise the rights and privileges granted by law to legitimate labor
organization upon issuance of the certificate of registration.

The Court likewise rejected petitioners’ contention that the respondent Minister committed grave abuse of discretion
when he upheld the security clause of a CBA. It held that a closed shop is a valid form of union security, and such
provision in a CBA is not a restriction of the right of freedom of association guaranteed by the Constitution.

In the instant case, the Company and Amigo Employees Union-PAFLU entered into a CBA with a union security clause.
Thus, PAFLU had the authority to investigate petitioners on the charges filed by their co-employees in the local union
and after finding them guilty as charged, to expel them from the roll of membership of the local union under the
constitution of the PAFLU to which the local union was affiliated.

In affirming the dismissal of the petitioners, the Court held that inherent in every labor union or any organization, is
the right of self- preservation. When members of a labor union seek the disintegration and destruction of the very
union to which they belong, they thereby forfeit their right to remain as members of the union which they seek to
destroy. Prudence and equity, as well as the dictates of law and justice, compel labor union to adopt corrective and
remedial measures, in keeping with its laws and regulations, for its continued existence; lest by its own folly and
inaction, the labor union crumble and fall.

16. Filipino Pipe & Foundry vs. NLRC, G.R. No. 115180, Nov. 16, 1999
-The relationship between a federation and a local union or affiliate is that of a principal-agent. The local
union or affiliate is the principal, while the federation is the agent. This principal-agent relationship exists
even if the local union is not independently registered. Consequently, in case of illegal strike, the liability for
damages devolves upon the local union and not upon the mother federation even if the federation was the
one who signed the notice of strike.
SUMMARY: Filipino Pipe Workers Union- National Labor Union, a local chapter of NLU-TUCP conducted an illegal strike which lasted
from March 3, 1986 to June 13, 1986. The petitioner company interposed a petition to declare the strike illegal with a prayer against the Union,
the Federation and the Federation president for damages caused by the strike. The company eventually moved for partial dismissal pursuing
only the complaint against the Federation and its president. The LA declared the strike illegal and held the Federation alone responsible to pay
the damages. The NLRC reversed the decision, dismissing the original complaint against the Federation and its president.

FACTS:
1. On February 10, 1986, respondent National Labor Union-Trade Union Congress of the Philippines (NLU), a national federation of labor
unions, filed with the Ministry of Labor and Employment, in behalf of its local chapter, the Filipino Pipe Workers Union-National Labor Union
(the Union), a notice of strike signed by its national president, Atty. Eulogio R. Lerum, against the petitioner, Filipino Pipe and Foundry
Corporation, alleging as grounds therefor union busting and non-implementation of the CBA.

2. The initial conciliation conference was set on February 24, 1986 but due to lack of notice thereof to petitioner company, as well as the failure
of the Union to furnish the latter a copy of the notice of strike, the initial conciliation conference was re-set to March 3, 1986.

3. In the early morning of March 3, 1986, without waiting for the outcome of the conciliation conference scheduled on said date, the Union
staged the strike in question which lasted until June 13, 1986, when a return to work agreement was reached by the Union and petitioner
company.

4. On April 8, 1986, petitioner company interposed before the Arbitration Branch of the then Ministry of Labor and Employment, a petition to
declare the strike illegal with prayer for damages against the Union, NLU and its national president, Atty. Eulogio Lerum.

5. On December 23, 1988, petitioner company moved for the partial dismissal of the Complaint against 43 officers and members of the Union,
but maintained the action against the NLU and Atty. Lerum.

6. On August 31, 1992, the Labor Arbiter came out with a decision for petitioner company, finding that the strike held was illegal and directing
NLU to pay damages, absolving Atty. Lerum.

7. Both parties appealed to the NLRC which dismissed the complaint against NLU and Atty. Lerum.

ISSUE:
WON NLU, the Federation, should be held responsible for the illegal strike staged by the Union. NO

RULING:
Petition is DISMISSED, and the Decision of the NLRC is AFFIRMED.

RATIO:
The mother union, acting for and in behalf of its affiliate, has the status of an agent while the local union remained 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. (Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975])

The same is true even if the local union is not a legitimate labor organization . Conformably, in the abovecited case the Court ruled that the
mother federation was a mere agent and the local chapter/union was the principal, notwithstanding the failure of the local union to comply with
the procedural requirements that would make it a legitimate labor organization.

It would not affect its status as the principal and basic unit of the association. The requirement laid down in the Progressive Development case,
that the local union must be a legitimate labor organization, pertains to the conditions before a union may file a petition for certification
election and to be certified as sole and exclusive bargaining agent. In the present case, there is no dispute that THE UNION is the sole and
exclusive bargaining representative of the rank-and-file employees of petitioner company. The union's status as a legitimate labor organization
is therefore of no moment in the resolution of the controversy here.

Furthermore, the petitioner company is now estopped from reneging on the recognition it extended to the FPUW-NLU as the bargaining
representative of its rank-and-file workers, by belatedly attacking its status which petitioner company had voluntarily recognized. It should be
noted that even as early as 1981, when the collective bargaining agreement sought to be implemented by the union was entered into, the latter
was already the bargaining representative of the employees concerned. It is not, therefore, true that it was respondent NLU which formed
FPWU. At most, the entry into the picture of the private respondent on March 23, 1983, merely affirmed the status of FPWU as the recognized
bargaining representative of the rank-and-file employees of petitioner company.

Evidently, direct and primary responsibility for the damages allegedly caused by the illegal strike sued upon fall on the local union FPWU,
being the principal, and not on respondent NLU, a mere agent of THE UNION which assisted the latter in filing the notice of strike. Being just
an agent, the notice of strike filed by Atty. Eulogio Lerum, the national president of NLU, is deemed to have been filed by its principal, the
THE UNION. Having thus dismissed the claim for damages against the principal, THE UNION, the action for damages against its agent,
respondent NLU, and it national president, has no more leg to stand on and should also be dismissed.

DISAFFILIATION
17. AWU vs. NLRC, G.R. No. 87266-69, July 30, 1990
-Generally, the local union can disaffiliate from its mother federation only during the freedom period.
Exceptionally, disaffiliation may be done before the onset of the freedom period, if there is a substantial shift
of allegiance on the part of the majority of the members of the union.
FACTS: Petitioner, the then bargaining representative of the dockworkers at South Harbor, Port Area, Manila, filed a
Notice of Strike against respondent Metro Port Service, Inc., the then arrastre contractor in the South Harbor, on the
issues, among others, of unfilled vacancies and union busting (NLRC Case No. NCR-NS-10-288- 84). Ministry of
Labor and Employment ordered for the compulsary arbitration to the NLRC and forbade the holding of strikes or lock-
outs ( Certified NLRC Case No. 0403- 85). In the latter case, one of the demands raised by AWU was that Metro
terminate the employment of 11 respondents for having organized the Associated Workers Union in Metroport
("AWUM"). Metro initially resisted AWU’s request by reason of due process. However, Metro eventually suspended
individual respondents after AWU staged a strike against it, despite the express prohibition in the Order. To end the
strike, Metro executed an Agreement with AWU. As a result of Metro’s implementation of the Agreement, individual
respondents filed a complaint against Metro (NLRC Case No. NCR-4-1372-85) . Labor Arbiter Diosana in an Order
directed Metro provisionally to reinstate individual respondents pending resolution of the issues raised therein, with
which Order Metro complied.
NLRC rendered a consolidated Decision. The NLRC ruled that that AWU was a national union, and that individual
respondents have the right to organize themselves into a local chapter thereof, the formation of which was a protected
activity and could not be considered as disloyalty, held the suspension or dismissal of individual respondents as illegal
and ordered their reinstatement with backwages, to be paid solidarily by AWU and respondent Metro. The NLRC also
found that the strike staged by AWU is not illegal, holding that AWU was of the belief, although erroneously, that it
could validly stage a strike during the pendency of its motion for reconsideration of the Minister's Order enjoining a
strike or lockout.
AWU thereafter in G.R. Nos. 87266-69 filed with the Court a Petition for certiorari praying for the reversal of the order
holding that Metro could not be compelled to fill up vacancies with AWU’s recommendees and of the order reinstating
the 11 private respondents to their former positions with backwages payable solidarily by AWU and respondent Metro.
Marina, meantime, had gone to the Court, protesting, on grounds of alleged denial of due process, its inclusion by the
NLRC as a party and its being required to reinstate individual respondents with backwages. Metro also went to the
court again and claimed that it should not have been held solidary liable with AWU because it had merely suspended
individual respondents pursuant to the Agreement it had executed with AWU. These cases were dismissed by the Court
and were remanded to the LA of origin for execution. The LA issued a writ of execution against Marina to reinstate
individual respondents and to pay them the salary adjustments. Marina then once more went to the Court in G.R. Nos.
91223-26 and filed a Petition for certiorari to invalidate the writ of execution. G.R. Nos. 91223-26 were consolidated
with G.R. Nos. 87266- 69.
ISSUES:
1. WON AWU was justified in expelling its membership the 11 individual respondents.
2. WON Metro and Marina should be held solidary liable with AWU for the payment of backwages.
HELD:
1. YES. AWU was justified in expelling from its membership the 11 individual respondents.
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, disaffiliation may still be carried out, but 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 continues to bind the members of the
new or disaffiliated and independent union up to the CBA's expiration date.
The record does not show that individual respondents had disaffiliated during the freedom period. The record does,
however, show that only 11 members of AWU had decided to disaffiliate from AWU and form AWUM. Respondent
Metro had about 4,000 employees, and around 2,000 of these were members of AWU. It is evident that individual
respondents had failed to muster the necessary majority in order to justify their disaffiliation. Thus, in the referendum
held at the PTGWO compound to determine whether individual respondents should be expelled from AWU, 1,229
members out of 1,695 members present voted for expulsion of individual respondents. In sum, the attempted
disaffiliation of the 11 private respondents from the petitioner mother union and the effort to organize either a new
local of the mother union or an entirely new and separate union, did not, under the circumstances of this case, constitute
protected activities of the 11 individual respondents.
2. Strictly speaking, in view of the conclusion above that AWU was justified in expelling individual respondents from
its membership, neither AWU nor Metro/Marina would be liable to individual respondents for the backwages accruing
during this Second Period.
In the interest of substantial and expeditious justice, however, we believe that the backwages accruing during the
Second Period should be paid and shared by AWU and by Metro Marina, on a 50-50 basis. The equitable
considerations which impel the Court to hold AWU liable for one-half of the backwages during the Second Period
include:
(a) the fact that Metro had been reluctant to comply with the demand of AWU to terminate the services of individual
respondents and had wanted to give the latter procedural due process, but gave in to the demands of AWU;
(b) that AWU had pressed Metro very hard and indeed went on strike against Metro when Metro refused simply to
terminate the services of the individual respondents;
(c) that AWU, instead of waiting for final judicial determination of the legality of its expulsion of individual
respondents, chose to importune the NLRC to issue the order requiring the re-suspension of the individual respondents
on 1 August 1985, with which order Metro eventually complied.
The equitable considerations which lead to hold Metro/Marina responsible for one-half of the backwages accruing
during the above Second Period relate to the failure of Metro to accord individual respondents procedural due process
by giving them reasonable opportunity to explain their side before suspending or dismissing them. Such dismissal was
accordingly in violation of the Labor Code. Notwithstanding AWU's closed-shop clause in the CBA, Metro was bound
to conduct its own inquiry to determine the existence of substantial basis for terminating the employment of individual
respondents. That AWU, disregarding the Minister of Labor and Employment's express order, had threatened to go on
strike, and indeed actually went on strike, if Metro had continued with the services of individual respondents, did not
relieve Metro from the duty to accord procedural due process to individual respondents.
18. ANGLO-KMU vs. Samahan ng mga Manggagawa sa MBSM, G.R. No. 118562, July 5, 1996
FACTS: Petitioner ANGLO is a duly registered labor organization while respondent Union is its affiliate. In
representation of SAMANA BAY, ANGLO entered and concluded a Collective Bargaining Agreement (CBA) with
Manila Bay Spinning Mills and J.P. Coats Manila Bay, Inc. (the corporations).
The Executive Committee of SAMANA BAY decided to disaffiliate from ANGLO in view of the latter’s dereliction of
its duty to promote and advance the welfare of SAMANA BAY and the alleged cases of corruption involving the
federation officers. Said disaffiliation was unanimously confirmed by the members of SAMANA BAY.
A petition to stop remittance of federation dues to ANGLO was filed by SAMANA BAY with the BLR. The
corporations, despite having been furnished copies of the union resolution relating to said disaffiliation, refused to
honor the same.
ANGLO counteracted by unseating all officers and board members of SAMANA BAY and appointing in their stead, a
new set of officers who were duly recognized by the corporations. Disaffiliation as void considering that a CBA is still
existing and the freedom period has not yet set in.
ISSUE: Whether or not the disaffiliation was valid
HELD: YES
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. This is a fundamental right of labor and derives its existence from the
Constitution. In interpreting the protection to labor and social justice provisions of the Constitution and the labor laws,
rules or regulations, we have always adopted the liberal approach which favors the exercise of labor rights.
This Court is not ready to bend this principle to yield to a mere procedural defect, to wit: failure to observe certain
procedural requirements for a valid disaffiliation. Non-compliance with the procedure on disaffiliation, being premised
on purely technical grounds cannot rise above the fundamental right of self-organization.
We quote, with approval, the findings of herein public respondent, that: "x x x the resolution of the general membership
ratifying the disaffiliation action initiated by the Board, substantially satisfies the procedural requirements for
disaffiliation. No doubt was raised on the support of the majority of the union members on the decision to disaffiliate."
This, to our mind, is clearly supported by the evidence. ANGLO's alleged acts inimical to the interests of respondent
union have not been sufficiently rebutted. It is clear under the facts that respondent union's members have unanimously
decided to disaffiliate from the mother federation and ANGLO has nothing to offer in dispute other than the law
prohibiting the disaffiliation outside the freedom period.
A local union has the right to disaffiliate from its mother union when circumstances warrant. 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. However, even before the onset of the freedom period, disaffiliation
may be carried out when there is a shift of allegiance on the part of the majority of the members of the union
A local labor union is a separate and distinct unit primarily designed to secure and maintain an equality of bargaining
power between the employer and their employee-members. A local union does not owe its existence to the federation
with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its
members. The mere act of affiliation does not divest the local union of its own personality, neither does it give the
mother federation the license to act independently of the local union. It only gives rise to a contract of agency where the
former acts in representation of the latter. By SAMANA BAY's disaffiliation from ANGLO, the vinculum that
previously bound the two entities was completely severed. ANGLO was divested of any and all power to act in
representation of SAMANA BAY. Thus, any act performed by ANGLO affecting the interests and affairs of SAMANA
BAY, including the ouster of herein individual private respondents, is rendered without force and effect.
DISPOSITIVE: Respondent WON.
CANCELLATION OF REGISTRATION'
19. ADFLO vs. Laguesma, G.R. No. 108625, March 11, 1996
-Cancellation of registration can only be done through a direct action (petition) for cancellation of
registration. It cannot be attacked collaterally in another case, such as in a petition for certification election.
The reason is because cancellation of registration is equivalent to snuffing out the life of the labor
organization, hence, it requires notice, hearing and proof by substantial evidence.
FACTS: The Alliance of Democratic Free Labor Organization (ADFLO) filed an application for registration as a national
federation alleging, among others that it has twelve (12) affiliates. After proper evaluation of its application, it was
issued a Certificate of Registration to the federation. The Confederation of Labor and Allied Social Services (CLASS)
filed a petition for the cancellation of the Registration Certificate issued to ADFLO.

The first hearing conducted by the BLR after the case was remanded to it for further proceedings. However, since
CLASS was not yet ready with its evidence, the hearing was postponed. CLASS then filed its Formal Offer of Evidence.
ADFLO filed an Objection to Admission of Exhibits based on the grounds that the exhibits were not marked nor
identified by any witness during the hearing of the case where ADFLO had been properly notified. In the meantime, at
the hearing of the case, CLASS failed to appear and only ADFLO's President Antonio Cedilla appeared. Unaware that
an objection had already been filed by ADFLO's counsel, Cedilla manifested that ADFLO will file its answer to CLASS'
offer of evidence within thirty (30) days. BLR Director without first ruling on the admissibility of the exhibits of CLASS
and without any further hearing then cancelled the registration of ADFLO.

ISSUE: Whether or not a certificate of registration can be cancelled without hearing

RULING: Subject to the requirements of notice and due process, the registration of any legitimate labor union,
chartered local and worker's association may be cancelled by the Regional Director, or in the case of federations,
national or industry unions and trade union centers, by the Bureau Director, by filing of an independent complaint or
petition for cancellation.

The cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor organization. For
without such registration, it loses – as a rule- its rights under the Labor Code. Under the circumstances, petitioner was
indisputably entitled to be heard before a judgment could be rendered cancelling its certificate of registration. In
David vs. Aguilizan it was held that a decision rendered without any hearing is null and void.

20. Laguna Autoparts vs. Office of the Secretary, G.R. No. 157146, April 29, 2005
-Once a labor organization is registered, it continues to enjoy its legitimacy and legal personality until its
certificate of registration is cancelled with finality.
FACTS: The respondent union filed a petition for certification election before the DOLE, alleging that Obrero Pilipino
and its chapter affiliate, LAMCOR Chapter were legitimate labor organizations. It averred that the said bargaining unit,
composed of more or less 160 rank-and-file employees, is unorganized and that there has been no certification
election conducted for the past 12 months prior to the filing of the petition. The petitioner company moved to dismiss
the petition for certification election and further asserted that even if the respondent union was issued a certificate of
registration, it could not file a petition for certification election since its legal personality was at question.

Med-Arbiter Bactin dismissed the petition for certification election for the respondent unions lack of legal personality
because it failed to indicate its principal office on the documents it submitted to the Regional Office. The respondent
union appealed the case to the SOLE Sto. Tomas, who granted the appeal and remanded the case to the regional office
of origin for the immediate conduct of a certification election. Finding no cogent reason to alter her decision, the SOLE
denied the motion for reconsideration thereof.
Not convinced, the petitioner filed a petition for certiorari with the CA, who ruled in favor of the respondnet union. The
petitioner’s MR was denied. Hence, this petition for review on certiorari.
ISSUES:
1)whether or not the respondent union is a legitimate labor organization;
2) whether or not a chapters legal personality may be collaterally attacked in a petition for certification election; and
3)whether or not the petitioner, as the employer, has the legal standing to oppose the petition for certification election.
HELD:
1. YES, based on the finding of the SOLE, the respondent union is a legitimate labor organization. As correctly stressed
by the CA, a local or chapter need not be registered to become a legitimate labor organization because a local or
chapter acquires legal personality as a labor organization from the date of filing of the complete documents enumerated
in Section 1of Rule VI of the Implementing Rules of Book V (as amended by Department Order [D.O.] No. 9).
The task of determining whether the local or chapter has submitted the complete documentary requirements is lodged
with the Regional Office or the BLR. The records of the case show that the respondent union submitted the said
documents to Regional Office No. IV and was subsequently issued certificates. It, therefore, declared that the
respondent union has acquired legal personality as a labor organization. Absent any pronouncement to the contrary,
such determination of the Labor Relations Division Chief will stand, on the presumption that the duty of determining
whether the respondent union submitted the complete documentary requirements has been regularly performed.
2. NO. Legal personality may not be subject to a collateral attack but only through a separate action instituted
particularly for the purpose of assailing it, as prescribed by Section 5, Rule V of the Implementing Rules of Book V. .
What applies in this case is the principle that once a union acquires legitimate status as a labor organization, it
continues as such until its certificate of registration is cancelled or revoked in an independent action for cancellation.
Equally important is Section 11, Paragraph II, Rule IX of D.O. 9, which provides for the dismissal of a petition for
certification election based on the lack of legal personality of a labor organization only in the following instances: (1)
appellant is not listed by the Regional Office or the BLR in its registry of legitimate labor organizations; or (2)
appellants legal personality has been revoked or cancelled with finality.
3. Petitioner does not have the legal standing to oppose the petition for certification election. The choice of a collective
bargaining agent is the sole concern of the employees. The only exception to this rule is where the employer has to file
the petition for certification election pursuant to Article 258 of the LC because it was requested to bargain collectively.
An employer’s role in a certification election has aptly been described in Trade Unions of the Philippines and Allied
Services (TUPAS) v. Trajano, as that of a mere bystander. It has no legal standing in a certification election as it cannot
oppose the petition or appeal the Med-Arbiters orders related thereto.
21. NUBE vs. Minister of Labor, G.R. No. L-53406, December 14, 1981
-During the pendency of the cancellation proceedings, it can still file a petition for certification election,
intervene in a certification election proceeding, participate in the certification election, or negotiate a CBA.
FACTS: Petitioner Union filed a petition to be directly certified as collective bargaining agent of the rank-and-file
employees of private respondent Bank. At the date of the hearing private respondent was required to submit a payroll of
employees the same have not been complied. Med - arbiter issued an order directing the holding of a certification
election.
Respondent Bank Corporation filed a motion to suspend further proceedings in view of a allegedly prejudicial issue
consisting of a pending proceeding for cancellation of the registration of petitioning union for allegedly engaging in
prohibited and unlawful activities in violation of the laws.
Med-Arbiter Alberto Abis Jr. ordered the holding of certification election among the rank and file employees but
sustained the stand of respondent company as to the exclusion of certain employees.
Respondent bank appealed from the aforesaid November 19, 1979 order of MedArbiter Alberto Abis, Jr. to the Minister
of Labor on the ground that the fact that petitioner's Union registration was subject of cancellation proceedings with the
Bureau of Labor Relations rendered the issuance of the above questioned Order directing the holding of a certification
election premature.
The Bureau of Labor Relations Director Carmelo C. Noriel rendered a decision affirming the Med-Arbiter's order with
certain modifications. with regard on the issue of the conduct of certification election the Regional Director ruling:
"We cannot fully concur with this contention Unless there is an order of cancellation which is final the union's
certificate of registration remains and its legal personality intact. It is entitled to the rights and privileges accorded by
law, including the right to represent its members and employees in a bargaining unit for collective bargaining purposes
including participation in a representation proceeding. This is especially true where the grounds for the cancellation of
its union certificate do not appear indubitable."
Petition for mandamus filed by petitioner to the court to compel public respondents to conduct a certification election
among the rank-and-file employees of the respondent employer.
ISSUE: WON cancellation proceedings against petitioner is a prejudicial issue which should suspend the petition for
certification election.
HELD: The court ruled in the affirmative. The court stated that the pendency of the petition for cancellation of
registration certificate of herein petitioner union is not a bar to the holding of a certification election. The pendency of
the petition for cancellation of the registration certificate of petitioner founded on the alleged illegal strikes staged by
the leaders and members of the intervenor union and petitioner union should not suspend the holding of a certification
election, because there is no order directing such cancellation.
Aside from the fact that the petition for cancellation of the registration certificate of petitioner union has not yet been finally
resolved, there is another fact that militates against the stand of private respondent Bank, the liberal approach observed by
this Court as to matters of certification election. The whole democratic process is geared towards the determination of
representation, not only in government but in other sectors as well, by election. Thus, the Court has declared its
commitment to the view that a certification election is crucial to the institution of collective bargaining, for it gives substance
to the principle of majority rule as one ' of the basic concepts of a democratic policy" 

INTER-UNION vs. INTRA-UNION DSPUTES

22. Ilaw at Buklod Ng Manggagawa vs. NLRC, 219 SCRA 536, G.R. Nos. 81852, March 5, 1993
-In this case, the union assessed its members 10% of the lump sum that they will receive under he newly
concluded CBA. Several employees protested the assessment. Hence, the said employees were expelled from
the union. The expelled union members filed a complaint with the Labor Arbiter for illegal deduction and
illegal expulsion. The SC held that the Labor Arbiter has no jurisdiction because the suit is an intra-union
dispute, considering that the controversy is between the union and its members over the assessment and
their expulsion from the union.
RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS
23. Lakas ng Manggagawang Makabayan vs. Marcelo Enterprises, G.R. No. L-38258, Nov. 19, 1982
-Generally, a legitimate labor organization can file a suit only on behalf of its members. However, if it has
been certified as the CB agent, it can file a suit not only in behalf of its members, but also in behalf of
employees who are covered by the bargaining unit. It cannot act in representation of employees outside of
the bargaining unit, even if the said employees signed the complaint.
24. Palacol vs. Ferrer-Calleja, G.R. No. 85333, Feb. 26, 1990
-Strict compliance with the prescribed requirements is required. Substantial compliance will not suffice.
Therefore: (1) A special assessment obtained in a local membership meeting is null and void because the law
requires a general membership meeting; (3) A special assessment based merely on the minutes of the
meeting is null and void, because the law requires a written resolution by the union members.
FACTS: On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as the Union),
as the collective bargaining agent of all regular salesmen, regular helpers, and relief helpers of the Manila Plant and
Metro Manila Sales Office of the respondent Coca Cola Bottlers (Philippines), Inc. (hereinafter referred to as the
Company) concluded a new collective bargaining agreement with the latter. Among the compensation benefits granted
to the employees was a general salary increase to be given in lump sum including recomputation of actual commissions
earned based on the new rates of increase.
On the same day, the president of the Union submitted to the Company the ratification by the union members of the
new CBA and authorization for the Company to deduct union dues equivalent to P10.00 every payday or P20.00 every
month and, in addition, 10% by way of special assessment, from the CBA lump-sum pay granted to the union
members. The last one among the aforementioned is the subject of the instant petition.
As embodied in the Board Resolution of the Union dated September 29, 1987, the purpose of the special assessment
sought to be levied is "to put up a cooperative and credit union; purchase vehicles and other items needed for the
benefit of the officers and the general membership; and for the payment for services rendered by union officers,
consultants and others." There was also an additional proviso stating that the "matter of allocation ... shall be at the
discretion of our incumbent Union President."
This "Authorization and CBA Ratification" was obtained by the Union through a secret referendum held in separate
local membership meetings on various dates. The total membership of the Union was about 800. 528 of 800 are
withdrawing or disauthorizing the deduction of any amount from their CBA lump sum leaving a remainder of 272 as
supporters.
On account of the above-mentioned disauthorization, the Company filed an action for interpleader with the Bureau of
Labor Relations in order to resolve the conflicting claims of the parties concerned. Petitioners filed a motion/complaint
for intervention therein in two groups of 161 and 94, respectively. They claimed to be among those union members
who either did not sign any individual written authorization, or having signed one, subsequently withdrew or retracted
their signatures therefrom.
Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to Article 222(b) of the
Labor Code and cited Galvadores v. Trajano wherein it was ruled that no check-offs from any amount due employees
may be effected without individual written authorizations duly signed by the employees specifically stating the amount,
purpose, and beneficiary of the deduction.
In its answer, the Union countered that the deductions not only have the popular indorsement and approval of the
general membership, but likewise complied with the legal requirements of Article 241 (n) and (o) of the Labor Code in
that the board resolution of the Union imposing the questioned special assessment had been duly approved in a general
membership meeting and that the collection of a special fund for labor education and research is mandated.
ISSUE: Can a special assessment be validly deducted by a labor union from the lumpsum pay of its members, granted
under a collective bargaining agreement (CBA), notwithstanding a subsequent disauthorization of the same by a
majority of the union members?
HELD: No.
After a careful review of the records of this case, We are convinced that the deduction of the 10% special assessment
by the Union was not made in accordance with the requirements provided by law.
Petitioners are correct in citing the ruling of this Court in Galvadores which is applicable to the instant case. The
principle "that employees are protected by law from unwarranted practices that diminish their compensation without
their known edge and consent" is in accord with the constitutional principle of the State affording full protection to
labor.
The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o) of Article 241 apply.
Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off" of a special assessment. Both provisions must
be complied with. Under paragraph (n), the Union must submit to the Company a written resolution of a majority of all
the members at a general membership meeting duly called for the purpose. In addition, the secretary of the organization
must record the minutes of the meeting which, in turn, must include, among others, the list of all the members present
as well as the votes cast.
It submitted only minutes of the local membership meetings when what is required is a written resolution adopted at the
general meeting. Worse still, the minutes of three of those local meetings held were recorded by a union director and
not by the union secretary. The minutes submitted to the Company contained no list of the members present and no
record of the votes cast. Since it is quite evident that the Union did not comply with the law at every turn, the only
conclusion that may be made therefrom is that there was no valid levy of the special assessment pursuant to paragraph
(n) of Article 241 of the Labor Code.
Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in order
that a special assessment may be validly checked-off. Even assuming that the special assessment was validly levied
pursuant to paragraph (n), and granting that individual written authorizations were obtained by the Union, nevertheless
there can be no valid check-off considering that the majority of the union members had already withdrawn their
individual authorizations. A withdrawal of individual authorizations is equivalent to no authorization at all. Hence, the
ruling in Galvadores that "no check-offs from any amounts due employees may be effected without an individual
written authorization signed by the employees ... " is applicable.
Moreover, it is well-settled that "all doubts in the implementation and interpretation of the provisions of the Labor
Code ... shall be resolved in favor of labor." And as previously stated, labor in this case refers to the union members, as
employees of the Company. Their mere desire to establish a separate bargaining unit, albeit unproven, cannot be
construed against them in relation to the legality of the questioned special assessment. On the contrary, the same may
even be taken to reflect their dissatisfaction with their bargaining representative, the respondent-Union, as shown by the
circumstances of the instant petition, and with good reason.
25. Stellar Industrial Services vs. NLRC, G.R. No. 117418, Jan. 24, 1996
-(4) A special assessment based on a resolution of the board of directors of the labor organization is likewise
null and void because the law requires a resolution by the majority of all the union members.
26. Holy Cross of Davao College vs. Joaquin, G.R. No. 110007, Oct. 18 1996
-Check-off is the process whereby the employer, on agreement with the CB agent and on prior authorization
from the employee, deducts union dues or assessments from the latter’s wages and remits them directly to
the union.
FACTS: A collective bargaining agreement (CBA) was entered into between Holy Cross of Davao College, Inc. (Holy
Cross), an educational institution, and the affiliate labor organization representing its employees, Holy Cross of Davao
College Union KAMAPI (KAMAPI). Shortly before the expiration of the agreement, KAMAPI President Jose Lagahit,
wrote Holy Cross expressing his union’s desire to renew the agreement, withal seeking its extension for two months, on
the ground that the teachers were still on summer vacation and union activities necessary or incident to the negotiation
of a new agreement could not yet be conducted. The Holy Cross President replied that he had no objection to the
extension sought, it being allowable under the collective bargaining agreement.
A meeting of the KAMAPI membership for the purpose of electing a new set of union officers was conducted. Rodolfo
Gallera won election as president. Gallera forthwith initiated discussions for the union’s disaffiliation from the
KAMAPI Federation. Gallera’s group subsequently formed a separate organization known as the Holy Cross of Davao
College Teachers Union, and elected its own officers.
Holy Cross thereafter stopped deducting from the salaries and wages of its teachers and employees the corresponding
union dues and special assessment, and agency fees, in accordance with the checkoff clause of the CBA.
In the meantime, there ensued between the two unions a full-blown action on the basic issue of representation, which
was to last for some two years. It began with the filing by the new union of a petition for certification election in the
Office of the Med-Arbiter. KAMAPI responded by filing a motion asking the Med-Arbiter to dismiss the petition. The
Med-Arbiter denied KAMAPI’s motion to dismiss, and ordered the holding of a certification election. On appeal,
however, the Secretary of Labor reversed the Med-Arbiter’s ruling and ordered the dismissal of the petition for
certification election, which action was eventually sustained by the Supreme Court in appropriate proceedings.
Thereafter, KAMAPI presented its bargaining proposals to Holy Cross; and it sent a letter to the School asking for its
counter-proposals. In response, Holy Cross declared that it would take no action towards a new CBA without a
definitive ruling on the proper interpretation of Article I of the old CBA. Said Article provides inter alia for the
automatic extension of the CBA for another period of three (3) years counted from its expiration, if the parties fail to
agree on a renewal, modification or amendment thereof.
There has been a dispute regarding the proper interpretation of items 1 and 2 of Article I of the CBA. After several
failed conciliation meetings, KAMAPI and Holy Cross referred the case to voluntary arbitration. Voluntary Arbitrator
Joaquin ruled in favor of KAMAPI. He ruled that the request for extension filed by KAMAPI constituted seasonable
notice of its intention to renew, modify or amend the agreement, which it could not however pursue because of the
absence of the teachers who were then on summer vacation. Further, he ordered Holy Cross to pay to KAMAPI the
amount equivalent to the uncollected union dues, it appearing that Holy Cross stopped complying with the CBA’s
check-off provisions.
Aggrieved, Holy Cross filed the instant petition.
ISSUE: Is Holy Cross liable to pay to KAMAPI, the amounts it failed to deduct from KAMAPI’s members as union
dues, or agency fees as regards those not union members, in accordance with the check-off provisions of the CBA?
RULING: No.
A check-off is a process or device whereby the employer, on agreement with the union recognized as the proper
bargaining representatives, or on prior authorization from its employees, deducts union dues or agency fees from the
latter's wages and remits them directly to the union. Its desirability to a labor organization is quite evident; by it, it is
assured of continuous funding. Indeed, this Court has acknowledged that the system of check-off is primarily for the
benefit of the union and, only indirectly, of the individual laborers. The legal basis of check-off is thus found in statute
or in contract. Statutory limitations on check-offs generally require written authorization from each employee to deduct
wages; however, a resolution approved and adopted by a majority of the union members at a general meeting will
suffice when the right to check-off has been recognized by the employer, including collection of reasonable
assessments in connection with mandatory activities of the union, or other special assessments and extraordinary fees.
On the other hand, the collection of agency fees in an amount equivalent to union dues and fees, from employees who
are not union members, is recognized by Article 248 (e) of the Labor Code. No requirement of written authorization
from the non-union employee is imposed. The employees’ acceptance of benefits resulting from a collective bargaining
agreement justifies the deduction of agency fees from his pay and the union’s entitlement thereto. In this aspect, the
legal basis of the union’s right to agency fees is neither contractual nor statutory, but quasi-contractual, deriving from
the established principle that nonunion employees may not unjustly enrich themselves by benefiting from employment
conditions negotiated by the bargaining union.
No provision of law makes the employer directly liable for the payment to the labor organization of union dues and
assessments that the former fails to deduct from its employees salaries and wages pursuant to a check-off stipulation.
The employer’s failure to make the requisite deductions may constitute a violation of a contractual commitment for
which it may incur liability for unfair labor practice. But it does not by that omission, incur liability to the union for the
aggregate of dues or assessments uncollected from the union members, or agency fees for non-union employees.
Where the employer fails or refuses to implement a check-off agreement, logic and prudence dictate that the union
itself undertake the collection of union dues and assessments from its members (and agency fees from non-union
employees); this, of course, without prejudice to suing the employer for unfair labor practice.
Therefore, there was no basis for the Voluntary Arbitrator to require Holy Cross to assume liability for the union dues
and assessments, and agency fees that it had failed to deduct from its employees’ salaries.