1.) G.R. No.

109002             April 12, 2000

DELA SALLE UNIVERSITY, petitioner,

vs.
DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA) and BUENAVENTURA
MAGSALIN, respondents.

x-----------------------x

G.R. No. 110072             April 12, 2000

DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION OF TEACHERS AND

EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner,
vs.
DELA SALLE UNIVERSITY and BUENAVENTURA MAGSALIN, respondents.

BUENA, J.:

Filed with this Court are two petitions for certiorari, the first petition with preliminary injunction and/or temporary
1 

restraining order, assailing the decision of voluntary arbitrator Buenaventura Magsalin, dated January 19, 1993, as
2 

having been rendered with grave abuse of discretion amounting to lack or excess of jurisdiction. These two petitions
have been consolidated inasmuch as the factual antecedents, parties involved and issues raised therein are
interrelated. 3

The facts are not disputed and, as summarized by the voluntary arbitrator, are as follows. On December 1986, Dela
Salle University (hereinafter referred to as UNIVERSITY) and Dela Salle University Employees Association
— National Federation of Teachers and Employees Union (DLSUEA-NAFTEU), which is composed of regular
non-academic rank and file employees, (hereinafter referred to as UNION) entered into a collective
4 

bargaining agreement with a life span of three (3) years, that is, from December 23, 1986 to December 22,
1989. During the freedom period, or 60 days before the expiration of the said collective bargaining agreement,
5 

the Union initiated negotiations with the University for a new collective bargaining agreement which, 6 

however, turned out to be unsuccessful, hence, the Union filed a Notice of Strike with the National Conciliation
and Mediation Board, National Capital Region. After several conciliation-mediation meetings, five (5) out of the
7 

eleven (11) issues raised in the Notice of Strike were resolved by the parties. A partial collective bargaining
agreement was thereafter executed by the parties. On March 18, 1991, the parties entered into a Submission
8 

Agreement, identifying the remaining six (6) unresolved issues for arbitration, namely: "(1) scope of the
bargaining unit, (2) union security clause, (3) security of tenure, (4) salary increases for the third and fourth years
[this should properly read second and third years] of the collective bargaining agreement, (5) indefinite union leave,
9 

reduction of the union president's workload, special leave, and finally, (6) duration of the agreement."  The parties
10 

appointed Buenaventura Magsalin as voluntary arbitrator.  On January 19, 1993, the voluntary arbitrator rendered
11 

the assailed decision.  12

In the said decision, the voluntary arbitrator, on the first issue involving the scope of the bargaining unit,
ruled that ". . . the Computer Operators assigned at the CSC [Computer Services Center], just like any other
Computer Operators in other units, [should be] included as members of the bargaining unit,"  after finding
13 

that "[e]vidently, the Computer Operators are presently doing clerical and routinary work and had nothing to do with
[the] setting of management policies for the University, as [may be] gleaned from the duties and responsibilities
attached to the position and embodied in the CSC [Computer Services Center] brochure. They may have, as argued
by the University, access to vital information regarding the University's operations but they are not necessarily
confidential."  Regarding the discipline officers, the voluntary arbitrator ". . . believes that this type of employees
14 

belong (sic) to the rank-and-file on the basis of the nature of their job."  With respect to the employees of the
15 

College of St. Benilde, the voluntary arbitrator found that the College of St. Benilde has a personality separate and

Labor II – 1
distinct from the University and thus, held ". . . that the employees therein are outside the bargaining unit of the
University's rank-and-file employees."  16

On the second issue regarding the propriety of the inclusion of a union shop clause in the collective bargaining
agreement, in addition to the existing maintenance of membership clause, the voluntary arbitrator opined that a
union shop clause ". . . is not a restriction on the employee's right of (sic) freedom of association but rather a valid
form of union security while the CBA is in force and in accordance with the Constitutional policy to promote unionism
and collective bargaining and negotiations. The parties therefore should incorporate such union shop clause in their
CBA."  17

On the third issue with respect to the use of the "last-in-first-out" method in case of retrenchment and transfer to
other schools or units, the voluntary arbitrator upheld the ". . . elementary right and prerogative of the management
of the University to select and/or choose its employees, a right equally recognized by the Constitution and the law.
The employer, in the exercise of this right, can adopt valid and equitable grounds as basis for lay-off or separation,
like performance, qualifications, competence, etc. Similarly, the right to transfer or reassign an employee is an
employer's exclusive right and prerogative."  18

Regarding the fourth issue concerning salary increases for the second and third years of the collective bargaining
agreement, the voluntary arbitrator opined that the ". . .proposed budget of the University for SY 1992-93 could not
sufficiently cope up with the demand for increases by the Union. . . . . . . . With the present financial condition of the
University, it cannot now be required to grant another round of increases through collective bargaining without
exhausting its coffers for other legitimate needs of the University as an institution,"  thus, he ruled that ". . . the
19 

University can no longer be required to grant a second round of increase for the school years under consideration
and charge the same to the incremental proceeds."  20

On the fifth issue as to the Union's demand for a reduction of the workload of the union president, special leave
benefits and indefinite union leave with pay, the voluntary arbitrator rejected the same, ruling that unionism ". . . is
no valid reason for the reduction of the workload of its President,"  and that there is ". . . no sufficient justification to
21 

grant an indefinite leave."  Finding that the Union and the Faculty Association are not similarly situated, technically
22 

and professionally,  and that "[w]hile professional growth is highly encouraged on the part of the rank-and-file
23 

employees, this educational advancement would not serve in the same degree as demanded of the faculty
members,"  the voluntary arbitrator denied the Union's demand for special leave benefits.
24 

On the last issue regarding the duration of the collective bargaining agreement, the voluntary arbitrator ruled that ". .
. when the parties forged their CBA and signed it on 19 November 1990, where a provision on duration was
explicitly included, the same became a binding agreement between them. Notwithstanding the Submission
Agreement, thereby reopening this issue for resolution, this Voluntary Arbitrator is constrained to respect the original
intention of the parties, the same being not contrary to law, morals or public policy."  As to the economic aspect of
25 

the collective bargaining agreement, the voluntary arbitrator opined that the ". . . economic provisions of the CBA
shall be re-opened after the third year in compliance with the mandate of the Labor Code, as amended."  26

Subsequently, both parties filed their respective motions for reconsideration which, however, were not entertained
by the voluntary arbitrator "pursuant to existing rules and jurisprudence governing voluntary arbitration cases."  27

On March 5, 1993, the University filed with the Second Division of this Court, a petition for certiorari with temporary
restraining order and/or preliminary injunction assailing the decision of the voluntary arbitrator, as having been
rendered "in excess of jurisdiction and/or with grave abuse of discretion."  Subsequently, on May 24, 1993, the
28 

Union also filed a petition for certiorari with the First Division.  Without giving due course to the petition pending
29 

before each division, the First and Second Divisions separately resolved to require the respondents in each petition,
including the Solicitor General on behalf of the voluntary arbitrator, to file their respective Comments.  Upon motion
30 

by the Solicitor General dated July 29, 1993, both petitions were consolidated and transferred to the Second
Division.  31

In his consolidated Comment  filed on September 9, 1993 on behalf of voluntary arbitrator Buenaventura C.
32 

Magsalin, the Solicitor General agreed with the voluntary arbitrator's assailed decision on all points except that
involving the employees of the College of St. Benilde. According to the Solicitor General, the employees of the
College of St. Benilde should have been included in the bargaining unit of the rank-and-file employees of the
Labor II – 1
University.  The Solicitor General came to this conclusion after finding ". . . sufficient evidence to justify the Union's
33 

proposal to consider the University and the CSB [College of St. Benilde] as only one entity because the latter is but
a mere integral part of the University," to wit: 
34

1. One of the duties and responsibilities of the CSB's Director of Academic Services is to coordinate with the
University's Director of Admissions regarding the admission of freshmen, shiftees and transferees (Annex
"3" of the University's Reply);

2. Some of the duties and responsibilities of the CSB's Administrative Officer are as follows:

A. xxx xxx xxx

4. Recommends and implements personnel policies and guidelines (in accordance with the Staff Manual) as
well as pertinent existing general policies of the university as a whole. . . . .

12. Conducts and establishes liaison with all the offices concerned at the Main Campus as well (sic) with
other government agencies on all administrative-related matters. . . .

B. xxx xxx xxx

7. Handles processing, canvassing and direct purchasing of all requisitions worth more than P10,000 or
less. Coordinates and canvasses with the Main Campus all requisitions worth more than P10,000. . . .

C. xxx xxx xxx

7. Plans and coordinates with the Security and Safety Committee at the Main Campus the development of a
security and safety program during times of emergency or occurrence of fire or other natural calamities. . . .
(Annex "4" of the University's Reply).

3. The significant role which the University assumes in the admission of students at the CSB is revealed in
the following provisions of the CSB's Bulletin for Arts and Business Studies Department for the schoolyear
1992-1993, thus:

Considered in the process of admission for a (sic) high school graduate applicants are the following criteria:
results of DLSU College Entrance Examination . . . .

Admission requirements for transferees are: . . . and an acceptable score in the DLSU admission test. . . .

Shiftees from DLSU who are still eligible to enroll may be admitted in accordance with the DLSU policy on
shifting. Considering that there sometimes exist exceptional cases where a very difficult but temporary
situation renders a DLSU student falling under this category a last chance to be re-admitted provided he
meets the cut-off scores required in the qualifying examination administered by the university. . . .

He may not be remiss in his study obligations nor incur any violation whatsoever, as such will be taken by
the University to be an indication of his loss of initiative to pursue further studies at DLSU. In sch (sic) a
case, he renders himself ineligible to continue studying at DLSU. DLSU thus reserves the right to the
discontinuance of the studies of any enrolee whose presence is inimical to the objectives of the
CSB/DLSU. . . .

As a college within the university, the College of St. Benilde subscribes to the De La Salle Mission."
(Annexes "C-1," "C-2," and "C-3" of the Union's Consolidated Reply and Rejoinder)

4. The academic programs offered at the CSB are likewise presented in the University's Undergraduate
Prospectus for schoolyear 1992-1993 (Annex "D" of the Union's Consolidated Reply and Rejoinder).

Labor II – 1
 5. The Leave Form Request (Annex "F" of the Union's Position Paper) at the CSB requires prior permission
from the University anent leaves of CSB employees, to wit:

AN EMPLOYEE WHO GOES ON LEAVE WITHOUT PRIOR PERMISSION FROM THE UNIVERSITY OR
WHO OVEREXTENDS THE PERIOD OF HIS APPROVED LEAVE WITHOUT SECURING AUTHORITY
FROM THE UNIVERSITY, OR WHO REFUSE TO BE RECALLED FROM AN APPROVED LEAVE SHALL
BE CONSIDERED ABSENT WITHOUT LEAVE AND SHALL BE SUBJECT TO DISCIPLINARY ACTION.

6. The University officials themselves claimed during the 1990 University Athletic Association of the
Philippines (UAAP) meet that the CSB athletes represented the University since the latter and the CSB
comprise only one entity.

On February 9, 1994, this Court resolved to give due course to these consolidated petitions and to require the
parties to submit their respective memoranda.  35

In its memorandum filed on April 28, 1994,  pursuant to the above-stated Resolution,  the University raised the
36  37 

following issues for the consideration of the Court:  38

I.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY

ARBITRATOR WHEN HE INCLUDED, WITHIN THE BARGAINING UNIT COMPRISING THE
UNIVERSITY'S RANK-AND-FILE EMPLOYEES, THE COMPUTER OPERATORS ASSIGNED AT THE
UNIVERSITY'S COMPUTER SERVICES CENTER AND THE UNIVERSITY'S DISCIPLINE OFFICERS,
AND WHEN HE EXCLUDED THE COLLEGE OF SAINT BENILDE EMPLOYEES FROM THE SAID
BARGAINING UNIT.

II.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY

ARBITRATOR WHEN HE UPHELD THE UNION'S DEMAND FOR THE INCLUSION OF A UNION SHOP
CLAUSE IN THE PARTIES' COLLECTIVE BARGAINING AGREEMENT.

III.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY

ARBITRATOR WHEN HE DENIED THE UNION'S PROPOSAL FOR THE "LAST-IN-FIRST-OUT" METHOD
OF LAY-OFF IN CASES OF RETRENCHMENT.

IV.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY

ARBITRATOR WHEN HE RULED THAT THE UNIVERSITY CAN NO LONGER BE REQUIRED TO GRANT
A SECOND ROUND OF WAGE INCREASES FOR THE SCHOOL YEARS 1991-92 AND 1992-93 AND
CHARGE THE SAME TO THE INCREMENTAL PROCEEDS.

V.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY

ARBITRATOR WHEN HE DENIED THE UNION'S PROPOSALS ON THE DELOADING OF THE UNION
PRESIDENT, IMPROVED LEAVE BENEFITS AND INDEFINITE UNION LEAVE WITH PAY.

The Union, on the other hand, raised the following issues, in its memorandum,  filed pursuant to Supreme Court
39 

Resolution dated February 9, 1994,  to wit; that the voluntary arbitrator committed grave abuse of discretion in:
40 

Labor II – 1
 (1) FAILING AND/OR REFUSING TO PIERCE THE VEIL OF CORPORATE FICTION OF THE COLLEGE
OF ST. BENILDE-DLSU DESPITE THE PRESENCE OF SUFFICIENT BASIS TO DO SO AND IN FINDING
THAT THE EMPLOYEES THEREAT ARE OUTSIDE OF THE BARGAINING UNIT OF THE DLSU'S
RANK-AND-FILE EMPLOYEES. HE ALSO ERRED IN HIS INTERPRETATION OF THE APPLICATION
OF THE DOCTRINE;

(2) DENYING THE PETITIONER'S PROPOSAL FOR THE "LAST-IN FIRST-OUT" METHOD OF LAY-OFF
IN CASE OF RETRENCHMENT AND IN UPHOLDING THE ALLEGED MANAGEMENT PREROGATIVE
TO SELECT AND CHOOSE ITS EMPLOYEES DISREGARDING THE BASIC TENETS OF SOCIAL
JUSTICE AND EQUITY UPON WHICH THIS PROPOSAL WAS FOUNDED;

(3) FINDING THAT THE MULTISECTORAL COMMITTEE IN THE RESPONDENT UNIVERSITY IS THE
LEGITIMATE GROUP WHICH DETERMINES AND SCRUTINIZES ANNUAL SALARY INCREASES AND
FRINGE BENEFITS OF THE EMPLOYEES;

(4) HOLDING THAT THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS IS THE ONLY
SOURCE OF SALARY INCREASES AND FRINGE BENEFITS OF THE EMPLOYEES;

(5) FAILING/REFUSING/DISREGARDING TO CONSIDER THE RESPONDENT UNIVERSITY'S

FINANCIAL STATEMENTS FACTUALLY TO DETERMINE THE FORMER'S CAPABILITY TO GRANT THE
PROPOSED SALARY INCREASES OVER AND ABOVE THE 70% SHARE IN THE INCREMENTAL
TUITION PROCEEDS AND IN GIVING WEIGHT AND CONSIDERATION TO THE RESPONDENT
UNIVERSITY'S PROPOSED BUDGET WHICH IS MERELY AN ESTIMATE.

(6) FAILING TO EQUATE THE POSITION AND RESPONSIBILITIES OF THE UNION PRESIDENT WITH
THOSE OF THE PRESIDENT OF THE FACULTY ASSOCIATION WHICH IS NOT EVEN A LEGITIMATE
LABOR ORGANIZATION AND IN SPECULATING THAT THE PRESIDENT OF THE FACULTY
ASSOCIATION SUFFERS A CORRESPONDING REDUCTION IN SALARY ON THE ACCOUNT OF THE
REDUCTION OF HIS WORKLOAD; IN FAILING TO APPRECIATE THE EQUAL RIGHTS OF THE
MEMBERS OF THE UNION AND OF THE FACULTY FOR PROFESSIONAL ADVANCEMENT AS WELL
AS THE DESIRABLE EFFECTS OF THE INSTITUTIONALIZATION OF THE SPECIAL LEAVE AND
WORKLOAD REDUCTION BENEFITS.  41

The question which now confronts us is whether or not the voluntary arbitrator committed grave abuse of
discretion in rendering the assailed decision, particularly, in resolving the following issues: (1) whether the
computer operators assigned at the University's Computer Services Center and the University's discipline
officers may be considered as confidential employees and should therefore be excluded from the
bargaining unit which is composed of rank and file employees of the University, and whether the employees
of the College of St. Benilde should also be included in the same bargaining unit; (2) whether a union shop
clause should be included in the parties' collective bargaining agreement, in addition to the existing maintenance of
membership clause; (3) whether the denial of the Union's proposed "last-in-first-out" method of laying-off
employees, is proper; (4) whether the ruling that on the basis of the University's proposed budget, the University can
no longer be required to grant a second round of wage increases for the school years 1991-92 and 1992-93 and
charge the same to the incremental proceeds, is correct; (5) whether the denial of the Union's proposals on the
deloading of the union president, improved leave benefits and indefinite union leave with pay, is proper; (6) whether
the finding that the multi-sectoral committee in the University is the legitimate group which determines and
scrutinizes the annual salary increases and fringe benefits of the employees of the University, is correct; and (7)
whether the ruling that the 70% share in the incremental tuition proceeds is the only source of salary increases and
fringe benefits of the employees, is proper.

Now, before proceeding to the discussion and resolution of the issues raised in the pending petitions, certain
preliminary matters call for disposition. As we reiterated in the case of Caltex Refinery Employees
Association (CREA) vs. Jose S. Brillantes,  the following are the well-settled rules in a petition
42 

for certiorari involving labor cases. "First, the factual findings of quasi-judicial agencies (such as the Department of
Labor and Employment), when supported by substantial evidence, are binding on this Court and entitled to great
respect, considering the expertise of these agencies in their respective fields. It is well-established that findings of
these administrative agencies are generally accorded not only respect but even finality.  43

Labor II – 1
Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will
accept as adequate to justify a conclusion.  44

Third, in Flores vs. National Labor Relations Commission,  we explained the role and function of Rule 65 as an
45 

extraordinary remedy:

It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule
65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly
exceptional cases — those wherein the action of an inferior court, board or officer performing judicial or
quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ
of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion
amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRC's
evaluation of the evidence and factual findings based thereon, which are generally accorded not only great
respect but even finality.

No question of jurisdiction whatsoever is being raised and/or pleaded in the case at bench. Instead, what is
being sought is a judicial re-evaluation of the adequacy or inadequacy of the evidence on record, which is
certainly beyond the province of the extraordinary writ of certiorari. Such demand is impermissible for it
would involve this Court in determining what evidence is entitled to belief and the weight to be assigned it.
As we have reiterated countless times, judicial review by this Court in labor cases does not go so far as to
evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its
determination but is limited only to issues of jurisdiction or grave abuse of discretion amounting to lack of
jurisdiction. (emphasis supplied).

With the foregoing rules in mind, we shall now proceed to discuss the merit of these consolidated petitions.

We affirm in part and modify in part.

On the first issue involving the classification of the computer operators assigned at the University's Computer
Services Center and discipline officers, the University argues that they are confidential employees and that the
Union has already recognized the confidential nature of their functions when the latter agreed in the parties'
1986 collective bargaining agreement to exclude the said employees from the bargaining unit of rank-and-file
employees. As far as the said computer operators are concerned, the University contends that ". . . the parties have
already previously agreed to exclude all positions in the University's Computer Services Center (CSC), which
include the positions of computer operators, from the collective bargaining unit. . . . . . . . "  The University further
46 

contends that ". . . the nature of the work done by these Computer Operators is enough justification for their
exclusion from the coverage of the bargaining unit of the University's rank-and-file
employees. . . . . . . ."  According to the University, the Computer Services Center, where these computer operators
47 

work, ". . . processes data that are needed by management for strategic planning and evaluation of systems. It also
houses the University's confidential records and information [e.g. student records, faculty records, faculty
and staff payroll data, and budget allocation and expenditure related data] which are contained in computer
files and computer-generated reports. . . . . . . . Moreover, the Computer Operators are in fact the repository of the
University's confidential information and data, including those involving and/or pertinent to labor relations. . . . . . . ."  48

As to the discipline officers, the University maintains that " . . . they are likewise excluded from the bargaining
unit of the rank-and-file employees under the parties' 1986 CBA. The Discipline Officers are clearly alter
egos of management as they perform tasks which are inherent in management [e.g. enforce discipline, act as
peace officers, secure peace and safety of the students inside the campus, conduct investigations on violations of
University regulations, or of existing criminal laws, committed within the University or by University
employees] . . . . . . . "  The University also alleges that "the Discipline Officers are privy to highly confidential
49 

information ordinarily accessible only to management."  50

With regard to the employees of the College of St. Benilde, the Union, supported by the Solicitor General at
this point, asserts that the veil of corporate fiction should be pierced, thus, according to the Union, the
University and the College of St. Benilde should be considered as only one entity because the latter is but a
mere integral part of the University.  51

Labor II – 1
The University's arguments on the first issue fail to impress us. The Court agrees with the Solicitor General that the
express exclusion of the computer operators and discipline officers from the bargaining unit of rank-and-
file employees in the 1986 collective bargaining agreement does not bar any re-negotiation for the future
inclusion of the said employees in the bargaining unit. During the freedom period, the parties may not only
renew the existing collective bargaining agreement but may also propose and discuss modifications or amendments
thereto. With regard to the alleged confidential nature of the said employees' functions, after a careful consideration
of the pleadings filed before this Court, we rule that the said computer operators and discipline officers are not
confidential employees. As carefully examined by the Solicitor General, the service record of a computer
operator reveals that his duties are basically clerical and non-confidential in nature.  As to the discipline
52 

officers, we agree with the voluntary arbitrator that based on the nature of their duties, they are not confidential
employees and should therefore be included in the bargaining unit of rank-and-file employees.

The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St. Benilde
should be excluded from the bargaining unit of the rank-and-file employees of Dela Salle University,
because the two educational institutions have their own separate juridical personality and no sufficient
evidence was shown to justify the piercing of the veil of corporate fiction.  53

On the second issue involving the inclusion of a union shop clause in addition to the existing maintenance of
membership clause in the collective bargaining agreement, the University avers that ". . . it is in the spirit of the
exercise of the constitutional right to self-organization that every individual should be able to freely choose whether
to become a member of the Union or not. The right to join a labor organization should carry with it the corollary right
not to join the same. This position of the University is but in due recognition of the individual's free will and capability
for judgment."  The University assails the Union's demand for a union shop clause as ". . . definitely unjust and
54 

amounts to oppression. Moreover, such a demand is repugnant to democratic principles and the constitutionally
guaranteed freedom of individuals to join or not to join an association as well as their right to security of tenure,
particularly, on the part of present employees."  55

The Union, on the other hand, counters that the Labor Code, as amended, recognizes the validity of a union shop
agreement in Article 248 thereof which reads:

Art. 248. Unfair labor practices of employers. —

x x x           x x x          x x x

(e) To discriminate in regard to hire or tenure of employment or any term or condition of employment
in order to encourage or discourage membership in any labor organization. Nothing in this Code or
in any other law shall prevent the parties from requiring membership in a recognized collective
bargaining agent as a condition for employment, except of those employees who are already
members of another union at the time of the signing of the collective bargaining agreement. . . . . . . ."
(emphasis supplied)

We affirm the ruling of the voluntary arbitrator for the inclusion of a union shop provision in addition to the
existing maintenance of membership clause in the collective bargaining agreement. As the Solicitor General
asserted in his consolidated Comment, the University's reliance on the case of Victoriano vs. Elizalde Rope
Workers' Union  is clearly misplaced. In that case, we ruled that ". . . the right to join a union includes the
56 

right to abstain from joining any union. . . . . . . . The right to refrain from joining labor organizations
recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to such
right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have
agreed on a closed shop, by virtue of which the employer may employ only members of the collective
bargaining union, and the employees must continue to be members of the union for the duration of the
contract in order to keep their jobs. . . . . . . ." 57

On the third issue regarding the Union's proposal for the use of the "last-in-first-out" method in case of lay-
off, termination due to retrenchment and transfer of employees, the Union relies on social justice and equity
to support its proposition, and submits that the University's prerogative to select and/or choose the
employees it will hire is limited, either by law or agreement, especially where the exercise of this prerogative
might result in the loss of employment.  The Union further insists that its proposal is ". . . in keeping with the
58 

Labor II – 1
 avowed State policy '(q) To ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare' (Art. 211, Labor Code, as amended)."  59

On the other hand, the University asserts its management prerogative and counters that "[w]hile it is
recognized that this right of employees and workers to 'participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law' has been enshrined in the Constitution (Article
III, [should be Article XIII], Section 3, par. 2), said participation, however, does not automatically entitle the
Union to dictate as to how an employer should choose the employees to be affected by a retrenchment
program. The employer still retains the prerogative to determine the reasonable basis for selecting such
employees."  60

We agree with the voluntary arbitrator that as an exercise of management prerogative, the University has
the right to adopt valid and equitable grounds as basis for terminating or transferring employees. As we
ruled in the case of Autobus Workers' Union (AWU) and Ricardo Escanlar vs. National Labor Relations
Commission,  "[a] valid exercise of management prerogative is one which, among others, covers: work
61 

assignment, working methods, time, supervision of workers, transfer of employees, work supervision, and
the discipline, dismissal and recall of workers. Except as provided for, or limited by special laws, an
employer is free to regulate, according to his own discretion and judgment, all aspects of employment."
(emphasis supplied)

On the fourth issue involving the voluntary arbitrator's ruling that on the basis of the University's proposed
budget, the University can no longer be required to grant a second round of wage increases for the school
years 1991-92 and 1992-93 and charge the same to the incremental proceeds, we find that the voluntary
arbitrator committed grave abuse of discretion amounting to lack or excess of jurisdiction. As we ruled in the
case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes,  ". . . . . . . [w]e believe that
62 

the standard proof of a company's financial standing is its financial statements duly audited by independent
and credible external auditors."  Financial statements audited by independent external auditors constitute
63 

the normal method of proof of profit and loss performance of a company.  The financial capability of a
64 

company cannot be based on its proposed budget because a proposed budget does not reflect the true
financial condition of a company, unlike audited financial statements, and more importantly, the use of a
proposed budget as proof of a company's financial condition would be susceptible to abuse by scheming
employers who might be merely feigning dire financial condition in their business ventures in order to avoid
granting salary increases and fringe benefits to their employees.

On the fifth issue involving the Union's proposals on the deloading of the union president, improved leave
benefits and indefinite union leave with pay, we agree with the voluntary arbitrator's rejection of the said
demands, there being no justifiable reason for the granting of the same.

On the sixth issue regarding the finding that the multi-sectoral committee in the University is the legitimate
group which determines and scrutinizes the annual salary increases and fringe benefits of the employees of
the University, the Court finds that the voluntary arbitrator did not gravely abuse his discretion on this matter.
From our reading of the assailed decision, it appears that during the parties' negotiations for a new collective
bargaining agreement, the Union demanded for a 25% and 40% salary increase for the second and third
years, respectively, of the collective bargaining agreement.  The University's counter-proposal was for a
65 

10% increase for the third year.  After the meeting of the multi-sectoral committee on budget, which is
66 

composed of students, parents, faculty, administration and union, the University granted across-the-board
salary increases of 11.3% and 19% for the second and third years, respectively.  While the voluntary
67 

arbitrator found that the said committee ". . . decided to grant the said increases based on the University's
viability which were exclusively sourced from the tuition fees. . . . . . . .," no finding was made as to the basis
of the committee's decision. Be that as it may, assuming for the sake of argument that the said committee is
the group responsible for determining wage increases and fringe benefits, as ruled by the voluntary
arbitrator, the committee's determination must still be based on duly audited financial statements following
our ruling on the fourth issue.1âwphi1

On the seventh and last issue involving the ruling that the 70% share in the incremental tuition proceeds is
the only source of salary increases and fringe benefits of the employees, the Court deems that any
determination of this alleged error is unnecessary and irrelevant, in view of our rulings on the fourth and
Labor II – 1
 preceding issues and there being no evidence presented before the voluntary arbitrator that the University
held incremental tuition fee proceeds from which any wage increase or fringe benefit may be satisfied.

WHEREFORE, premises considered, the petitions in these consolidated cases, G.R. No. 109002 and G.R.
No. 110072 are partially GRANTED. The assailed decision dated January 19, 1993 of voluntary arbitrator
Buenaventura Magsalin is hereby AFFIRMED with the modification that the issue on salary increases for the
second and third years of the collective bargaining agreement be REMANDED to the voluntary arbitrator for
definite resolution within one month from the finality of this Decision, on the basis of the externally audited
financial statements of the University already submitted by the Union before the voluntary arbitrator and
forming part of the records.
1âwphi1.nêt

Labor II – 1
2.) G.R. No. 100485 September 21, 1994

SAN MIGUEL CORPORATION, petitioner,

vs.
THE HONORABLE BIENVENIDO E. LAGUESMA and NORTH LUZON MAGNOLIA SALES LABOR UNION-
INDEPENDENT, respondents.

Siguion Reyna, Montecillo & Ongsiako for petitioner.

E.N.A. Cruz & Associates for private respondent.

PUNO, J.:

Petitioner San Miguel Corporation (SMC) prays that the Resolution dated March 19, 1991 and the Order dated April
12, 1991 of public respondent Undersecretary Bienvenido E. Laguesma declaring respondent union as the sole
and exclusive bargaining agent of all the Magnolia sales personnel in northern Luzon be set aside for having
been issued in excess of jurisdiction and/or with grave abuse of discretion.

On June 4, 1990, the North Luzon Magnolia Sales Labor Union (respondent union for brevity) filed with the
Department of Labor a petition for certification election among all the regular sales personnel of Magnolia
Dairy Products in the North Luzon Sales Area.  1

Petitioner opposed the petition and questioned the appropriateness of the bargaining unit sought to be
represented by respondent union. It claimed that its bargaining history in its sales offices, plants and
warehouses is to have a separate bargaining unit for each sales office.

The petition was heard on November 9, 1990 with petitioner

being represented by Atty. Alvin C. Batalla of the Siguion Reyna law office. Atty. Batalla withdrew petitioner's
opposition to a certification election and agreed to consider all the sales offices in northern Luzon as one bargaining
unit. At the pre-election conference, the parties agreed inter alia, on the date, time and place of the consent election.
Respondent union won the election held on November 24, 1990. In an Order dated December 3, 1990,   Mediator-2

Arbiter Benalfre J. Galang certified respondent union as the sole and exclusive bargaining agent for all the regular
sales personnel in all the sales offices of Magnolia Dairy Products in the North Luzon Sales Area.

Petitioner appealed to the Secretary of Labor. It claimed that

Atty. Batalla was only authorized to agree to the holding of certification elections subject to the following conditions:
(1) there would only be one general election; (2) in this general election, the individual sales offices shall still
comprise separate bargaining units.  3

In a Resolution dated March 19, 1991,   public respondent, by authority of the Secretary of Labor, denied SMC's
4

appeal and affirmed the Order of the Med- Arbiter.

Hence this petition for certiorari.

Petitioner claims that:

THE HONORABLE UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF

DISCRETION WHEN HE IGNORED AND TOTALLY DISREGARDED PETITIONER'S VALID AND
JUSTIFIABLE GROUNDS WHY THE ERROR MADE IN GOOD FAITH BY PETITIONER'S
COUNSEL BE CORRECTED, AND INSTEAD RULED:

Labor II – 1
 THAT PRIVATE RESPONDENT IS "THE SOLE AND EXCLUSIVE BARGAINING
AGENT FOR ALL THE REGULAR SALES OFFICES OF MAGNOLIA DAIRY
PRODUCTS, NORTH LUZON SALES AREA", COMPLETELY IGNORING THE
ESTABLISHED BARGAINING HISTORY OF PETITIONER SMC.

THAT PETITIONER IS ESTOPPED FROM QUESTIONING THE "AGREEMENT"

ENTERED INTO AT THE HEARING ON
9 NOVEMBER 1990, IN CONTRAVENTION OF THE ESTABLISHED FACTS OF
THE CASE AND THE APPLICABLE LAW ON THE MATTER.

We find no merit in the petition.

The issues for resolution are: (1) whether or not respondent union represents an appropriate bargaining unit, and (2)
whether or not petitioner is bound by its lawyer's act of agreeing to consider the sales personnel in the north Luzon
sales area as one bargaining unit.

Petitioner claims that in issuing the impugned Orders, public respondent disregarded its collective
bargaining history which is to have a separate bargaining unit for each sales office. It insists that its prior
collective bargaining history is the most persuasive criterion in determining the appropriateness of the
collective bargaining unit.

There is no merit in the contention.

A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the
entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve the
reciprocal rights and duties of the parties under the collective bargaining provisions of the law."  5

The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the
employees (Globe Doctrine);   (2) affinity and unity of the employees' interest, such as substantial similarity
6

of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests
Rule); (3) prior collective bargaining history; and (4) similarity of employment status.  7

Contrary to petitioner's assertion, this Court has categorically ruled that the existence of a prior collective
bargaining history is neither decisive nor conclusive in the determination of what constitutes an appropriate
bargaining unit. 8

Indeed, the test of grouping is mutuality or commonality of interests. The employees sought to be
represented by the collective bargaining agent must have substantial mutual interests in terms of
employment and working conditions as evinced by the type of work they perform.

In the case at bench, respondent union sought to represent the sales personnel in the various Magnolia sales
offices in northern Luzon. There is similarity of employment status for only the regular sales personnel in the
north Luzon area are covered. They have the same duties and responsibilities and substantially similar
compensation and working conditions. The commonality of interest among he sales personnel in the north Luzon
sales area cannot be gainsaid. In fact, in the certification election held on November 24, 1990, the employees
concerned accepted respondent union as their exclusive bargaining agent. Clearly, they have expressed their desire
to be one.

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

Labor II – 1
further be fractionalized. The adage "there is strength in number" is the very rationale underlying the
formation of a labor union.

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

We are not persuaded. As discussed earlier, the collective bargaining history of a company is not decisive of what
should comprise the collective bargaining unit. Insofar as the alleged "mistake" of the substitute lawyer is
concerned, we find that this mistake was the direct result of the negligence of petitioner's lawyers. It will be noted
that Atty. Ona was under the supervision of two (2) other lawyers, Attys. Jacinto de la Rosa, Jr. and George C.
Nograles. There is nothing in the records to show that these two (2) counsels were likewise unavailable at that time.
Instead of deferring the hearing, petitioner's counsels chose to proceed therewith. Indeed, prudence dictates that, in
such case, the lawyers allegedly actively involved in SMC's labor case should have adequately and sufficiently
briefed the substitute lawyer with respect to the matters involved in the case and the specific limits of his authority.
Unfortunately, this was not done in this case. The negligence of its lawyers binds petitioner. As held by this Court in
the case of Villa Rhecar Bus v. De la Cruz:  10

. . . As a general rule, a client is bound by the mistakes of his counsel. Only when the application of
the general rule would result in serious injustice should an exception thereto be called for.

In the case at bench, petitioner insists that each of the sales offices in northern Luzon should be considered as a
separate bargaining unit for negotiations would be more expeditious. Petitioner obviously chooses to follow the path
of least resistance. It is not, however, the convenience of the employer that constitutes the determinative factor in
forming an appropriate bargaining unit. Equally, if not more important, is the interest of the employees. In choosing
and crafting an appropriate bargaining unit, extreme care should be taken to prevent an employer from having any
undue advantage over the employees' bargaining representative. Our workers are weak enough and it is not our
social policy to further debilitate their bargaining representative.

In sum, we find that no arbitrariness or grave abuse of discretion can be attributed to public respondents certification
of respondent union as the sole and exclusive bargaining agent of all the regular Magnolia sales personnel of the
north Luzon sales area.

WHEREFORE, premises considered, the challenged Resolution and Order of public respondent are hereby
AFFIRMED in toto, there being no showing of grave abuse of discretion or lack of jurisdiction.

Labor II – 1
3.) G.R. No. 146206               August 1, 2011

SAN MIGUEL FOODS, INCORPORATED, Petitioner,

vs.
SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT UNION, Respondent.

DECISION

PERALTA, J.:

The issues in the present case, relating to the inclusion of employees in supervisor levels 3 and 4 and the exempt
employees in the proposed bargaining unit, thereby allowing their participation in the certification election; the
application of the "community or mutuality of interests" test; and the determination of the employees who belong to
the category of confidential employees, are not novel.

In G.R. No. 110399, entitled San Miguel Corporation Supervisors and Exempt Union v. Laguesma,1 the Court
held that even if they handle confidential data regarding technical and internal business operations, supervisory
employees 3 and 4 and the exempt employees of petitioner San Miguel Foods, Inc. (SMFI) are not to be considered
confidential employees, because the same do not pertain to labor relations, particularly, negotiation and settlement
of grievances. Consequently, they were allowed to form an appropriate bargaining unit for the purpose of collective
bargaining. The Court also declared that the employees belonging to the three different plants of San Miguel
Corporation Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis, having "community or
mutuality of interests," constitute a single bargaining unit. They perform work of the same nature, receive the
same wages and compensation, and most importantly, share a common stake in concerted activities. It was
immaterial that the three plants have different locations as they did not impede the operations of a single bargaining
representative.2

Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and Employment – National
Capital Region (DOLE-NCR) conducted pre-election conferences. 3 However, there was a discrepancy in the
list of eligible voters, i.e., petitioner submitted a list of 23 employees for the San Fernando plant and 33 for the
Cabuyao plant, while respondent listed 60 and 82, respectively.4

On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an Order5 directing Election Officer Cynthia
Tolentino to proceed with the conduct of certification election in accordance with Section 2, Rule XII of Department
Order No. 9.

On September 30, 1998, a certification election was conducted and it yielded the following results,6 thus:

Cabuyao San Fernando Total

Plant Plant

Yes 23 23 46

No 0 0 0

Spoiled 2 0 2

Segregated 41 35 76

Total Votes Cast 66 58 124

On the date of the election, September 30, 1998, petitioner filed the Omnibus Objections and Challenge to
Voters,7 questioning the eligibility to vote by some of its employees on the grounds that some employees
do not belong to the bargaining unit which respondent seeks to represent or that there is no existence of
employer-employee relationship with petitioner. Specifically, it argued that certain employees should not be

Labor II – 1
allowed to vote as they are: (1) confidential employees; (2) employees assigned to the live chicken
operations, which are not covered by the bargaining unit; (3) employees whose job grade is level 4, but are
performing managerial work and scheduled to be promoted; (4) employees who belong to the Barrio Ugong
plant; (5) non-SMFI employees; and (6) employees who are members of other unions.

On October 21, 1998, the Med-Arbiter issued an Order directing respondent to submit proof showing that the
employees in the submitted list are covered by the original petition for certification election and belong to the
bargaining unit it seeks to represent and, likewise, directing petitioner to substantiate the allegations contained in its
Omnibus Objections and Challenge to Voters.8

In compliance thereto, respondent averred that (1) the bargaining unit contemplated in the original petition is the
Poultry Division of San Miguel Corporation, now known as San Miguel Foods, Inc.; (2) it covered the operations in
Calamba, Laguna, Cavite, and Batangas and its home base is either in Cabuyao, Laguna or San Fernando,
Pampanga; and (3) it submitted individual and separate declarations of the employees whose votes were
challenged in the election.9

Adding the results to the number of votes canvassed during the September 30, 1998 certification election, the final
tally showed that: number of eligible voters – 149; number of valid votes cast – 121; number of spoiled ballots - 3;
total number of votes cast – 124, with 118 (i.e., 46 + 72 = 118 ) "Yes" votes and 3 "No" votes.10

The Med-Arbiter issued the Resolution11 dated February 17, 1999 directing the parties to appear before the Election
Officer of the Labor Relations Division on March 9, 1999, 10:00 a.m., for the opening of the segregated ballots.
Thereafter, on April 12, 1999, the segregated ballots were opened, showing that out of the 76 segregated votes, 72
were cast for "Yes" and 3 for "No," with one "spoiled" ballot.12

Based on the results, the Med-Arbiter issued the Order13 dated April 13, 1999, stating that since the "Yes" vote
received 97% of the valid votes cast, respondent is certified to be the exclusive bargaining agent of the
supervisors and exempt employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San
Fernando, and Otis.

On appeal, the then Acting DOLE Undersecretary, in the Resolution14 dated July 30, 1999, in OS-A-2-70-91 (NCR-
OD-M-9010-017), affirmed the Order dated April 13, 1999, with modification that George C. Matias, Alma Maria M.
Lozano, Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from the bargaining unit which respondent
seeks to represent. She opined that the challenged voters should be excluded from the bargaining unit, because
Matias and Lozano are members of Magnolia Poultry Processing Plants Monthly Employees Union, while Delos
Reyes and Pajaron are employees of San Miguel Corporation, which is a separate and distinct entity from petitioner.

Petitioner’s Partial Motion for Reconsideration15 dated August 14, 1999 was denied by the then Acting DOLE
Undersecretary in the Order16 dated August 27, 1999.

In the Decision17 dated April 28, 2000, in CA-G.R. SP No. 55510, entitled San Miguel Foods, Inc. v. The Honorable
Office of the Secretary of Labor, Bureau of Labor Relations, and San Miguel Corporation Supervisors and Exempt
Union, the Court of Appeals (CA) affirmed with modification the Resolution dated July 30, 1999 of the DOLE
Undersecretary, stating that those holding the positions of Human Resource Assistant and Personnel Assistant are
excluded from the bargaining unit.

Petitioner’s Motion for Partial Reconsideration18 dated May 23, 2000 was denied by the CA in the Resolution19 dated
November 28, 2000.

Hence, petitioner filed this present petition raising the following issues:

I.

WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE WHEN IT EXPANDED THE
SCOPE OF THE BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R. NO. 110399.

Labor II – 1
 II.

WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE - SPECIFICALLY, THIS

COURT'S DEFINITION OF A "CONFIDENTIAL EMPLOYEE" - WHEN IT RULED FOR THE INCLUSION OF
THE "PAYROLL MASTER" POSITION IN THE BARGAINING UNIT.

III.

WHETHER THIS PETITION IS A "REHASH" OR A "RESURRECTION" OF THE ISSUES RAISED IN G.R.

NO. 110399, AS ARGUED BY PRIVATE RESPONDENT.

Petitioner contends that with the Court's ruling in G.R. No. 11039920 identifying the specific employees who can
participate in the certification election, i.e., the supervisors (levels 1 to 4) and exempt employees of San Miguel
Poultry Products Plants in Cabuyao, San Fernando, and Otis, the CA erred in expanding the scope of the
bargaining unit so as to include employees who do not belong to or who are not based in its Cabuyao or
San Fernando plants. It also alleges that the employees of the Cabuyao, San Fernando, and Otis plants of
petitioner’s predecessor, San Miguel Corporation, as stated in G.R. No. 110399, were engaged in "dressed"
chicken processing, i.e., handling and packaging of chicken meat, while the new bargaining unit, as defined
by the CA in the present case, includes employees engaged in "live" chicken operations, i.e., those who
breed chicks and grow chickens.

Respondent counters that petitioner’s proposed exclusion of certain employees from the bargaining unit was a
rehashed issue which was already settled in G.R. No. 110399. It maintains that the issue of union membership
coverage should no longer be raised as a certification election already took place on September 30, 1998, wherein
respondent won with 97% votes.

Petitioner’s contentions are erroneous. In G.R. No. 110399, the Court explained that the employees of San
Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single
bargaining unit, which is not contrary to the one-company, one-union policy. An appropriate bargaining unit is
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.21

In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union – United
Lumber and General Workers of the Phils,22 the Court, taking into account the "community or mutuality of interests"
test, ordered the formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the
Logging Division in Zapanta Valley, Kitcharao, Agusan [Del] Norte of the Mainit Lumber Development Company. It
held that while the existence of a bargaining history is a factor that may be reckoned with in determining the
appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of
grouping is community or mutuality of interest. This is so because the basic test of an asserted bargaining
unit’s acceptability is whether or not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights.23 Certainly, there is a mutuality of interest among
the employees of the Sawmill Division and the Logging Division. Their functions mesh with one another. One group
needs the other in the same way that the company needs them both. There may be differences as to the nature of
their individual assignments, but the distinctions are not enough to warrant the formation of a separate bargaining
unit.24

Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there should be only
one bargaining unit for the employees in Cabuyao, San Fernando, and Otis25 of Magnolia Poultry Products
Plant involved in "dressed" chicken processing and Magnolia Poultry Farms engaged in "live" chicken
operations. Certain factors, such as specific line of work, working conditions, location of work, mode of
compensation, and other relevant conditions do not affect or impede their commonality of interest.
Although they seem separate and distinct from each other, the specific tasks of each division are actually
interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit.

Labor II – 1
Petitioner asserts that the CA erred in not excluding the position of Payroll Master in the definition of a confidential
employee and, thus, prays that the said position and all other positions with access to salary and compensation data
be excluded from the bargaining unit.

This argument must fail. Confidential employees are defined as those who (1) assist or act in a confidential capacity,
in regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor
relations.26 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 supervisor, and the
supervisor must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining units
of employees who, in the normal course of their duties, become aware of management policies relating to labor
relations is a principal objective sought to be accomplished by the "confidential employee rule."27

A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and
protection of the employer’s property.28 Confidential employees, such as accounting personnel, should be excluded
from the bargaining unit, as their access to confidential information may become the source of undue
advantage.29 However, such fact does not apply to the position of Payroll Master and the whole gamut of employees
who, as perceived by petitioner, has access to salary and compensation data. The CA correctly held that the
position of Payroll Master does not involve dealing with confidential labor relations information in the course of the
performance of his functions. Since the nature of his work does not pertain to company rules and regulations and
confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.

Corollarily, although Article 24530 of the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or
those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to
managerial employees and, hence, are likewise privy to sensitive and highly confidential records.31 Confidential
employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and
disqualification to join any labor organization is similar to the inhibition for managerial employees, because if allowed
to be affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of interests and
the union can also become company-denominated with the presence of managerial employees in the union
membership.32 Having access to confidential information, confidential employees may also become the source of
undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement.33 1avvphi1

In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant
belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering
their respective positions and job descriptions. As Human Resource Assistant,34 the scope of one’s work necessarily
involves labor relations, recruitment and selection of employees, access to employees' personal files and
compensation package, and human resource management. As regards a Personnel Assistant,35 one's work includes
the recording of minutes for management during collective bargaining negotiations, assistance to management
during grievance meetings and administrative investigations, and securing legal advice for labor issues from the
petitioner’s team of lawyers, and implementation of company programs. Therefore, in the discharge of their
functions, both gain access to vital labor relations information which outrightly disqualifies them from union
membership.

The proceedings for certification election are quasi-judicial in nature and, therefore, decisions rendered in such
proceedings can attain finality.36 Applying the doctrine of res judicata, the issue in the

present case pertaining to the coverage of the employees who would constitute the bargaining unit is now a
foregone conclusion.

It bears stressing that a certification election is the sole concern of the workers; hence, an employer lacks the
personality to dispute the same. The general rule is that an employer has no standing to question the process of
certification election, since this is the sole concern of the workers.37 Law and policy demand that employers take a
strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free
from any extraneous influence of management. A labor bargaining representative, to be effective, must owe its
loyalty to the employees alone and to no other.38 The only exception is where the employer itself has to file the
petition pursuant to Article 25839 of the Labor Code because of a request to bargain collectively.40

Labor II – 1
With the foregoing disquisition, the Court writes finis to the issues raised so as to forestall future suits of similar
nature.

WHEREFORE, the petition is DENIED. The Decision dated April 28, 2000 and Resolution dated November 28, 2000
of the Court of Appeals, in CA-G.R. SP No. 55510, which affirmed with modification the Resolutions dated July 30,
1999 and August 27, 1999 of the Secretary of Labor, are AFFIRMED.

Labor II – 1
4.) G.R. No. 96189 July 14, 1992

UNIVERSITY OF THE PHILIPPINES, petitioner,

vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, Department of Labor and
Employment, and THE ALL U.P. WORKERS' UNION, represented by its President, Rosario del
Rosario, respondent.

NARVASA, C.J.:

In this special civil action of certiorari the University of the Philippines seeks the nullification of the Order dated
October 30, 1990 of Director Pura Ferrer-Calleja of the Bureau of Labor Relations holding that "professors,
associate professors and assistant professors (of the University of the Philippines) are . . rank-and-file employees . .
;" consequently, they should, together with the so-called non-academic, non-teaching, and all other employees of
the University, be represented by only one labor organization.   The University is joined in this undertaking by the
1

Solicitor General who "has taken a position not contrary to that of petitioner and, in fact, has manifested . . that he is
not opposing the petition . . ." 
2

The case   was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990 by a registered labor
3

union, the "Organization of Non-Academic Personnel of UP" (ONAPUP).   Claiming to have a membership of
4

3,236 members — comprising more than 33% of the 9,617 persons constituting the non-academic personnel of
UP-Diliman, Los Baños, Manila, and Visayas, it sought the holding of a certification election among all said
non-academic employees of the University of the Philippines. At a conference thereafter held on March 22,
1990 in the Bureau, the University stated that it had no objection to the election.

On April 18, 1990, another registered labor union, the "All UP Workers' Union,"   filed a comment, as
5

intervenor in the certification election proceeding. Alleging that its membership covers both academic and
non-academic personnel, and that it aims to unite all UP rank-and-file employees in one union, it declared
its assent to the holding of the election provided the appropriate organizational unit was first clearly
defined. It observed in this connection that the Research, Extension and Professional Staff (REPS), who are
academic non-teaching personnel, should not be deemed part of the organizational unit.

For its part, the University, through its General Counsel,   made of record its view that there should be two (2)
6

unions: one for academic, the other for non-academic or administrative, personnel considering the dichotomy of
interests, conditions and rules governing these employee groups.

Director Calleja ruled on the matter on August 7, 1990.   She declared that "the appropriate organizational
7

unit . . should embrace all the regular rank-and-file employees, teaching and non-teaching, of the University
of the Philippines, including all its branches" and that there was no sufficient evidence "to justify the grouping of
the non-academic or administrative personnel into an organization unit apart and distinct from that of the academic
or teaching personnel." Director Calleja adverted to Section 9 of Executive Order No. 180, viz.:

Sec. 9. The appropriate organizational unit shall be the employer unit consisting of rank-and-file
employees, unless circumstances otherwise require.

and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC. 2, Resolution of Public
Sector Labor Management Council dated May 14, 1989, viz.:

xxx xxx xxx

For purposes of registration, an appropriate organizational unit may refer to:

xxx xxx xxx

Labor II – 1
 d. State universities or colleges, government-owned or controlled corporations with original charters.

She went on to say that the general intent of EO 180 was "not to fragmentize the employer unit, as "can be
gleaned from the definition of the term "accredited employees' organization," which refers to:

. . a registered organization of the rank-and-file employees as defined in these rules recognized to

negotiate for the employees in an organizational unit headed by an officer with sufficient authority to
bind the agency, such as . . . . . . state colleges and universities.

The Director thus commanded that a certification election be "conducted among rank-and-file employees,
teaching and non-teaching" in all four autonomous campuses of the UP, and that management appear and
bring copies of the corresponding payrolls for January, June, and July, 1990 at the "usual pre-election conference . .
."

At the pre-election conference held on March 22, 1990 at the Labor Organizational Division of the DOLE, 8 the
University sought further clarification of the coverage of the term, "rank-and-file" personnel, asserting that not every
employee could properly be embraced within both teaching and non-teaching categories since there are those
whose positions are in truth managerial and policy-determining, and hence, excluded by law.

At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking the exclusion from
the organizational unit of those employees holding supervisory positions among non-academic personnel,
and those in teaching staff with the rank of Assistant Professor or higher, submitting the following as grounds
therefor:

1) Certain "high-level employees" with policy-making, managerial, or confidential functions, are ineligible to join
rank-and-file employee organizations under Section 3, EO 180:

Sec. 3. High-level employees whose functions are normally considered as policy-making or

managerial or whose duties are of a highly confidential nature shall not be eligible to join the
organization of rank-and file government employees;

2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank-and file: just as there are
those occupying managerial positions within the non-teaching roster, there is also a dichotomy between various
levels of the teaching or academic staff;

3) Among the non-teaching employees composed of Administrative Staff and Research personnel, only those
holding positions below Grade 18 should be regarded as rank-and-file, considering that those holding higher grade
positions, like Chiefs of Sections, perform supervisory functions including that of effectively recommending
termination of appointments or initiating appointments and promotions; and

4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only those holding appointments
at the instructor level may be so considered, because those holding appointments from Assistant Professor to
Associate Professor to full Professor take part, as members of the University Council, a policy-making body, in the
initiation of policies and rules with respect to faculty tenure and promotion. 
9

The ONAPUP quite categorically made of record its position; that it was not opposing the University's proferred
classification of rank-and file employees. On the other hand, the "All UP Workers' Union" opposed the
University's view, in a Position Paper presented by it under date of October 18, 1990.

Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the "sole issue" of
"whether or not professors, associate professors and assistant professors are included in the definition of
high-level employee(s)" in light of Rule I, Section (1) of the Implementing Guidelines of Executive Order No. 180,
defining "high level employee" as follows:

Labor II – 1
 1. High Level Employee — is one whose functions are normally considered policy determining,
managerial or one whose duties are highly confidential in nature. A managerial function refers to the
exercise of powers such as:

1. To effectively recommend such managerial actions;

2. To formulate or execute management policies and decisions; or

3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees.

The Director adjudged that said teachers are rank-and-file employees "qualified to join unions and vote in
certification elections." According to her —

A careful perusal of the University Code . . shows that the policy-making powers of the Council are
limited to academic matters, namely, prescribing courses of study and rules of discipline, fixing
student admission and graduation requirements, recommending to the Board of Regents the
conferment of degrees, and disciplinary power over students. The policy-determining functions
contemplated in the definition of a high-level employee pertain to managerial, executive, or
organization policies, such as hiring, firing, and disciplining of employees, salaries, teaching/working
hours, other monetary and non-monetary benefits, and other terms and conditions of employment.
They are the usual issues in collective bargaining negotiations so that whoever wields these powers
would be placed in a situation of conflicting interests if he were allowed to join the union of rank-and-
file employees.

The University seasonably moved for reconsideration, seeking to make the following points, to wit:

1) UP professors do "wield the most potent managerial powers: the power to rule on tenure, on the creation of new
programs and new jobs, and conversely, the abolition of old programs and the attendant re-assignment of
employees.

2) To say that the Council is "limited to (acting on) academic matters" is error, since academic decisions "are the
most important decisions made in a University . . (being, as it were) the heart, the core of the University as a
workplace.

3) Considering that the law regards as a "high level" employee, one who performs either policy-determining,
managerial, or confidential functions, the Director erred in applying only the "managerial functions" test, ignoring the
"policy-determining functions" test.

4) The Director's interpretation of the law would lead to absurd results, e.g.: "an administrative officer of the College
of Law is a high level employee, while a full Professor who has published several treatises and who has
distinguished himself in argument before the Supreme Court is a mere rank-and-file employee. A dormitory manager
is classified as a high level employee, while a full Professor or Political Science with a Ph. D. and several Honorary
doctorates is classified as rank-and-file." 
10

The motion for reconsideration was denied by Director Calleja, by Order dated November 20, 1990.

The University would now have this Court declare void the Director's Order of October 30, 1990 as well as that of
November 20, 1990.   A temporary restraining order was issued by the Court, by Resolution dated December 5,
11

1990 conformably to the University's application therefor.

Two issues arise from these undisputed facts. One is whether or not professors, associate professors and
assistant professors are "high-level employees" "whose functions are normally considered policy
determining, managerial or . . highly confidential in nature." The other is whether or not, they, and other
employees performing academic functions,   should comprise a collective bargaining unit distinct and
12

different from that consisting of the non-academic employees of the University,   considering the
13

dichotomy of interests, conditions and rules existing between them.

Labor II – 1
As regards the first issue, the Court is satisfied that it has been correctly resolved by the respondent Director of
Bureau Relations. In light of Executive Order No. 180 and its implementing rules, as well as the University's charter
and relevant regulations, the professors, associate professors and assistant professors (hereafter simply
referred to as professors) cannot be considered as exercising such managerial or highly confidential
functions as would justify their being categorized as "high-level employees" of the institution.

The Academic Personnel Committees, through which the professors supposedly exercise managerial functions,
were constituted "in order to foster greater involvement of the faculty and other academic personnel in
appointments, promotions, and other personnel matters that directly affect them."   Academic Personnel
14

Committees at the departmental and college levels were organized "consistent with, and demonstrative of the very
idea of consulting the faculty and other academic personnel on matters directly affecting them" and to allow
"flexibility in the determination of guidelines peculiar to a particular department or college." 15

Personnel actions affecting the faculty and other academic personnel should, however, "be considered under
uniform guidelines and consistent with the Resolution of the Board (of Regents) adopted during its 789th Meeting
(11-26-69) creating the University Academic Personnel Board."   Thus, the Departmental Academic Personnel
16

Committee is given the function of "assist(ing) in the review of the recommendations initiated by the Department
Chairman with regard to recruitment, selection, performance evaluation, tenure and staff development, in
accordance with the general guidelines formulated by the University Academic Personnel Board and the
implementing details laid down by the College Academic Personnel Committee;"   while the College Academic
17

Personnel Committee is entrusted with the following functions:  18

1. Assist the Dean in setting up the details for the implementation of policies, rules, standards or
general guidelines as formulated by the University Academic Personnel Board;

2. Review the recommendation submitted by the DAPCs with regard to recruitment, selection,
performance evaluation, tenure, staff development, and promotion of the faculty and other academic
personnel of the College;

3. Establish departmental priorities in the allocation of available funds for promotion;

4. Act on cases of disagreement between the Chairman and the members of the DAPC particularly
on personnel matters covered by this Order;

5. Act on complaints and/or protests against personnel actions made by the Department Chairman
and/or the DAPC.

The University Academic Personnel Board, on the other hand, performs the following functions:  19

1. Assist the Chancellor in the review of the recommendations of the CAPC'S.

2. Act on cases of disagreement between the Dean and the CAPC.

3. Formulate policies, rules, and standards with respect to the selection, compensation, and
promotion of members of the academic staff.

4. Assist the Chancellor in the review of recommendations on academic promotions and on other
matters affecting faculty status and welfare.

From the foregoing, it is evident that it is the University Academic Personnel Committee, composed of deans, the
assistant for academic affairs and the chief of personnel, which formulates the policies, rules and standards
respecting selection, compensation and promotion of members of the academic staff. The departmental and
college academic personnel committees' functions are purely recommendatory in nature, subject to review
and evaluation by the University Academic Personnel Board. In Franklin Baker Company of the Philippines vs.
Trajano,   this Court reiterated the principle laid down in National Merchandising Corp. vs. Court of Industrial
20

Relations,   that the power to recommend, in order to qualify an employee as a supervisor or managerial employee
21

Labor II – 1
"must not only be effective but the exercise of such authority should not be merely of a routinary or clerical nature
but should require the use of independent judgment." Where such recommendatory powers, as in the case at
bar, are subject to evaluation, review and final action by the department heads and other higher executives
of the company, the same, although present, are not effective and not an exercise of independent judgment
as required by law.

Significantly, the personnel actions that may be recommended by the departmental and college academic personnel
committees must conform with the general guidelines drawn up by the university personnel academic committee.
This being the case, the members of the departmental and college academic personnel committees are not unlike
the chiefs of divisions and sections of the National Waterworks and Sewerage Authority whom this Court considered
as rank-and-file employees in National Waterworks & Sewerage Authority vs. NWSA Consolidated
Unions,   because "given ready policies to execute and standard practices to observe for their execution, . . . they
22

have little freedom of action, as their main function is merely to carry out the company's orders, plans and policies."

The power or prerogative pertaining to a high-level employee "to effectively recommend such managerial actions, to
formulate or execute management policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss,
assign or discipline employees"   is exercised to a certain degree by the university academic personnel
23

board/committees and ultimately by the Board of Regents in accordance with Section 6 of the University
Charter,   thus:
24

(e) To appoint, on the recommendation of the President of the University, professors, instructors,
lecturers and other employees of the University; to fix their compensation, hours of service, and such
other duties and conditions as it may deem proper; to grant them in its discretion leave of absence
under such regulations as it may promulgate, any other provision of law to the contrary
notwithstanding, and to remove them for cause after investigation and hearing shall have been had.

Another factor that militates against petitioner's espousal of managerial employment status for all its professors
through membership in the departmental and college academic personnel committees is that not all professors are
members thereof. Membership and the number of members in the committees are provided as follows:  25

Sec. 2. Membership in Committees. — Membership in committees may be made either through

appointment, election, or by some other means as may be determined by the faculty and other
academic personnel of a particular department or college.

Sec. 3. Number of Members. — In addition to the Chairman, in the case of a department, and the
Dean in the case of a college, there shall be such number of members representing the faculty and
academic personnel as will afford a fairly representative, deliberative and manageable group that
can handle evaluation of personnel actions.

Neither can membership in the University Council elevate the professors to the status of high-level employees.
Section 6 (f) and 9 of the UP Charter respectively provide: 26

Sec. 6. The Board of Regents shall have the following powers and duties . . . ;

xxx xxx xxx

(f) To approve the courses of study and rules of discipline drawn up by the University Council as
hereinafter provided; . . .

Sec. 9. There shall be a University Council consisting of the President of the University and of all
instructors in the university holding the rank of professor, associate professor, or assistant professor.
The Council shall have the power to prescribe the courses of study and rules of discipline, subject to
the approval of the Board of Regents. It shall fix the requirements for admission to any college of the
university, as well as for graduation and the receiving of a degree. The Council alone shall have the
power to recommend students or others to be recipients of degrees. Through its president or
committees, it shall have disciplinary power over the students within the limits prescribed by the

Labor II – 1
 rules of discipline approved by the Board of Regents. The powers and duties of the President of the
University, in addition to those specifically provided in this Act shall be those usually pertaining to the
office of president of a university.

It is readily apparent that the policy-determining functions of the University Council are subject to review, evaluation
and final approval by the Board of Regents. The Council's power of discipline is likewise circumscribed by the limits
imposed by the Board of Regents. What has been said about the recommendatory powers of the departmental and
college academic personnel committees applies with equal force to the alleged policy-determining functions of the
University Council.

Even assuming arguendo that UP professors discharge policy-determining functions through the University Council,
still such exercise would not qualify them as high-level employees within the context of E.O. 180. As correctly
observed by private respondent, "Executive Order No. 180 is a law concerning public sector unionism. It must
therefore be construed within that context. Within that context, the University of the Philippines represents the
government as an employer. 'Policy-determining' refers to policy-determination in university mattes that affect those
same matters that may be the subject of negotiation between public sector management and labor. The reason why
'policy-determining' has been laid down as a test in segregating rank-and-file from management is to ensure that
those who lay down policies in areas that are still negotiable in public sector collective bargaining do not themselves
become part of those employees who seek to change these policies for their collective welfare."  27

The policy-determining functions of the University Council refer to academic matters, i.e. those governing the
relationship between the University and its students, and not the University as an employer and the professors as
employees. It is thus evident that no conflict of interest results in the professors being members of the
University Council and being classified as rank-and-file employees.

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

A "bargaining unit" has been defined as a group of employees of a given employer, comprised of all or less
than all of the entire body of employees, which the collective interest of all the employees, consistent with
equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law.  28

Our labor laws do not however provide the criteria for determining the proper collective bargaining unit. Section 12
of the old law, Republic Act No. 875 otherwise known as the Industrial Peace Act, simply reads as follows:  29

Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. — The labor
organization designated or selected for the purpose of collective bargaining by the majority of the
employees in an appropriate collective bargaining unit shall be the exclusive representative of all the
employees in such unit for the purpose of collective bargaining in respect to rates of pay, wages,
hours of employment, or other conditions of employment; Provided, That any individual employee or
group of employees shall have the right at any time to present grievances to their employer.

Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the Labor Code with minor
changes, no guidelines were included in said Code for determination of an appropriate bargaining unit in a given
case.   Thus, apart from the single descriptive word "appropriate," no specific guide for determining the proper
30

collective bargaining unit can be found in the statutes.

Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section 9, is that "(t)he
appropriate organizational unit shall be the employer unit consisting of rank-and-file employees, unless
circumstances otherwise require." Case law fortunately furnishes some guidelines.

When first confronted with the task of determining the proper collective bargaining unit in a particular controversy,
the Court had perforce to rely on American jurisprudence. In Democratic Labor Association vs. Cebu Stevedoring
Company, Inc., decided on February 28, 1958,   the Court observed that "the issue of how to determine the proper
31

collective bargaining unit and what unit would be appropriate to be the collective bargaining

Labor II – 1
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter abound . . (to which resort
may be had) considering that our present Magna Carta has been patterned after the American law on the subject."
Said the Court:

. . . Under these precedents, there are various factors which must be satisfied and considered in
determining the proper constituency of a bargaining unit. No one particular factor is itself decisive
of the determination. The weight accorded to any particular factor varies in accordance with the
particular question or questions that may arise in a given case. What are these factors? Rothenberg
mentions a good number, but the most pertinent to our case are: (1) will of the employees (Globe
Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity of work
and duties, or similarity of compensation and working conditions; (3) prior collective
bargaining history; and (4) employment status, such as temporary, seasonal probationary
employees. . . .

xxx xxx xxx

An enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the
10th Annual Report of the National Labor Relations Board wherein it is emphasized that the factors
which said board may consider and weigh in fixing appropriate units are: the history, extent and type
of organization of employees; the history of their collective bargaining; the history, extent and type of
organization of employees in other plants of the same employer, or other employers in the same
industry; the skill, wages, work, and working conditions of the employees; the desires of the
employees; the eligibility of the employees for membership in the union or unions involved; and the
relationship between the unit or units proposed and the employer's organization, management, and
operation. . . .

. . In said report, it is likewise emphasized that the basic test in determining the appropriate
bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions and other subjects of collective
bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . . .

The Court further explained that "(t)he test of the grouping is community or mutuality of interests. And this
is so because 'the basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their collective
bargaining rights' (Rothenberg on Labor Relations, 490)." Hence, in that case, the Court upheld the trial court's
conclusion that two separate bargaining units should be formed, one consisting of regular and permanent
employees and another consisting of casual laborers or stevedores.

Since then, the "community or mutuality of interests" test has provided the standard in determining the proper
constituency of a collective bargaining unit. In Alhambra Cigar & Cigarette Manufacturing Company, et al. vs.
Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting that the employees in the administrative,
sales and dispensary departments of a cigar and cigarette manufacturing firm perform work which have nothing to
do with production and maintenance, unlike those in the raw lead (malalasi), cigar, cigarette, packing (precintera)
and engineering and garage departments, authorized the formation of the former set of employees into a separate
collective bargaining unit. The ruling in the Democratic Labor Association case, supra, was reiterated in Philippine
Land-Air-Sea Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees were barred from
joining the union of the permanent and regular employees.

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

Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the
Logging Division. Their functions mesh with one another. One group needs the other in the same
Labor II – 1
 way that the company needs them both. There may be difference as to the nature of their individual
assignments but the distinctions are not enough to warrant the formation of a separate bargaining
unit.

In the case at bar, the University employees may, as already suggested, quite easily be categorized into two
general classes: one, the group composed of employees whose functions are non-academic, i.e., janitors,
messengers, typists, clerks, receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics,
plumbers;   and two, the group made up of those performing academic functions, i.e., full professors,
32

associate professors, assistant professors, instructors — who may be judges or government executives — and
research, extension and professorial staff.   Not much reflection is needed to perceive that the community or
33

mutuality of interests which justifies the formation of a single collective bargaining unit is wanting between
the academic and non-academic personnel of the university. It would seem obvious that teachers would
find very little in common with the University clerks and other non-academic employees as regards
responsibilities and functions, working conditions, compensation rates, social life and interests, skills and
intellectual pursuits, cultural activities, etc. On the contrary, the dichotomy of interests, the dissimilarity in
the nature of the work and duties as well as in the compensation and working conditions of the academic
and non-academic personnel dictate the separation of these two categories of employees for purposes of
collective bargaining. The formation of two separate bargaining units, the first consisting of the rank-and-
file non-academic personnel, and the second, of the rank-and-file academic employees, is the set-up that
will best assure to all the employees the exercise of their collective bargaining rights. These special
circumstances, i.e., the dichotomy of interests and concerns as well as the dissimilarity in the nature and conditions
of work, wages and compensation between the academic and non-academic personnel, bring the case at bar within
the exception contemplated in Section 9 of Executive Order No. 180. It was grave abuse of discretion on the part of
the Labor Relations Director to have ruled otherwise, ignoring plain and patent realities.

WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it declares the professors,
associate professors and assistant professors of the University of the Philippines as rank-and-file employees. The
Order of August 7, 1990 is MODIFIED in the sense that the non-academic rank-and-file employees of the University
of the Philippines shall constitute a bargaining unit to the exclusion of the academic employees of the institution
— i.e., full professors, associate professors, assistant professors, instructors, and the research, extension and
professorial staff, who may, if so minded, organize themselves into a separate collective bargaining unit; and that,
therefore, only said non-academic rank-and-file personnel of the University of the Philippines in Diliman, Manila, Los
Baños and the Visayas are to participate in the certification election.

Labor II – 1
 5.) [G.R. No. 102130. July 26, 1994.]

GOLDEN FARMS, INC., Petitioner, v. THE HONORABLE SECRETARY OF LABOR and THE

PROGRESSIVE FEDERATION OF LABOR, Respondents.

SYLLABUS

1. LABOR AND OTHER SOCIAL LEGISLATION; RIGHT TO SELF-ORGANIZATION AND COLLECTIVE

BARGAINING; BARGAINING UNIT, DEFINED. — A bargaining unit has been defined as a group of
employees of a given employer comprised of all or less than all of the entire body of employees,
which the collective interest of all the employees, consistent with equity to the employer, indicate to
be the best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law. The community or mutuality of interest is therefore the essential
criterion in the grouping. "And this is so because ‘the basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights.’"

2. ID.; ID.; WHEN THE FORMATION OF A SEPARATE AND DISTINCT BARGAINING UNIT
WARRANTED; CASE AT BAR. — In the case at bench, the evidence established that the monthly paid
rank-and-file employees of petitioner primarily perform administrative or clerical work. In
contradistinction, the petitioner’s daily paid rank-and-file employees mainly work in the cultivation of
bananas in the fields. It is crystal clear the monthly paid rank-and-file employees of petitioner have
very little in common with its daily paid rank-and-file employees in terms of duties and obligations,
working conditions, salary rates, and skills. To be sure, the said monthly paid rank-and-file
employees have even been excluded from the bargaining unit of the daily paid rank-and-file
employees. This dissimilarity of interests warrants the formation of a separate and distinct bargaining
unit for the monthly paid rank-and-file employees of the petitioner. To rule otherwise would deny this
distinct class of employees the right to self-organization for purposes of collective bargaining.
Without the shield of an organization, it will also expose them to the exploitations of management.
So we held in University of the Philippines v. Ferrer-Calleja, where we sanctioned the formation of
two (2) separate bargaining units within the establishment, viz:" [T]he dichotomy of interests, the
dissimilarity in the nature of the work and duties as well as in the compensation and working
conditions of the academic and non-academic personal dictate the separation of these two categories
of employees for purposes of collective bargaining. The formation of two separate bargaining units,
the first consisting of the rank-and-file non-academic employees, and the second, of the rank-and-
file academic employees, is the set-up that will best assure to all the employees the exercise of their
collective bargaining rights."
cralaw virtua1aw library

3. ID.; ID.; MANAGERIAL EMPLOYEES, DEFINED; NOT SATISFIED IN CASE AT BAR. — Article 212,
paragraph (m) of the Labor Code, as amended, defines a managerial employee as follows:
"Managerial employee is one who is vested with power or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. All employees not falling within any
of the above definitions are considered rank-and-file employees for purposes of this Book. "Given this
definition, the monthly paid office and technical employees, accountants, and cashiers of the
petitioner are not managerial employees for they do not participate in policy-making but are given
cut out policies to execute and standard practices to observe. In the main, the discharge of their
duties does not involve the use of independent judgment. As factually found by the Med-Arbiter, to
wit:" A perusal of the list of the office and technical employees sought to be represented in the
instant case, with their corresponding designation does not show that said Office and Technical
employees exercises supervisory or managerial functions. The office believes and so hold that the
Labor II – 1
employees whose names appear in the "Masterlist of Office and Technical Employees" submitted
during the hearing are eligible to join/form a labor organization of their own choice." cralaw virtua1aw library

4. ID.; ID.; CERTIFICATION ELECTION; RULE. — The general rule is that an employer has no
standing to question a certification election since this is the sole concern of the workers. Law and
policy demand that employers take a strict, hands-off stance in certification elections. The bargaining
representative of employees should be chosen free from any extraneous influence of management. A
labor bargaining representative, to be effective, must owe its loyalty to the employees alone and to
no other.

DECISION

PUNO, J.:

The sole issue for resolution in this Petition for Certiorari with prayer for the issuance of preliminary
injunction and/or restraining order is whether or not petitioner’s monthly paid rank-and-file
employees can constitute a bargaining unit separate from the existing bargaining unit of its daily paid
rank-and-file employees.

Petitioner Golden Farms, Inc., is a corporation engaged in the production and marketing of bananas
for export. On February 27, 1992, private respondent Progressive Federation of Labor (PFL)
filed a petition before the Med-Arbiter praying for the holding of a certification election
among the monthly paid office and technical rank-and-file employees of petitioner Golden
Farms.

Petitioner moved to dismiss the petition on three (3) grounds. First, respondent PFL failed to
show that it was organized as a chapter within petitioner’s establishment. Second, there was
already an existing collective bargaining agreement between the rank-and-file employees
represented by the National Federation of Labor (NFL) and petitioner. And third, the
employees represented by PFL had allegedly been disqualified by this Court from
bargaining with management in Golden Farms, Inc., v. Honorable Director Pura Ferrer-Calleja,
G.R. No. 78755, July 19, 1989. 1

Respondent PFL opposed petitioner’s Motion to Dismiss. It countered that the monthly paid
office and technical employees should be allowed to form a separate bargaining unit
because they were expressly excluded from coverage in the Collecting Bargaining
Agreement (CBA) between petitioner and NFL. It also contended that the case invoked by
petitioner was inapplicable to the present case.

In its reply, petitioner argued that the monthly paid office and technical employees should
have joined the existing collective bargaining unit of the rank-and-file employees if they
are not managerial employees.

On April 18, 1991, the Med-Arbiter granted the petition and ordered that a certification
election be conducted, viz: jgc:chanrobles.com.ph

"WHEREFORE, premises considered, the present petition filed by the Progressive Federation of Labor,
for certification election among the office and technical employees of Golden Farms, Inc., is, as it is
hereby, GRANTED with the following choices: chanrob1es virtual 1aw library

1. Progressive Federation of Labor (PFL);

Labor II – 1
2. No union.

The designated representation officer is hereby directed to call the parties to a pre-election
conference to thresh out the mechanics of the election and to conduct and supervise the same within
twenty (20) days from receipt by the parties of this Order. The "Masterlist of Office and Technical
Employees" shall be the basis in determining the employees qualified to vote during the certification
election.

SO ORDERED." 2

Petitioner seasonably appealed to public respondent Secretary of Labor. On August 6, 1991,

respondent Secretary of Labor issued the assailed Decision denying the appeal for lack of merit. 3
Petitioner filed a Motion for Reconsideration but the same was also denied on September 13, 1991.

Thus, this petition for certiorari interposing two (2) issues.

THE CREATION OF AN ADDITIONAL BARGAINING UNIT FOR CERTAIN RANK AND FILE
EMPLOYEES WILL NOT ONLY SPLIT THE EXISTING ONE BUT WILL ALSO NEGATE THE
PRINCIPLE OF RES JUDICATA.

II

THE PROGRESSIVE FEDERATION OF LABOR BEING THE EXCLUSIVE BARGAINING AGENT OF THE
SUPERVISORY EMPLOYEES IS DISQUALIFIED FROM REPRESENTING THE OFFICE AND TECHNICAL
EMPLOYEES.

The petition is devoid of merit.

The monthly paid office and technical rank-and-file employees of petitioner Golden Farms enjoy the
constitutional right to self-organization and collective bargaining. 4 A "bargaining unit" has been
defined as a group of employees of a given employer, comprised of all or less than all of
the entire body of employees, which the collective interest of all the employees, consistent
with equity to the employer, indicate to be the best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the law. 5 The
community or mutuality of interest is therefore the essential criterion in the grouping.
"And this is so because ‘the basic test of an asserted bargaining unit’s acceptability is
whether or not it is fundamentally the combination which will best assure to all employees
the exercise of their collective bargaining rights.’" 6

In the case at bench, the evidence established that the monthly paid rank-and-file employees of
petitioner primarily perform administrative or clerical work. In contradistinction, the
petitioner’s daily paid rank-and-file employees mainly work in the cultivation of bananas in
the fields. It is crystal clear the monthly paid rank-and-file employees of petitioner have
very little in common with its daily paid rank-and-file employees in terms of duties and
obligations, working conditions, salary rates, and skills. To be sure, the said monthly paid
rank-and-file employees have even been excluded from the bargaining unit of the daily
paid rank-and-file employees. This dissimilarity of interests warrants the formation of a
separate and distinct bargaining unit for the monthly paid rank-and-file employees of the
petitioner. To rule otherwise would deny this distinct class of employees the right to self-
organization for purposes of collective bargaining. Without the shield of an organization, it will
also expose them to the exploitations of management. So we held in University of the Philippines v.
Labor II – 1
Ferrer-Calleja, 7 where we sanctioned the formation of two (2) separate bargaining units within the
establishment, viz:jgc:chanrobles.com.ph

" [T]he dichotomy of interests, the dissimilarity in the nature of the work and duties as well as in the
compensation and working conditions of the academic and non-academic personal dictate the
separation of these two categories of employees for purposes of collective bargaining. The formation
of two separate bargaining units, the first consisting of the rank-and-file non-academic employees,
and the second, of the rank-and-file academic employees, is the set-up that will best assure to all the
employees the exercise of their collective bargaining rights." cralaw virtua1aw library

Petitioner next contends that these monthly paid office and technical employees are managerial
employees. They allegedly include those in the accounting and personnel department, cashier, and
other employees holding positions with access to classified information.

We are not persuaded, Article 212, paragraph (m) of the Labor Code, as amended, defines a
managerial employee as follows: jgc:chanrobles.com.ph

"‘Managerial employee’ is one who is vested with power or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. All employees not falling within any
of the above definitions are considered rank-and-file employees for purposes of this Book." cralaw virtua1aw library

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

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

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

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

The second assigned error which was not raised in the proceedings below must necessarily fail. The
alleged error involves a question of fact which this Court cannot resolve. Petitioner submitted this
contention only in its Memorandum dated February 12, 1993. 10 In this Memorandum, petitioner
cited LRD Case No. OXI-UR-70 for Direct Recognition/Certification Election. But even a side glance of
the cited case will reveal that it involves a petition for direct certification among the rank-and-file
office and technical employees of the Golden Farms Inc., (not supervisory employees) under the
House of Investment, Ladislawa Village, Buhangin, Davao City filed by the National Federation of
Labor (not the respondent Progressive Federation of Labor). The averment of petitioner is baseless
Labor II – 1
and its recklessness borders the contemptuous.

Finally, we note that it was petitioner company that filed the motion to dismiss the petition for
election. The general rule is that an employer has no standing to question a certification election
since this is the sole concern of the workers. 11 Law and policy demand that employers take a strict,
hands-off stance in certification elections. The bargaining representative of employees should be
chosen free from any extraneous influence of management. A labor bargaining representative, to be
effective, must owe its loyalty to the employees alone and to no other.

WHEREFORE, the petition is DISMISSED for lack of merit. With costs against petitioner.

Labor II – 1
6.) G.R. No. L-28223           August 30, 1968

MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE NATIONAL RAILWAYS, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS and SAMAHAN NG MGA MANGGAGAWA SA CALOOCAN
SHOPS, respondents.

Sisenando Villaluz for petitioner.

Gregorio E. Fajardo for respondent Samahan ng mga Manggagawa sa Caloocan Shops.

REYES, J.B.L., J.:

Petition by the "Mechanical Department Labor Union sa PNR" for a review of an order of the Court of Industrial
Relations, in its Case No. 1475-MC, directing the holding of a plebiscite election to determine whether the
employees at the Caloocan Shops desire the respondent union, "Samahan ng mga Manggagawa sa Caloocan
Shops", to be separated from the Mechanical Department Labor Union, with a view to the former being recognized
as a separate bargaining unit.

The case began on 13 February 1965 by a petition of the respondent "Samahan ng mga Manggagawa, etc."
calling attention to the fact that there were three unions in the Caloocan shops of the Philippine National
Railways: the "Samahan", the "Kapisanan ng Manggagawa sa Manila Railroad Company", and the Mechanical
Department Labor Union; that no certification election had been held in the last 12 months in the Caloocan
shops; that both the "Samahan" and the Mechanical Department Labor Union had submitted different labor
demands upon the management for which reason a certification election was needed to determine the proper
collective bargaining agency for the Caloocan shop workers.

The petition was opposed by the management as well as by the Mechanical Department Labor Union, the
latter averring that it had been previously certified in two cases as sole and exclusive bargaining agent of
the employees and laborers of the PNR'S mechanical department, and had negotiated two bargaining
agreements with management in 1961 and 1963; that before the expiration of the latter, a renewal thereof had been
negotiated and the contract remained to be signed; that the "Samahan" had been organized only in 21 January
1965; that the Caloocan shops unit was not established nor separated from the Mechanical Department unit;
that the "Samahan" is composed mainly of supervisors who had filed a pending case to be declared non-
supervisors; and that the purpose of the petition was to disturb the present smooth working labor management
relations.

By an order of 18 August 1967, Judge Arsenio Martinez, after receiving the evidence, made the following
findings:.
1äwphï1.ñët

The Court, after a cursory examination of the evidence presented made the following findings: That
petitioner union is composed of workers exclusively at the Caloocan shops of the Philippine
National Railways charged with the maintenance of rolling stocks for repairs; major repairs of
locomotive, engines, etc. are done in the Caloocan shops while minor ones in the Manila sheds; workers in
the Caloocan shops do not leave their station unlike Manila shop workers who go out along the
routes and lines for repairs; workers both in the Caloocan shops and Manila sheds are exposed to
hazards occasioned by the nature of their work; that with respect to wages and salaries of employees,
categories under the Job Classification and Evaluation Plan of the company apply to all workers
both in the Caloocan Shops and Manila sheds; administration over employees, members of petitioner
union as well as oppositor is under the Administrative Division of the company; that from the very nature of
their work, members of petitioner union and other workers of the Mechanical Department have been
under the coverage of the current collective bargaining agreement which was a result of a certification
by this Court of the Mechanical Department Labor union, first in 1960 and later in 1963. Subsequently, when
the latter contract expired, negotiations for its renewal were had and at the time of the filing of this petition
was already consummated, the only act remaining to be done was to affix the signatures of the parties
thereto; that during the pendency of this petition, on June 14, 1965, the aforesaid collective bargaining

Labor II – 1
 agreement was signed between the Philippine National Railways and the Mechanical Department Labor
Union sa Philippine National Railways (Manila Railroad Company).

The main issue involved herein is: Whether or not a new unit should be established, the Caloocan shops,
separate and distinct from the rest of the workers under the Mechanical Department now represented by the
Mechanical Department Labor Union.

The Caloocan Shops, all located at Caloocan City have 360 workers more or less. It is part and parcel of
the whole Mechanical Department of the Philippine National Railways. The department is composed of
four main divisions or units, namely: Operations, Manila Area and Lines; Locomotive Crew; Motor
Car Crew; and the Shops Rolling Stocks Maintenance. (Exhibits "D" and "D-1").

The Locomotive crew and Motor Car Crew, though part of the Mechanical Department, is a separate
unit, and is represented by the Union de Maquinistas, Fogoneros Y Motormen. The workers under the
other two main units of the departments are represented by the Mechanical Department Labor
Union. The workers of the Shops Rolling Stocks Maintenance Division or the Caloocan Shops now
seek to be separated from the rest of the workers of the department and to be represented by the
"Samahan Ng Mga Manggagawa sa Caloocan Shops." .

There is certainly a community of interest among the workers of the Caloocan Shops. They are grouped in
one place. They work under one or same working condition, same working time or schedule and are
exposed to same occupational risk.

Though evidence on record shows that workers at the Caloocan Shops perform the same nature of work as
their counterparts in the Manila Shed, the difference lies in the fact that workers at the Caloocan Shops
perform major repairs of locomotives, rolling stocks, engines, etc., while those in the Manila Shed, works on
minor repairs. Heavy equipment and machineries are found in the Caloocan Shops.

The trial judge then reviewed the collective bargaining history of the Philippine National Railways, as follows:  1äwphï1.ñët

On several similar instances, this Court allowed the establishment of new and separate bargaining unit in
one company, even in one department of the same company, despite the existence of the same facts and
circumstances as obtaining in the case at bar.

The history of the collective bargaining in the Manila Railroad Company, now the Philippine National
Railways shows that originally, there was only one bargaining unit in the company, represented by the
Kapisanan Ng Manggagawa sa MRR. Under Case No. 237-MC, this Court ordered the establishment of
two additional units, the engine crew and the train crew to be represented by the Union de Maquinistas,
Fogoneros, Ayudante Y Motormen and Union de Empleados de Trenes, respectively. Then in 1961, under
Cases Nos. 491-MC, 494-MC and 507-MC three new separate units were established, namely, the yard
crew unit, station employees unit and engineering department employees unit, respectively, after the
employees concerned voted in a plebiscite conducted by the court for the separation from existing
bargaining units in the company. Then again, under Case No. 763-MC, a new unit, composed of the
Mechanical Department employees, was established to be represented by the Mechanical Department
Labor Union. Incidentally, the first attempt of the employees of the Mechanical Department to be separated
as a unit was dismissed by this Court of Case No. 488-MC.

In the case of the yard crew, station employees and the Engineering Department employees, the Supreme
Court sustained the order of this Court in giving the employees concerned the right to vote and decide
whether or not they desire to be separate units (See G.R. Nos. L-16292-94, L-16309 and L-16317-18,
November, 1965).

In view of its findings and the history of "union representation" in the railway company, indicating that
bargaining units had been formed through separation of new units from existing ones whenever plebiscites
had shown the workers' desire to have their own representatives, and relying on the "Globe doctrine"
(Globe Machine & Stamping Co., 3 NLRB 294) applied in Democratic Labor Union vs. Cebu Stevedoring Co., L-

Labor II – 1
10321, 28 February 1958, Judge Martinez held that the employees in the Caloocan Shops should be given a
chance to vote on whether their group should be separated from that represented by the Mechanical
Department Labor Union, and ordered a plebiscite held for the purpose. The ruling was sustained by the Court en
banc; wherefore, the Mechanical Department Labor Union appealed to this Court questioning the applicability under
the circumstances of the "Globe doctrine" of considering the will of the employees in determining what union should
represent them.

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

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

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

As to the charge that some of the members of the appellee, "Samahan Ng Manggagawa", are actually supervisors,
it appears that the question of the status of such members is still pending final decision; hence, it would not
constitute a legal obstacle to the holding of the plebiscite. At any rate, the appellant may later question whether the
votes of those ultimately declared to be supervisors should be counted.

Whether or not the agreement negotiated by the appellant union with the employer, during the pendency of the
original petition in the Court of Industrial Relations, should be considered valid and binding on the workers of the
Caloocan shops is a question that should be first passed upon by the Industrial Court.

IN VIEW OF THE FOREGOING, the order appealed from is affirmed, with costs against appellant Mechanical
Department Labor Union sa Philippine National Railways.

Labor II – 1
7.) G.R. No. 92357 July 21, 1993

PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION AGENCY (PSVSIA), GVM SECURITY AND
INVESTIGATION AGENCY (GVM) and ABAQUIN SECURITY AND DETECTIVE AGENCY, INC.
(ASDA), petitioners,
vs.
THE HON. SECRETARY OF LABOR RUBEN D. TORRES AND PGA BROTHERHOOD ASSOCIATION-UNION
OF FILIPINO WORKERS, respondents.

V.E. Del Rosario & Associates for petitioners.

German N. Pascua, Jr. for private respondent.

NOCON, J.:

The sole issue presented for resolution in this petition for certiorari with prayer for preliminary injunction is whether
or not a single petition for certification election or for recognition as the sole and exclusive bargaining agent can
validly or legally be filed by a labor union in three (3) corporations each of which has a separate and distinct legal
personality instead of filing three (3) separate petitions.

On April 6, 1989, private respondent labor union, PGA Brotherhood Association - Union of Filipino Workers
(UFW), hereinafter referred to as "the Union " filed a petition for Direct Certification/Certification Election
among the rank and file employees of Philippine Scout Veterans Security and Investigation Agency
(PSVSIA), GVM Security and Investigations Agency, Inc. (GVM). and Abaquin Security and Detective
Agency, Inc. (ASDA). These three agencies were collectively referred to by private respondent Union as the
"PGA Security Agency," which is actually the first letters of the corporate names of the agencies.

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

On April 11, 26, 1986, petitioners filed a single comment alleging therein that the said three security agencies
have separate and distinct corporate personalities while PGA Security Agency is not a business or corporate
entity and does not possess any personality whatsoever; the petition was unclear as to whether the rank-and-file
employees mentioned therein refer to those of the three security agencies collectively and if so, the labor union
cannot seek a certification election in three separate bargaining units in one petition; the labor union included in their
organization "security supervisors," in violation of R.A. 6715; and though R.A. 6715 is already in effect, there were
still no implementing rules therefor.

On May 4, 1989, the security agencies filed a Consolidated Motion to Dismiss on the grounds that the 721
supporting signatures do not meet the 20% minimum requirement for certification election as the number of
employees totals 2374 and that there are no implementing rules yet of R.A. 6715.

On May 8, 1989, the Union filed an Omnibus Reply to Comment and Motion to Dismiss alleging that it is clear
that it is seeking a certification election in the three agencies; that the apparent separate personalities of
the three agencies were used merely to circumvent the prohibition in R.A. 5847, as amended by P.D. 11 and
P.D. 100, that a security agency must not have more than 1,000 guards in its employ; that the three security
agencies' administration, management and operations are so intertwined that they can be deemed to be a
single entity; and that the security supervisors cannot be deemed part of management since they do not meet the
definition of "supervisory employees" found in Articles 212(m), Labor Code, as amended by Section 4, R.A. No.
6715.

On May 18, 1989, the security agencies filed a Rejoinder claiming that there is no violation of R.A. 5487, as
amended by P.D. 11 and P.D. 100 since the three agencies were incorporated long before the decrees' issuance;
Labor II – 1
that mere duplication of incorporators does not prove that the three security agencies are actually one single entity;
and that security guard supervisors, most especially detachment commanders, fall within the definition of the term
"supervisors."

On July 6, 1989, Med-Arbiter Rasidali C. Abdullah issued an Order in favor of the labor union finding that
PSVSIA, GVM and ASDA should be deemed as a single entity and bargaining unit for the purpose of union
organizing and the holding of a certification election. The dispositive portion of the Order reads as follows:

WHEREFORE, premises considered, let a certification election be conducted among the rank and
file security guards of PSVSIA, GVM and ASDA within twenty (20) days from receipt hereof with the
usual pre-election conference of the parties. The list of eligible voters shall be based on the security
agencies' payroll three (3) months prior to the filing of this petition with the following choices:

a) PGA Brotherhood Association-Union of Filipino Workers (UFW); and

b) No union.

SO ORDERED. 1

On July 21, 1989, the security agencies appealed the Med-Arbiter's Order to the Secretary of Labor and
Employment claiming that said Order was issued with grave abuse of discretion when it ruled that the three security
agencies could be considered as a single bargaining entity for purposes of the holding of a certification election.

On December 15, 1989, the Labor Secretary Franklin M. Drilon denied the appeal for lack of merit while at the
same time affirming the Med-Arbiter's Order of July 6, 1989. He also ordered the immediate conduct of a
certification election. The dispositive portion of which reads as follows:

WHEREFORE, premises considered, the Appeal of respondents Security agencies is hereby denied
for lack of merit and the Order dated 6 July affirmed.

Let therefore, the pertinent records of this case be immediately forwarded to the Regional Office for
he immediate conduct of the certification election.

SO ORDERED.  2

On January 5, 1990, the three security agencies filed a Motion for Reconsideration arguing that they were denied
their rights to due process and that jurisdiction was not acquired over them by the labor authorities.

On January 26, 1990, the succeeding Labor Secretary, Ruben D. Torres, likewise denied the Motion for
Reconsideration for lack of merit and reiterated the directive that a certification election be conducted without further
delay.

On March 14, 1990, the instant petition was filed by the three security agencies, raising the following grounds:

SERIOUS ERRORS IN THE FINDINGS OF FACTS.

II

GRAVE ABUSE OF DISCRETION ON THE PART OF THE SECRETARY OF LABOR.  3

Petitioners insist that there are three (3) corporations in this petition, each of which has a separate and
distinct corporate personality of its own with separate registrations with the Securities and Exchange
Commission (SEC) and different Articles of Incorporation and By-Laws; with separate sets of corporate
Labor II – 1
officers and directors; and no common business address except for GVM and ASDA which are located at
1957 España corner Craig Streets, Sampaloc, Manila.

Petitioners claim that the facts and circumstances of the case of La Campana Coffee Factory, Inc. v. Kaisahan Ng
Mga Manggagawa sa La Campana   which public respondent claims to be on all fours with the instant case, are very
4

distinct from the facts and circumstance obtaining in the case at bar. As to form of business organization, in the La
Campana case, only one of two (2) businesses was a corporation i.e., the La Campana Coffee Factory, Inc. and the
other, the La Campana Gaugau Packing, is a "non-entity," being merely a business name. In the case at bar, all
three (3) agencies are incorporated. Moreover, the issue involved in the instant case is one of representation while
in the La Campana case, the issue involved is the validity of a demand for wage increases and other labor
standards benefits.

Petitioners likewise contend that it was error to hold that the three companies should be treated as one in a single
bargaining unit in one petition for certification elections resulting in a violation of the right to due process of each
corporation as no notice of hearing and other legal processes were served on each of said corporations.
Consequently, no jurisdiction was acquired on them by the Department of Labor and Employment.

Petitioners' arguments deserve scant consideration. The facts and circumstances extant in the record
indicate that the Med-Arbiter and Secretaries Drilon and Torres were not mistaken in holding that the three
security companies are in reality a single business entity operating as a single company called the "PGA
Security Group" or "PGA Security Services Group." Factual findings of labor officials are conclusive and binding
on the Court when supported by substantial evidence. 5

The public repondent noted the following circumstances in the La Campana case similar to the case at bar, as
indicative of the fact that the La Campana Coffee Factory and La Campana Gaugau Packing were in reality only
one business with two trade names: (1) the two factories occupied the same address, wherein they had their
principal place of business; (2) their signboards, advertisements, packages of starch, delivery truck and delivery
forms all use one appellation, "La Campana Starch and Coffee Factory"; (3) the workers in either company received
their pay from a single cashier, and (4) the workers in one company could easily transfer to the other company, and
vice-versa. This Court held therein that the veil of corporate fiction of the coffee factory may be pierced to thwart the
attempt to consider it part from the other business owned by the same family. Thus, the fact that one of the
businesses is not incorporated was not the decisive factor that led the Court to consider the two factories as one.
Moreover, we do not find any materiality in the fact that the La Campana case was instituted to demand wage
increases and other labor standards benefits while this case was filed by the labor union to seek recognition as the
sole bargaining agent in the establishment. If businesses operating under one management are treated as one
for bargaining purposes, there is not much difference in treating such businesses also as one for the
preliminary purpose of labor organizing.

Indeed, the three agencies in the case at bar failed to rebut the fact that they are managed through the
Utilities Management Corporation with all of their employees drawing their salaries and wages from said
entity; that the agencies have common and interlocking incorporators and officers; and that the PSVSIA,
GVM and ASDA employees have a single Mutual Benefit System and followed a single system of
compulsory retirement.

No explanation was also given by petitioners why the security guards of one agency could easily transfer
from one agency to another and then back again by simply filling-up a common pro forma slip called "Request
for Transfer". Records also shows that the PSVSIA, GVM and ASDA always hold joint yearly ceremonies such as
the "PGA Annual Awards Ceremony". In emergencies, all PSVSIA Detachment Commanders were instructed in a
memorandum dated November 10, 1988 to get in touch with the officers not only of PSVSIA but also of GVM and
ASDA. All of these goes to show that the security agencies concerned do not exist and operate separately and
distinctly from each other with different corporate directions and goals. On the contrary, all the cross-linking of the
three agencies' command, control and communication systems indicate their unitary corporate personality.
Accordingly, the veil of corporate fiction of the three agencies should be lifted for the purpose of allowing
the employees of the three agencies to form a single labor union. As a single bargaining unit, the
employees therein need not file three separate petitions for certification election. All of these could be
covered in a single petition.

Labor II – 1
Petitioners' claim of alleged defect in the petition for certification election which although addressed to the three
security agencies merely alleged that there are only 1,000 employees when the total number of employees in said
security agencies is about 2,374 (PSVSIA - 1252; GVM - 807; and ASDA - 315) thereby failing to comply with the
legal requirement that at least twenty percent (20%) of the employees in the bargaining unit must support the
petition, betrays lack of knowledge of the amendments introduced by R.A 6715 which became effective on March
21, 1989, prior to the filing of the petition for certification election on April 6, 1989. Under the amendments, there is
no need for the labor union to prove that at least 20% of the security guards in the three agencies supported the
petition. When a duly organized union files a petition for certification election, the Med-Arbiter has the duty to
automatically conduct an election. He has no discretion on the matter. This is clearly the mandate of Article 257 of
the Labor Code, as amended by Section 24 of R.A. 6715, which now reads:

Art. 257. Petitions in unorganized establishments. — In any establishment where there is no certified
bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon
the filing of a petition by a legitimate labor organization.

The designation of the three agencies collectively as "PGA Security Agency" and the service of summons to the
management thereof at 82 E. Rodriguez Avenue, Quezon City did not render the petition defective. Labor Secretary
Franklin Drilon correctly noted the fact that the affidavits executed separately and under oath by the three managers
of the three security agencies indicated their office address to be at PSVSIA Center II, E. Rodriguez Sr. Blvd.,
Quezon City. Besides, even if there was improper service of summons by the Med-Arbiter, the three (3) security
agencies voluntarily submitted themselves to the jurisdiction of the labor authorities. The summons were clearly sent
to and received by their lawyer who filed motions and pleadings on behalf of the three security agencies and who
always appeared as their legal counsel. It puzzles this Court why petitioners, who claim to be separate entities,
continue to be represented by one counsel even in this instant petition.

Finally, except where the employer has to file a petition for certification election pursuant to Article 258 of the Labor
Code because of a request to bargain collectively, it has nothing to do with a certification election which is the sole
concern of the workers. Its role in a certification election has aptly been described in Trade Unions of the Philippines
and Allied Services (TUPAS) v. Trajano,  as that of a mere by-stander. It has no legal standing in a certification
6

election as it cannot oppose the petition or appeal the Med-Arbiter's orders related thereto. An employer that
involves itself in a certification election lends suspicion to the fact that it wants to create a company union.

This Court's disapprobation of management interference in certification elections is even more forceful
in Consolidated Farms, Inc. v. Noriel,  where we held:
7

On a matter that should be the exclusive concern of labor, the choice of a collective bargaining
representative, the employer is definitely an intruder. His participation, to say the least, deserves no
encouragement. This Court should be the last agency to lend support to such an attempt at
interference with a purely internal affair of labor.

Indeed, the three security agencies should not even be adverse parties in the certification election itself. We note
with disapproval the title given to the petition for certification election of the Union by the Med-Arbiter and the
Secretary of Labor naming the three security agencies as respondents. Such is clearly an error. While employers
may rightfully be notified or informed of petitions of such nature, they should not, however, be considered parties
thereto with concomitant right to oppose it. Sound policy dictates that they should maintain a strictly hands-off policy.

WHEREFORE, finding no reversible error in the questioned decision of the Secretary of Labor, the instant petition
for certiorari is hereby DISMISSED for utter lack of merit.

Labor II – 1
 8.) [G.R. No. 128845. June 1, 2000.]

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), Petitioner, v. HON. LEONARDO

A. QUISUMBING in his capacity as the Secretary of Labor and Employment; HON.
CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor and
Employment; DR. BRIAN MACCAULEY in his capacity as the Superintendent of International
School-Manila; and INTERNATIONAL SCHOOL, INC., Respondents.

DECISION

KAPUNAN, J.:

Receiving salaries less than their counterparts hired abroad, the local-hires of private
respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid
more than their colleagues in other schools is, of course, beside the point. The point is that
employees should be given equal pay for work of equal value. That is a principle long honored in this
jurisdiction. That is a principle that rests on fundamental notions of justice. That is the principle we
uphold today.

Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree
732, is a domestic educational institution established primarily for dependents of foreign diplomatic
personnel and other temporary residents. 1 To enable the School to continue carrying out its
educational program and improve its standard of instruction, Section 2(c) of the same decree
authorizes the School to employ its own teaching and management personnel selected by it either
locally or abroad, from Philippine or other nationalities, such personnel being exempt from otherwise
applicable laws and regulations attending their employment, except laws that have been or will be
enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four
tests to determine whether a faculty member should be classified as a foreign-hire or a local hire: chanrob1es virtual 1aw library

a. What is one’s domicile?

b. Where is one’s home economy?

c. To which country does one owe economic allegiance?

d. Was the individual hired abroad specifically to work in the School and was the School responsible
for bringing that individual to the Philippines? 2

Should the answer to any of these queries point to the Philippines, the faculty member is classified as
a local hire; otherwise, he or she is deemed a foreign-hire. chanroblesvirtuallawlibrary

The School grants foreign-hires certain benefits not accorded local- hires. These include
housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-
hires are also paid a salary rate twenty-five percent (25%) more than local-hires. The
School justifies the difference on two "significant economic disadvantages" foreign-hires
have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. The School
explains:chanrob1es virtual 1aw library

A foreign-hire would necessarily have to uproot himself from his home country, leave his family and
friends, and take the risk of deviating from a promising career path — all for the purpose of pursuing
Labor II – 1
his profession as an educator, but this time in a foreign land. The new foreign hire is faced with
economic realities: decent abode for oneself and/or for one’s family, effective means of
transportation, allowance for the education of one’s children, adequate insurance against illness and
death, and of course the primary benefit of a basic salary/retirement compensation.

Because of a limited tenure, the foreign hire is confronted again with the same economic reality after
his term: that he will eventually and inevitably return to his home country where he will have to
confront the uncertainty of obtaining suitable employment after a long period in a foreign land.

The compensation scheme is simply the School’s adaptive measure to remain competitive on an
international level in terms of attracting competent professionals in the field of international
education. 3

When negotiations for a new collective bargaining agreement were held on June 1995, petitioner
International School Alliance of Educators, "a legitimate labor union and the collective bargaining
representative of all faculty members" 4 of the School, contested the difference in salary rates
between foreign and local-hires. This issue, as well as the question of whether foreign-hires
should be included in the appropriate bargaining unit, eventually caused a deadlock between
the parties.

On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and
Mediation Board to bring the parties to a compromise prompted the Department of Labor and
Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting
Secretary, Cresenciano B. Trajano, issued an Order resolving the parity and representation issues in
favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner’s
motion for reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this
Court.

Petitioner claims that the point-of-hire classification employed by the School is discriminatory to
Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination.

The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all,
with nationalities other than Filipino, who have been hired locally and classified as local hires. 5 The
Acting Secretary of Labor found that these non-Filipino local-hires received the same benefits as the
Filipino local-hires: chanrob1es virtual 1aw library

The compensation package given to local-hires has been shown to apply to all, regardless of race.
Truth to tell, there are foreigners who have been hired locally and who are paid equally as Filipino
local hires. 6

The Acting Secretary upheld the point-of-hire classification for the distinction in salary
rates: chanrob1es virtual 1aw library

The principle "equal pay for equal work" does not find application in the present case. The
international character of the School requires the hiring of foreign personnel to deal with different
nationalities and different cultures, among the student population.

We also take cognizance of the existence of a system of salaries and benefits accorded to foreign
hired personnel which system is universally recognized. We agree that certain amenities have to be
provided to these people in order to entice them to render their services in the Philippines and in the
process remain competitive in the international market.

Furthermore, we took note of the fact that foreign hires have limited contract of employment unlike
the local hires who enjoy security of tenure. To apply parity therefore, in wages and other benefits
would also require parity in other terms and conditions of employment which include the employment
Labor II – 1
contract. chanrobles.com.ph:red

A perusal of the parties’ 1992-1995 CBA points us to the conditions and provisions for salary
and professional compensation wherein the parties agree as follows: chanrob1es virtual 1aw library

All members of the bargaining unit shall be compensated only in accordance with Appendix C hereof
provided that the Superintendent of the School has the discretion to recruit and hire expatriate
teachers from abroad, under terms and conditions that are consistent with accepted international
practice.

Appendix C of said CBA further provides: chanrob1es virtual 1aw library

The new salary schedule is deemed at equity with the Overseas Recruited Staff (OSRS) salary
schedule. The 25% differential is reflective of the agreed value of system displacement and
contracted status of the OSRS as differentiated from the tenured status of Locally
Recruited Staff (LRS).

To our mind, these provisions demonstrate the parties’ recognition of the difference in the
status of two types of employees, hence, the difference in their salaries.

The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an
established principle of constitutional law that the guarantee of equal protection of the laws is not
violated by legislation or private covenants based on reasonable classification. A classification is
reasonable if it is based on substantial distinctions and apply to all members of the same class.
Verily, there is a substantial distinction between foreign hires and local hires, the former enjoying
only a limited tenure, having no amenities of their own in the Philippines and have to be given a good
compensation package in order to attract them to join the teaching faculty of the School. 7

We cannot agree.

That public policy abhors inequality and discrimination is beyond contention. Our Constitution and
laws reflect the policy against these evils. The Constitution 8 in the Article on Social Justice and
Human Rights exhorts Congress to "give highest priority to the enactment of measures that protect
and enhance the right of all people to human dignity, reduce social, economic, and political
inequalities." The very broad Article 19 of the Civil Code requires every person, "in the exercise of his
rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith." cralaw virtua1aw library

International law, which springs from general principles of law, 9 likewise proscribes discrimination.
General principles of law include principles of equity, 10 i.e., the general principles of fairness and
justice, based on the test of what is reasonable. 11 The Universal Declaration of Human Rights, 12
the International Covenant on Economic, Social. and Cultural Rights, 13 the International Convention
on the Elimination of All Forms of Racial Discrimination, 14 the Convention against Discrimination in
Education, 15 the Convention (No. 111) Concerning Discrimination in Respect of Employment and
Occupation 16 — all embody the general principle against discrimination, the very antithesis of
fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part
of its national laws.

In the workplace, where the relations between capital and labor are often skewed in favor of capital,
inequality and discrimination by the employer are all the more reprehensible.

The Constitution 17 specifically provides that labor is entitled to "humane conditions of work." These
conditions are not restricted to the physical workplace — the factory, the office or the field — but
include as well the manner by which employers treat their employees.

Labor II – 1
The Constitution 18 also directs the State to promote "equality of employment opportunities for all."
Similarly, the Labor Code 19 provides that the State shall "ensure equal work opportunities
regardless of sex, race or creed." It would be an affront to both the spirit and letter of these
provisions if the State, in spite of its primordial obligation to promote and ensure equal employment
opportunities, closes its eyes to unequal and discriminatory terms and conditions of employment. 20

Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for
example, prohibits and penalizes 21 the payment of lesser compensation to a female employee as
against a male employee for work of equal value. Article 248 declares it an unfair labor practice
for an employer to discriminate in regard to wages in order to encourage or discourage
membership in any labor organization.

Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7
thereof, provides:chanrob1es virtual 1aw library

The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just
and favorable conditions of work, which ensure, in particular: chanrob1es virtual 1aw library

a. Remuneration which provides all workers, as a minimum, with: chanrob1es virtual 1aw library

i. Fair wages and equal remuneration for work of equal value without distinction of any kind, in
particular women being guaranteed conditions of work not inferior to those enjoyed by men, with
equal pay for equal work;

x          x           x

The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism
of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort
and responsibility, under similar conditions, should be paid similar salaries. 22 This rule applies to the
School, its "international character" notwithstanding.

The School contends that petitioner has not adduced evidence that local-hires perform work equal to
that of foreign-hires. 23 The Court finds this argument a little cavalier. If an employer accords
employees the same position and rank, the presumption is that these employees perform equal work.
This presumption is borne by logic and human experience. If the employer pays one employee less
than the rest, it is not for that employee to explain why he receives less or why the others receive
more. That would be adding insult to injury. The employer has discriminated against that employee;
it is for the employer to explain why the employee is treated unfairly.

The employer in this case has failed to discharge this burden. There is no evidence here that foreign-
hires perform 25% more efficiently or effectively than the local-hires. Both groups have similar
functions and responsibilities, which they perform under similar working conditions.

The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the
distinction in salary rates without violating the principle of equal work for equal pay.

"Salary" is defined in Black’s Law Dictionary (5th ed.) as "a reward or recompense for services
performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is the" [c]onsideration
paid at regular intervals for the rendering of services." In Songco v. National Labor Relations
Commission, 24 we said that: jgc:chanrobles.com.ph

"salary" means a recompense or consideration made to a person for his pains or industry in another
man’s business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of the
Roman soldier, it carries with it the fundamental idea of compensation for services rendered.
Labor II – 1
(Emphasis supplied.)

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

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

In this case, we find the point-of-hire classification employed by respondent School to justify the
distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is
no reasonable distinction between the services rendered by foreign-hires and local-hires. The practice
of the School of according higher salaries to foreign-hires contravenes public policy and, certainly,
does not deserve the sympathy of this Court.

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

A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of
the entire body of employees, consistent with equity to the employer indicate to be the best suited to
serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the
law." 29 The factors in determining the appropriate collective bargaining unit are (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees’ interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions (Substantial
Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment
status. 30 The basic test of an asserted bargaining unit’s acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their collective
bargaining rights. 31

It does not appear that foreign-hires have indicated their intention to be grouped together
with local-hires for purposes of collective bargaining. The collective bargaining history in
the School also shows that these groups were always treated separately. Foreign-hires
have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform
similar functions under the same working conditions as the local-hires, foreign-hires are
accorded certain benefits not granted to local-hires. These benefits, such as housing,
transportation, shipping costs, taxes, and home leave travel allowance, are reasonably
related to their status as foreign-hires, and justify the exclusion of the former from the
latter. To include foreign-hires in a bargaining unit with local-hires would not assure either
group the exercise of their respective collective bargaining rights.

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The
Orders of the Secretary of Labor and Employment dated June 10, 1996 and March 19, 1997, are
hereby REVERSED and SET ASIDE insofar as they uphold the practice of respondent School of
according foreign-hires higher salaries than local hires.
chanrobles.com : red

Labor II – 1
 9.) [G.R. No. 157086, February 18, 2013]

LEPANTO CONSOLIDATED MINING COMPANY, Petitioner, v. THE LEPANTO CAPATAZ

UNION, Respondents.

DECISION

BERSAMIN, J.:

Capatazes are not rank-and-file employees because they perform supervisory functions for
the management; hence, they may form their own union that is separate and distinct from
the labor organization of rank-and-file employees.

The Case

Lepanto Consolidated Mining Company (Lepanto) assails the Resolution promulgated on December
18, 2002,1 whereby the Court of Appeals (CA) dismissed its petition for certiorari on the ground of its
failure to first file a motion for reconsideration against the decision rendered by the Secretary of the
Department of Labor and Employment (DOLE); and the resolution promulgated on January 31,
2003,2 whereby the CA denied Lepanto’s motion for reconsideration.

Antecedents

As a domestic corporation authorized to engage in large-scale mining, Lepanto operated several

mining claims in Mankayan, Benguet. On May 27, 1998, respondent Lepanto Capataz Union
(Union), a labor organization duly registered with DOLE, filed a petition for consent
election with the Industrial Relations Division of the Cordillera Regional Office (CAR) of
DOLE, thereby proposing to represent 139 capatazes of Lepanto.3

In due course, Lepanto opposed the petition,4 contending that the Union was in reality seeking a
certification election, not a consent election, and would be thereby competing with the Lepanto
Employees Union (LEU), the current collective bargaining agent. Lepanto pointed out that
the capatazes were already members of LEU, the exclusive representative of all rank-and-file
employees of its Mine Division.

On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect
that the  capatazes  could form a separate bargaining unit due to their not being rank-and-
file employees,5viz:

xxxx

We agree with petitioner that its members perform a function totally different from the rank-and-file
employees. The word capataz is defined in Webster’s Third International Dictionary, 1986 as “a
boss”, “foreman” and “an overseer”. The employer did not dispute during the hearing that the
capatazes indeed take charge of the implementation of the job orders by supervising and
instructing the miners, mackers and other rank-and-file workers under them, assess and
evaluate their performance, make regular reports and recommends (sic) new systems and
procedure of work, as well as guidelines for the discipline of employees. As testified to by
petitioner’s president, the capatazes are neither rank-and-file nor supervisory and, more
or less, fall in the middle of their rank. In this respect, we can see that indeed the
capatazes differ from the rank-and-file and can by themselves constitute a separate
bargaining unit.

While it is claimed by the employer that historically, the capatazes have been considered among the
Labor II – 1
rank-and-file and that it is only now that they seek a separate bargaining unit such history of
affiliation with the rank-and-file association of LEU cannot totally prevent the capatazes from
disaffiliating and organizing themselves separately. The constitutional right of every worker to self-
organization essentially gives him the freedom to join or not to join an organization of his own
choosing.

The fact that petitioner seeks to represent a separate bargaining unit from the rank-and-file
employees represented by the LEU renders the contract bar rule inapplicable. While the collective
bargaining agreement existing between the LEU and the employer covering the latter’s rank-and-file
employee covers likewise the capatazes, it was testified to and undisputed by the employer that the
capatazes did not anymore participate in the renegotiation and ratification of the new CBA upon
expiration of their old one on 16 November 1998. Their nonparticipation was apparently due to their
formation of the new bargaining unit. Thus, while the instant petition was filed on 27 May 1998, prior
to the freedom period, in the interest of justice and in consonance with the constitutional right of
workers to self-organization, the petition can be deemed to have been filed at the time the 60-day
freedom period set in. After all, the petition was still pending and unresolved during this period.

WHEREFORE, the petition is hereby granted and a certification election among the capataz employees
of the Lepanto Consolidated Mining Company is hereby ordered conducted, subject to the usual pre-
election and inclusion/exclusion proceedings, with the following choices:

1. Lepanto Capataz Union; and

2. No Union.

The employer is directed to submit to this office within ten (10) days from receipt hereof a copy of
the certified list of its capataz employees and the payroll covering the said bargaining unit for the last
three (3) months prior to the issuance hereof.

SO DECIDED. 6

Lepanto appealed to the DOLE Secretary.7

On July 12, 2000, then DOLE Undersecretary Rosalinda Dimapilis-Baldoz (Baldoz), acting by authority
of the DOLE Secretary, affirmed the ruling of Med-Arbiter Lontoc,8 pertinently stating as follows:

xxxx

The bargaining unit sought to be represented by the appellee are the capataz employees of the
appellant. There is no other labor organization of capatazes within the employer unit except herein
appellant. Thus, appellant is an unorganized establishment in so far as the bargaining unit of
capatazes is concerned. In accordance with the last paragraph of Section 11, Rule XI, Department
Order No. 9 which provides that “in a petition filed by a legitimate labor organization involving an
unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code, automatically
order the conduct of certification election after determining that the petition has complied with all
requirements under Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal
thereof exists”, the order for the conduct of a certification election is proper.

Finally, as to the issue of whether the Med-Arbiter exhibited ignorance of the law when she directed
the conduct of a certification election when appellee prays for the conduct of a consent election, let it
be stressed that appellee seeks to be recognized as the sole and exclusive bargaining representative
of all capataz employees of appellant. There are two modes by which this can be achieved, one is by
voluntary recognition and two, by consent or certification election. Voluntary recognition under Rule
X, Department Order No. 9 is a mode whereby the employer voluntarily recognizes the union as the
bargaining representative of all the members in the bargaining unit sought to be represented.
Consent and certification election under Rules XI and XII of Department Order No. 9 is a mode
Labor II – 1
whereby the members of the bargaining unit decide whether they want a bargaining representative
and if so, who they want it to be. The difference between a consent election and a certification
election is that the conduct of a consent election is agreed upon by the parties to the petition while
the conduct of a certification election is ordered by the Med-Arbiter. In this case, the appellant
withdrew its consent and opposed the conduct of the election. Therefore, the petition necessarily
becomes one of a petition for certification election and the Med-Arbiter was correct in granting the
same.9

xxxx

In the ensuing certification election held on November 28, 2000, the Union garnered 109
of the 111 total valid votes cast.10

On the day of the certification election, however, Lepanto presented an opposition/protest. 11 Hence,
on February 8, 2001, a hearing was held on Lepanto’s opposition/protest. Although the parties were
required in that hearing to submit their respective position papers, Lepanto later opted not to submit
its position paper,12 and contended that the issues identified during the hearing did not pose any
legal issue to be addressed in a position paper.13

On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered a

decision certifying the Union as the sole and exclusive bargaining agent of all capatazes of
Lepanto.14

On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-Ulep to the DOLE Secretary.

By her Resolution dated September 17, 2002,15 DOLE Secretary Patricia A. Sto. Tomas affirmed
the decision dated April 26, 2001, holding and disposing thus:

Appellant accused Med-Arbiter Ulep of grave abuse of discretion amounting to lack of jurisdiction
based on her failure to resolve appellant’s motion to modify order to submit position papers and on
rendering judgment on the basis only of appellee’s position paper.

We deny.

Section 5, Rule XXV of Department Order No. 9, otherwise known as the New Rules Implementing
Book V of the Labor Code, states that “in all proceedings at all levels, incidental motions shall not be
given due course, but shall remain as part of the records for whatever they may be worth when the
case is decided on the merits”.

Further, the motion to modify order to submit position papers filed by appellant is without merit.
Appellant claimed that the issues over which Med-Arbiter Ulep directed the submission of position
papers were:  (1) failure to challenge properly; (2) failure (especially of LEU) to participate actively in
the proceedings before the decision calling for the conduct of certification election; and (3) validity of
earlier arguments.  According to appellant, the first issue was for appellee LCU to reply to in its
position paper, the second issue was for the LEU and the third issue for appellant company to explain
in their respective position paper.  It was the position of appellant company that unless the parties
filed their position paper on each of their respective issues, the other parties cannot discuss the
issues they did not raise in the same position papers and have to await receipt of the others’ position
paper for their appropriate reply.

Section 9, Rule XI of Department Order No. 9, which is applied with equal force in the disposition of
protests on the conduct of election, states that “the Med-Arbiter shall in the same hearing direct all
concerned parties, including the employer, to simultaneously submit their respective position papers
within a non-extendible period of ten days”.  The issues as recorded in the minutes of 28 February
2001 hearing before the Med-Arbiter are clear.  The parties, including appellant company were
Labor II – 1
required to submit their respective positions on whether there was proper challenge of the voters,
whether LEU failed to participate in the proceedings, if so, whether it should be allowed to participate
at this belated stage and whether the arguments raised during the pre-election conferences and in
the protests are valid. The parties, including appellant company were apprised of these issues and
they agreed thereto.  The minutes of the hearing even contained the statement that “no order will
issue” and that “the parties are informed accordingly”.  If there is any matter that had to be clarified,
appellant should have clarified the same during the said hearing and refused to file its position paper
simultaneously with LCU and LEU.  It appears that appellant did not do so and acquiesced to the
filing of its position paper within fifteen days from the date of said hearing.

Neither is there merit in appellant’s contention that the Med-Arbiter resolved the protest based solely
on appellee LCU’s position paper. Not only did the Med-Arbiter discuss the demerits of appellant’s
motion to modify order to submit position papers but likewise the demerits of its protest. We do not,
however, agree with the Med-Arbiter that the protest should be dismissed due to appellant’s failure
to challenge the individual voters during the election. We take note of the minutes of the pre-election
conference on 10 November 2000, thus:

“It was also agreed upon (by union and management’s legal officer) that all those listed will be
allowed to vote during the certification election subject to challenge by management on ground
that none of them belongs to the bargaining unit”. (Underscoring supplied)

It is therefore, not correct to say that there was no proper challenge made by appellant company.
The challenge was already manifested during the pre-election conference, specifying that all listed
voters were being challenged because they do not belong to the bargaining unit of capatazes.
Likewise, the formal protest filed by appellant company on the day of the election showed its protest
to the conduct of the election on the grounds that (1) none of the names submitted and included
(with pay bracket 8 and 9) to vote qualifies as capataz under the five-point characterization made in
02 May 2000 decision calling for the conduct of certification election; (2) the characterization made in
the 02 May 2000 decision pertains to shift bosses who constitutes another union, the Lepanto Local
Staff Union; and (3) the names listed in the voters’ list are members of another union, the Lepanto
Employees Union. This constitutes proper challenge to the eligibility of all the voters named in the list
which includes all those who cast their votes. The election officer should have not canvassed the
ballots and allowed the Med-Arbiter to first determine their eligibility.

Notwithstanding the premature canvass of the votes, we note that appellant company failed to
support its grounds for challenge with sufficient evidence for us to determine the validity of its claim.
No job description of the challenged voters was submitted by appellant from which we can verify
whether the said voters are indeed disqualified from the alleged five-point characterization made in
the 02 May 2000 decision, either before the Med-Arbiter or on appeal. Neither was the job
description of the shift bosses whom appellant company claims pertain to the alleged five-point
characterization submitted for our perusal. The challenge must perforce fail for lack of evidence.

As to the alleged membership of appellee LCU’s member with another union LEU, the issue has been
resolved in the 02 May 2000 decision of Med-Arbiter Lontoc which we affirmed on 12 July 2000.

WHEREFORE, the appeal is hereby DENIED for lack of merit and the decision of the Med-Arbiter
dated 26 April 2001, certifying Lepanto Capataz Union as the sole and exclusive bargaining agent of
all capataz workers of Lepanto Consolidated Mining Company, is AFFIRMED.

SO RESOLVED.16

Ruling of the CA

Still dissatisfied with the result, but without first filing a motion for reconsideration, Lepanto
Labor II – 1
challenged in the CA the foregoing decision of the DOLE Secretary through a petition for certiorari.

On December 18, 2002, the CA dismissed Lepanto’s petition for certiorari, stating in its first
assailed resolution:

Considering that the petitioner failed to file a prior motion for reconsideration of the Decision of the
public respondent before instituting the present petition as mandated by Section 1 of Rule 65 of the
1997 Rules of Civil Procedure, as amended, the instant “Petition for Certiorari Under Rule 65 with
Prayer for Temporary Restraining Order and Injunction” is hereby DISMISSED.

Well-settled is the rule that the  “filing of a petition for certiorari under Rule 65 without first moving
for reconsideration of the assailed resolution generally warrants the petition’s outright dismissal. As
we consistently held in numerous cases, a motion for reconsideration by a concerned party is
indispensable for it affords the NLRC an opportunity to rectify errors or mistakes it might have
committed before resort to the courts can be had.

It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate
remedy in the ordinary course of law against acts of public respondents. Here, the plain and
adequate remedy expressly provided by law was a motion for reconsideration of the impugned
resolution, based on palpable or patent errors, to be made under oath and filed within ten (10) days
from receipt of the questioned resolution of the NLRC, a procedure which is jurisdictional. Further, it
should be stressed that without a motion for reconsideration seasonably filed within the ten-day
reglementary period, the questioned order, resolution or decision of NLRC, becomes final and
executory after ten (10) calendar days from receipt thereof.” (Association of Trade Unions (ATU),
Rodolfo Monteclaro and Edgar Juesan v. Hon. Commissioners Oscar N. Abella, Musib N.
Buat, Leon Gonzaga, Jr., Algon Engineering Construction Corp., Alex Gonzales and Editha
Yap. 323 SCRA 50).

SO ORDERED.17

Lepanto moved to reconsider the dismissal, but the CA denied its motion for reconsideration through
the second assailed resolution.18

Issues

Hence, this appeal by Lepanto based on the following errors, namely:

THE COURT OF APPEALS ERRED IN SUMMARILY DISMISSING THE PETITION FOR CERTIORARI ON
THE GROUND THAT NO PRIOR MOTION FOR RECONSIDERATION WAS FILED. THE DECISION OF THE
SECRETARY BEING FINAL AND EXECUTORY, A MOTION FOR RECONSIDERATION WAS NOT AN
AVAILABLE REMEDY FOR PETITIONER.

II

ON THE MERITS, THE SECRETARY OF LABOR ACTED WITHOUT OR IN EXCESS OF JURISDICTION,

[O]R WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
ISSUNG THE DECISION DATED SEPTEMBER 17, 2002, WHEN SHE DELIBERATELY IGNORED THE
FACTS AND RULED IN FAVOR OF THE RESPONDENT UNION, DESPITE HER OWN FINDING THAT
THERE HAD BEEN A PREMATURE CANVASS OF VOTES. 19

Lepanto argues that a motion for reconsideration was not an available remedy due to the decision
of the DOLE Secretary being already classified as final and executory under Section 15, Rule XI, Book
V of Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 9, series of

Labor II – 1
1997;20 that the Union’s petition for consent election was really a certification election; that the Union
failed to give a definite description of the bargaining unit sought to be represented; and that
the capatazes should be considered as rank-and-file employees.

The issues to be resolved are, firstly, whether a motion for reconsideration was a pre-requisite in the
filing of its petition for certiorari; and, secondly, whether the capatazes  could form their own
union independently of the rank-and-file employees.

Ruling

The petition for review has no merit.

I.
The filing of the motion for reconsideration
is a pre-requisite to the filing of a petition for
certiorari to assail the decision of the DOLE Secretary

We hold to be untenable and not well taken Lepanto’s submissions that: (1) a motion for
reconsideration was not an available remedy from the decision of the DOLE Secretary because of
Section 15, Rule XI, Book V of the Omnibus Rules Implementing the Labor Code, as amended; and
(2) the ruling in National Federation of Labor v. Laguesma21 (recognizing the remedy of certiorari
against the decision of the DOLE Secretary to be filed initially in the CA) actually affirms its position
that an immediate recourse to the CA on certiorari is proper even without the prior filing of a motion
for reconsideration.

To start with,  the requirement of the timely filing of a motion for reconsideration as a precondition to
the filing of a petition for certiorari accords with the principle of exhausting administrative remedies
as a means to afford every opportunity to the respondent agency to resolve the matter and correct
itself if need be.22

And, secondly, the ruling in National Federation of Labor v. Laguesma reiterates St. Martin’s Funeral
Home v. National Labor Relations Commission,23 where the Court has pronounced that the special
civil action of certiorari is the appropriate remedy from the decision of the National Labor Relations
Commission (NLRC) in view of the lack of any appellate remedy provided by the Labor Code to a
party aggrieved by the decision of the NLRC. Accordingly, any decision, resolution or ruling of the
DOLE Secretary from which the Labor Code affords no remedy to the aggrieved party may be
reviewed through a petition for certiorari  initiated only in the CA in deference to the principle of the
hierarchy of courts.

Yet, it is also significant to note that  National Federation of Labor v. Laguesma also reaffirmed the
dictum issued in St. Martin’s Funeral Homes v. National Labor Relations Commission to the effect
that “the remedy of the aggrieved party is to timely file a motion for reconsideration as a
precondition for any further or subsequent remedy, and then seasonably avail of the special civil
action of certiorari  under Rule 65 x x x.”24

Indeed, the Court has consistently stressed the importance of the seasonable filing of a motion for
reconsideration prior to filing the certiorari petition. In SMC Quarry 2 Workers Union-February Six
Movement (FSM) Local Chapter No. 1564 v. Titan Megabags Industrial Corporation25 and Manila Pearl
Corporation v. Manila Pearl Independent Workers Union,26 the Court has even warned that a failure to
file the motion for reconsideration would be fatal to the cause of the petitioner. 27 Due to its
extraordinary nature as a remedy, certiorari  is to be availed of only when there is no appeal, or any
plain, speedy or adequate remedy in the ordinary course of law. 28 There is no question that a motion
for reconsideration timely filed by Lepanto was an adequate remedy in the ordinary course of law in
view of the possibility of the Secretary of Justice reconsidering her disposition of the matter, thereby
according the relief Lepanto was seeking.
Labor II – 1
Under the circumstances, Lepanto’s failure to timely file a motion for reconsideration prior to filing its
petition for certiorari in the CA rendered the September 17, 2002 resolution of the DOLE Secretary
beyond challenge.

II.
Capatazes are not rank-and-file employees;
hence, they could form their own union

Anent the second issue, we note that Med-Arbiter Lontoc found in her Decision issued on May 2,
2000 that the capatazes  were performing functions totally different from those performed
by the rank-and-file employees, and that the capatazes were “supervising and instructing
the miners, mackers and other rank-and-file workers under them, assess[ing] and
evaluat[ing] their performance, mak[ing] regular reports and recommend[ing] new
systems and procedure of work, as well as guidelines for the discipline of employees.”29 
Hence, Med-Arbiter Lontoc concluded, the capatazes “differ[ed] from the rank-and-file and
[could] by themselves constitute a separate bargaining unit.”30

Agreeing with Med-Arbiter Lontoc’s findings, then DOLE Undersecretary Baldoz, acting by authority of
the DOLE Secretary, observed in the resolution dated July 12, 2000, thus: 31

The bargaining unit sought to be represented by the appellee are the capataz employees of
the appellant. There is no other labor organization of capatazes within the employer unit
except herein appellant. Thus, appellant is an unorganized establishment in so far as the
bargaining unit of capatazes is concerned. In accordance with the last paragraph of Section 11, Rule
XI, Department Order No. 9 which provides that “in a petition filed by a legitimate labor organization
involving an unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code,
automatically order the conduct of certification election after determining that the petition has
complied with all requirements under Section 1, 2 and 4 of the same rules and that none of the
grounds for dismissal thereof exists”, the order for the conduct of a certification election is proper. 32

We cannot undo the affirmance by the DOLE Secretary of the correct findings of her subordinates in
the DOLE, an office that was undeniably possessed of the requisite expertise on the matter in issue.
In dealing with the matter, her subordinates in the DOLE fairly and objectively resolved whether the
Union could lawfully seek to be the exclusive representative of the bargaining unit of capatazes in the
company. Their factual findings, being supported by substantial evidence, are hereby accorded great
respect and finality. Such findings cannot be made the subject of our judicial review by petition under
Rule 45 of the Rules of Court, because:

x x x [T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires
that it shall raise only questions of law. The factual findings by quasi-judicial agencies, such as the
Department of Labor and Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective field. Judicial review of labor cases does not go
far as to evaluate the sufficiency of evidence on which the labor official’s findings rest. It is not our
function to assess and evaluate all over again the evidence, testimonial and documentary, adduced
by the parties to an appeal, particularly where the findings of both the trial court (here, the DOLE
Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule limits that
function of the Court to review or revision of errors of law and not to a second analysis of the
evidence. Here, petitioners would have us re-calibrate all over again the factual basis and the
probative value of the pieces of evidence submitted by the Company to the DOLE, contrary to the
provisions of Rule 45. Thus, absent any showing of whimsical or capricious exercise of judgment, and
unless lack of any basis for the conclusions made by the appellate court may be amply
demonstrated, we may not disturb such factual findings. 33

In any event, we affirm that capatazes or foremen are not rank-and-file employees

Labor II – 1
because they are an extension of the management, and as such they may influence the
rank-and-file workers under them to engage in slowdowns or similar activities detrimental
to the policies, interests or business objectives of the employers.34

WHEREFORE, the Court DENIES the petition for review for lack of merit, and AFFIRMS the
resolutions the Court of Appeals promulgated on December 18, 2002 and January 31, 2003.

Labor II – 1
 10.) G.R. No. 179146, July 23, 2013

HOLY CHILD CATHOLIC SCHOOL, Petitioner, v. HON. PATRICIA STO. TOMAS, IN HER

OFFICIAL CAPACITY AS SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT,
AND PINAG-ISANG TINIG AT LAKAS NG ANAKPAWIS – HOLY CHILD CATHOLIC SCHOOL
TEACHERS AND EMPLOYEES LABOR UNION (HCCS-TELU-PIGLAS), Respondents.

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Civil Procedure are the
April 18, 2007 Decision1 and July 31, 2007 Resolution2 of the Court of Appeals in CA-G.R. SP No.
76175, which affirmed the December 27, 2002 Decision 3 and February 13, 2003 Resolution4 of the
Secretary of the Department of Labor and Employment (SOLE) that set aside the August 10, 2002
Decision5 of the Med-Arbiter denying private respondent’s petition for certification election.

The factual antecedents are as follows: cralavvonlinelawlibrary

On May 31, 2002, a petition for certification election was filed by private respondent Pinag-
Isang Tinig at Lakas ng Anakpawis – Holy Child Catholic School Teachers and Employees
Labor Union (HCCS-TELU-PIGLAS), alleging that: PIGLAS is a legitimate labor organization duly
registered with the Department of Labor and Employment (DOLE) representing HCCS-TELU-PIGLAS;
HCCS is a private educational institution duly registered and operating under Philippine laws; there
are approximately one hundred twenty (120) teachers and employees comprising the proposed
appropriate bargaining unit; and HCCS is unorganized, there is no collective bargaining
agreement or a duly certified bargaining agent or a labor organization certified as the sole and
exclusive bargaining agent of the proposed bargaining unit within one year prior to the filing of the
petition.6 Among the documents attached to the petition were the certificate of affiliation with Pinag-
Isang Tinig at Lakas ng Anakpawis Kristiyanong Alyansa ng Makabayang Obrero (PIGLAS-
KAMAO) issued by the Bureau of Labor Relations (BLR), charter certificate issued by PIGLAS-KAMAO,
and certificate of registration of HCCS-TELU as a legitimate labor organization issued by the DOLE. 7

In its Comment8 and Position Paper,9 petitioner HCCS consistently noted that it is a parochial school
with a total of 156 employees as of June 28, 2002, broken down as follows: ninety-eight (98)
teaching personnel, twenty-five (25) non-teaching academic employees, and thirty-three (33) non-
teaching non-academic workers. It averred that of the employees who signed to support the petition,
fourteen (14) already resigned and six (6) signed twice. Petitioner raised that members of
private respondent do not belong to the same class; it is not only a mixture of managerial,
supervisory, and rank-and-file employees – as three (3) are vice-principals, one (1) is a
department head/supervisor, and eleven (11) are coordinators – but also a combination of
teaching and non-teaching personnel – as twenty-seven (27) are non-teaching personnel. It
insisted that, for not being in accord with Article 245 10 of the Labor Code, private respondent is
an illegitimate labor organization lacking in personality to file a petition for certification
election, as held in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation
Labor Union;11 and an inappropriate bargaining unit for want of community or mutuality of
interest, as ruled in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and Employment12 and De
La Salle University Medical Center and College of Medicine v. Laguesma.13

Private respondent, however, countered that petitioner failed to substantiate its claim that
some of the employees included in the petition for certification election holds managerial
and supervisory positions.14 Assuming it to be true, it argued that Section 11 (II),15 Rule XI of
DOLE Department Order (D.O.) No. 9, Series of 1997, provided for specific instances in which a
petition filed by a legitimate organization shall be dismissed by the Med-Arbiter and that “mixture of
Labor II – 1
employees” is not one of those enumerated. Private respondent pointed out that questions pertaining
to qualifications of employees may be threshed out in the inclusion-exclusion proceedings prior to the
conduct of the certification election, pursuant to Section 2, 16 Rule XII of D.O. No. 9. Lastly, similar to
the ruling in In Re: Globe Machine and Stamping Company,17 it contended that the will of petitioner’s
employees should be respected as they had manifested their desire to be represented by only one
bargaining unit. To back up the formation of a single employer unit, private respondent
asserted that even if the teachers may receive additional pay for an advisory class and for
holding additional loads, petitioner’s academic and non-academic personnel have similar
working conditions. It cited Laguna College v. Court of Industrial Relations,18 as well as the case of
a union in West Negros College in Bacolod City, which allegedly represented both academic and non-
academic employees.

On August 10, 2002, Med-Arbiter Agatha Ann L. Daquigan denied the petition for certification
election on the ground that the unit which private respondent sought to represent is inappropriate.
She resolved: cralavvonlinelawlibrary

A certification election proceeding directly involves two (2) issues namely: (a) the proper

composition and constituency of the bargaining unit; and (b) the validity of majority representation
claims. It is therefore incumbent upon the Med-Arbiter to rule on the appropriateness of the
bargaining unit once its composition and constituency is questioned.

Section 1 (q), Rule I, Book V of the Omnibus Rules defines a “bargaining unit” as a group of
employees sharing mutual interests within a given employer unit comprised of all or less than all of
the entire body of employees in the employer unit or any specific occupational or geographical
grouping within such employer unit. This definition has provided the “community or mutuality of
interest”  test as the standard in determining the constituency of a collective bargaining unit. This is
so because the basic test of an asserted bargaining unit’s acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their collective
bargaining rights. The application of this test may either result in the formation of an employer unit
or in the fragmentation of an employer unit.

In the case at bar, the employees of [petitioner], may, as already suggested, quite easily be
categorized into (2) general classes[:] one, the teaching staff; and two, the non-teaching-staff. Not
much reflection is needed to perceive that the community or mutuality of interest is wanting between
the teaching and the non-teaching staff. It would seem obvious that the teaching staff would find
very little in common with the non-teaching staff as regards responsibilities and function, working
conditions, compensation rates, social life and interests, skills and intellectual pursuits, etc. These
are plain and patent realities which cannot be ignored. These dictate the separation of these two
categories of employees for purposes of collective bargaining. (University of the Philippines vs.
Ferrer-Calleja, 211 SCRA 451)19

Private respondent appealed before the SOLE, who, on December 27, 2002, ruled against
the dismissal of the petition and directed the conduct of two separate certification
elections for the teaching and the non-teaching personnel, thus: cralavvonlinelawlibrary

We agree with the Med-Arbiter that there are differences in the nature of work, hours and conditions
of work and salary determination between the teaching and non-teaching personnel of [petitioner].
These differences were pointed out by [petitioner] in its position paper. We do not, however, agree
with the Med-Arbiter that these differences are substantial enough to warrant the dismissal of the
petition. First, as pointed out by [private respondent], “inappropriateness of the bargaining unit
sought to be represented is not a ground for the dismissal of the petition[.”] In fact, in the cited case
of University of the Philippines v. Ferrer-Calleja, supra, the Supreme Court did not order the
dismissal of the petition but ordered the conduct of a certification election, limiting the same among
the non-academic personnel of the University of the Philippines.

Labor II – 1
It will be recalled that in the U.P. case, there were two contending unions, the Organization of Non-
Academic Personnel of U.P. (ONAPUP) and All U.P. Workers Union composed of both academic and
non-academic personnel of U.P. ONAPUP sought the conduct of certification election among the rank-
and-file non-academic personnel only while the all U.P. Workers Union sought the conduct of
certification election among all of U.P.’s rank-and-file employees covering academic and non-
academic personnel. While the Supreme Court ordered a separate bargaining unit for the U.P.
academic personnel, the Court, however, did not order them to organize a separate labor
organization among themselves. The All U.P. Workers Union was not directed to divest itself of its
academic personnel members and in fact, we take administrative notice that the All U.P. Workers
Union continue to exist with a combined membership of U.P. academic and non-academic personnel
although separate bargaining agreements is sought for the two bargaining units. Corollary, [private
respondent] can continue to exist as a legitimate labor organization with the combined
teaching and non-teaching personnel in its membership and representing both classes of
employees in separate bargaining negotiations and agreements.

WHEREFORE, the Decision of the Med-Arbiter dated 10 August 2002 is hereby REVERSED and SET

ASIDE. In lieu thereof, a new order is hereby issued directing the conduct of two certification
elections, one among the non-teaching personnel of Holy Child Catholic School, and the other, among
the teaching personnel of the same school, subject to the usual pre-election conferences and
inclusion-exclusion proceedings, with the following choices: cralavvonlinelawlibrary

A. Certification Election Among [Petitioner]’s Teaching Personnel: cralavvonlinelawlibrary

1. Holy Child Catholic School Teachers and Employees Labor Union; and
2. No Union.

B. Certification Election Among [Petitioner]’s Non-Teaching Personnel: cralavvonlinelawlibrary

1. Holy Child Catholic School Teachers and Employees Labor Union; and
2. No Union.

[Petitioner] is hereby directed to submit to the Regional Office of origin within ten (10) days from
receipt of this Decision, a certified separate list of its teaching and non-teaching personnel or when
necessary a separate copy of their payroll for the last three (3) months prior to the issuance of this
Decision.20

Petitioner filed a motion for reconsideration21 which, per Resolution dated February 13, 2003, was
denied. Consequently, petitioner filed before the CA a Petition for Certiorari with Prayer for
Temporary Restraining Order and Preliminary Injunction. 22 The CA resolved to defer action on the
prayer for TRO pending the filing of private respondent’s Comment. 23 Later, private respondent and
petitioner filed their Comment24 and Reply,25 respectively.

On July 23, 2003, petitioner filed a motion for immediate issuance of a TRO, alleging that Hon. Helen
F. Dacanay of the Industrial Relations Division of the DOLE was set to implement the SOLE Decision
when it received a summons and was directed to submit a certified list of teaching and non-teaching
personnel for the last three months prior to the issuance of the assailed Decision. 26 Acting thereon,
on August 5, 2003, the CA issued the TRO and ordered private respondent to show cause why the
writ of preliminary injunction should not be granted. 27 Subsequently, a Manifestation and
Motion28 was filed by private respondent, stating that it repleads by reference the arguments raised
in its Comment and that it prays for the immediate lifting of the TRO and the denial of the
preliminary injunction. The CA, however, denied the manifestation and motion on November 21,
200329 and, upon motion of petitioner,30 granted the preliminary injunction on April 21,
2005.31 Thereafter, both parties filed their respective Memorandum. 32
Labor II – 1
On April 18, 2007, the CA eventually dismissed the petition. As to the purported commingling of
managerial, supervisory, and rank-and-file employees in private respondent’s membership, it held
that the Toyota ruling is inapplicable because the vice-principals, department head, and coordinators
are neither supervisory nor managerial employees. It reasoned: cralavvonlinelawlibrary

x x x While it may be true that they wield power over other subordinate employees of the petitioner,
it must be stressed[,] however[,] that their functions are not confined with policy-determining such
as hiring, firing, and disciplining of employees, salaries, teaching/working hours, other monetary and
non-monetary benefits, and other terms and conditions of employment. Further, while they may
formulate policies or guidelines, nonetheless, such is merely recommendatory in nature, and still
subject to review and evaluation by the higher executives, i.e., the principals or executive officers of
the petitioner. It cannot also be denied that in institutions like the petitioner, company policies have
already been pre-formulated by the higher executives and all that the mentioned employees have to
do is carry out these company policies and standards. Such being the case, it is crystal clear that
there is no improper [commingling] of members in the private respondent union as to preclude its
petition for certification of (sic) election.33

Anent the alleged mixture of teaching and non-teaching personnel, the CA agreed with petitioner that
the nature of the former’s work does not coincide with that of the latter. Nevertheless, it ruled that
the SOLE did not commit grave abuse of discretion in not dismissing the petition for certification
election, since it directed the conduct of two separate certification elections based on Our ruling
in University of the Philippines v. Ferrer-Calleja.34

A motion for reconsideration35 was filed by petitioner, but the CA denied the same; 36 hence, this
petition assigning the alleged errors as follows: cralavvonlinelawlibrary

I.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RULING IN THE CASE OF
TOYOTA MOTOR PHILIPPINES CORPORATION VS. TOYOTA MOTOR PHILIPPINES CORPORATION
LABOR UNION (268 SCRA 573) DOES NOT APPLY IN THE CASE AT BAR DESPITE THE
[COMMINGLING] OF BOTH SUPERVISORY OR MANAGERIAL AND RANK-AND-FILE EMPLOYEES IN THE
RESPONDENT UNION; chanroblesvirtualawlibrary

II

THE HONORABLE COURT OF APPEALS ERRED IN ITS CONFLICTING RULING ALLOWING THE
CONDUCT OF CERTIFICATION ELECTION BY UPHOLDING THAT THE RESPONDENT UNION
REPRESENTED A BARGAINING UNIT DESPITE ITS OWN FINDINGS THAT THERE IS NO
MUTUALITY OF INTEREST BETWEEN THE MEMBERS OF RESPONDENT UNION APPLYING THE
TEST LAID DOWN IN THE CASE OF UNIVERSITY OF THE PHILIPPINES VS. FERRER-CALLEJA (211
SCRA 451).37

We deny.

Petitioner claims that the CA contradicted the very definition of managerial and supervisory
employees under existing law and jurisprudence when it did not classify the vice-principals,
department head, and coordinators as managerial or supervisory employees merely because the
policies and guidelines they formulate are still subject to the review and evaluation of the principal or
executive officers of petitioner. It points out that the duties of the vice-principals, department head,
and coordinators include the evaluation and assessment of the effectiveness and capability of the
teachers under them; that such evaluation and assessment is independently made without the
participation of the higher Administration of petitioner; that the fact that their recommendation
undergoes the approval of the higher Administration does not take away the independent nature of

Labor II – 1
their judgment; and that it would be difficult for the vice-principals, department head, and
coordinators to objectively assess and evaluate the performances of teachers under them if they
would be allowed to be members of the same labor union.

On the other hand, aside from reiterating its previous submissions, private respondent cites Sections
9 and 1238 of Republic Act (R.A.) No. 9481 to buttress its contention that petitioner has no standing
to oppose the petition for certification election. On the basis of the statutory provisions, it reasons
that an employer is not a party-in-interest in a certification election; thus, petitioner does not have
the requisite right to protect even by way of restraining order or injunction.

First off, We cannot agree with private respondent’s invocation of R.A. No. 9481. Said law took effect
only on June 14, 2007; hence, its applicability is limited to labor representation cases filed on or after
said date.39 Instead, the law and rules in force at the time private respondent filed its petition for
certification election on May 31, 2002 are R.A. No. 6715, which amended Book V of Presidential
Decree (P.D.) No. 442 (the Labor Code), as amended, and the Rules and Regulations Implementing
R.A. No. 6715, as amended by D.O. No. 9, which was dated May 1, 1997 but took effect on June 21,
1997.40

However, note must be taken that even without the express provision of Section 12 of RA No. 9481,
the “Bystander Rule” is already well entrenched in this jurisdiction. It has been consistently held in a
number of cases that a certification election is the sole concern of the workers, except when the
employer itself has to file the petition pursuant to Article 259 of the Labor Code, as amended, but
even after such filing its role in the certification process ceases and becomes merely a
bystander.41 The employer clearly lacks the personality to dispute the election and has no right to
interfere at all therein.42 This is so since any uncalled-for concern on the part of the employer may
give rise to the suspicion that it is batting for a company union. 43 Indeed, the demand of the law and
policy for an employer to take a strict, hands-off stance in certification elections is based on the
rationale that the employees’ bargaining representative should be chosen free from any extraneous
influence of the management; that, to be effective, the bargaining representative must owe its
loyalty to the employees alone and to no other.44

Now, going back to petitioner’s contention, the issue of whether a petition for certification election is
dismissible on the ground that the labor organization’s membership allegedly consists of supervisory
and rank-and-file employees is actually not a novel one. In the 2008 case of Republic v. Kawashima
Textile Mfg., Philippines, Inc.,45 wherein the employer-company moved to dismiss the petition for
certification election on the ground inter alia that the union membership is a mixture of rank-and-file
and supervisory employees, this Court had conscientiously discussed the applicability
of Toyota and Dunlop in the context of R.A. No. 6715 and D.O. No. 9, viz.: cralavvonlinelawlibrary

It was in R.A. No. 875, under Section 3, that such questioned mingling was first prohibited, to wit: cralavvonlinelawlibrary

Sec. 3. Employees' right to self-organization. - Employees shall have the right to self-organization
and to form, join or assist labor organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing and to engage in concerted activities for
the purpose of collective bargaining and other mutual aid or protection. Individuals employed as
supervisors shall not be eligible for membership in a labor organization of employees
under their supervision but may form separate organizations of their own. (Emphasis
supplied)

Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the legitimacy of
the labor organization. Under Section 15, the only instance when a labor organization loses its
legitimacy is when it violates its duty to bargain collectively; but there is no word on whether such
mingling would also result in loss of legitimacy. Thus, when the issue of whether the membership of
two supervisory employees impairs the legitimacy of a rank-and-file labor organization came before
the Court En Banc in Lopez v. Chronicle Publication Employees Association, the majority
pronounced: cralavvonlinelawlibrary

Labor II – 1
It may be observed that nothing is said of the effect of such ineligibility upon the union itself or on
the status of the other qualified members thereof should such prohibition be disregarded.
Considering that the law is specific where it intends to divest a legitimate labor union of any of the
rights and privileges granted to it by law, the absence of any provision on the effect of the
disqualification of one of its organizers upon the legality of the union, may be construed to
confine the effect of such ineligibility only upon the membership of the supervisor. In
other words, the invalidity of membership of one of the organizers does not make the
union illegal, where the requirements of the law for the organization thereof are,
nevertheless, satisfied and met. (Emphasis supplied)
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No. 875. The provision
in the Labor Code closest to Sec. 3 is Article 290, which is deafeningly silent on the prohibition
against supervisory employees mingling with rank-and-file employees in one labor organization. Even
the Omnibus Rules Implementing Book V of the Labor Code (Omnibus Rules) merely provides in
Section 11, Rule II, thus: cralavvonlinelawlibrary

Sec. 11. Supervisory unions and unions of security guards to cease operation. - All existing
supervisory unions and unions of security guards shall, upon the effectivity of the Code, cease to
operate as such and their registration certificates shall be deemed automatically cancelled. However,
existing collective agreements with such unions, the life of which extends beyond the date of
effectivity of the Code shall be respected until their expiry date insofar as the economic benefits
granted therein are concerned.

Members of supervisory unions who do not fall within the definition of managerial
employees shall become eligible to join or assist the rank and file organization. The
determination of who are managerial employees and who are not shall be the subject of negotiation
between representatives of supervisory union and the employer. If no agreement s reached between
the parties, either or both of them may bring the issue to the nearest Regional Office for
determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to declare
in Bulletin v. Sanchez that supervisory employees who do not fall under the category of managerial
employees may join or assist in the formation of a labor organization for rank-and-file employees,
but they may not form their own labor organization.

While amending certain provisions of Book V of the Labor Code, E.O. No. 111 and its implementing
rules continued to recognize the right of supervisory employees, who do not fall under the category
of managerial employees, to join a rank- and-file labor organization.

Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in one labor
organization, viz.:
cralavvonlinelawlibrary

Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to read as follows: cralavvonlinelawlibrary

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 (Emphasis supplied)
Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any
violation of the prohibition would bring about on the legitimacy of a labor organization.

It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which
supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions): cralavvonlinelawlibrary

Sec. 1. Who may join unions. - x x x Supervisory employees and security guards 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; Provided, that those supervisory
employees who are included in an existing rank-and-file bargaining unit, upon the effectivity of
Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz.; chanroblesvirtualawlibrary

Labor II – 1
Sec. 1. Where to file. - A petition for certification election may be filed with the Regional Office which
has jurisdiction over the principal office of the employer. The petition shall be in writing and under
oath.

Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain
collectively, may file the petition.

The petition, when filed by a legitimate labor organization, shall contain, among others: cralavvonlinelawlibrary

xxxx

(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate bargaining
unit of the rank-and-file employees shall not include supervisory employees and/or
security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered
labor organization from exercising its right to file a petition for certification election.

Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing
Article 245 of the Labor Code, as amended by R.A. No. 6715, held: cralavvonlinelawlibrary

Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory
employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor
organization. Not being one, an organization which carries a mixture of rank-and-file and
supervisory employees cannot possess any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the purpose of collective
bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever
the status of the labor organization is challenged on the basis of Article 245 of the Labor
Code.

xxxx

In the case at bar, as respondent union's membership list contains the names of at least twenty-
seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself
of its supervisory employee members, attain the status of a legitimate labor organization. Not being
one, it cannot possess the requisite personality to file a petition for certification election. (Emphasis
supplied)

In Dunlop, in which the labor organization that filed a petition for certification election was one for
supervisory employees, but in which the membership included rank-and-file employees, the Court
reiterated that such labor organization had no legal right to file a certification election to represent a
bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its
members.

It should be emphasized that the petitions for certification election involved

in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995, respectively;
hence, the 1989 Rules was applied in both cases.

But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department
Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under
Sec. 2(c) of the 1989 Amended Omnibus Rules - that the petition for certification election indicate
that the bargaining unit of rank-and-file employees has not been mingled with supervisory

Labor II – 1
employees - was removed. Instead, what the 1997 Amended Omnibus Rules requires is a plain
description of the bargaining unit, thus: cralavvonlinelawlibrary

Rule XI
Certification Elections

xxxx

Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and shall
contain, among others, the following: x x x (c) The description of the bargaining unit.”
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the 1997
Amended Omnibus Rules, although the specific provision involved therein was only Sec. 1, Rule VI, to
wit:cralavvonlinelawlibrary

Sec. 1. Chartering and creation of a local/chapter.- A duly registered federation or national union
may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2)
copies of the following: a) a charter certificate issued by the federation or national union indicating
the creation or establishment of the local/chapter; (b) the names of the local/chapter's officers, their
addresses, and the principal office of the local/chapter; and (c) the local/ chapter's constitution and
by-laws; provided that where the local/chapter's constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the
Treasurer of the local/chapter and attested to by its President.
which does not require that, for its creation and registration, a local or chapter submit a list of its
members.

Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-
PTGWO in which the core issue was whether mingling affects the legitimacy of a labor organization
and its right to file a petition for certification election. This time, given the altered legal milieu, the
Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that
while there is a prohibition against the mingling of supervisory and rank-and-file employees in one
labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that
after a labor organization has been registered, it may exercise all the rights and privileges of a
legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds for cancellation of its
registration, unless such mingling was brought about by misrepresentation, false statement or fraud
under Article 239 of the Labor Code.

In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San
Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-FFW, the Court explained
that since the 1997 Amended Omnibus Rules does not require a local or chapter to provide a list of
its members, it would be improper for the DOLE to deny recognition to said local or chapter on
account of any question pertaining to its individual members.

More to the point is Air Philippines Corporation v. Bureau of Labor Relations,  which involved a
petition for cancellation of union registration filed by the employer in 1999 against a rank-and-file
labor organization on the ground of mixed membership: the Court therein reiterated its ruling in
Tagaytay Highlands that the inclusion in a union of disqualified employees is not among the grounds
for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code.

All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted
by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it.
Toyota and Dunlop no longer hold sway in the present altered state of the law and the rules. 46

Labor II – 1
When a similar issue confronted this Court close to three years later, the above ruling was
substantially quoted in  Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the
Philippines for Empowerment and Reforms (SMCC-Super) v. Charter Chemical and Coating
Corporation.47 In unequivocal terms, We reiterated that the alleged inclusion of supervisory
employees in a labor organization seeking to represent the bargaining unit of rank-and-file
employees does not divest it of its status as a legitimate labor organization. 48

Indeed, Toyota and Dunlop no longer hold true under the law and rules governing the instant case.
The petitions for certification election involved in Toyota and Dunlop were filed on November 26,
1992 and September 15, 1995, respectively; hence, the 1989 Rules and Regulations Implementing
R.A. No. 6715 (1989 Amended Omnibus Rules) was applied. In contrast, D.O. No. 9 is applicable in
the petition for certification election of private respondent as it was filed on May 31, 2002.

Following the doctrine laid down in Kawashima  and SMCC-Super, it must be stressed that petitioner
cannot collaterally attack the legitimacy of private respondent by praying for the dismissal of the
petition for certification election:
cralavvonlinelawlibrary

Except when it is requested to bargain collectively, an employer is a mere bystander to any petition
for certification election; such proceeding is non-adversarial and merely investigative, for the purpose
thereof is to determine which organization will represent the employees in their collective bargaining
with the employer. The choice of their representative is the exclusive concern of the employees; the
employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the
process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some
employees participating in a petition for certification election are actually managerial employees will
lend an employer legal personality to block the certification election. The employer's only right in the
proceeding is to be notified or informed thereof.

The amendments to the Labor Code and its implementing rules have buttressed that policy even
more.49

Further, the determination of whether union membership comprises managerial and/or supervisory
employees is a factual issue that is best left for resolution in the inclusion-exclusion proceedings,
which has not yet happened in this case so still premature to pass upon. We could only emphasize
the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters
within their jurisdiction, are generally accorded not only with respect but even finality by the courts
when supported by substantial evidence.50 Also, the jurisdiction of this Court in cases brought before
it from the CA via Rule 45 is generally limited to reviewing errors of law or jurisdiction. The findings
of fact of the CA are conclusive and binding. Except in certain recognized instances, 51 We do not
entertain factual issues as it is not Our function to analyze or weigh evidence all over again; the
evaluation of facts is best left to the lower courts and administrative agencies/quasi-judicial bodies
which are better equipped for the task.52

Turning now to the second and last issue, petitioner argues that, in view of the improper
mixture of teaching and non-teaching personnel in private respondent due to the absence
of mutuality of interest among its members, the petition for certification election should
have been dismissed on the ground that private respondent is not qualified to file such
petition for its failure to qualify as a legitimate labor organization, the basic qualification
of which is the representation of an appropriate bargaining unit.

We disagree.

The concepts of a union and of a legitimate labor organization are different from, but
related to, the concept of a bargaining unit: cralavvonlinelawlibrary

Labor II – 1
Article 212(g) of the Labor Code defines a labor organization as "any union or association of
employees which exists in whole or in part for the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment." Upon compliance with all the
documentary requirements, the Regional Office or Bureau shall issue in favor of the applicant labor
organization a certificate indicating that it is included in the roster of legitimate labor organizations.
Any applicant labor organization shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration.53

In case of alleged inclusion of disqualified employees in a union, the proper procedure for an
employer like petitioner is to directly file a petition for cancellation of the union’s certificate of
registration due to misrepresentation, false statement or fraud under the circumstances enumerated
in Article 239 of the Labor Code, as amended.54 To reiterate, private respondent, having been validly
issued a certificate of registration, should be considered as having acquired juridical personality
which may not be attacked collaterally.

On the other hand, a bargaining unit has been defined as a "group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective interests of all
the employees, consistent with equity to the employer, indicated to be best suited to serve reciprocal
rights and duties of the parties under the collective bargaining provisions of the law."55 In
determining the proper collective bargaining unit and what unit would be appropriate to be the
collective bargaining agency, the Court, in the seminal case of Democratic Labor Association v. Cebu
Stevedoring Company, Inc.,56 mentioned several factors that should be considered, to wit: (1) will of
employees (Globe Doctrine); (2) affinity and unity of employees' interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions; (3) prior
collective bargaining history; and (4) employment status, such as temporary, seasonal and
probationary employees. We stressed, however, that the test of the grouping is community or
mutuality of interest, because “the basic test of an asserted bargaining unit's acceptability is whether
or not it is fundamentally the combination which will best assure to all employees the exercise of
their collective bargaining rights." 57

As the SOLE correctly observed, petitioner failed to comprehend the full import of Our ruling
in U.P. It suffices to quote with approval the apt disposition of the SOLE when she denied petitioner’s
motion for reconsideration: cralavvonlinelawlibrary

[Petitioner] likewise claimed that we erred in interpreting the decision of the Supreme Court in U.P.
v. Ferrer-Calleja, supra. According to [petitioner], the Supreme Court stated that the non-academic
rank-and-file employees of the University of the Philippines shall constitute a bargaining unit to the
exclusion of the academic employees of the institution. Hence, [petitioner] argues, it sought the
creation of separate bargaining units, namely: (1) [petitioner]’s teaching personnel to the exclusion
of non-teaching personnel; and (2) [petitioner]’s non-teaching personnel to the exclusion of teaching
personnel.

[Petitioner] appears to have confused the concepts of membership in a bargaining unit

and membership in a union. In emphasizing the phrase “to the exclusion of academic employees”
stated in U.P. v. Ferrer-Calleja, [petitioner] believed that the petitioning union could not
admit academic employees of the university to its membership. But such was not the
intention of the Supreme Court.

A bargaining unit is a group of employees sought to be represented by a petitioning union.

Such employees need not be members of a union seeking the conduct of a certification
election. A union certified as an exclusive bargaining agent represents not only its
members but also other employees who are not union members. As pointed out in our
assailed Decision, there were two contending unions in the U.P. case, namely[,] the Organization of
Non-Academic Personnel of U.P. (ONAPUP) and the All U.P. Worker’s Union composed of both U.P.
Labor II – 1
academic and non-academic personnel. ONAPUP sought the conduct of a certification election among
the rank-and-file non-academic personnel only, while the All U.P. Workers Union intended to cover all
U.P. rank-and-file employees, involving both academic and non-academic personnel.

The Supreme Court ordered the “non-academic rank-and-file employees of U.P. to constitute a
bargaining unit to the exclusion of the academic employees of the institution”, but did not order them
to organize a separate labor organization. In the U.P. case, the Supreme Court did not dismiss the
petition and affirmed the order for the conduct of a certification election among the non-academic
personnel of U.P., without prejudice to the right of the academic personnel to constitute a separate
bargaining unit for themselves and for the All U.P. Workers Union to institute a petition for
certification election.

In the same manner, the teaching and non-teaching personnel of [petitioner] school must
form separate bargaining units. Thus, the order for the conduct of two separate
certification elections, one involving teaching personnel and the other involving non-
teaching personnel. It should be stressed that in the subject petition, [private respondent]
union sought the conduct of a certification election among all the rank-and-file personnel
of [petitioner] school. Since the decision of the Supreme Court in the U.P. case prohibits us
from commingling teaching and non-teaching personnel in one bargaining unit, they have
to be separated into two separate bargaining units with two separate certification
elections to determine whether the employees in the respective bargaining units desired
to be represented by [private respondent]. In the U.P. case, only one certification election
among the non-academic personnel was ordered, because ONAPUP sought to represent that
bargaining unit only. No petition for certification election among the academic personnel was
instituted by All U.P. Workers Union in the said case; thus, no certification election pertaining to its
intended bargaining unit was ordered by the Court. 58

Indeed, the purpose of a certification election is precisely to ascertain the majority of the employees’
choice of an appropriate bargaining unit – to be or not to be represented by a labor organization and,
if in the affirmative case, by which one.59

At this point, it is not amiss to stress once more that, as a rule, only questions of law may be raised
in a Rule 45 petition. In Montoya v. Transmed Manila Corporation,60 the Court discussed the
particular parameters of a Rule 45 appeal from the CA’s Rule 65 decision on a labor case, as
follows:cralavvonlinelawlibrary

x x x In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast

with the review for jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits
us to the review of questions of law raised against the assailed CA decision. In ruling for legal
correctness, we have to view the CA decision in the same context that the petition for certiorari it
ruled upon was presented to it; we have to examine the CA decision from the prism of
whether it correctly determined the presence or absence of grave abuse of discretion in
the NLRC decision before it, not on the basis of whether the NLRC decision on the merits of
the case was correct. In other words, we have to be keenly aware that the CA undertook a Rule 65
review, not a review on appeal, of the NLRC decision challenged before it. This is the approach that
should be basic in a Rule 45 review of a CA ruling in a labor case. In question form, the question
to ask is: Did the CA correctly determine whether the NLRC committed grave abuse of
discretion in ruling on the case?61

Our review is, therefore, limited to the determination of whether the CA correctly resolved the
presence or absence of grave abuse of discretion in the decision of the SOLE, not on the basis of
whether the latter’s decision on the merits of the case was strictly correct. Whether the CA
committed grave abuse of discretion is not what is ruled upon but whether it correctly determined
the existence or want of grave abuse of discretion on the part of the SOLE.

Labor II – 1
WHEREFORE, the petition is DENIED. The April 18, 2007 Decision and July 31, 2007, Resolution of
the Court of Appeals in CA-G.R. SP No. 76175, which affirmed the December 27, 2002 Decision of
the Secretary of the Department of Labor and Employment that set aside the August 10, 2002
Decision of the Med-Arbiter denying private respondent’s petition for certification election are
hereby AFFIRMED

Labor II – 1
 11.) G.R. No. 193816, November 21, 2016

ERSON ANG LEE DOING BUSINESS AS "SUPER LAMINATION

SERVICES," Petitioner, v. SAMAHANG MANGGAGAWA NG SUPER LAMINATION (SMSLS-
NAFLU-KMU), Respondent.

DECISION

SERENO, C.J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court on the Decision 1 and
Resolution2 of the Court of Appeals (CA) affirming the assailed Decision 3 of the Department of Labor
and Employment (DOLE). DOLE allowed the conduct of certification election among the rank-and-file
employees of Super Lamination Services (Super Lamination), Express Lamination Services, Inc.
(Express Lamination), and Express Coat Enterprises, lnc. (Express Coat).

THE ANTECEDENT FACTS

Petitioner Erson Ang Lee (petitioner), through Super Lamination, is a duly registered entity
principally engaged in the business of providing lamination services to the general public.
Respondent Samahan ng mga Manggagawa ng Super Lamination Services (Union A) is a
legitimate labor organization, which is also a local chapter affiliate of the National Federation of Labor
Unions - Kilusang Mayo Uno.4 It appears that Super Lamination is a sole proprietorship under
petitioner's name,5 while Express Lamination and Express Coat are duly incorporated
entities separately registered with the Securities and Exchange Commission (SEC). 6

On 7 March 2008, Union A filed a Petition for Certification Election 7 to represent all the rank-
and-file employees of Super Lamination.8

Notably, on the same date, Express Lamination Workers' Union (Union B) also filed a Petition
for Certification Election to represent all the rank-and-file employees of Express
Lamination.9

Also on the same date, the Samahan ng mga Manggagawa ng Express Coat Enterprises, Inc.
(Union C) filed a Petition for Certification Election to represent the rank-and-file
employees of Express Coat.10

Super Lamination, Express Lamination, and Express Coat, all represented by one counsel,
separately claimed in their Comments and Motions to Dismiss that the petitions must be
dismissed on the same ground — lack of employer-employee relationship between these
establishments and the bargaining units that Unions A, B, and C seek to represent as well
as these unions' respective members.11 Super Lamination, in its Motion, posited that a
majority of the persons who were enumerated in the list of members and officers of Union
A were not its employees, but were employed by either Express Lamination or Express
Coat.12 Interestingly, both Express Lamination and Express Coat, in turn, maintained the
same argument that a majority of those who had assented to the Petition for Certification
Election were not employees of either company, but of one of the two other companies
involved.13

All three Petitions for Certification Election of the Unions were denied. On 21 May 2008, an
Order was issued by DOLE National Capital Region (NCR) Med-Arbiter Michael Angelo Parado denying
the respective petitions of Unions B and C on the ground that there was no existing employer-
employee relationship between the members of the unions and the companies concerned.
Labor II – 1
On 23 May 2008, DOLE NCR Med-Arbiter Alma Magdaraog-Alba also denied the petition of
respondent Union A on the same ground. 14

The three unions filed their respective appeals before the Office of the DOLE Secretary, which
consolidated the appeal because the involved companies alternately referred to one another as the
employer of the members of the bargaining units sought to be represented. 15 The unions argued that
their petitions should have been allowed considering that the companies involved were unorganized,
and that the employers had no concomitant right to oppose the petitions. They also claimed that
while the questioned employees might have been assigned to perform work at the other
companies, they were all under one management's direct control and supervision. 16

DOLE, through Undersecretary Romeo C. Lagman, rendered the assailed Decision, the dispositive
portion of which reads as follows: 
ChanRoblesVirtualawlibrary

WHEREFORE, premises considered, the appeals filed by Express Lamination Workers Union (ELWU-
NAFLU-KMU), Samahang Manggagawa ng Express Coat Enterprises, Inc. (SMEC-NAFLU-KMU) and
Samahang Manggagawa ng Super Lamination Services (SMSLS NAFLU-KMU) are
hereby GRANTED and the Orders dated 21 May 2008 of DOLE-NCR Mediator-Arbiter Michael Angelo
T. Parado are hereby REVERSED and SET ASIDE. The Order dated 23 May 2008 of DOLE NCR
Mediator-Arbiter Alma E. Magdaraog-Alba is likewise REVERSED and SET ASIDE.

Accordingly, let the entire records of this be remanded to the regional office of origin for the
immediate conduct of certification election among the rank-and-file employees of Express
Lamination Services, Inc., Super Lamination Services and Express Coat Enterprises Inc.,
after the conduct of pre-election conference/s, with the following as choices;

1. Express Lamination Workers Union-NAFLU-KMU;

2. Samahan ng mga Manggagawa ng Super Lamination Services NAFLU-KMU;

3. Samahang ng mga Manggagawa ng Express Coat Enterprises, Inc.-NAFLU-KMU; and

4. "No Union."

The employer/s and/or contending union(s) are hereby directed to submit to the Regional Office of
origin, within ten (10) days from receipt of this Decision, a certified list of employees in the
bargaining unit or the payrolls covering the members of the bargaining unit for the last three (3)
months prior to the issuance of the Decision.

SO DECIDED.17(Emphases in the original)

DOLE found that Super Lamination, Express Lamination, and Express Coat were sister
companies that had a common human resource department responsible for hiring and
disciplining the employees of the three companies. The same department was found to have
also given them daily instructions on how to go about their work and where to report for work. It also
found that the three companies involved constantly rotated their workers, and that the
latter's identification cards had only one signatory. 18

To DOLE, these circumstances showed that the companies were engaged in a work-pooling
scheme, in light of which they might be considered as one and the same entity for the
purpose of determining the appropriate bargaining unit in a certification election.19 DOLE
applied the concept of multi-employer bargaining under Sections 5 and 6 of DOLE Department
Order 40-03, Series of 2003. Under that concept, the creation of a single bargaining unit for
the rank-and-file employees of all three companies was not implausible and was justified
Labor II – 1
under the given circumstances.20 Thus, it considered these rank-and-file employees as one
bargaining unit and ordered the conduct of a certification election as uniformly prayed for by the
three unions.

Aggrieved, petitioner instituted an appeal before the CA, which denied his Petition and affirmed the
Decision of DOLE. It sided with DOLE in finding that Super Lamination, Express Lamination, and
Express Coat were sister companies that had adopted a work-pooling scheme. Therefore, it held that
DOLE had correctly applied the concept of multi-employer bargaining in finding that the three
companies could be considered as the same entity, and their rank-and-file employees as comprising
one bargaining unit.21

Petitioner filed a Motion for Reconsideration of the CA Decision, but the motion was
denied.22 Therefore, he now comes to this Court through the present Petition.

ISSUES

From the established facts and arguments, we cull the issues as follows:

1. Whether the application of the doctrine of piercing the corporate veil is warranted

2. Whether the rank-and-file employees of Super Lamination, Express Lamination, and

Express Coat constitute an appropriate bargaining unit

THE COURT'S RULING

We deny the petition.

An application of the doctrine of

piercing the corporate veil is
warranted.

Petitioner argues that separate corporations cannot be treated as a single bargaining unit
even if their businesses are related,23 as these companies are indubitably distinct entities
with separate juridical personalities. 24 Hence, the employees of one corporation cannot be
allowed to vote in the certification election of another corporation, lest the abovementioned rule be
violated.25cralawred

Petitioner's argument, while correct, is a general rule. This Court has time and again disregarded
separate juridical personalities under the doctrine of piercing the corporate veil. It has done so in
cases where a separate legal entity is used to defeat public convenience, justify wrong, protect fraud,
or defend crime, among other grounds.26 In any of these situations, the law will regard it as an
association of persons or, in case of two corporations, merge them into one. 27

A settled formulation of the doctrine of piercing the corporate veil is that when two business
enterprises are owned, conducted, and controlled by the same parties, both law and equity
will, when necessary to protect the rights of third parties, disregard the legal fiction that
these two entities are distinct and treat them as identical or as one and the same. 28

This formulation has been applied by this Court to cases in which the laborer has been put in a
disadvantageous position as a result of the separate juridical personalities of the employers
involved.29 Pursuant to veil-piercing, we have held two corporations jointly and severally liable for an
employee's back wages.30 We also considered a corporation and its separately incorporated branches
as one and the same for purposes of finding the corporation guilty of illegal dismissal. 31 These rulings

Labor II – 1
were made pursuant to the fundamental doctrine that the corporate fiction should not be used as a
subterfuge to commit injustice and circumvent labor laws. 32

Here, a certification election was ordered to be held for all the rank-and-file employees of Super
Lamination, Express Lamination, and Express Coat. The three companies were supposedly
distinct entities based on the fact that Super Lamination is a sole proprietorship while
Express Lamination and Express Coat were separately registered with the SEC. 33 The
directive was therefore, in effect, a piercing of the separate juridical personalities of the corporations
involved. We find the piercing to be proper and in accordance with the law as will be discussed below.

The following established facts show that Super Lamination, Express Lamination, and
Express Coat are under the control and management of the same party — petitioner Ang
Lee. In effect, the employees of these three companies have petitioner as their common
employer, as shown by the following facts:

1. Super Lamination, Express Lamination, and Express Coat were engaged in the same
business of providing lamination services to the public as admitted by petitioner in his
petition.34

2. The three establishments operated and hired employees through a common human
resource department as found by DOLE in a clarificatory hearing. 35 Though it was not clear
which company the human resource department was officially attached to, petitioner admits in
his petition that such department was  shared by the three companies for purposes of
convenience.36

3. The workers of all three companies were constantly rotated and periodically
assigned to Super Lamination or Express Lamination or Express Coat to perform the same or
similar tasks.37 This finding was further affirmed when petitioner admitted in his petition
before us that the Super Lamination had entered into a work-pooling agreement with the two
other companies and shared a number of their employees. 38

4. DOLE found and the CA affirmed that the common human resource department imposed
disciplinary sanctions and directed the daily performance of all the members of Unions A, B,
and C.39

5. Super Lamination included in its payroll and SSS registration not just its own
employees, but also the supposed employees of Express Lamination and Express
Coat. This much was admitted by petitioner in his Motion to Dismiss 40 which was affirmed by
the Med-Arbiter in the latter's Order.41cralawred

6. Petitioner admitted that Super Lamination had issued and signed the identification cards of
employees who were actually working for Express Lamination and Express Coat. 42

7. Super Lamination, Express Lamination, and Express Coat were represented by the same
counsel who interposed the same arguments in their motions before the Med-Arbiters and
DOLE.43

Further, we discern from the synchronized movements of petitioner and the two other companies an
attempt to frustrate or defeat the workers' right to collectively bargain through the shield of the
corporations' separate juridical personalities. We make this finding on the basis of the motions to
dismiss filed by the three companies. While similarly alleging the absence of an employer-employee
relationship, they alternately referred to one another as the employer of the members of the
bargaining units sought to be represented respectively by the unions. This fact was affirmed by the
Med-Arbiters' Orders finding that indeed, the supposed employees of each establishment were found

Labor II – 1
to be alternately the employees of either of the two other companies as well. This was precisely the
reason why DOLE consolidated the appeals filed by Unions A, B, and C. 44

Due to the finger-pointing by the three companies at one another, the petitions were dismissed. As a
result, the three unions were not able to proceed with the conduct of the certification election. This
also caused confusion among the employees as to who their real employer is, as Union A claims in its
Comment.45

We hold that if we allow petitioner and the two other companies to continue obstructing the holding
of the election in this manner, their employees and their respective unions will never have a chance
to choose their bargaining representative. We take note that all three establishments were
unorganized. That is, no union therein was ever duly recognized or certified as a bargaining
representative.46

Therefore, it is only proper that, in order to safeguard the right of the workers and Unions
A, B, and C to engage in collective bargaining, the corporate veil of Express Lamination and
Express Coat must be pierced. The separate existence of Super Lamination, Express Lamination,
and Express Coat must be disregarded. In effect, we affirm the lower tribunals in ruling that these
companies must be treated as one and the same unit for purposes of holding a certification election.

Petitioner has cited Diatagon Labor Federation Local v. Ople47 and Indophil Textile Mill Worker Union
v. Calica48 in which this Court refused to treat separate corporations as a single bargaining unit.
Those cases, however, are not substantially identical with this case and would not warrant their
application herein. Unlike in the instant case, the corporations involved were found to be completely
independent or were not involved in any act that frustrated the laborers' rights.

In Diatagon,49 we refused to include the 236 employees of Georgia Pacific International Corporation
in the bargaining unit of the employees of Liangga Bay Logging Co., Inc. This Court's refusal was in
light of the fact that the two corporations were indubitably distinct entities with separate corporate
identities and origins. Moreover, there was no discernible attempt to frustrate any of their labor-
related rights, as the only conflict was over which bargaining unit they belonged to.

In Indophil,50 this Court refused to pierce the corporate veil of Indophil Textile Mill and Indophil
Acrylic Manufacturing. We found that the creation of Indophil Acrylic was not a device to evade the
application of the collective bargaining agreement (CBA) between petitioner union and Indophil
Textile Mill. This Court further found that despite the similarity in their business operations, the
separate personalities of the two corporations were maintained and were not used for any of the
purposes specified under the law that would warrant piercing. It is also apparent in this case that the
workers' rights were not being hampered by the employers concerned, as the only issue between
them was the extent of the subject CBA's application.

In this case, not only were Super Lamination, Express Lamination, and Express Coat found
to be under the control of petitioner, but there was also a discernible attempt to disregard
the workers' and unions' right to collective bargaining.

The foregoing considered, we find no error in the CA's affirmance of the DOLE directive. We affirm
DOLE's application by analogy of the concept of multi-employer bargaining to justify its
Decision to treat the three companies as one. While the multi-employer bargaining
mechanism is relatively new and purely optional under Department Order No. 40-03, it
illustrates the State's policy to promote the primacy of free and responsible exercise of the
right to collective bargaining.51 The existence of this mechanism in our labor laws affirm
DOLE's conclusion that its treatment of the employees of the three companies herein as a
single bargaining unit is neither impossible nor prohibited. 52 It is justified under the
circumstances discussed above.

Labor II – 1
Besides, it is an established rule that factual findings of labor officials, who are deemed to have
acquired expertise in matters within their jurisdiction, are generally accorded by the courts not only
respect but even finality when supported by substantial evidence; i.e., that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion. 53

The bargaining unit of the rank-and

file employees of the three companies
is appropriate.

Petitioner argues that there is no showing that the rank-and-file employees of the three companies
would constitute an appropriate bargaining unit on account of the latter's different geographical
locations.54 This contention lacks merit. The basic test for determining the appropriate bargaining unit
is the application of a standard whereby a unit is deemed appropriate if it affects a grouping of
employees who have substantial, mutual interests in wages, hours, working conditions, and other
subjects of collective bargaining. 55 We have ruled that geographical location can be completely
disregarded if the communal or mutual interests of the employees are not sacrificed.56

In the present case, there was communal interest among the rank-and-file employees of
the three companies based on the finding that they were constantly rotated to all three
companies, and that they performed the same or similar duties whenever
rotated.57 Therefore, aside from geographical location, their employment status and working
conditions were so substantially similar as to justify a conclusion that they shared a
community of interest. This finding is consistent with the policy in favor of a single-employer unit,
unless the circumstances require otherwise.58 The more solid the employees are, the stronger is their
bargaining capacity.59

As correctly observed by the CA and DOLE, while there is no prohibition on the mere act of
engaging in a work-pooling scheme as sister companies, that act will not be tolerated, and
the sister companies' separate juridical personalities will be disregarded, if they use that
scheme to defeat the workers' right to collective bargaining. The employees' right to
collectively bargain with their employers is necessary to promote harmonious labor-management
relations in the interest of sound and stable industrial peace. 60

WHEREFORE, the Petition for Review on Certiorari under Rule 45 is DENIED for lack of merit. The
Court of Appeals Decision61 and Resolution62 in CA-G.R. SP No. 109486 are hereby AFFIRMED

Labor II – 1
 12.) [G.R. NO. 157146. April 29, 2005]

LAGUNA AUTOPARTS MANUFACTURING CORPORATION, Petitioners, v. OFFICE OF THE

SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) and LAGUNA AUTOPARTS
MANUFACTURING CORPORATION OBRERO PILIPINO-LAMCOR CHAPTER, Respondents.

DECISION

CALLEJO, SR., J.:

This is a Petition for Review of the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 67424
dated September 13, 2002, and the Resolution dated February 5, 2003 denying the motion for
reconsideration thereof. The assailed decision affirmed in toto the decision of the Secretary of Labor
and Employment, granting the petition for certification election filed by respondent Laguna Autoparts
Manufacturing Corporation Obrero Pilipino-LAMCOR Chapter.

On May 3, 1999, the respondent union filed a petition for certification election before the
Department of Labor and Employment (DOLE), Regional Office No. IV, Calamba, Laguna. In its
petition, the respondent union alleged that Obrero Pilipino was a legitimate labor
organization under Registration Certificate No. NCR-LF-11-04-92 issued by DOLE on November 11,
1992 and that its chapter affiliate, LAMCOR Chapter, had been assigned Control No. RO400-
9807-CC-030 dated March 23, 1999. A copy of the respondent union's Certificate of Creation was
attached to the petition. The petition further alleged that the bargaining unit sought to be
represented was composed of all the rank-and-file employees in the petitioner company, more
or less, 160 employees. It averred that the said bargaining unit is unorganized and that there has
been no certification election conducted for the past 12 months prior to the filing of the petition. 2

The petitioner company moved to dismiss the petition for certification election. It claimed that
the respondent union was not a legitimate labor organization for failure to show that it
had complied with the registration requirements, such as the submission of the following
requirements to the Regional Office or the Bureau of Labor Relations (BLR):

a) Proof of payment of registration fee;

b) List of officers and their addresses, and the address of the principal place of business of the union;

c) Minutes of the organizational meeting and the list of workers who participated in the said meeting;

d) Names of the members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where the union seeks to operate;

e) Copies of financial reports or books of accounts; and cralawlibrary

f) Copies of petitioner's constitution and by-laws, minutes of its adoption or ratification, and list of
members who participated in it.3

The petitioner company further asserted in the said motion 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.4

On October 24, 2000, Med-Arbiter Anastasio L. Bactin dismissed the petition for certification
election for the respondent union's lack of legal personality. The Med-Arbiter found that the

Labor II – 1
respondent union had not yet attained the status of a legitimate labor organization because it failed
to indicate its principal office on the documents it submitted to the Regional Office. He opined that
this was a fatal defect tantamount to failure to submit the complete requirements, which warranted
the dismissal of the petition for certification election. 5

The respondent union appealed the case to the Secretary of Labor and Employment, Patricia
A. Sto. Tomas, who ruled as follows:

WHEREFORE, the appeal is GRANTED. The order dated 24 October 2000 of the Med-Arbiter
is REVERSED and SET ASIDE. Accordingly, let the entire records of this case be remanded to the
regional office of origin for the immediate conduct of a certification election, subject to the usual pre-
election conference, among the rank-and-file employees of Laguna Auto Parts Manufacturing
Corporation (LAMCOR), with the following choices:

1. Obrero Pilipino 'LAMCOR Chapter; and cralawlibrary

2. No Union

Pursuant to Section 11.1, Rule XI of the New Implementing Rules, the employer is hereby directed to
submit to the regional office of origin the certified list of current employees in the bargaining unit for
the last three months prior to the issuance of this decision.

SO DECIDED.6

Finding no cogent reason to alter her decision, the Secretary of Labor and Employment denied the
motion for reconsideration thereof.7

Not convinced, the petitioner filed a petition for certiorari with the CA on the following grounds:

I. PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN FINDING THAT PRIVATE

RESPONDENT HAS COMPLIED WITH ALL REQUIREMENTS FOR REGISTRATION;

II. THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN FINDING THAT
PRIVATE RESPONDENT IS A LEGITIMATE LABOR UNION DESPITE LACK OF REGISTRATION AS SUCH.8

On September 13, 2002, the CA rendered a Decision in favor of the respondent union, thus:

WHEREFORE, the instant petition is hereby DENIED and the assailed decision of the Secretary of
Labor and Employment is AFFIRMED in toto.

SO ORDERED.9

The CA stressed that a local or chapter need not be registered to become a legitimate labor
organization. It pointed out that a local or chapter acquires legal personality as a labor organization
from the date of filing of the complete documents enumerated in Section 110 of Rule VI of the
Implementing Rules of Book V (as amended by Department Order [D.O.] No. 9). The CA held that
the findings of the Labor Secretary was amply supported by the records; such findings would not be
reversed since she is considered to have acquired expertise as her jurisdiction is confined to specific
matters. The CA, citing the case of Pagpalain Haulers, Inc. v. Trajano,11 also upheld the validity of
D.O. No. 9 since the petitioner failed to show that it was contrary to law or the Constitution.

Finally, the CA noted that it was the employer which offered the most tenacious resistance to the
holding of a certification election among its regular rank-and-file employees. It opined that this must

Labor II – 1
not be so for the choice of a collective bargaining agent was the sole concern of the employees, and
the employer should be a mere bystander. 12

The petitioner filed a motion for reconsideration of the CA decision, but the same was likewise denied
in a Resolution dated February 5, 2003.

Hence, this Petition for Review wherein the petitioner relies on the sole ground'

WITH DUE RESPECT, THE HON. COURT OF APPEALS COMMITTED REVERSIBLE ERRORS OF FACTS
AND LAW WHEN IT AFFIRMED THE DECISION DATED JULY 5, 2001 OF THE HON. SECRETARY
PATRICIA STO. TOMAS IN THE CASE IN RE: PETITION FOR CERTIFICATION ELECTION AMONG THE
RANK - AND-FILE EMPLOYEES OF LAGUNA AUTO PARTS MFTG. CORP. CASE NO. RO400-9905-RU-
001 WHEN IT RENDERED ITS DECISION DATED SEPTEMBER 13, 2002. 13

The issues are the following: (a) whether or not the respondent union is a legitimate labor
organization; (b) whether or not a chapter's legal personality may be collaterally attacked in a
petition for certification election; and (c) whether or not the petitioner, as the employer, has the legal
standing to oppose the petition for certification election.

The petitioner submits that there is no law prohibiting it from questioning and impugning
the status of the respondent union even in a petition for certification election. It stresses
that the right to file a petition for certification election is a mere statutory right and, to
enjoy such right, the respondent union must comply with the requirements provided under
the law, particularly the requirement that the applicant must be a legitimate labor
organization. In this case, the Med-Arbiter found that the respondent union, which is a local or
chapter, had not yet attained the status of a legitimate labor organization for failure to indicate its
principal office on the list of officers it submitted to the Regional Office. The petitioner insists that
substantial compliance with the requirements is not sufficient; as such, even if such address was
indicated in the other documents submitted to the Regional Office, the requirement would still not be
considered fulfilled. The petitioner concludes that the respondent union, therefore, does not have the
right to file a petition for certification election.

The petitioner further postulates that in order to be considered legitimate, a labor

organization must be issued a certificate of registration. It contends that D.O. No. 9, insofar as
it requires that the mere submission of documentary requirements as sufficient to give legitimate
personality to a labor organization, is ultra vires. The petitioner avers that the said Department Order
could not amend Article 234 of the Labor Code which clearly states that the registration of a union is
the operative act that imbues it with legitimate personality.

The petitioner then argues that since the mere submission of documents does not vest legitimate
status on a local or chapter, it follows that such status may be questioned collaterally in a petition for
certification election. It adds that the issue of whether or not the respondent union has the legal
personality must first be resolved before the petition for certification election should be granted.

Finally, the petitioner maintains that in a number of cases,14 the employer was allowed to question
the status of the union-applicant in a petition for certification election. 15

For its part, the respondent union avers that the petitioner's active participation in the representation
proceedings was an act of intervention of the employee's right to self-organization. It asserts that the
CA was correct in finding that the petitioner did not observe a strictly hands-off policy in the
representation proceedings, in violation of established jurisprudence. It argues that the petitioner's
alleged violation of the requirements of D.O. No. 9, for failure to indicate its principal address, has
already been resolved by the decision of the Secretary of Labor and Employment. 16

Labor II – 1
The petition is unmeritorious.

In a Petition for Review on Certiorari as a mode of appeal under Rule 45 of the Rules of Court, a
petitioner can raise only questions of law - the Supreme Court is not the proper venue to consider a
factual issue as it is not a trier of facts. 17 Findings of fact of administrative agencies and quasi-judicial
bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are
generally accorded not only great respect but even finality. 18 This is particularly true where the CA
affirms such findings of fact. In this case, the CA affirmed the finding of the Secretary of Labor and
Employment that the respondent union is a legitimate labor organization.

Indeed, a local or chapter need not be independently registered to acquire legal

personality. Section 3, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9
clearly states'

SEC. 3. Acquisition of legal personality by local/chapter. 'A local/chapter constituted in

accordance with Section 1 of this Rule shall acquire legal personality from the date of filing of
the complete documents enumerated therein. Upon compliance with all documentary
requirements, the Regional Office or Bureau shall issue in favor of the local/chapter a certificate
indicating that it is included in the roster of legitimate labor organizations. 19

As gleaned from the said provision, the task of determining whether the local or chapter has
submitted the complete documentary requirements is lodged with the Regional Office or the BLR, as
the case may be. The records of the case show that the respondent union submitted the said
documents to Regional Office No. IV and was subsequently issued the following certificate:

CERTIFICATE OF CREATION OF LOCAL/ CHAPTER NO.

This certifies that as of July 16, 1998 the OBRERO PILIPINO-LAMCOR submitted to this Office Charter
Certificate No. 07-98 issued by OBRERO PILIPINO with complete supporting documents. From said
date, it has acquired legal personality as a labor organization. It shall have the right to represent its
members for all purposes not contrary to law or applicable regulations and to its constitution and by-
laws.

The legitimate personality of OBRERO PILIPINO-LAMCOR CHAPTER is without prejudice to whatever

grounds for revocation or cancellation as may be prescribed by applicable laws and regulations.

March 23, 1999

Date

By:

(SGD.)

RAYMUNDO G. AGRAVANTE

Labor Relations Division Chief20

Hence, the Regional Office, through the Labor Relations Division Chief, has determined
that the respondent union complied with the requirements under the law. 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.
Labor II – 1
We rule, however, that such legal personality may not be subject to a collateral attack but
only through a separate action instituted particularly for the purpose of assailing it. This is
categorically prescribed by Section 5, Rule V of the Implementing Rules of Book V, which states as
follows:

SEC. 5. Effect of registration. 'The labor organization or workers' association shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of
registration. Such legal personality cannot thereafter be subject to collateral attack but may
be questioned only in an independent petition for cancellation in accordance with these
Rules.21

Hence, to raise the issue of the respondent union's legal personality is not proper in this case. The
pronouncement of the Labor Relations Division Chief, that the respondent union acquired a legal
personality with the submission of the complete documentary requirement, cannot be challenged in a
petition for certification election.

The discussion of the Secretary of Labor and Employment on this point is also enlightening, thus:

'Section 5, Rule V of D.O. 9 is instructive on the matter. It provides that the legal personality of a
union cannot be the subject of collateral attack in a petition for certification election, but may be
questioned only in an independent petition for cancellation of union registration. This has been the
rule since NUBE v. Minister of Labor, 110 SCRA 274 (1981). 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) appellant's legal
personality has been revoked or cancelled with finality. Since appellant is listed in the
registry of legitimate labor organizations, and its legitimacy has not been revoked or
cancelled with finality, the granting of its petition for certification election is proper.22

Finally, on the issue of whether the petitioner has the legal standing to oppose the petition
for certification election, we rule in the negative. Our ruling in San Miguel Foods, Inc.-Cebu B-
Meg Feed Plant v. Laguesma23 is still sound, thus:

In any case, this Court notes that it is petitioner, the employer, which has offered the most tenacious
resistance to the holding of a certification election among its monthly-paid rank-and-file employees.
This must not be so, for the choice of a collective bargaining agent is the sole concern of the
employees. The only exception to this rule is where the employer has to file the petition for
certification election pursuant to Article 258 of the Labor Code because it was requested to bargain
collectively, which exception finds no application in the case before us. Its role in a certification
election has aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS) v.
Trajano, as that of a mere bystander. It has no legal standing in a certification election as it cannot
oppose the petition or appeal the Med-Arbiter's orders related thereto. ' 24

In conclusion, we find no reversible error in the CA's decision dismissing the Petition for Certiorari for
the nullification of the decision of the Secretary of Labor and Employment. It should be stressed
that certiorari will issue only to correct errors of jurisdiction and not to correct errors of judgment or
mistakes in the tribunal's findings and conclusions.25 The petitioner failed to demonstrate any grave
abuse of discretion on the part of the Secretary of Labor and Employment in granting the petition for
certification election.

Labor II – 1
WHEREFORE, premises considered, the petition is DENIED DUE COURSE. The Decision of the Court
of Appeals in CA-G.R. SP No. 67424 and the Resolution dated February 5, 2003 are AFFIRMED.

Labor II – 1
13.) G.R. No. 101730 June 17, 1993

PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, petitioner,

vs.
HON. BIENVENIDO E. LAGUESMA and PT & T SUPERVISORY EMPLOYEES UNION-APSOTEU, respondents.

Leonard U. Sawal for private respondent.

[Petitioner Union wanted to dismiss the petition for CE of respondent Union bc there already exists a
bargaining unit for their RNF employees also bc they said that the employees to be represented are not
supervisory but managerial. Court ruled no. 1.) If unorganized, then there should be automatic CE upon
filing of petition. Even if there are RNF BU already, it is still unorganized bc no Supervisory union still. 2.)
PT&T had no personality to file a MTD, CE sole concern of employees. 3.) If they wanted to question the
inclusion of employees, they should have raised it in the inclusion-exclusion proceedings.]

BELLOSILLO, J.:

Can a petition for certification election filed by supervisory employees of an unorganized establishment —
one without a certified bargaining agent — be dismissed on the ground that these employees are actually
performing managerial functions?

This is the issue for reconsideration in this petition for certiorari and mandamus, with prayer for the issuance of a
temporary restraining order, of
the Resolution of 11 June 1991  of then Acting Secretary of Labor and Employment Nieves D. Confesor dismissing
1

the appeal from the Order of 11 December 1990  of the Med-Arbiter which granted the petition for certification
2

election, and of the Order of 15 August 1991  denying reconsideration.

3

On 22 October 1990, private respondent PT&T Supervisory Employees Union-APSOTEU (UNION, for brevity)
filed a petition before the Industrial Relations Decision of the Department of Labor and Employment praying for the
holding of a certification election among the supervisory employees of petitioner Philippine Telegraph &
Telephone Corporation (PT&T, for brevity). On 29 October 1990, UNION amended its petition to include the
allegation that PT&T was an unorganized establishment employing roughly 100 supervisory employees from whose
ranks will constitute the bargaining unit sought to be established.

On 22 November 1990, PT&T moved to dismiss the petition for certification election on the ground that
UNION members were performing managerial functions and thus were not merely supervisory employees.
Moreover, PT&T alleged that a certified bargaining unit already existed among its rank-and-file employees
which barred the filing of the petition.

On 27 November 1990, respondent UNION opposed the motion to dismiss, contending that under the Labor Code
supervisory employees are not eligible to join the Labor organization of the rank-and-file employees although they
may form their own.

On 4 December 1990, PT&T filed its reply to the opposition and manifested that it is the function of an employee
which is determinative of whether said employee is a managerial or supervisory employee.

On 11 December 1990, the Med-Arbiter granted the petition and ordered that "a certification election . . . (be)
conducted among the supervisory personnel of the Philippine Telegraph & Telephone Corporation
(PT&T)."  Petitioner PT&T appealed to the Secretary of Labor and Employment.
4

On 24 May 1991, PT&T filed its supplemental appeal and attached copies of the job descriptions and employment
service records of these supervisory employees, including samples of memoranda and notices they made which

Labor II – 1
purportedly illustrate their excercise of management prerogatives. On 31 May 1991, petitioner submitted more job
descriptions to further bolster its contention.

On 11 June 1991, the Acting Secretary of Labor and Employment Nieves R. Confesor denied petitioner's appeal for
lack of merit. However, she did not rule on the additional evidence presented by PT&T. Instead, she directed that
the evidence "should be scrutinized and . . . considered during the exclusion-inclusion proceedings where the
employees who should be part of the bargaining unit . . . will be determined." 5

On 15 August 1991, respondent Undersecretary of Labor and Employment Bienvenido E. Laguesma denied
reconsideration of the resolution dismissing the appeal. Hence, the instant petition anchored on the ground that
public respondent committed grave abuse of discretion in failing to rule on the additional evidence submitted by
petitioner which would have buttressed its contention that there were no supervisory employees in its employ and
which, as a consequence, would have barred the holding of a certification election.

The petition is devoid of merit.

The applicable provision of law in the case at bar is Art. 257 of the Labor Code. It reads —

Art. 257. Petitions in unorganized establishments. — In any establishment where there is no

certified bargaining agent, a certification election shall automatically be conducted by the
Med-Arbiter upon the filing of a petition by a legitimate labor organization (emphasis supplied).

The supervisory employees of PT&T did not yet have a certified bargaining agent to represent them at the time the
UNION, which is legitimate labor organization duly registered with the Department of Labor and Employment,  filed 6

the petition for certification election. Since no certified bargaining agent represented the supervisory employees,
PT&T may be deemed an unorganized establishment within the purview of Art. 257 of the Labor Code.

The fact that petitioner's rank-and-file employees were already represented by a certified bargaining agent
doe not make PT&T an organized establishment vis-a-vis the supervisory employees. After all, supervisory
employees are "not . . . eligible for membership in a labor organization of the rank-and-file employees." 7

Consequently, the Med-Arbiter, as sustained by public respondent, committed no grave abuse of discretion in
granting the petition for certification election among the supervisory employee of petitioner PT&T because Art. 257
of the Labor Code provides that said election should be automatically conducted upon filing of the petition.
In fact, Sec. 6 of Rule V, Book V, of the Implementing Rules and Regulations makes it mandatory for the Med-
Arbiter to order the holding of a certification election. It reads —

Sec. 6. Procedure. — Upon receipt of a petition, the Regional Director shall assign the case to a
Med-Arbiter for appropriate action. The Med-Arbiter, upon receipt of the assigned petition, shall have
twenty (20) working days from submission of the case for resolution within which to dismiss or grant
the petition.

In a petition filed by a legitimate organization involving an unorganized establishment, the

Med-Arbiter shall immediately order the conduct of a certification election . . . (emphasis
supplied)

Furthermore, PT&T did not possess the legal personality to file a motion to dismiss the petition for
certification election even if based on the ground that its supervisory employees are in reality managerial
employees. It is well-settled that an employer has no standing to question a certification election  since this is
8

the sole concern of the workers.  The only exception to this rule is where the employer has to file the
9

petition for certification election itself pursuant to Art. 258   of the Labor Code because it was requested to
10

bargain collectively. But, other that this instance, the choice of a collective bargaining agent is purely the internal
affair of labor. 
11

What PT&T should have done was to question the inclusion of any disqualified employee in the certification
election during the exclusion-inclusion proceedings before the representation officer. Indeed, this is precisely
Labor II – 1
the purpose of the exclusion-inclusion proceedings, i.e., to determine who among the employees are entitled to vote
and be part of the bargaining unit sought to be certified.

Then Acting Secretary Nieves D. Confesor therefore did not abuse her discretion when she opted not to act upon
the additional evidence by petitioner PT&T. For, the holding of a certification election in an unorganized
establishment is mandatory and must immediately be ordered upon petition by a legitimate labor organization, which
is the case here.

At any rate, the additional evidence presented by petitioner failed to sufficiently show that the supervisory
employees who sought to be included in the bargaining unit were in fact performing managerial functions. On the
contrary, while these supervisory employees did excercise independent judgment which is not routinary or clerical in
nature, their authority was merely recommendatory in character. In all instances, they were still accountable for their
actions to a superior officer, i.e., their respective superintendents. The Solicitor General succinctly puts it thus —

A perusal of petitioner's annexes . . . would readily show that the power of said supervisors in
matters relating to the excercise of prerogatives for or against rank-and-file employees is not
absolute but merely recommendatory in character. Note that their reports recommending or
imposing disciplinary action against rank-and-file employees always bore the concurrence of one or
two superiors . . . and the job descriptions . . . clearly stated that these supervisors directly reported
to a superior and were accountable to the latter   (emphasis supplied).
12

As the Med-Arbiter himself noted, "It is incredible that only rank-and-file and managerial employees are the
personnel of respondent firm, considering the line of service it offers to the public"   and the fact that it employed
13

2,500 employees, more or less, all over the country.

A word more. PT&T alleges that respondent UNION is affiliated with the same national federation representing its
rank-and-file employees. Invoking Atlas Lithographic Services, Inc. v. Laguesma,   PT&T seeks the disqualification
14

of respondent UNION. Respondent, however, denied it was affiliated with the same national federation of the rank-
and-file employees union, the Associated Labor Union or ALU. It clarified that the PT&T Supervisory Employees
Union is affiliated with Associated Professional, Supervisory Office, Technical Employees Union or APSOTEU,
which is a separate and distinct national federation from ALU.

IN VIEW OF THE FOREGOING, the Petition for Certiorari and Mandamus with prayer for the issuance of a
temporary restraining order is DENIED.

Labor II – 1
14.) G.R. No. 77539 April 12, 1989

ASSOCIATED LABOR UNIONS (ALU)-TUCP, petitioner,

vs.
HON. CRESENCIANO B. TRAJANO, as Officer-In-Charge of the Bureau of Labor Relations, ASSOCIATION
OF DEMOCRATIC LABOR ORGANIZATION (ADLO) and MITSUMI PHILIPPINES, INC., respondents.

Romeo S. Occeña for petitioner.

Banzuela, Flores, Miralles, Raneses, Sy, Taquio and Associates for private respondent ADLO.

The Solicitor General for public respondent.

[Petitioner Union had a CBA which was about to expire. They tried to negotiate but did not come to
agreement. Meanwhile, while the new CBA was being negotiated, respondent ADLO filed a petition for CE.
Subsequently a new CBA was agreed on. Petitioner opposed the petition for CE stating that a CBA was in
talks when the CE was filed which cannot be done per the IRR. Hence this petition. Court ruled that it can
because the CE was filed during the freedom period, or 60-days prior to the expiration of the old CBA. Even
if there were talks of the new CBA, the fact that the old one is about to expire gave them the right to
question the majority status of the petitioner union.]

PARAS, J.:

This is a petition for certiorari with prayer for a temporary restraining order, seeking review of the resolution of the
Director of Labor Relations * dated January 30, 1987 in BLR Case No. A-1-18-87 ordering a certification election
among the rank and file employees of respondent company and the order of public respondent ** dated February
24, 1987 dismissing petitioner's motion for reconsideration for lack of merit.

The dispositive portion of the questioned resolution of the Bureau of Labor Relations dated January 30, 1987 (Rollo,
p. 55), reads, as follows:

Accordingly, let a certification election be conducted within the twenty (20) days from receipt of this
Resolution, subject to the usual pre-election conference, with the following as choices:

1. Association of Democratic Labor Union (ADLO);

2. Associated Labor union-ALU; and

3. No Union.

Let, therefore, the records be forwarded to the Office of origin for the immediate implementation of
this Resolution.

The undisputed facts of the case are as follows:

Petitioner herein is the recognized collective bargaining representative of all the rank and file employees of
respondent Company with a collective bargaining agreement effective January 1, 1984 to December 31, 1986.
Article XX of the collective bargaining agreement provides that the CBA shall be for a period of three (3) years
effective January 1, 1984 to December 31, 1986, provided that within sixty (60) days before its expiration the parties
shall renegotiate for a new one (Memorandum for the Petitioner, Rollo, p. 208).

On October 22,1986, a big majority of the covered employees of respondent Company petitioned for the renewal of
the expiring agreement which petitioner and the respondent Company agreed to negotiate. The parties, however,

Labor II – 1
failed to arrive at an acceptable agreement so that a bargaining deadlock on CBA negotiation was declared
(Memorandum for the Petitioner, Rollo, p. 209).

On November 3, 1986, petitioner filed a notice of strike (Rollo, p. 27). Failing to arrive at an agreement during the
conciliation following the filing of the notice of strike, on December 1, 1986 petitioner went on strike.

Meanwhile, on November 4,1986 private respondent Union, Association of Democratic Labor Organization
(ADLO) filed with the Ministry of Labor and Employment, Panlalawigang Tanggapan ng Paggawa, Bataan Export
Processing Zone, a verified petition for certification election among the regular rank and file workers of private
company, docketed as Case No. BZED-CE-11-011-86 (Rollo, p. 87).

On December 4, 1986, petitioner and respondent company came to an agreement with representatives of the
parties setting their signature on the resulting CBA on the same date (Rollo, p. 28), ratified by a big majority of the
covered employees, 584 out of 742 covered employees, also on the same date (Rollo, p. 43). Petitioner registered
the new CBA with the Regional Director of the Ministry of Labor and Employment in San Fernando, Pampanga on
December 4, 1986 (Rollo, p. 41) as required under Article 231 of the Labor Code.

Petitioner herein intervened in the petition for certification election. On December 9, 1986, the Med-Arbiter
called for a conference to see whether a consent election could be agreed upon between the intervenor union and
the petitioner union, but, the parties failed to reach an agreement despite several conferences (Rollo pp 59; 78).

The Med-Arbiter, Eladio de Jesus, issued an order for the holding of a certification election in a resolution
dated December 10, 1986, premised on the fact that the petitioner, respondent union herein, "has satisfactorily
complied with the jurisdictional requirement of this Office. The same records show that the instant petition was
seasonably filed within the sixty-day freedom period." (Rollo, p. 59). The said resolution was appealed by petitioner
to the Director of Bureau of Labor Relations but the appeal was dismissed for lack of merit, in the questioned
resolution of January 30, 1987 (Rollo, p. 53). Petitioner's motion for reconsideration dated February 12, 1987 (Rollo,
p. 19) was likewise dismissed in the equally questioned order of February 24, 1987 (Rollo, p. 17). The Med-Arbiter
then set the certification election for March 17, 1987 (Rollo, p. 60).

Instant petition was filed with the Court on March 9, 1987 (Rollo, p. 2). On the same date, petitioner filed an
urgent ex parte motion for issuance of a temporary restraining order ("Rollo, P. 6). On March 16, 1987, the Second
Division of this Court, without giving due course to the petition, required the respondents to comment thereon and
issued a temporary restraining order effective on the same date that the resolution was passed, to continue until
otherwise ordered by the Court (Rollo, p. 64).

The comment of public respondent was filed by the Office of the Solicitor General on June 3, 1987 (Rollo, p. 75). In
a resolution dated June 29, 1987, petitioner was required to file a reply thereto and the letters addressed to then
Chief Justice Claudio Teehankee, of twenty one (21) progressive democratic labor unions in Japan protesting the
temporary restraining order issued by the Court on March 16, 1987 was noted (Rollo, p. 129). Again on August 31,
1987, the Court resolved to note the letters of the progressive democratic organizations in Japan (Rollo, p. 140).

On August 10, 1987, the petition was given due course and both parties were required to submit their simultaneous
memoranda within thirty (30) days from notice (Rollo, p. 166). On September 18, 1987, the Office of the Solicitor
General manifested that it was adopting for its memorandum its comment on the petition for certiorari filed with the
Court on June 3, 1987 (Rollo, p. 194) which was noted by the Court in its resolution dated November 11, 1987
(Rollo, p. 202). In the same resolution, the Court also noted receipt of two telegrams of the Mitsumi Workers Union
— ALDO of Mariveles, Bataan dated September 3 and September 9, 1987 (Rollo, pp. 184,185), requesting for
information on the status of the case and for its expeditious resolution, and the letters all addressed to the Chief
Justice from progressive unions in Japan together with two undated letters signed in Japanese characters, all
demanding for a certification election (Rollo, pp. 170-182).

Memorandum for the Petitioner was filed on November 27, 1987 (Rollo, p. 208) noted by the Court in its resolution
dated February 15, 1988 (Rollo, p. 231). The motion to admit memorandum filed by respondent union on April 7,
1988 (Rollo, p. 232) was granted by the Court in its resolution dated April 18, 1988 (Rollo, p. 259) wherein the Court
also noted the memorandum of respondent union attached to the motion (Rollo, p. 234).

Labor II – 1
The issues raised by petitioner (Rollo, p. 212), are as follows:

THAT THE PUBLIC RESPONDENT ERRED IN NOT HOLDING THAT NO CERTIFICATION

ELECTION MAY BE HELD DUE TO THE FACT THAT A BARGAINING DEADLOCK TO WHICH
PETITIONER IS A PARTY IS SUBMITTED TO CONCILIATION/ ARBITRATION AND THERE IS A
VALID NOTICE OF STRIKE PRIOR TO THE FILING OF THE PETITION FOR CERTIFICATION
ELECTION ON DECEMBER 4, 1986.

II

THAT THE PUBLIC RESPONDENT ERRED IN NOT HOLDING THAT THE COLLECTIVE
BARGAINING AGREEMENT ENTERED INTO AS A RESULT OF A BARGAINING DEADLOCK
AND CONCILIATION DURING THE PROGRESS OF A STRIKE HAVING BEEN ACCORDINGLY
REPORTED TO THE DEPARTMENT OF LABOR AND EMPLOYMENT PURSUANT TO THE
PROVISIONS OF ARTICLE 231 OF THE LABOR CODE RENDERS THE FILING OF THE
PETITION FOR CERTIFICATION ELECTION PREMATURE.

III

THAT THE PUBLIC RESPONDENT ERRED IN NOT DISMISSING THE PETITION, ANNEXED "D"
AND HOLDING THAT THE COLLECTIVE BARGAINING AGREEMENT (ANNEX "B" to ANNEX "B"
HEREOF) HAVING BEEN RATIFIED BY THE MEMBBERS AND THE BENEFITS THEREIN
ENJOYED IS A BAR TO THE HOLDING OF A CERTIFICATION ELECTION.

The petition is devoid of merit.

Simply stated, the sole issue is whether or not public respondent committed a grave abuse of discretion
amounting to lack of jurisdiction in ordering a certification election considering that at the time the petition
for certification election was filed, there was a bargaining deadlock between company and the petitioner
union, as a result of which petitioner union filed a notice of strike.

In fact, it actually went on strike, and pending decision on the said petition, petitioner and respondent company
came to terms on the collective bargaining agreement duly ratified by a big majority of the covered members and
duly registered with the Department of Labor and Employment.

Public respondent denied petitioner's motion for reconsideration, finding "no compelling justification to effect a
reconsideration, much less a reversal" of the resolution of January 30, 1987 (Rollo, p. 18). The aforesaid resolution
dismissed the appeal of petitioner as intervenor in the petition for certification election based on the following: (1) the
records show that the petition for certification election was seasonably filed within the sixty (60) day freedom period;
and (2) the records likewise reveal that the petition is supported by two hundred forty-two (242) of the more or less
six hundred (600) rank-and-file employees of Mitsumi Philippines, Inc., hence, has complied with the thirty percent
(30%) statutory requirement (Rollo, p. 54). The provision of the law then in force was Article 258 of the Labor Code
inasmuch as Executive Order No. 111 which amended it took effect only on March 4, 1987. Article 258 reads, as
follows:

Art. 258. Requisites for certification election. — Any petition for certification election filed by
any legitimate labor organization shall be supported by the written consent of at least thirty
percent (30%) of all the employees in the bargaining unit. Upon receipt and verification of such
petition, it shall be mandatory for the Bureau to conduct a certification election for the purpose of
determining the representative of the employees in the appropriate bargaining unit and certify the
winner as the exclusive collective bargaining representative of all the employees in the unit.

There is no question that the 30% support requirement for a certification election had been met even if the
covered employees number 742, as alleged by petitioner (Memorandum for the Petitioner, Rollo, p. 217) not
Labor II – 1
600, Hence, it became mandatory for the Director of Labor Relations to call a certification election (Atlas Free
Workers Union (AFWU-PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association
(VIWA) v Noriel, 131 SCRA 569 [1984]; Samahang Manggagawa ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152
[1985]), and in the language of the Labor Code, "mandatory for the Bureau to conduct a certification election for the
purpose of determining the representative of the employees in the appropriate bargaining unit and certify the winner
as the exclusive bargaining representative of all employees in the unit" (Federacion Obrera de la Industria
Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan ng mga Manggagawa v.
Noriel, 77 SCRA 414 [1977]).

"No administrative agency can ignore the imperative tone of the above article. The language used is one of
command. Once it has been verified that a petition for certification election has the support of at least 30%
of the employees in the bargaining unit, it must be granted. The specific word used yields no other meaning"
(Federation of Free Workers v. Noriel, 86 SCRA 132 [1978]; Warren Manufacturing Workers Union (WMWU) v.
Bureau of Labor Relations, G.R. No. 76185, March 30, 1988).

Petitioner, however, insists that the deadlock in negotiation already submitted to conciliation/arbitration
after the filing of a valid notice of strike based on deadlock in negotiation prior to the filing of the petition
for certification election bars the holding of a certification election basing its argument on the contract bar
rule under Section 3 of Rule V, Book V of the Omnibus Rules Implementing the Labor Code (Memorandum
for the Petitioner, Rollo, p. 213), which provides:

Sec. 3. When to file — In the absence of a collective agreement submitted in accordance with
Article 231 of the Code, a petition for certification election may be filed at any time. However,
no certification i petition election may be held within one year from the date of issuance of
declaration of a final certification election result. Neither may a representation question be
entertained if, before the filing of a petition for certification election, a bargaining deadlock to
which an incumbent or certified bargaining agent is a party had been submitted to
conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

If a collective agreement has been submitted in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within
60 days prior to the expiry date of such agreement.

As the introductory sentence of the first paragraph states, said paragraph applies where there is no existing
collective bargaining agreement. This circumstance is not obtaining in the instant case. As admitted by
petitioner (Memorandum for the Petitioner, Rollo, p. 208) there was an existing collective bargaining agreement
when the petition for certification election was filed, which was to expire on December 31, 1986. It is the
second paragraph which is applicable to the case at bar.

In a recent decision, this Court interpreted the above provision as follows:

This rule simply provides that a petition for certification election or a motion for intervention
can only be entertained within 60 days prior to the expiry date of an existing collective
bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification
election during the existence of a collective bargaining agreement except within the freedom
period, as it is called, when the said agreement is about to expire. The purpose, obviously, is to
ensure stability in the relationship of the workers and the management by preventing frequent
modifications of any collective bargaining agreement earlier entered into by them in good faith and
for the stipulated original period. (Associated Trade Unions (ATU) v. Trajano, G.R. No. 75321, June
20, 1988).

Undoubtedly, the petition for certification election was filed during the 60- day freedom period. The fact that
petitioner was able to negotiate a new CBA with respondent company on December 4, 1986 within the
freedom period of the existing CBA, does not foreclose the right of a rival union, which in this instant case
is the respondent union, to challenge petitioner's claim to majority status, by filing earlier on November 4,
1986, a timely petition for certification election before the old CBA expired on December 31, 1986 and before
petitioner signed a new CBA with respondent company (Kapatiran Sa Meat and Canning Division (TUPAS
Labor II – 1
Local Chapter No. 1027) vs. Calleja, G.R. No. 82914, June 20, 1988). There should be no obstacle to the right of
the employees to petition for a certification election at the proper time, that is, within sixty (60) days prior to the
expiration of the life of a certified collective bargaining agreement (General Textiles Allied Workers Association
(GTAWA) v. Director of the Bureau of Labor Relations, 84 SCRA 430 [1978]; Warren Manufacturing Workers Union
(WMWU) v. Bureau of Labor Relations, supra), not even by a collective agreement submitted during the pendency
of a representation case.

On said subject, Rule V of the Omnibus Rules Implementing the Labor Code, provides:

Sec. 4. Effects of early agreements. — The representation case shall not, however, be
adversely affected by a collective agreement submitted before or during the last 60 days of a
subsisting agreement or during the pendency of the representation case.

The new CBA negotiated by petitioners whether or not submitted to the MOLE in accordance with Article
231 of the Labor Code cannot be deemed permanent, precluding the commencement negotiations by
another union with management, considering that it was entered into at a time when the petition for
certification election had already been filed by respondent union (Associated Trade Unions (ATU) v.
Trajano, supra). Meantime this interim agreement must be recognized and given effect on a temporary basis so as
not to deprive the workers of the favorable terms of the agreement (Vassar Industries Employers Union (VIEW) v.
Estrella, 82 SCRA 280 [1978]; National Mines and Allied Workers Union (NAMAWUMIF) v. Estrella, 87 SCRA 84
[1978], cited in Associated Trade Unions (ATU) v. Trajano, Ibid.)

If, as a result of the certification election, respondent union or a union other than petitioner union which
executed the interim agreement, is certified as the exclusive bargaining representative of the rank and file
employees of respondent company, then, such union may adopt the interim collective bargaining
agreement or negotiate with management for a new collective bargaining agreement (Associated Trade
Unions (ATU) v. Trajano, Ibid).

PREMISES CONSIDERED, (a) the petition for certiorari is DISMISSED for lack of merit; (b) the resolution of the
Bureau of Labor Relations dated January 30,1987 and the order of the Bureau dated February 24, 1987 are
AFFIRMED; and (c) the temporary restraining order issued by the Court on March 9, 1987 is LIFTED permanently.

Labor II – 1
15.) G.R. Nos. 94929-30 March 18, 1992

PORT WORKERS UNION OF THE PHILIPPINES (PWUP), petitioner,

vs.
THE HONORABLE UNDERSECRETARY OF LABOR AND EMPLOYMENT BIENVENIDO E. LAGUESMA, ATTY.
ANASTACIO L. BACTIN, MED-ARBITER NCR-DOLE, Public Respondents; INTERNATIONAL CONTAINER
TERMINAL SERVICES, INC., (ICTSI) and ASSOCIATED PORT CHECKERS AND WORKERS UNION (APCWU),
Private Respondents; SANDIGAN NG MANGGAGAWA SA DAUNGAN (SAMADA) and PORT EMPLOYEES
ASSOCIATION AND LABOR UNION (PEALU), Nominal Private Respondents, respondents.

CRUZ, J.:

There was muffled excitement among the workers of the International Container Terminal Services, Inc. (ICTSI)
because its collective bargaining agreement with private respondents Associate Port Checkers and Workers Union
(APCWU), the incumbent union, was due to expire on April 14, 1990. Other unions were seeking to represent the
laborers in the negotiation of the next CBA and were already plotting their moves.

The first challenge to APCWU was hurled on March 14, 1990, when the Sandigan ng Manggagawa sa Daungan
(SAMADA) filed a petition for certification election. The consent signatures of at least 25% of the employees in the
bargaining unit were submitted on March 26, 1990, or eleven days after the petition.

On April 2, 1990, herein petitioner Port Workers Union of the Philippines (PWUP) filed a petition for intervention.

Still another petition for certification election was filed by the Port Employees Association and Labor Union (PEALU),
on April 6, 1990. The consent signatures were submitted on May 11, 1990, or thirty-five days after the filing of the
petition.

The petitions of SAMADA and PEALU were consolidated for joint decision. On April 26, 1990, APCWU filed a
motion to dismiss them on the ground that they did not comply with the requirement set forth in Section 6, Rule V,
Book V of the Implementing Rules, quoted in part as follows:

In a petition involving an organized establishment or enterprise where the majority status of the
incumbent collective bargaining union is questioned through a verified petition by a legitimate labor
organization, the Med-Arbiter shall immediately order the certification election by secret ballot if the
petition is filed during the last sixty (60) days of the collective bargaining agreement and supported
by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining
unit. Any petition filed before or after the sixty-day freedom period shall be dismissed outright. The
twenty-five percent (25%) requirement shall be satisfied upon the filing of the petition, otherwise the
petition shall be dismissed. (Emphasis supplied.)

Specifically, APCWU faulted both petitions for non-compliance with the requirement for the 25% consent signatures
at the time of filing. This contention was upheld by the Med-Arbiter in an order dated June 5, 1990, dismissing the
consolidated petitions. 
1

PWUP appealed to the Secretary of Labor on June 28, 1990, arguing that Article 256 of the Labor Code did not
require the written consent to be submitted simultaneously with the petition for certification election. The principal
petitioners did not appeal. On August 21, 1990, DOLE Undersecretary Bienvenido Laguesma affirmed the order of
the Med-Arbiter and dismissed PWUP's appeal.  2

Thereafter, ICTSI and APCWU resumed negotiations for a new collective bargaining agreement, which was
concluded on September 28, 1990. This was ratified on October 7, 1990, by a majority of the workers in the
bargaining unit, i.e., 910 out of the 1,223 members, and subsequently registered with the DOLE.

Labor II – 1
PWUP is now before us, claiming grave abuse of discretion on the part of the public respondent in the application of
Article 256 of the Labor Code. The article provides in part as follows:

Art. 256. Representation issue in organized establishments. — In organized establishments, when a

verified petition questioning the majority status of the incumbent bargaining agent is filed before the
Department of Labor and Employment within the sixty-day period before the expiration of the
collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret
ballot when the verified petition is supported by the written consent of at least twenty-five (25%)
percent of all the employees in the bargaining unit to ascertain the will of the employees in the
appropriate bargaining unit. . . .

The petitioner argues that under this article, the Med-Arbiter should automatically order election by secret ballot
when the petition is supported by at least 25% of all employees in the bargaining unit. SAMADA and PEALU
substantially complied with the law when they submitted the required consent signatures several days after filing the
petition. The petitioner complains that the dismissal of the petitions for certification election, including its own petition
for intervention, had the effect of indirectly certifying APCWU as the sole and exclusive bargaining representative of
the ICTSI employees.

Private respondent ICTSI maintains that the dismissal was based on Article 256 of the Labor Code as implemented
by Section 6, Rule V, Book V of the Implementing Rules, quoted above. Moreover, under Section 10, Rule V, Book
V of the Implementing Rules, decisions of the Secretary in certification election cases shall be final and
unappealable.

ICTSI also cites the following ruling of this Court in Tupas v. Inciong:  3

We find no merit in the petition. As observed by the Solicitor General, while the petition of TUPAS for
a certification election may have the written support of 30 per cent of all the workers of the
bargaining unit, it is also an undisputed fact that UMI (the rival union of TUPAS) has a clear majority
of the said workers, as shown by the fact that 499 workers out of the total working force of 641 have
not only ratified the collective bargaining agreement concluded between UMI and LUSTEVECO, but
also affirmed their membership in UMI so that there is no more need for holding a certification
election. (Emphasis supplied.)

For its part, APCWU questions PWUP's personality in these proceedings in view of the lack of consent signatures in
its petition, and argues as well that the petitioner has no authority to represent SAMADA or PEALU, which had not
appealed. The private respondent also invokes Tupas and maintains that the ratification of the new CBA by the
majority of the workers was an affirmation of their membership in the union that negotiated that agreement.

In his own Comment, the Solicitor General agrees with the petitioner that there has been substantial compliance
with the requirements of the law. He submits that Article 256 should be liberally interpreted pursuant to Article 4 of
the Labor Code, stating as follows:

Art. 4. Construction in favor of labor. — All doubts in the implementation and interpretation of the
provisions of this Code including its implementing rules and regulations, shall be resolved in favor of
labor.

The Court has deliberated on the arguments of the parties in their respective pleadings and finds for the petitioner.

We have held that pursuant to the constitutional provision guaranteeing workers the right to self-organization and
collective bargaining, "the constant and unwavering policy of this Court" has been "to require a certification election
as the best means of ascertaining which labor organization should be the collective bargaining representative."  4

The certification election is the most democratic and expeditious method by which the laborers can freely determine
the union that shall act as their representative in their dealings with the establishment where they are working.   As5

we stressed in Belyca Corporation vs. Ferrer-Calleja,   the holding of a certification election is a statutory policy that
6

should not be circumvented.

Labor II – 1
This Court also held in Western Agusan Workers Union-Local 101 of the United Lumber and General Workers of
the Philippines vs. Trajano:  7

. . . it has long been settled that the policy of the Labor Code is indisputably partial to the holding of a
certification election so as to arrive in a manner definitive and certain concerning the choice of the
labor organization to represent the workers in a collective bargaining unit. Conformably to said basic
concept, this Court recognized that the Bureau of Labor Relations in the exercise of sound
discretion, may order a certification election notwithstanding the failure to meet the 30%
requirement. (Scout Ramon V. Albano Memorial College v. Noriel, 85 SCRA 494 [1978]; Vicmico
Industrial Wokers Asso. v. Noriel, 131 SCRA 569 [1984])

In line with the policy, we feel that the administrative rule requiring the simultaneous submission of the 25% consent
signatures upon the filing of petition for certification election should not be strictly applied to frustrate the
determination of the legitimate representative of the workers. Significantly, the requirement in the rule is not found in
Article 256, the law it seeks to implement. This is all the more reason why the regulation should at best be given
only a directory effect. Accordingly, we hold that the mere filing of a petition for certification election within the
freedom period is sufficient basis for the issuance of an order for the holding of a certification election, 8 subject to the
submission of the consent signatures within a reasonable period from such filing.

This interpretation is consonant with Philippine Association of Free Labor Unions v. Bureau of Labor
Relations,  where we declared:
9

. . . even conceding that the statutory requirement of 30% of the labor force asking for a certification
election had not been strictly complied with, respondent Director is still empowered to order that it be
held precisely for the purpose of ascertaining which (of the contending labor organizations) shall be
the exclusive collective bargaining representative. (National Mines and Allied Workers Union v.
Luna, et al., 83 SCRA 607)

It is not denied that the petition to intervene filed by PWUP did not carry the 25% consent signatures, but that the
requirement is in fact not applicable to a petition in intervention. We so held in PAFLU v. Ferrer-Calleja thus:  10

It is crystal clear from the said provisions that the requisite written consent of at least 20% of the
workers in the bargaining unit applies to petitioners for certification election only and not to motions
for intervention. . . . As long as the motion for intervention has been properly and timely filed and the
intervention would not cause any injustice to anyone, it should not be denied and this is so even if
the eventual purpose of the Motion for Intervention is to participate in the Certification Election. After
all, the original applicant had already met the 20% requirement.

The contention that the petitioners had no right to represent the principal petitioners which had not appealed the
dismissal order is also not acceptable. We repeat that the certification election is not litigation but a mere
investigation of a non-adversary character where the rules of procedure are not strictly applied.   Technical rules
11

and objections should not hamper the correct ascertainment of the labor union that has the support of confidence of
the majority of the workers and is thus entitled to represent them in their dealings with management.

The above-quoted decision affirms the right of PWUP to call for the holding of the election although it was initially
only an intervenor. That recognition should not be defeated by the circumstance that the other petitioning unions
have not seen fit to appeal the dismissal of their petitions even if such dismissal was questionable and is in fact
being reversed here. The petition for intervention was viable at the time it was filed because the principal petitions
had complied with the requirement for the consent signatures as specified by Article 256. Hence, its intervention
should not be disallowed simply because of the withdrawal or failure to appeal of SAMADA and PEALU.

It is correct to say that as a matter of strict procedure, a petition for intervention should be deemed automatically
dismissed where the principal petition itself fails. However, that technical rule should be allowed to prevent a correct
determination of the real representative of the workers in line with their constitutional rights to self-organization and
collective bargaining.

Labor II – 1
Regarding the invocation of Inciong by the private respondents, the Court has modified that decision in Associated
Labor Unions vs. Calleja,   where we held:
12

Finally, the petitioner assails the decision of the respondent Director on the ground that "the
ratification of the collective bargaining agreement renders the certification election moot and
academic."

This contention finds no basis in law.

The petitioner was obviously referring to the contract-bar rule where the law prohibits the holding of
certification elections during the lifetime of the collective bargaining agreement. Said agreement was
hastily and prematurely entered into apparently in an attempt to avoid the holding of a certification
election.

Deviation from the contract-bar rule is justified only where the need for industrial stability is clearly shown to be
imperative.   Subject to this singular exception, contracts where the identity of the authorized representative of the
13

workers is in doubt must be rejected in favor of a more certain indication of the will of the workers. As we stated
in Philippine Association of Free Labor Union vs. Estrella,   any stability that does not establish the type of industrial
14

peace contemplated by the law must be subordinated to the employees' freedom to choose their real representative.

The private respondents contend that the overwhelming ratification of the CBA is an affirmation of their membership
in the bargaining agent, rendering the representation issue moot and academic and conclusively barring the holding
of a certification election thereon. That conclusion does not follow. Even Tupas did not say that the mere ratification
of the CBA by the majority of the workers signified their affirmation of membership in the negotiating union. That
case required, first, ratification of the CBA, the second, affirmation of membership in the negotiating union. The
second requirement has not been established in the case at bar as the record does not show that the majority of the
workers, besides ratifying the new CBA, have also formally affiliated with APCWU.

Section 4, Rule V, Book V of the Omnibus Rules implementing the Labor Code provides that the representation
case shall not be adversely affected by a collective agreement submitted before or during the last 60 days of a
subsisting agreement or during the pendency of the representation case. As the new CBA was entered into at the
time when the representation case was still pending, it follows that it cannot be recognized as the final agreement
between the ICTSI and its workers.

On the allegation that the decision of the Secretary of Labor on certification election is final and inappealable, this
Court held in San Miguel Corp. v. Secretary of Labor   that:
15

It is generally understood that as to administrative agencies exercising quasi-judicial or legislative

power there is an underlying power in the courts to scrutinize the acts of such agencies on questions
of law and jurisdiction even though no right of review is given by statute. (73, C.J.S. 506, note 56). . .
. judicial review is proper in case of lack of jurisdiction, grave abuse of discretion. error of law, fraud
or collusion (Timbancaya v. Vicente, 82 O.G. 9424; Macatangay v. Secretary of Public Works and
Communication, 63 O.G. 11236; Ortua v. Singson Encarnacion, 59 Phil. 440).

There was indeed grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public
respondents when they dismissed the petitions for certification election because the consent signatures had not
been submitted simultaneously with the petition. The issue of majority representation thus remains open and awaits
settlement. Following the rulings above-quoted, we hereby declare that the newly-concluded CBA cannot constitute
a bar to the holding of a certification election.

It is possible that the APCWU will prevail in the certification election, in which event the new CBA it concluded with
ICTSI will be upheld and recognized. It is also possible that another union will be chosen, in which event it will have
to enter into its own negotiations with ICTSI that may result in the adoption of a new CBA. In the meantime,
however, the old CBA having expired, it is necessary to lay down the rules regulating the relations of the workers
with the management. For this reason, the Court hereby orders that the new CBA concluded by ICTSI and APCWU
shall remain effective between the parties, subject to the result and effects of the certification election to be called.

Labor II – 1
The certification election is the best method of determining the will of the workers on the crucial question of who
shall represent them in their negotiations with the management for a collective bargaining agreement that will best
protect and promote their interests. It is essential that there be no collusion against this objective between an
unscrupulous management and a union covertly supporting it while professing its loyalty to labor, or at least that the
hopes of labor be not frustrated because of its representation by a union that does not enjoy its approval and
support. It is therefore sound policy that any doubt regarding the real representation of the workers be resolved in
favor of the holding of the certification election. This is preferable to the suppression of the voice of the workers
through the prissy observance of technical rules that will exalt procedure over substantial justice.

WHEREFORE, the petition is GRANTED. The challenged order dated August 21, 1990, is REVERSED and SET
ASIDE and the public respondent is DIRECTED to schedule and hold certification election among the workers of the
International Container Terminal Services, Inc., this to be done with all possible dispatch. No costs.

Labor II – 1
 16.) [G.R. No. 77818. August 3, 1988.]

NATIONAL ASSOCIATION OF FREE TRADE UNIONS (NAFTU-TUCP), Petitioner, v. BUREAU

OF LABOR RELATIONS (BLR) and SOUTHERN PHILIPPINES FEDERATION OF LABOR
(SPFL), Respondents, PACIFIC CEMENT COMPANY, INC. (PACEMCO), employer.

Hustino E. Horculada for Petitioner.

Alfonso S. Casurra for respondent PACEMCO.

Fuentes Law Office for respondent SPFL.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; CERTIFICATION ELECTION; MUST BE

HELD TO DETERMINE THE EXCLUSIVE BARGAINING REPRESENTATIVE OF THE UNION. — The Court
inclines to the position taken by the private respondent as more conformable to the language and
spirit of the said law. This rule precisely called for the holding of a certification election whenever
there appeared to be a reasonable doubt as to whether or not the union directly certified had really
been chosen by the majority of the workers as their exclusive bargaining representative. Such was
the situation in the case at bar. Moreover, a certification election is a more acceptable method than
direct certification, which under the provisions of the aforementioned article, should be resorted to
only where there was no doubt that the union so certified had the full or at least the majority support
of the workers.

2. ID.; ID.; DIRECT CERTIFICATION; NO LONGER AVAILABLE IN REPRESENTATION ISSUES. — By

virtue of Executive Order No. 111, which became effective on March 4, 1987, the direct certification
originally allowed in this article has apparently been discontinued as a method of selecting the
exclusive bargaining agent of the workers. This amendment affirms the superiority of the certification
election over the direct certification which, assuming it was validly made in favor of the petitioner in
1986, is no longer available to it now under the change in the said provision. The new rule as
amended by the executive order now reads as follows: "ART. 256. Representation issues on
organized establishments. — In organized establishments, when a petition questioning the majority
status of the incumbent bargaining agent is filed before the Ministry within the sixty-day period
before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically
order an election by secret ballot to ascertain the will of the employees in the appropriate bargaining
unit. To have a valid election, at least a majority of all eligible voters in the unit must have cast their
votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit. When an election which provides for three or more
choices results in no choice receiving a majority of the valid cast, a run-off election shall be
conducted between the choices receiving the two highest number of votes."

DECISION

CRUZ, J.:

Will the direct certification of a labor union as the exclusive bargaining agent of the workers preempt
and preclude the calling of a certification election on petition of another labor union in the same
establishment?

Labor II – 1
The direct certification was obtained on June 6, 1986, by the petitioner in this case, the National
Association of Free Trade Unions (NAFTU TUCP), on the strength of its allegation, as confirmed by the
med-arbiter, that there was no other labor union requesting recognition as representative of the
workers in their negotiations with the management of the Pacific Cement Co. (PACEMCO). 1` On
June 20, 1986, however, and also within the freedom period, the Southern Philippines Federation of
Labor (SPFL), the private respondent herein, filed a petition for certification election signed by 168
workers, representing over 60% of the total number of rank-and-filers of the company. 2 NAFTU, as
forced intervenor, opposed the petition, invoking its own earlier direct certification, but on August 11,
1986, the med-arbiter who had granted the same reversed his previous order and authorized the
holding of the certification election. 3 On appeal, his order was sustained by the Bureau of Labor
Standards, which held that the certification election was justified under the circumstances, adding
that the workers had the constitutional right to choose the labor union to represent them in
negotiating with the management. 4 Its motion for reconsideration having been denied, the
petitioner then came to this Court to ask for the reversal of the resolution of the public respondent
dated October 24, 1986, on the ground that it was reached with grave abuse of discretion correctible
by writ of certiorari. chanrobles virtual lawlibrary

The original Article 257 of the Labor Code provided as follows: jgc:chanrobles.com.ph

"ART. 257. Procedure governing representation issues. — When a question concerning the
representation of employees is submitted to the Ministry, a Med-Arbiter shall hear and decide such
controversy and certify to the parties in writing the name of the labor organization that has been
designated or selected by the majority of the workers in the appropriate bargaining unit as the
exclusive bargaining agent. If there is any reasonable doubt as to which union the employees have
chosen as their representative for the purpose of collective bargaining, the Med-Arbiter shall order an
election by secret ballot to be conducted by the Ministry to ascertain the freely chosen representative
of the employees concerned, under such rules and regulations as the Ministry may prescribe, at
which election representatives of the contending parties shall have the right to act as inspectors. The
labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining
representative of the workers." cralaw virtua1aw library

The petitioner contends that having been directly certified by the med-arbiter as the exclusive
bargaining representative of the workers, it cannot now be replaced through the certification election,
which was not validly called under the above provision. It stresses that the first method of choosing
such representation is by direct certification and, once employed, can no longer be undone by the
certification election which, as the exception to the rule, should be applied only when there is a
reasonable doubt on the real choice of the laborers as their negotiating agent. In the view of the
petitioner, there is no such reasonable doubt to justify reversal of the med-arbiter’s order of June 6,
1986. chanrobles lawlibrary : rednad

For its part, the private respondent invokes the support of the 168 workers who had signed the
petition for certification election, including some of those who had earlier supposedly manifested their
confidence in the petitioner union, and argues that such change of support demonstrates the need
for the holding of a certification election as required by the said article. This election will erase once
and for all the reasonable doubt as to the real choice of the union that will represent the workers in
the negotiation of the new collective bargaining agreement with PACEMCO, besides giving the
workers the freedom to which they are entitled in making this choice.

Assuming that the original provisions of Article 257 are still applicable in this case, the Court inclines
to the position taken by the private respondent as more conformable to the language and spirit of
the said law. This rule precisely called for the holding of a certification election whenever there
appeared to be a reasonable doubt as to whether or not the union directly certified had really been
chosen by the majority of the workers as their exclusive bargaining representative. Such was the
situation in the case at bar. Moreover, a certification election is a more acceptable method than direct
certification, which under the provisions of the aforementioned article, should be resorted to only
Labor II – 1
where there was no doubt that the union so certified had the full or at least the majority support of
the workers.

In the instant case, we find that the manifestation made by most of the workers in favor of NAFTU
was later questioned on the ground that it was obtained through the suspicious grant of a food
subsidy to the signatories. 5 This was denied by the petitioner, which claimed that the said
manifestation was spontaneous and voluntary. At any rate, whether true or not, the charge
generated the reasonable doubt that justified the med-arbiter in reversing his previous direct
certification of the petitioner and in authorizing the holding of a certification election instead.

It is noteworthy that since this case arose in 1986, an important change has been made in Article
257. By virtue of Executive Order No. 111, which became effective on March 4, 1987, the direct
certification originally allowed in this article has apparently been discontinued as a method of
selecting the exclusive bargaining agent of the workers. This amendment affirms the superiority of
the certification election over the direct certification which, assuming it was validly made in favor of
the petitioner in 1986, is no longer available to it now under the change in the said provision. The
new rule as amended by the executive order now reads as follows: jgc:chanrobles.com.ph

"ART. 256. Representation issues on organized establishments. — In organized establishments, when

a petition questioning the majority status of the incumbent bargaining agent is filed before the
Ministry within the sixty-day period before the expiration of the collective bargaining agreement, the
Med-Arbiter shall automatically order an election by secret ballot to ascertain the will of the
employees in the appropriate bargaining unit. To have a valid election, at least a majority of all
eligible voters in the unit must have cast their votes. The labor union receiving the majority of the
valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit.
When an election which provides for three or more choices results in no choice receiving a majority of
the valid cast, a run-off election shall be conducted between the choices receiving the two highest
number of votes." cralaw virtua1aw library

Additionally, the record discloses that the certification election ordered by the med-arbiter and
sustained by the Bureau of Labor Relations was actually held on March 9, 1987, resulting in the
victory of private respondent SPFL. 6 Despite notices duly received by it, the petitioner did not attend
the pre-election conferences and did not participate in the said election after its motion to reset it
was denied. It now says the election should not have been held because this petition was pending
with the Court, although we had not issued any restraining order. It assumes too much, of course. In
any event, after it was ascertained that the SPFL had obtained 201 of the 212 votes cast at the
certification election, it was accordingly certified by the public respondent as the exclusive bargaining
agent of the workers. As such, it thereafter negotiated and finally concluded a collective bargaining
agreement with PACEMCO on September 15, 1987, which contract is now in force. 7 This is a fait
accompli that has rendered this case moot and academic. chanrobles lawlibrary : rednad

It remains to stress, as we have repeatedly declared in earlier decisions, that the certification
election is the most democratic and expeditious method by which the laborers can freely determine
the union that shall act as their representative in their dealings with the establishment where they
are working. Any union sure of the support of the workers should have no reason to resist the
holding of a certification election where it can expect a vote of confidence from them for its efforts
and ability to improve their interests.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner.

Labor II – 1
17.) G.R. No. 84685 February 23, 1990

ILAW AT BUKLOD NG MANGGAGAWA (IBM) LOCAL NO. 56, petitioner,

vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director, BUREAU OF LABOR RELATIONS, and SAN
MIGUEL CORPORATION, respondents.

E.N.A Cruz & Associates for petitioner.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

GRIÑO-AQUINO, J.:

This is a special civil action of certiorari with a prayer for the issuance of a writ of preliminary injunction to annul the
orders dated February 22, 1988 and June 23, 1988, of the Med-Arbiter and the Bureau of Labor Relations (BLR),
respectively, for the holding of a certification election in the Calasiao Beer Region of the San Miguel Corporation.

On September 7, 1987, petitioner Union, formerly registered with the Labor Organization Division of the Bureau of
Labor Relations, as the San Miguel Corporation Sales Force Union Calasiao Beer Region-IBM Local No. 56, a local
union of Ilaw at Buklod ng Manggagawa (IBM), which is a national union, requested San Miguel Corporation for
voluntary recognition as the sole and exclusive bargaining representative of all the covered employees which
consist of the monthly and daily-paid employees of the Calasiao Sales Office, now Dagupan Sales Office. As the
territorial coverage of the Calasiao Beer Region embraces the regional sales office and the six (6) sales offices in
Calasiao, Carmen, Alaminos, Tarlac, Cabanatuan and San Isidro, SMC denied the union's request and instead,
suggested that it avail of a certification election. So, on November 27, 1987, SMC, through its North-Central Luzon
Sales Operations Manager, filed a petition for certification election among the sales personnel of the Region
only, excluding the daily-paid and monthly paid employees, but including the sales offices of the entire beer region.

The Union filed a motion to dismiss alleging that the petition for certification election was premature as it did not ask
SMC to bargain collectively with it. It cited Article 258 of the Labor Code which provides:

ART. 258. When an employer may file petition. — When requested to bargain collectively, an
employer may petition the Bureau for an election. If there is no existing certified collective bargaining
agreement in the unit, the Bureau shall, after hearing, order a certification election.

All certification cases shall be decided within twenty (20) working days.

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules
and regulations prescribed by the Secretary of Labor.

On February 22, 1988, the Med-Arbiter issued an order, the dispositive portion of which reads as follows:

IN VIEW OF ALL THE FOREGOING, let therefore, a certification election be conducted among the
sales force personnel of the SMC-North Central Luzon Beer Region covering the following sales
offices: Dagupan City, Carmen, Alaminos, Tarlac, Cabanatuan and San Isidro, within twenty (20)
days from receipt hereof with the following choices:

1. San Miguel Corporation Sales Force Labor Union Calasiao Beer Region — Ilaw at
Bukod ng Manggagawa (IBM) Local No. 56;

2. No union.

Labor II – 1
 Parties are hereby directed to attend a pre-election conference which shall be called by this Office
one (1) week before the actual conduct of said election, with corresponding notices to be sent to
them. (p. 6, Rollo.)

Petitioner appealed the order to the Bureau of Labor Relations (BLR) which denied the appeal on June 23, 1988 for
lack of merit. Hence, this petition for certiorari alleging that the Director of the BLR gravely abused her discretion in
ordering the holding of a certification election. Parenthetically, the certification election was actually conducted on
September 19, 1988 resulting in "NO UNION" as the winner.

The petition has no merit. Ordinarily, in an unorganized establishment like the SMC Calasiao Beer Region, it is the
union that files a petition for a certification election if there is no certified bargaining agent for the workers in the
establishment. If a union asks the employer to voluntarily recognize it as the bargaining agent of the employees, as
the petitioner did, it in effect asks the employer to certify it as the bargaining representative of the employees — a
certification which the employer has no authority to give, for it is the employees' prerogative (not the employer's) to
determine whether they want a union to represent them, and, if so, which one it should be.

The petitioner's request for voluntary recognition as the bargaining representative of the employees was in effect a
request to bargain collectively, or the first step in that direction, hence, the employer's request for a certification
election was in accordance with Article 258 of the Labor Code, and the public respondents did not abuse their
discretion in granting the request.

WHEREFORE, the petition for certiorari is dismissed for lack of merit. Costs against the petitioner.

Labor II – 1
18.) G.R. No. 92391 July 3, 1992

PHILIPPINE FRUITS AND VEGETABLE INDUSTRIES, INC., petitioner,

vs.
HON. RUBEN D. TORRES, in his capacity as Secretary of the Department of Labor and Employment and
TRADE UNION OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS), respondents.

PARAS, J.:

This petition for review on certiorari with prayer for the issuance of a temporary restraining order and/or preliminary
injunction assails the following:

(1) The Resolution dated December 12, 1989 of public respondent Secretary of Labor   affirming on appeal the
1

Order dated March 7, 1989 issued by Med-Arbiter Danilo T. Basa, and certifying private respondent Trade Union of
the Philippines and Allied Services (or TUPAS) as the sole and exclusive bargaining agent of all regular rank-and-
file and seasonal workers at Philippine Fruits and Vegetable Industries, Inc. (or PFVII), petitioner herein; and

(2) The Order dated February 8, 1990 issued by public respondent Secretary of Labor   denying petitioner's Urgent
2

Motion for Reconsideration.

Petitioner PFVII contends the questioned resolution and order are null and void as they are contrary to law and have
been issued with grave abuse of discretion, and having no other plain, speedy and adequate remedy in the ordinary
course of law, it filed with this Court the petition now at hand.

The facts of the case are well-stated in the Comment filed by the Solicitor General, and are thus reproduced
hereunder, as follows:

On October 13, 1988, Med-Arbiter Basa issued an Order granting the petition for Certification
election filed by the Trade Union of the Philippines and Allied Services (TUPAS). Said order directed
the holding of a certification election among the regular and seasonal workers of the Philippine Fruits
and Vegetables, Inc. (p. 42, NLRC, Records).

After a series of pre-election conferences, all issues relative to the conduct of the certification
election were threshed out except that which pertains to the voting qualifications of the hundred
ninety four (194) workers enumerated in the lists of qualified voters submitted by TUPAS.

After a late submission by the parties of their respective position papers, Med-Arbiter Basa issued an
Order dated December 9, 1988 allowing 184 of the 194 questioned workers to vote, subject to
challenge, in the certification election to be held on December 16, 1989. Copies of said Order were
furnished the parties (p. 118, NLRC, Records) and on December 12, 1988 the notice of certification
election was duly posted. One hundred sixty eight (168) of the questioned workers actually voted on
election day.

In the scheduled certification election, petitioner objected to the proceeding, through a Manifestation
(p. 262, NLRC, Records) filed with the Representation Officer before the close of the election
proceedings. Said Manifestation pertinently reads:

The posting of the list of eligible voters authorized to participate in the certification
election was short of the five (5) days provided by law considering that it was posted
only on December 12, 1988 and the election was held today, December 16, 1988 is
only four days prior to the scheduled certification election.

Labor II – 1
 By agreement of petitioner and TUPAS, workers whose names were inadvertently omitted in the list
of qualified voters were allowed to vote, subject to challenge (p. 263, NLRC, Records). Thirty eight of
them voted on election day.

Initial tally of the election results excluding the challenged votes showed the following:

Total No. of the Votes 291

Yes votes 40
No votes 38
Spoiled 7
Challenged (Regular) 38
——
Total No. of Votes Cast 123

On January 6, 1989, Management and TUPAS agreed to have the 36 challenged votes of the
regular rank-and-file employees opened and a canvass thereof showed:

Yes votes 20
No votes 14
Spoiled 4
——
Total 38

Added to the initial election results of December 16, 1988, the canvass of results showed:

Yes 60
No 52
Spoiled 11
——
Total 123

Based on the foregoing results, the yes votes failed to obtain the majority of the votes cast in said
certification election, hence, the necessity of opening the 168 challenged votes to determine the true
will of the employees.

On January 20, 1989, petitioner filed a position paper arguing against the opening of said votes
mainly because said voters are not regular employees nor seasonal workers for having allegedly
rendered work for less than 180 days.

Trade Union of the Philippines and Allied Services (TUPAS), on the other hand, argued that the
employment status of said employees has been resolved when Labor Arbiter Ricardo N. Martinez, in
his Decision dated November 26, 1988 rendered in NLRC Case No. Sub-Rab-01-09-7-0087-88,
declared that said employees were illegally dismissed.

In an Order dated February 2, 1989 (pp. 278-280, NLRC, Records) Med-Arbiter Basa ordered the
opening of said 168 challenged votes upon his observation that said employees were illegally
dismissed in accordance with the foregoing Decision of Labor Arbiter Martinez. As canvassed, the
results showed

Yes votes 165

No votes 0
Spoiled 3
——
Total 168

Labor II – 1
 On February 23, 1989, petitioner formally filed a Protest (pp.
284-287, NLRC, Records) claiming that the required five day posting of notice was not allegedly
complied with and that the list of qualified voters so posted failed to include fifty five regular workers
agreed upon by the parties as qualified to vote. The Protest further alleged that voters who were
ineligible to vote were allowed to vote.

Med-Arbiter Basa, in his Order dated March 7, 1989, dismissed said Protest which Order was
affirmed on appeal in the Resolution dated December 12, 1989 of then Secretary of Labor, Franklin
Drillon.

Petitioner's Motion for Reconsideration was denied for lack of merit in public respondent's Order
dated February 28, 1990.

(pp. 84-88, Rollo) 3

The instant petition has, for its Assignment of Errors, the following:

(1) The Honorable Secretary of Labor and Employment acted with grave abuse of discretion
amounting to lack of jurisdiction and committed manifest error in upholding the certification of
TUPAS as the sole bargaining agent mainly on an erroneous ruling that the protest against the
canvassing of the votes cast by 168 dismissed workers was filed beyond the reglementary period.

(2) The Honorable Secretary of Labor committed an abuse of discretion in completely disregarding
the issue as to whether or not non-regular seasonal workers who have long been separated from
employment prior to the filing of the petition for certification election would be allowed to vote and
participate in a certification election. 
4

The Court finds no merit in the petition.

For it is to be noted that the formal protest of petitioner PFVII was filed beyond the reglementary period. A close
reading of Sections 3 and 4, Rule VI, Book V of the Implementing Rules of the Labor Code, which read as follows:

Sec. 3. Representation officer may rule on any-on-the-spot questions. — The Representation officer
may rule on any on-the-spot question arising from the conduct of the election. The interested party
may however, file a protest with the representation officer before the close of the proceedings.

Protests not so raised are deemed waived. Such protest shall be contained in the minutes of the
proceedings. (Emphasis supplied)

Sec. 4. Protest to be decided in twenty (20) working days. — Where the protest is formalized before
the med-arbiter with five (5) days after the close of the election proceedings, the med-arbiter shall
decide the same within twenty (20) working days from the date of formalization. If not formalized
within the prescribed period, the protest shall be deemed dropped. The decision may be appealed to
the Bureau in the same manner and on the same grounds as provided under Rule V. (Emphasis
supplied)

would readily yield, as a matter of procedure, the following requirements in order that a protest filed thereunder
would prosper, to wit:

(1) The protest must be filed with the representation officer and made of record in the minutes of the
proceedings before the close of election proceedings, and

(2) The protest must be formalized before the Med-Arbiter within five (5) days after the close of the
election proceedings.

Labor II – 1
The records before Us quite clearly disclose the fact that petitioner, after filing a manifestation of protest on
December 16, 1988, election day, only formalized the same on February 20, 1989, or more than two months after
the close of election proceedings (i.e., December 16, 1988). We are not persuaded by petitioner's arguments that
election proceedings include not only casting of votes but necessarily includes canvassing and appreciation of votes
cast and considering that the canvassing and appreciation of all the votes cast were terminated only on February
16, 1989, it was only then that the election proceedings are deemed closed, and thus, when the formal protest was
filed on February 20, 1989, the five-day period within which to file the formal protest still subsisted and its protest
was therefore formalized within the reglementary period.  5

As explained correctly by the Solicitor General, the phrase "close of election proceedings" as used in Sections 3 and
4 of the pertinent Implementing Rules refers to that period from the closing of the polls to the counting and
tabulation of the votes as it could not have been the intention of the Implementing Rules to include in the term "close
of the election proceedings" the period for the final determination of the challenged votes and the canvass thereof,
as in the case at bar which may take a very long period.   Thus, if a protest can be formalized within five days after a
6

final determination and canvass of the challenged votes have been made, it would result in an undue delay in the
affirmation of the employees' expressed choice of a bargaining representative.  7

Petitioner would likewise bring into issue the fact that the notice of certification election was posted only on
December 12, 1988 or four days before the scheduled elections on December 16, 1988, instead of the five-day
period as required under Section 1 of Rule VI, Book V of the Implementing Rules. But it is not disputed that a
substantial number, or 291 of 322 qualified voters, of the employees concerned were informed, thru the notices thus
posted, of the elections to be held on December 16, 1988, and that such employees had in fact voted accordingly
on election day. Viewed thus in the light of the substantial participation in the elections by voter-employees, and
further in the light of the all-too settled rule that in interpreting the Constitution's protection to labor and social justice
provisions and the labor laws and rules and regulations implementing the constitutional mandate, the Supreme
Court adopts the liberal approach which favors the exercise of labor rights, 8 We find the lack of one day in the posting of notices
insignificant, and hence, not a compelling reason at all in nullifying the elections.

As regards the second assignment of error, the public respondent Secretary of Labor did not completely disregard
the issue as to the voting rights of the alleged separated employees for precisely, he affirmed on appeal the findings
of the Med-Arbiter when he ruled

The election results indicate that TUPAS obtained majority of the valid votes cast in the election —
60 plus 165, or a total of 225 votes out of a possible total of 291.

WHEREFORE, premises considered, the appeal is hereby denied and the Med-Arbiter's order dated
7 March 1989 affirmed. Petitioner TUPAS is hereby certified as the sole and exclusive bargaining
agent of all regular rank-and-file and seasonal workers at Philippine Fruits and Vegetable Industries,
Inc.   (p. 26, Rollo)
9

At any rate, it is now well-settled that employees who have been improperly laid off but who have a present,
unabandoned right to or expectation of re-employment, are eligible to vote in certification elections.   Thus, and to
10

repeat, if the dismissal is under question, as in the case now at bar whereby a case of illegal dismissal and/or unfair
labor practice was filed, the employees concerned could still qualify to vote in the elections.  11

And finally, the Court would wish to stress once more the rule which it has consistently pronounced in many earlier
cases that a certification election is the sole concern of the workers and the employer is regarded as nothing more
than a bystander with no right to interfere at all in the election. The only exception here is where the employer has to
file a petition for certification election pursuant to Article 258 of the Labor Code because it is requested to bargain
collectively. Thus, upon the score alone of the "Bystander Rule", the instant petition would have been dismissed
outright.

WHEREFORE, the petition filed by Philippine Fruits and Vegetable Industries, Inc. (PFVII) in hereby DISMISSED for
lack of merit.

Labor II – 1
19.) G.R. No. 107792 March 2, 1998

SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-TUCP), petitioners,

vs.
THE SECRETARY OF LABOR, NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER AND EXPORTER
CORPORATION, respondents.

MENDOZA, J.:

This is a petition for review on certiorari of the decision, dated October 8, 1992 and order dated November 12, 1992,
of Undersecretary of Labor and Employment Bienvenido Laguesma, ordering a certification election to be conducted
among the employees of respondent company.

The facts of the case are as follows. On January 15, 1991, a certification election was conducted among employees
of respondent Permex Producer and Exporter Corporation (hereafter referred to as Permex Producer). The results
of the elections were as follows:

National Federation of Labor 235

(NFL)

No Union 466

Spoiled Ballots 18

Marked Ballots 9

Challenged Ballots 7

However, some employees of Permex Producer formed a labor organization known as the Samahang Manggagawa
sa Permex (SMP) which they registered with the Department of Labor and Employment on March 11, 1991. The
union later affiliated with the Philippine Integrated Industries Labor Union (PIILU).

On August 16, 1991, Samahang Manggagawa sa Permex-Philippine Integrated Industries Labor Union (SMP-
PIILU), wrote the respondent company requesting recognition as the sole and exclusive bargaining representative of
employees at the Permex Producer. On October 19, 1991 Permex Producer recognized SMP-PIILU and, on
December 1, entered into a collective bargaining agreement with it. The CBA was ratified between December 9 and
10, 1991 by the majority of the rank and file employees of Permex Producer. On December 13, 1991, it was certified
by the DOLE.

On February 25, 1992, respondent NFL filed a petition for certification election, but it was dismissed by Med-Arbiter
Edgar B. Gongalos in an order dated August 20, 1992. Respondent NFL then appealed the order to the Secretary of
Labor and Employment. On October 8, 1992, the Secretary of Labor, through Undersecretary Bienvenido
Laguesma, set aside the order of the Med-Arbiter and ordered a certification election to be conducted among the
rank and file employees at the Permex Producer, with the following choices:

1. National Federation of Labor

2. Samahang Manggagawa sa Permex

3. No union

Labor II – 1
Petitioner moved for a reconsideration but its motion was denied in an order dated November 12, 1992. Hence, this
petition.

Two arguments are put forth in support of the petition. First, it is contended that petitioner has been recognized by
the majority of the employees at Permex Producer as their sole collective bargaining agent. Petitioner argues that
when a group of employees constituting themselves into an organization and claiming to represent a majority of the
work force requests the employer to bargain collectively, the employer may do one of two things. First, if the
employer is satisfied with the employees' claim the employer may voluntarily recognize the union by merely
bargaining collectively with it. The formal written confirmation is ordinarily stated in the collective bargaining
agreement. Second, if on the other hand, the employer refuses to recognize the union voluntarily, it may petition the
Bureau of Labor Relations to conduct a certification election. If the employer does not submit a petition for
certification election, the union claiming to represent the employees may submit the petition so that it may be directly
certified as the employees' representative or a certification election may be held.

The case of Ilaw at Buklod ng Manggagawa v. Ferrer-Calleja, 1 cited by the Solicitor General in his comment filed in
behalf of the NLRC, is particularly apropos. There, the union also requested voluntary recognition by the company.
Instead of granting the request, the company petitioned for a certification election. The union moved to dismiss on
the ground that it did not ask the company to bargain collectively with it. As its motion was denied, the union brought
the matter to this Court. In sustaining the company's stand, this Court ruled:

. . . Ordinarily, in an unorganized establishment like the Calasiao Beer Region, it is the union that
files a petition for a certification election if there is no certified bargaining agent for the workers in the
establishment. If a union asks the employer to voluntarily recognize it as the bargaining agent of the
employees, as the petitioner did, it in effect asks the employer to certify it as the bargaining
representative of the employees — A CERTIFICATION WHICH THE EMPLOYER HAS NO
AUTHORITY TO GIVE, for it is the employees' prerogative (not the employer's) to determine
whether they want a union to represent them, and, if so, which one it should be. (emphasis supplied)

In accordance with this ruling, Permex Producer should not have given its voluntary recognition to SMP-PIILU-
TUCP when the latter asked for recognition as exclusive collective bargaining agent of the employees of the
company. The company did not have the power to declare the union the exclusive representative of the workers for
the purpose of collective bargaining,

Indeed, petitioner's contention runs counter to the trend towards the holding of certification election. By virtue of
Executive Order No. 111, which became effective on March 4, 1987, the direct certification previously allowed under
the Labor Code had been discontinued as a method of selecting the exclusive bargaining agents of the
workers. 2 Certification election is the most effective and the most democratic way of determining which labor
organization can truly represent the working force in the appropriate bargaining unit of a company. 3

Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its application for
registration with the DOLE and that when petitioner signed the CBA with the company, the CBA was ratified by 542
employees. Petitioner contends that such support by the majority of the employees justifies its finding that the CBA
made by it is valid and binding.

But it is not enough that a union has the support of the majority of the employees. It is equally important that
everyone in the bargaining unit be given the opportunity to express himself. 4

This is especially so because, in this case, the recognition given to the union came barely ten (10) months after the
employees had voted "no union" in the certification election conducted in the company. As pointed out by
respondent Secretary of Labor in his decision, there can be no determination of a bargaining representative within a
year of the proclamation of the results of the certification election. 5 Here the results, which showed that 61% of the
employees voted for "no union," were certified only on February 25, 1991 but on December 1, 1991 Permex
Producer already recognized the union and entered into a CBA with it.

There is something dubious about the fact that just ten (10) months after the employees had voted that they did not
want any union to represent them, they would be expressing support for petitioner. The doubt is compounded by the
fact that in sworn affidavits some employees claimed that they had either been coerced or misled into signing a
Labor II – 1
document which turned out to be in support of petitioner as its collective bargaining agent. Although there were
retractions, we agree with the Solicitor General that retractions of statements by employees adverse to a company
(or its favored union) are oftentimes tainted with coercion and intimidation. For how could one explain the seeming
flip-flopping of position taken by the employees? The figures claimed by petitioner to have been given to it in support
cannot readily be accepted as true.

Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253, 253-A and 256 of the Labor
Code and Book V, Rule 5, §3 of its Implementing Rules and Regulations, a petition for certification election or
motion for intervention may be entertained only within 60 days prior to the date of expiration of an existing collective
bargaining agreement. The purpose of the rule is to ensure stability in the relationships of the workers and the
management by preventing frequent modifications of any collective bargaining agreement earlier entered into by
them in good faith and for the stipulated original period. Excepted from the contract-bar rule are certain types of
contracts which do not foster industrial stability, such as contracts where the identity of the representative is in
doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice because
it does not establish the kind of industrial peace contemplated by the law. 6 Such situation obtains in this case. The
petitioner entered into a CBA with Permex Producer when its status as exclusive bargaining agent of the employees
had not been established yet.

WHEREFORE, the challenged decision and order of the respondent Secretary of Labor are AFFIRMED.

Labor II – 1
20.) G.R. No. 116751 August 28, 1998

ORIENTAL TIN CAN LABOR UNION, petitioner,

vs.
SECRETARY OF LABOR AND EMPLOYMENT, ORIENTAL TIN CAN WORKERS UNION — FEDERATION OF
FREE WORKERS [OTCWU-FFW] and ORIENTAL TIN CAN AND METAL SHEET
MANUFACTURING, respondents.

G.R. No. 116779 August 28, 1998

ORIENTAL TIN CAN AND METAL SHEET MANUFACTURING CO., INC., petitioner,

vs.
HON. BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF LABOR AND EMPLOYMENT, ORIENTAL TIN
CAN WORKERS UNION — FFW and ORIENTAL TIN CAN LABOR UNION, respondents.

ROMERO, J.:

Respondent (in G.R. No. 116751) and petitioner (in sister case G.R. No. 116779), Oriental Tin Can and Metal Sheet
Manufacturing Company, Inc. (the company) is engaged in the manufacture of tin can containers and metal sheets.
On March 3, 1994, it entered into a collective bargaining agreement (CBA) with petitioner Oriental Tin Can Labor
Union (OTCLU) as the existing CBA was due to expire on April 15, 1994. Four days later, 248 of the company's
rank-and-file employees authorized the Federation of Free Workers (FFW) to file a petition for certification
election.  On March 10, 1994, however, this petition was repudiated via a written waiver  by 115 of the signatories
1 2

who, along with other employees totalling 897, ratified the CBA on the same date.

On March 18, 1994, armed with Charter Certificate No. IV-MEE-089, respondent Oriental Tin Can Workers Union —
Federation of Free Workers (OTCWU-FFW) filed a petition for certification election with the National Capital Region
office of the Department of Labor and Employment (DOLE), pursuant to Article 256 of the Labor Code. Purporting to
represent the regular rank-and-file employees of the company, the petition was accompanied by the "authentic
signatures" of 25% of the employees/workers in the bargaining unit.

The OTCLU filed a manifestation and motion on April 15, 1994, praying for the dismissal of the petition for
certification election on the ground that it was not endorsed by at least 25% of the employees of the bargaining unit.
Some of the employees who initially signed the petition had allegedly withdrawn in writing such support prior to the
filing of the same.

The OTCWU-FFW filed a reply to said manifestation and motion, claiming that the retraction of support for the
petition was "not verified under oath" and, therefore, had no legal and binding effect. It further asserted that the
petition had the required support of more than 25% of all the employees in the bargaining unit.

For its part, the company filed a comment alleging inter alia that the new CBA was ratified by 897 out of the 1,020
rank-and-file employees within the bargaining unit. The OTCLU then filed a motion to dismiss and/or position paper
reiterating its position that the petition did not comply with the 25% signature requirement and maintaining that the
new CBA was a bar to a certification election.

To said comment and motion to dismiss, the OTCWU-FFW filed a consolidated reply, alleging that "an employer has
no legal personality to oppose a petition for certification election; that there are only 882 rank and file workers in the
bargaining unit and not 1,020 which included supervisors and workers hired after the filing of the petition; that those
who gave their support to the filing of the petition did not withdraw or retract the same before or after the petition
was filed; the Collective Bargaining Agreement (CBA) between respondent company and Forced Intervenor
(OTCLU) is a sweetheart contract and concluded within the freedom period; and that additional employees gave
their support to the petition after the same was filed." 
3

Labor II – 1
The company filed a rejoinder to said consolidated reply, asserting its objection to the petition for certification
election because the case at bar "involves a collective bargaining agreement which was ratified by 897 employees
including the 245 workers who had earlier given their consent to the filing of the petition; that the benefits provided
for therein are being enjoyed by the workers themselves; that a certification election would impair the said contract;
that the officers of (OTCWU-FFW) were among those who ratified the CBA; and (OTCWU-FFW) failed to name the
supervisors and workers hired after the filing of the petition that were allegedly included in the list of rank and file
employees."  4

In the meantime, on April 18, 1994, the DOLE issued a certificate of registration of the CBA pursuant to Article 231
of the Labor Code, as amended by Republic Act No. 6715. It showed that the CBA between the company and the
OTCLU would have the force and effect of law between the parties that had complied with the requirements and
standards for registration thereof.

On June 1, 1994, the officers of the OTCWU-FFW walked out of their jobs, prompting the company to require them
to explain in writing why no disciplinary action should be taken against them for walking out en masse. The following
day, said union filed a notice of strike with the National Conciliation and Mediation Board (NCMB) grounded on the
alleged dismissal of union members/officers. Two days later, the company directed said officers to report back to
work within 48 hours, but none of them did.

In an order dated June 7, 1994, Med-Arbiter Renato D. Paruñgo dismissed the petition for certification election for
lack of merit. Noting that the petition was filed after the valid retractions were made, he concluded that by the
withdrawal of support to the petition by 115 workers, the remaining 133 of the 1,020 employees were clearly less
than the 25% subscription requirement. Thus, he opined:

There is merit to the Company's contention that by subsequently ratifying the CBA, the employees in
effect withdrew their previous support to the petition. Thus, when the petition was filed on March 18,
1994, it did not have the required consent of the employees within the bargaining unit. Another factor
which militates against the petition is the fact that actually there are 1,020 rank and file workers in
the bargaining unit. Twenty-five percent (25%) of this is 255, but admittedly only 248 union members
had originally authorized the filing of the petition. The law expressly requires that a petition for
certification election should be supported by the written consent of at least 25% of all the employees
in the bargaining unit at the time of the filing thereof.

In view of the circumstances obtaining in the case at bar, we are constrained to order the dismissal
of the instant petition. Furthermore, it would be in the interest of industrial peace to deny the holding
of a certification election among the rank and file workers of respondent Company during the
effectivity of the new CBA it appearing that out of 1,020 rank and file employees, 897 have ratified
the same and the benefits of which are currently being enjoyed by all covered employees of
respondent Company.  5

The OTCWU-FFW appealed this ruling to the Labor Secretary. On June 18, 1994, however, during the pendency of
the appeal, said union staged a strike that prevented the free ingress and egress of non-striking employees, delivery
trucks and other vehicles to and from the company's premises. Upon complaint of the company, the National Labor
Relations Commission (NLRC) issued a writ of preliminary injunction on July 19, 1994, on the ground that the strike
caused the company to incur daily losses amounting to P3.6 million.

Meanwhile, on July 15, 1994, Undersecretary Bienvenido E. Laguesma, acting on the appeal of the OTCWU-FFW,
issued a resolution   holding that:
6

An examination of the records of this case shows that the subject CBA was concluded during the 60-
day freedom period of the old CBA which expired on 15 April 1994, and registered with the Regional
Office of this Department on 18 April 1994 while the petition for certification election was filed on 18
March 1994. It is therefore, crystal clear that, the present petition was filed during the freedom period
and no registered CBA in the respondent establishment could be invoked (to) pose as a bar to the
holding of a certification election. In other words, when the said CBA was registered there was a
pending representation case. Consequently, said CBA cannot bar the election being prayed for. This

Labor II – 1
 is the rule contained in Section 4, Rule V of the Rules and Regulations Implementing the Labor
Code, as amended, which provides that:

Sec. 4. Effects of early agreements. — The representation case shall not, however,
be adversely affected by a collective bargaining agreement registered before or
during the last sixty (60) days of a subsisting agreement or during the pendency of
the representation case. (Emphasis supplied)

On the issue of whether the 25% support requirement for filing the petition for certification election had been met,
Undersecretary Laguesma opined thus:

The rule being followed in case of alleged retractions and withdrawals, as appellant correctly pointed
out, is that the best forum for determining whether there was (sic) indeed retractions is the
certification election itself wherein the workers can freely express their choice in a secret ballot.
(Atlas Free Workers Union vs. Noriel, et al., 104 SCRA 565) The argument of (OTCLU) that since
the withdrawal was made prior to the filing of the petition it should be presumed voluntary and
therefore, has adversely affected the petition, lacks merit. The Supreme Court ruling cited in support
of the argument (i.e. La Suede Cigar and Cigarette Factory, et al. vs. Director of the Bureau of Labor
Relations, et al., 123 SCRA 679) is not squarely applicable in the present case. For while in the said
case it was undisputably (sic) shown that 31 members have withdrawn their support to the petition,
in the present case, the employees who supposedly withdrew from the union executed joint
statements (Sama-samang Pahayag) declaring that the "WAIVER" document they signed has no
force and effect considering that it was the product of duress, force and intimidation employed by the
company after it learned of the petition for certification election, and reiterating their wish to be given
the opportunity to choose the union of their choice. Said statements raised doubts on the
voluntariness of the retractions, destroyed the presumption that retractions made before the filing of
the petition are deemed voluntary and consequently brought the present case outside the mantle of
the Atlas ruling

He added that even if there were 1,020 rank-and-file employees in the bargaining unit, the signatures gathered
sufficed to meet the 25% support requirement because the Sama-samang Pahayag invalidating the previous
"Waiver," contained 359 signatures which, when added to the 165 signatures submitted by the OTCWU-FFW on
May 27, 1994, brought the total to 524, much more than the required 25% of the alleged 1,020 rank-and-file
employees. Moreover, in case of doubt, the DOLE tends to favor the conduct of certification election, for the rule on
simultaneous submission of the consent signatures and the petition should be liberally interpreted. As such,
"contracts where the identity of the authorized representative of the workers is in doubt must be rejected in favor of
a more certain indication of the will of the workers. Any stability that does not establish the type of industrial peace
contemplated by the law must be subordinated to the employees' freedom to choose their real representative."
Accordingly, Undersecretary Laguesma disposed of the appeal as follows:

WHEREFORE, the appeal of the petitioner is hereby granted and the Order of the Med-Arbiter is
hereby set aside. In lieu thereof, a new order is hereby issued directing the conduct of a certification
election among the regular rank and file employees of the Oriental Tin Can and Metal Sheet
Manufacturing, with the following as choices:

1. Oriental Tin Can Workers Union — Federation of Free Workers (OTCWU-FFW);

2. Oriental Tin Can Labor Union (OTCLU);

3. No Union.

Let therefore, the entire records of this case be forwarded to the Regional Office of origin for the
immediate conduct of certification election, subject to the usual pre-election conference. The payrolls
three (3) months before the filing of the petition shall be the basis of the list of eligible voters.

SO RESOLVED.

Labor II – 1
Herein petitioners filed a motion for reconsideration of said resolution, but this was denied for lack of merit in the
resolution dated August 22, 1994. From this resolution, the company and the OTCLU filed separate petitions
for certiorari before this Court.

G. R. No. 116779

In assailing the resolution of July 15, 1994, the company raises in issue the following grounds to show that the
Labor Secretary, through Undersecretary Laguesma, gravely abused his discretion in: (a) ordering the conduct of a
certification election even though the employees who signed the petition therefor had withdrawn their support by
ratifying the CBA and even though no certification election could be conducted without the written consent of at least
25% of all the employees in the bargaining unit, and (b) ruling, in effect, "that the provision of Article 256 of the
Labor Code takes precedence over that of Article 253 of the same Code."

The company concedes that, as an employer, it should "remain a bystander in the entire process of selection by the
employees of their bargaining representative, since the exercise is indisputably an all-employee affair."
Nonetheless, it justifies its "right to question the filing of the petition for certification election" by the situation "where,
the small number of employees, the very ones who had earlier supported the petition for certification election,
subsequently changed their mind, and ratified the CBA and thereafter reaped from its bounty."  Thus, in its desire to
7

maintain industrial peace, the company deemed it necessary to challenge the propriety of holding a certification
election.

This argument is misleading.

It is a well-established rule that certification elections are exclusively the concern of employees; hence, the employer
lacks the legal personality to challenge the same.   In Golden Farms, Inc. v. Secretary of Labor,   the Court declared:
8 9

. . . Law and policy demand that employers take a strict, hands-off stance in certification elections.
The bargaining representative of employees should be chosen free from any extraneous influence of
management. A labor bargaining representative, to be effective, must owe its loyalty to the
employees alone and to no other.

The only instance when an employer may concern itself with employee representation activities is when it has to file
the petition for certification election because there is no existing CBA in the unit and it was requested to bargain
collectively, pursuant to Article 258 of the Labor code.   After filing the petition, the role of the employer ceases and
10

it becomes a mere bystander.   The company's interference in the certification election below by actively opposing
11

the same is manifestly uncalled-for and unduly creates a suspicion that it intends to establish a company
union.   On this score, it is clear that the perceived grave abuse of discretion on the part of the Labor Secretary is
12

non-existent and G.R. No. 116779 should, consequently, be dismissed. This case will now proceed and decided on
the merits of the issues raised in G.R. No. 116751.

G.R. No. 116751

The OTCLU contends that the Labor Secretary acted without jurisdiction or with grave abuse of discretion: (a) in
"imposing upon the employees the manner of choosing their collective bargaining representative by ordering a
certification election notwithstanding the fact that the overwhelming majority of the employees have already decided
to retain the petitioner (OCTLU) as their collective bargaining representative," and (b) in giving due course to the
petition for certification election even though it lacked the required support of 25% of the employees.

(a) The OTCLU maintains that the Labor Secretary improperly prescribed the mode of picking a collective
bargaining agent upon the employees who effectively repudiated the "notion" of a certification election by ratifying
the CBA entered into during the freedom period

This contention is without merit as it runs counter to the policy of the State on the matter.

Undersecretary Laguesma, by authority of the Secretary of the DOLE, was exercising the function of the
Department to "(e)nforce social and labor legislation to protect the working class and regulate the relations between
Labor II – 1
the worker and his employee"   when he issued the resolution being assailed in the instant petition. As will be
13

shown shortly, he was merely applying the law applicable to the appeal raised before his office.

The Labor Code imposes upon the employer and the representative of the employees the duty to bargain
collectively.   Since the question of right of representation as between competing labor organizations in a bargaining
14

unit is imbued with public interest,   the law governs the choice of a collective bargaining representative which shall
15

be the duly certified agent of the employees concerned. An official certification becomes necessary where the
bargaining agent fails to present adequate and reasonable proof of its majority authorization and where the
employer demands it, or when the employer honestly doubts the majority representation of several contending
bargaining groups.   In fact, Article 255 of the Labor Code allows the majority of the employees in an appropriate
16

collective bargaining unit to designate or select the labor organization which shall be their exclusive representative
for the purpose of collective bargaining.

The designation or selection of the bargaining representative without, however, going through the process set out by
law for the conduct of a certification election applies only when representation is not in issue. There is no problem if
a union is unanimously chosen by a majority of the employees as their bargaining representative, but a question of
representation arising from the presence of more than one union in a bargaining unit aspiring to be the employees'
representative, can only be resolved by holding a certification election under the supervision of the proper
government authority. Thus:

It bears stressing that no obstacle must be placed to the holding of certification elections, for it is a
statutory policy that should not be circumvented. We have held that whenever there is doubt as to
whether a particular union represents the majority of the rank-and-file employees, in the absence of
a legal impediment, the holding of a certification election is the most democratic method of
determining the employees' choice of their bargaining representative. It is the appropriate means
whereby controversies and disputes on representation may be laid to rest, by the unequivocal vote
of the employees themselves. Indeed, it is the keystone of industrial democracy.  17

Given these premises, the filing of a petition for certification election by one of the two unions in the bargaining unit
is enough basis for the DOLE, through its authorized official, to implement the law by directing the conduct of a
certification election.

Art. 253-A of the Labor Code explicitly provides that the aspect of a union's representation of the rank-and-file
employees contained in the CBA shall be for a term of five (5) years and that "(n)o petition questioning the majority
status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such
five year term of the Collective Bargaining Agreement." Accordingly, Section 3, Rule V, Book V of the Omnibus
Rules Implementing the Labor Code provides that "(i)f a collective bargaining agreement has been duly registered in
accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be
entertained within sixty (60) days prior to the expiry date of such agreement."

It is uncontroverted that the petition for certification election in this case was filed on March 18, 1994, twenty-eight
days before the expiration of the existing CBA on April 15, 1994, and well within the 60-day period provided for by
the Code. The OTCLU, however, is concerned with the effect of the employees' ratification of the new CBA on the
timely filing of the petition for certification election. Would such ratification nullify the petition?

The law dictates a negative reply. The filing of a petition for certification election during the 60-day freedom period
gives rise to a representation case that must be resolved even though a new CBA has been entered into within that
period. This is clearly provided for in the aforequoted Section 4, Rule V, Book V of the Omnibus Rules Implementing
the Labor Code. The reason behind this rule is obvious. A petition for certification election is not necessary where
the employees are one in their choice of a representative in the bargaining process. Moreover, said provision of the
Omnibus Rules manifests the intent of the legislative authority to allow, if not encourage, the contending unions in a
bargaining unit to hold a certification election during the freedom period. Hence, the Court held in the case
of Warren Manufacturing Workers Union (WMWU) v. Bureau of Labor Relations,  that the agreement prematurely
18

signed by the union and the company during the freedom period does not affect the petition for certification election
filed by another union.

Labor II – 1
(b) As regards the 25% support requirement, we concur with public respondent's finding that said requisite has been
met in this case. With regard to the finding that the "waiver" document executed by the employees "was the product
of duress, force and intimidation employed by the company after it learned of the petition for certification
election,"   the following pronouncement of the Court is relevant:
19

. . . Even doubts as to the required 30% being met warrant (the) holding of the certification election.
In fact, once the required percentage requirement has been reached, the employees' withdrawal
from union membership taking place after the filing of the petition for certification election will not
affect the petition. On the contrary, the presumption arises that the withdrawal was not free but was
procured through duress, coercion or for a valuable consideration. Hence, the subsequent
disaffiliation of the six (6) employees from the union will not be counted against or deducted from the
previous number who had signed up for certification . . .   (Citations omitted)
20

The support requirement is a mere technicality which should be employed in determining the true will of the
workers   instead of frustrating the same. Thus, in Port Workers Union of the Philippines (PWUP) v.
21

Laguesma,   this Court declared that:

22

In line with this policy (that the holding of a certification election is a certain and definitive mode of
arriving at the choice of the employees' bargaining representative), we feel that the administrative
rule requiring the simultaneous submission of the 25% consent signatures upon the filing of the
petition for certification election should not be strictly applied to frustrate the determination of the
legitimate representative of the workers. Significantly, the requirement in the rule is not found in
Article 256, the law it seeks to implement. This is all the more reason why the regulation should at
best be given only a directory effect. Accordingly, we hold that the mere filing of a petition for
certification election within the freedom period is sufficient basis for the issuance of an order for the
holding of a certification election, subject to the submission of the consent signatures within a
reasonable period from such filing.

All doubts as to the number of employees actually supporting the holding of a certification election should, therefore,
be resolved by going through such procedure. It is judicially settled that a certification election is the most effective
and expeditious means of determining which labor organizations can truly represent the working force in the
appropriate bargaining unit of the company.   If the OTCLU wanted to be retained as the rank-and-file employees'
23

bargaining representative, it should have sought their vote, not engaged in legal sophistry. The selection by the
majority of the employees of the union which would best represent them in the CBA negotiations should be
achieved through the democratic process of an election.  24

The fear expressed by the OTCLU that granting the petition for certification election would be prejudicial to all the
employees since the new CBA would run the risk of being nullified and the employees would be required to restitute
whatever benefits they might have received under the new CBA, is to be dismissed as being baseless and highly
speculative.

The benefits that may be derived from the implementation of the CBA prematurely entered into between the OTCLU
and the company shall, therefore, be in full force and effect until the appropriate bargaining representative is chosen
and negotiations for a new collective bargaining agreement is thereafter concluded.   A struggle between
25

contending labor unions must not jeopardize the implementation of a CBA that is advantageous to employees.

WHEREFORE, both petitions for certiorari are hereby DISMISSED. This decision is immediately executory. Costs
against petitioners.

Labor II – 1
21.) G.R. No. 128067 June 5, 1998

SAMAHAN NG MGA MANGGAGAWA SA FILSYSTEMS (SAMAFIL-NAFLU-KMU), petitioner,

vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT and FILSYSTEMS, INC., respondents.

PUNO, J.:

Assailed under Rule 65 of the Rules of Court are the Resolution and Order   of the public respondent,
1

dated June 28, 1996 and November 18, 1996, respectively, dismissing petitioner's petition for
certification election.

It appears that petitioner Samahan ng mga Manggagawa sa Filsystems (SAMAFIL-NAFLU-KMU) is a

registered labor union with Certificate of Registration No. NCR-UR-10-1575-95 issued by the
Department of Labor and Employment (DOLE) on October 25, 1995. On November 6, 1995, petitioner
union filed a Petition for Certification Election among the rank-and-file employees of private
respondent FILSYSTEMS, Inc. before the DOLE — National Capital Region (NCR).  Attached as
2

annexes to the petition are the Certificate of Registration issued by the DOLE, copies of union
membership signed by thirty three (33) rank-and-file employees of respondent company, the Charter
Certificate showing its affiliation with the National Federation of Labor Unions (NAFLU-KMU), the list
of union officers, the certification of the union secretary of the minutes of the general membership
meeting, the Books of Accounts and its Constitution and By-Laws. 3

Private respondent opposed the petition. It questioned the status of petitioner as a legitimate labor
organization on the ground of lack of proof that its contract of affiliation with the NAFLU-KMU has
been submitted to the Bureau of Labor Relations (BLR) within thirty (30) days from its execution. 4

In reply, petitioner averred that as a duly registered labor union, it has "all the rights and
privileges . . . to act as representative of its members for the purpose of collective bargaining with
employers." 5

On January 12, 1996, Med-Arbiter Paterno D. Adap dismissed the petition for certification election.
He ruled that petitioner, as an affiliate of NAFLU-KMU, has no legal personality on account of its
failure to comply with paragraphs (a), (b) and (e) of Section 3, Rule II of the Implementing Rules of
Book V of the Labor Code,  viz:
6

x x x           x x x          x x x

In matters of affiliation of an independently registered union, the rules provide that the latter
shall be considered an affiliate of a labor federation after submission of the contract or
agreement of affiliation to the Bureau of Labor Relations (BLR) within thirty (30) days after its
execution.

Likewise, it mandates the federation or national union concerned to issue a charter certificate
indicating the creation or establishment of a local or chapter, copy of which shall be
submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such
certificate.

A close examination of the records of the case does not reveal that the federation and the
independent union have executed a contract or agreement of affiliation, nor had it shown that
it has submitted its charter certificate to the Bureau of Labor Relations, within thirty (30) days
from issuance of such charter certificate as amended by the rules.

Labor II – 1
 Petitioner argued that it has complied with all the requirements for certification election
pursuant to the mandate of Sec. 2, Rule V of Book V of the Implementing Rules of the Labor
Code; that the rule cited by respondent is not included in the Rule citing the requirements for
certification election.

We disagree with petitioner's contention. The rule cited by the petitioner, Sec. 2, Rule V, Book
V, sub-paragraphs A, B, C, D, E, F and G, refers to an independently registered labor
organization which has filed a petition for certification election.

In the case at bar, an independently registered union has affiliated with a federation, hence,
strict compliance with the requirements embodied in Sec. 3, paragraphs A, B and E of Rule II,
Book V of the Rules and Regulations implementing the Labor Code should be complied with.

Record discloses that petitioner has not shown to have executed a contract or agreement of
affiliation nor has it established that is has submitted its charter certificate to the Bureau of
Labor Relations (BLR) within thirty (30) days from its execution.

Thus, petitioner in this case having failed to comply with the mandatory requirement, there
was no valid affiliation. Consequently, petitioner has no legal personality because the union
failed to attain the status of legitimacy for failure to comply with the requirements of law.

Petitioner appealed to the Office of the Secretary of Labor and Employment. It reiterated its
contention that as an independently registered union, it has the right to file a petition for certification
election regardless of its failure to prove its affiliation with NAFLU-KMU. 7

On February 26, 1996, private respondent opposed the appeal. It argued that petitioner should have
filed its petition for certification election as an independently registered union and not as a union
affiliated with NAFLU-
KMU. 8

Meanwhile or on February 7, 1996, another union, the Filsystems Workers Union (FWU), filed a
Petition for Certification Election in the same bargaining unit. On March 22, 1996, the Med-Arbitration
— NCR Branch granted the petition. The certification election held on April 19, 1996, was won by
FWU which garnered twenty six (26) votes out of the forty six (46) eligible voters. The FWU was
certified on April 29, 1996, as the exclusive bargaining agent of all rank-and-file employees of private
respondent. Eventually, FWU and the private respondent negotiated a CBA. 9

On June 11, 1996, the private respondent filed a Motion to Dismiss Appeal of petitioner as it has
become moot and academic. It also invoked Section 3, Rule V of the Implementing Rules of Book V
of the Labor Code stating that "once a union has been certified, no certification election may be held
within one (1) year from the date of issuance of a final certification election [result]." 10

In opposing the Motion to Dismiss Appeal, petitioner contended that its appeal is not moot as the
certification election held on April 19, 1996, was void for violating Section 10, Rule V of the
Implementing Rules of Book V of the Labor Code,  viz: 11

Sec. 10. Decision of the Secretary final and inappealable. — The Secretary shall have fifteen
(15) calendar days within which to decide the appeal from receipt of the records of the case.
The filing of the appeal from the decision of the Med-Arbiter stays the holding of any
certification election. The decision of the Secretary shall be final and inappealable.

Petitioner further argued that the CBA executed between the FWU and the private respondent could
not affect its pending representation case following Section 4, Rule V of the Implementing Rules of
Book V of the Labor Code  which states:
12

Labor II – 1
 Sec. 4. Effects of early agreements. — The representation case shall not, however, be
adversely affected by a collective bargaining agreement registered before or during the last
60 days of the subsisting agreement or during the pendency of the representation case.

On June 28, 1996, respondent Secretary dismissed the appeal interposed by petitioner on the
ground that it has been rendered moot by the certification of FWU as the sole and exclusive
bargaining agent of the rank-and-file workers of respondent company. Petitioner's Motion for
Reconsideration was denied in an Order dated November 18, 1996. 13

Before this Court, petitioner contends:

Public respondent acted with grave abuse of discretion amounting to acting without or in
excess of jurisdiction in holding that the pending appeal in the representation case was
rendered moot and academic by a subsequently enacted collective bargaining agreement in
the company.

II

Public respondent committed a serious legal error and gravely abused its discretion in failing
to hold that the legal personality of petitioner as a union having been established by its
Certificate of Registration, the same could not be subjected to collateral attack.

The petition is meritorious.

We shall first resolve whether the public respondent committed grave abuse of discretion when he
effectively affirmed the Resolution dated January 12, 1996 of the Med-Arbiter dismissing petitioner's
petition for certification election for failure to prove its affiliation with NAFLU-KMU.

The reasoning of the public respondent and the Med-Arbiter is flawed, proceeding as it does from a
wrong premise. Firstly, it must be underscored that petitioner is an independently registered labor
union as evidenced by a Certificate of Registration issued by the DOLE. As a legitimate labor
organization, petitioner's right to file a petition for certification election on its own is beyond
question.  Secondly, the failure of petitioner to prove its affiliation with NAFLU-KMU cannot affect its
14

right to file said petition for certification election as an independent union. At the most, petitioner's
failure will result in an ineffective affiliation with NAFLU-KMU. Still, however, it can pursue its
petition for certification election as an independent union. In our rulings, we have stressed that
despite affiliation, the local union remains the basic unit free to serve the common interest of all its
members and pursue its own interests independently of the federation. 15

In fine, the Med-Arbiter erred in dismissing petitioner's petition for certification election on account
of its non-submission of the charter certificate and the contract of affiliation with the NAFLU-KMU
with the BLR. The public respondent gravely abused his discretion in sustaining the Med-Arbiter's
Resolution.

II

We shall now resolve the issue of whether the appeal filed by the petitioner was rendered moot and
academic by the subsequent certification election ordered by the Med-Arbiter, won by FWU and
which culminated in a CBA with private respondent.

Public respondent's ruling is anchored on his finding that there exists no pending representation
case since the petition for certification election filed by the petitioner was dismissed by the Med-
Labor II – 1
 Arbiter. According to the public respondent, the legal effect of the dismissal of the petition was to
leave the playing field open without any legal barrier or prohibition to any petitioner; thus, other
legitimate labor organizations may file an entirely new petition for certification election.

We reject public respondent's ruling. The order of the Med-Arbiter dismissing petitioner's petition for
certification election was seasonably appealed. The appeal stopped the holding of any certification
election. Section 10, Rule V of the Implementing Rules of Book V of the Labor Code is crystal clear
and hardly needs any interpretation.

Accordingly, there was an unresolved representation case at the time the CBA was entered between
FWU and private respondent. Following Section 4, Rule V of the Implementing Rules of Book V of the
Labor Code, such CBA cannot and will not prejudice petitioner's pending representation case or
render the same moot.  This rule was applied in the case of Associated Labor Unions (ALU-TUCP)
16

v. Trajano 17 where we held that "[t]here should be no obstacle to the right of the proper time, that
is, within sixty (60) days prior to the expiration of the life of a certified collective bargaining
agreement . . ., not even by a collective agreement submitted during the pendency of the
representation case." Likewise, in Associated Labor Unions (ALU) v. Ferrer-Calleja,  we held that a
18

prematurely renewed CBA is not a bar to the holding of a certification election.

Finally, we bewail private respondent's tenacious opposition to petitioner's certification election

petition. Such a stance is not conducive to industrial peace. Time and again, we have emphasized
that when a petition for certification election is filed by a legitimate labor organization, it is good
policy for the employer not to have any participation or partisan interest in the choice of the
bargaining representative. While employers may rightfully be notified or informed of petitions of
such nature, they should not, however, be considered parties thereto with an inalienable right to
oppose it. An employer that involves itself in a certification election lends suspicion to the fact that it
wants to create a company union. Thus, in Consolidated Farms, Inc. II v. Noriel,  we declared that
19

"[o]n a matter that should be the exclusive concern of labor, the choice of a collective bargaining
representative, the employer is definitely an intruder. His participation, to say the least, deserves no
encouragement. This Court should be the last agency to lend support to such an attempt at
interference with a purely internal affair of labor. . . . [While] it is true that there may be
circumstances where the interest of the employer calls for its being heard on the matter, . . . sound
policy dictates that as much as possible, management is to maintain a strictly hands-off policy. For
it is does not, it may lend itself to the legitimate suspicion that it is partial to one of the contending
unions. That is repugnant to the concept of collective bargaining. That is against the letter and spirit
of welfare legislation intended to protect labor and promote social justice. The judiciary then should
be the last to look with tolerance at such efforts of an employer to take part in the process leading to
the free and untrammeled choice of the exclusive bargaining representative of the workers."

IN VIEW WHEREOF, the instant petition is GRANTED. The assailed Resolution and Order of the
public respondent are set aside. The Bureau of Labor Relations is ORDERED to hold a certification
election in respondent company with petitioner as a contending union. No costs.

Labor II – 1
22.) G.R. No. 123426 March 10, 1999

NATIONAL FEDERATION OF LABOR (NFL), petitioner,

vs.
HON. BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, AND ALLIANCE OF NATIONALIST GENUINE LABOR ORGANIZATION-KILUSANG MAYO
UNO (ANGLO-KMU), respondents.

KAPUNAN, J.:

Before us is a petition for certiorari under Rule 65 assailing the Resolution in OS-A-7-142-93 (RO700-9412-RU-037)

dated August 8, 1995 of Undersecretary Bienvenido E. Laguesma, by authority of the Secretary of Labor and
Employment, setting aside the Resolution of the Med-Arbiter dated March 13, 1995.

The antecedents are summarized in the assailed Resolution of Undersecretary Laguesma as follows:

Records show that on 27 December 1994, a petition for certification election among the rank and file
employees of Cebu Shipyard and Engineering Work, Inc. was filed by the Alliance of Nationalist and
Genuine Labor Organization (ANGLO-KMU), alleging among others, that it is a legitimate labor
organization; that respondent Cebu Shipyard and Engineering Work, Inc. is a company engaged in
the business of shipbuilding and repair with more or less, four hundred (400) rank and file
employees; that the Nagkahiusang Mamumuo sa Baradero — National Federation of Labor is the
incumbent bargaining agent of the rank and file employees of the respondent company; that the
petition is supported by more than twenty-five percent (25%) of all the employees in the bargaining
unit; that the petition is filed within the sixty (60) day period prior to the expiry date of the collective
bargaining agreement (CBA) entered into by and between the Nagkahiusang Mamumuo sa
Baradero-NFL and Cebu Shipyard Engineering Work, Inc. which is due to expire on 31 December
1994; and, that there is no bar to its bid to be certified as the sole and exclusive bargaining agent of
all the rank and file employees of the respondent company.

On 2 January 1995, the Med-Arbiter issued an Order, the pertinent portion of which reads as follows:

The petitioner is given five days from receipt of this Order to present proofs that it has created a local
in the appropriate bargaining unit where it seeks to operate as the bargaining agent and that, relative
thereto, it has submitted to the Bureau of Labor Relations or the Industrial Relations Division of this
Office the following: 1) A charter certificate; 2) the constitution and by-laws, a statement on the set of
officers, and the books of accounts all of which are certified under oath by the Secretary or
Treasurer, as the case may be, of such local or chapter and attested to by its President,
OTHERWISE, this case will be dismissed.

SO ORDERED.

On 9 January 1995, forced-intervenor National Federation of Labor (NFL) moved for the dismissal of
the petition on grounds that petitioner has no legal personality to file the present petition for
certification election and that it failed to comply with the twenty-five percent (25%) consent
requirement. It averred among others, that settled is the rule that when a petition for certification
election is filed by the federation which is merely an agent, the petition is deemed to be filed by the
local/chapter, the principal, which must be a legitimate labor organization; that for a local to be
vested with the status a legitimate labor organization, it must submit to the Bureau of Labor
Relations (BLR) or the Industrial Relations Division of the Regional Office of the Department of
Labor and Employment the following: a) charter certificate, indicating the creation or establishment
of a local or chapter; b) constitution and by-laws; c) set of officers, and d) books of accounts; that
petitioner failed to submit the aforesaid requirements necessary for its acquisition of legal
Labor II – 1
 personality; that compliance with the aforesaid requirements must be made at the time of the filing of
the petition within the freedom period; that the submission of the aforesaid requirements beyond the
freedom period will not operate to allow the defective petition to prosper; that contrary to the
allegation of the petitioner, the number of workers in the subject bargaining unit is 486, twenty-five
percent (25%) of which is 122; that the consent signatures submitted by the petitioner is 120 which is
below the required 25% consent requirement; that of the 120 employees who allegedly supported
the petition, one (1) executed a certification stating that the signature, Margarito Cabalhug, does not
belong to him, 15 retracted, 9 of which were made before the filing of the petition while 6 were made
after the filing of the petition; and, that the remaining 104 signatures are way below the 25% consent
requirement.

On 16 January 1995, forced-intervenor filed an Addendum/Supplement to its Motion to Dismiss,

together with the certification issued by the Regional Office No. VII, this Department, attesting to the
fact that the mandatory requirements necessary for the petitioner to acquire the requisite legal
personality were submitted only on 6 January 1995 and the certification issued by the BLR, this
Department, stating that as of 11 January 1995, the ANGLO-Cebu Shipyard and Engineering Work
has not been reported as one of the affiliates of the Alliance of Nationalist and Genuine Labor
Organization (ANGLO). Forced intervenor alleged that it is clear from the said certification that when
the present petition was filed on 27 December 1994, petitioner and its alleged local/chapter have no
legal personality to file the same. It claimed that the fatal defect in the instant petition cannot be
cured with the submission of the requirements in question as the local/chapter may be accorded the
status of a legitimate labor organization only on 6 January 1995 which is after the freedom period
expired on 31 December 1994. Forced intervenor further claimed that the documents submitted by
the petitioner were procured thru misrepresentation, and fraud, as there was no meeting on 13
November 1994 for the purpose of ratifying a constitution and by-laws and there was no election of
officers that actually took place.

On 15 February 1995, petitioner filed its opposition to the respondent's motion to dismiss. It averred
among others, that in compliance with the order of the Med-Arbiter, it submitted to the Regional
Office No. VII, this Department, the following documents; charter certificate, constitution and by-
laws; statement on the set of officers and treasurer's affidavit in lieu of the books of accounts; that
the submission of the aforesaid document, as ordered, has cured whatever defect the petition may
have at the time of the filing of the petition, that at the time of the filing of petition, the total number of
rank and file employees in the respondent company was about 400 and that the petition was
supported by 120 signatures which are more than the 25% required by law; that granting without
admitting that it was not able to secure the signatures of at least 25% of the rank and file employees
in the bargaining unit, the Med-Arbiter is still empowered to order for the conduct of a certification
election precisely for the purpose of ascertaining which of the contending unions shall be the
exclusive bargaining agent pursuant to the ruling of the Supreme Court in the case of California
Manufacturing Corporation vs. Hon. Undersecretary of Labor, et al., G.R. No. 97020, June 8, 1992.

On 20 February 1995, forced-intervenor filed its reply, reiterating all its arguments and allegations
contained in its previous pleadings. It stressed that petitioner is not a legitimate labor organization at
the time of the filing of the petition and that the petitioner's submission of the mandatory
requirements after the freedom period would not cure the defect of the petition.

On 13 March 1995, the Med-Arbiter issued the assailed Resolution dismissing the petition, after
finding that the submission of the required documents evidencing the due creation of a local was
made after the lapse of the freedom period.  1

The Alliance of Nationalist Genuine Labor Organization-Kilusang Mayo Uno (ANGLO-KMU) filed an appeal from the
March 13, 1995 Med-Arbiter's resolution insisting that it is a legitimate labor organization at the time of the filing of
the petition for certification election, and claiming that whatever defect the petition may have had was cured by the
subsequent submission of the mandatory requirements.

In a Resolution dated August 8, 1995, respondent Undersecretary Bienvenido E. Laguesma, by authority of the
Secretary of Labor and Employment, set aside the Med-Arbiter's resolution and entered in lieu thereof a new order
Labor II – 1
"finding petitioner [ANGLO-KMU] as having complied with the requirements of registration at the time of filing of the
petition and remanding the records of this case to the Regional Office of origin . . . ." 
2

The National Federation of Labor thus filed this special civil action for certiorari under Rule 65 of the Rules of Court
raising the following grounds:

A. RESOLUTION OF PUBLIC RESPONDENT HON. BIENVENIDO

E. LAGUESMA DATED 8 AUGUST 1995 AND HIS ORDER DATED
14 SEPTEMBER 1995 WERE ISSUED IN DISREGARD OF
EXISTING LAWS AND JURISPRUDENCE; AND

B. GRAVELY ABUSED HIS DISCRETION IN APPLYING THE

RULING IN THE CASE OF FUR V. LAGUESMA, G.R. NO. 109251,
MAY 26, 1993, IN THE PRESENT CASE.

We will not rule on the merits of the petition. Instead, we will take this opportunity to lay the rules on the procedure
for review of decisions or rulings of the Secretary of Labor and Employment under the Labor Code and its
Implementing Rules. (P.D. No. 442 as amended)

In St. Martin Funeral Homes v. National Labor Relations Commission and Bienvenido Aricayos, G.R. No. 130866,
September 16, 1998, the Court re-examined the mode of judicial review with respect to decisions of the National
Labor Relations Commission.

The course taken by decisions of the NLRC and those of the Secretary of Labor and Employment are tangent, but
all are within the umbra of the Labor Code of the Philippines and its implementing rules. On this premise, we find
that the very same rationale in St. Martin Funeral Homes v. NLRC finds application here, leading ultimately to the
same disposition as in that leading case.

We have always emphatically asserted our power to pass upon the decisions and discretionary acts of the NLRC
well as the Secretary of Labor in the face of the contention that no judicial review is provided by the Labor Code. We
stated in San Miguel Corporation v. Secretary of Labor   thus:
3

. . . It is generally understood that as to a administrative agencies exercising quasi-judicial or

legislative power there is an underlying power in the courts to scrutinize the acts of such agencies on
questions of law and jurisdiction even though no right of review is given by statute (73 C.J.S. 506,
note 56).

The purpose of judicial review is to keep the administrative agency within its jurisdiction and protect
substantial rights of parties affected by its decision (73 C.J.S. 507, Sec. 165). It is part of the system
of checks and balances which restricts the separation of powers and forestalls arbitrary and unjust
adjudications.

Considering the above dictum and as affirmed by decisions of this Court, St. Martin Funeral Homes
v. NLRC succinctly pointed out, the remedy of an aggrieved party is to timely file a motion for reconsideration as a
precondition for any further or subsequent remedy, and then seasonably file a special civil action for certiorari under
Rule 65 of the 1997 Rules of Civil Procedure.

The propriety of Rule 65 as a remedy was highlighted in St. Martin Funeral Homes v. NLRC, where the legislative
history of the pertinent statutes on judicial review of cases decided under the Labor Code was traced, leading to and
supporting the thesis that "since appeals from the NLRC to the Supreme Court were eliminated, the legislative
intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of
decision of the NLRC"   and consequently "all references in the amended Section 9 of B.P. No. 129 to supposed
4

appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions
for certiorari under Rule 65."
5

Labor II – 1
Proceeding therefrom and particularly considering that the special civil action of certiorari under Rule 65 is within the
concurrent original jurisdiction of the Supreme Court and the Court of Appeals, St. Martin Funeral Homes
v. NLRC concluded and directed that all such petitions should be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts.

In the original rendering of the Labor Code, Art. 222 thereof provided that the decisions of the NLRC are appealable
to the Secretary of Labor on specified grounds.   The decisions of the Secretary of Labor may be appealed to the
6

President of the Philippines subject to such conditions or limitations as the President may direct.

Thus under the state of the law then, this Court had ruled that original actions for certiorari and prohibition filed with
this Court against the decision of the Secretary of Labor passing upon the decision of the NLRC were unavailing for
mere error of judgment as there was a plain, speedy and adequate remedy in the ordinary course of law, which was
an appeal to the President. We said in the 1975 case, Scott v. Inciong,  quoting Nation Multi Service Labor Union
7

v. Acgoaili:  "It is also a matter of significance that there was an appeal to the President. So it is explicitly provided
8

by the Decree. That was a remedy both adequate and appropriate. It was in line with the executive determination,
after the proclamation of martial law, to leave the solution of labor disputes as much as possible to administrative
agencies and correspondingly to limit judicial participation."9

Significantly, we also asserted in Scott v. Inciong that while appeal did not lie, the corrective power of this Court by
a writ of certiorari was available whenever a jurisdictional issue was raised or one of grave abuse of discretion
amounting to a lack or excess thereof, citing San Miguel Corporation v. Secretary of Labor. 10

P.D. No. 1367   amending certain provisions of the Labor Code eliminated appeals to the President, but gave the
11

President the power to assume jurisdiction over any cases which he considered national interest cases. The
subsequent P.D. No. 1391,   enacted "to insure speedy labor justice and further stabilize industrial peace", further
12

eliminated appeals from the NLRC to the Secretary of Labor but the President still continued to exercise his power
to assume jurisdiction over any cases which he considered national interest
cases. 13

Though appeals from the NLRC to the Secretary of Labor were eliminated, presently there are several instances in
the Labor Code and its implementing and related rules where an appeal can be filed with the Office of the Secretary
of Labor or the Secretary of Labor issues a ruling, to wit:

(1) Under the Rules and Regulations Governing Recruitment and Placement Agencies for Local
Employment   dated June 5, 1997 superseding certain provisions of Book I (Pre-Employment) of the
14

implementing rules, the decision of the Regional Director on complaints against agencies is
appealable to the Secretary of Labor within ten (10) working days from receipt of a copy of the order,
on specified grounds, whose decision shall be final and inappealable.

(2) Art. 128 of the Labor Code provides that an order issued by the duly authorized representative of
the Secretary of Labor in labor standards cases pursuant to his visitorial and enforcement power
under said article may be appealed to the Secretary of Labor.

Sec. 2 in relation to Section 3 (a), Rule X, Book III (Conditions of Employment) of the implementing
rules gives the Regional Director the power to order and administer compliance with the labor
standards provisions of the Code and other labor legislation. Section 4 gives the Secretary the
power to review the order of the Regional Director, and the Secretary's decision shall be final and
executory.

Sec. 1, Rule IV (Appeals) of the Rules on the Disposition of Labor Standards Cases in the Regional
Offices dated September 16, 1987   provides that the order of the Regional Director in labor
15

standards cases shall be final and executory unless appealed to the Secretary of Labor.

Sec. 5, Rule V (Execution) provides that the decisions, orders or resolutions of the Secretary of
Labor and Employment shall become final and executory after ten (10) calendar days from receipt of
the case records. The filing of a petition for certiorari before the Supreme Court shall not stay the

Labor II – 1
 execution of the order or decision unless the aggrieved party secures a temporary restraining order
from the Court within fifteen (15) calendar days from the date of finality of the order or decision or
posts a supersedeas bond.

Sec. 6 of Rule VI (Health and Safety Cases) provides that the Secretary of Labor at his own initiative
or upon the request of the employer and/or employee may review the order of the Regional Director
in occupational health and safety cases. The Secretary's order shall be final and executory.

(2) Art. 236 provides that the decision of the Labor Relations Division in the regional office denying
an applicant labor organization, association or group of unions or workers' application for registration
may be appealed by the applicant union to the Bureau of Labor Relations within ten (10) days from
receipt of notice thereof.

Sec. 4, Rule V, Book V (Labor Relations), as amended by Department Order No. 9 dated May 1,
1997   provides that the decision of the Regional Office denying the application for registration of a
16

workers association whose place of operation is confined to one regional jurisdiction, or the Bureau
of Labor Relations denying the registration of a federation, national or industry union or trade union
center may be appealed to the Bureau or the Secretary as the case may be who shall decide the
appeal within twenty (20) calendar days from receipt of the records of the case.

(3) Art. 238 provides that the certificate of registration of any legitimate organization shall be
canceled by the Bureau of Labor Relations if it has reason to believe, after due hearing, that the said
labor organization no longer meets one or more of the requirements prescribed by law.

Sec. 4, Rule VIII, Book V provides that the decision of the Regional Office or the Director of the
Bureau of Labor Relations may be appealed within ten (10) days from receipt thereof by the
aggrieved party to the Director of the Bureau or the Secretary of Labor, as the case may be, whose
decision shall be final and executory.

(4) Art. 259 provides that any party to a certification election may appeal the order or results of the
election as determined by the Med-Arbiter directly to the Secretary of Labor who shall decide the
same within fifteen (15) calendar days.

Sec. 12, Rule XI, Book V provides that the decision of the Med-Arbiter on the petition for certification
election may be appealed to the Secretary.

Sec. 15, Rule XI, Book V provides that the decision of the Secretary of Labor on an appeal from the
Med-Arbiter's decision on a petition for certification election shall be final and executory. The
implementation of the decision of the Secretary affirming the decision to conduct a certification
election shall not be stayed unless restrained by the appropriate court.

Sec. 15, Rule XII, Book V provides that the decision of the Med-Arbiter on the results of the
certification election may be appealed to the Secretary within ten (10) days from receipt by the
parties of a copy thereof, whose decision shall be final and executory.

Sec. 7, Rule XVIII (Administration of Trade Union Funds and Actions Arising Therefrom), Book V
provides that the decision of the Bureau in complaints filed directly with said office pertaining to
administration of trade union funds may be appealed to the Secretary of Labor within ten (10) days
from receipt of the parties of a copy thereof.

Sec. 1, Rule XXIV (Execution of Decisions, Awards, or Orders), Book V provides that the decision of
the Secretary of Labor shall be final and executory after ten (10) calendar days from receipt thereof
by the parties unless otherwise specifically provided for in Book V.

Labor II – 1
 (5) Art. 263 provides that the Secretary of Labor shall decide or resolve the labor dispute over which
he assumed jurisdiction within thirty (30) days from the date of the assumption of jurisdiction. His
decision shall be final and executory ten (10) calendar days after receipt thereof by the parties.

From the foregoing we see that the Labor Code and its implementing and related rules generally do not provide for
any mode for reviewing the decision of the Secretary of Labor. It is further generally provided that the decision of the
Secretary of Labor shall be final and executory after ten (10) days from notice. Yet, like decisions of the NLRC which
under Art. 223 of the Labor Code become final after ten (10) days,   decisions of the Secretary of Labor come to this
17

Court by way of a petition for certiorari even beyond the ten-day period provided in the Labor Code and the
implementing rules but within the reglementary period set for Rule 65 petitions under the 1997 Rules of Civil
Procedure. For example, in M. Ramirez Industries v. Secretary of Labor,   assailed was respondent's order
18

affirming the Regional Director's having taken cognizance of a case filed pursuant to his visitorial powers under Art.
128 (a) of the Labor Code; in Samahang Manggagawa sa Permex v. Secretary of
Labor,   assailed was respondent's order setting aside the Med-Arbiter's dismissal a petition for certification
19

election; Samahan ng Manggagawa sa Pacific Plastic v. Laguesma,   assailed was respondent's order affirming the
20

Med-Arbiter's decision on the results of a certification election; in Philtread Workers Union v. Confessor,   assailed
21

was respondent's order issued under Art. 263 certifying a labor dispute to the NLRC for compulsory arbitration.

In two instances, however, there is specific mention of a remedy from the decision of the Secretary of Labor, thus:

(1) Section 15, Rule XI, Book V of the amended implementing rules provides that the decision of the Secretary of
Labor on appeal from the Med-Arbiter's decision on a petition for certification election shall be final and executory,
but that the implementation of the Secretary's decision affirming the Med-Arbiter's decision to conduct a certification
election "shall not be stayed unless restrained by the appropriate court."

(2) Section 5, Rule V (Execution) of the Rules on the Disposition of Labor Standards Cases in Regional Offices
provides that "the filing of a petition for certiorari before the Supreme Court shall not stay the execution of the
[appealed] order or decision unless the aggrieved party secures a temporary restraining order from the Court."

We perceive no conflict with our pronouncements on the proper remedy which is Rule 65 and which should be
initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts. Accordingly, we
read "the appropriate court" in Section 15, Rule XI, Book V of the Implementing Rules to refer to the Court of
Appeals.

Sec. 5, Rule V of the Rules on the Disposition of Labor Standards Cases in Regional Offices specifying the
Supreme Court as the forum for filing the petition for certiorari is not infirm in like manner or similarly as is the statute
involved in Fabian v. Desierto.  And Section 5 cannot be read to mean that the petition for certiorari can only be
22

filed exclusively and solely with this Court, as the provision must invariably be read in relation to the pertinent laws
on the concurrent original jurisdiction of this Court and the Court of Appeals in Rule 65 petitions.

In fine, we find that it is procedurally feasible as well as practicable that petitions for certiorari under Rule 65 against
the decision of the Secretary of Labor rendered under the Labor Code and its implementing and related rules be
filed initially in the Court of Appeals. Paramount consideration is strict observance of the doctrine on the hierarchy of
the courts, emphasized in St. Martin Funeral Homes v. NLRC, on "the judicial policy that this Court will not entertain
direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and calling for the exercise of our preliminary
jurisdiction." 23

WHEREFORE, in view of the foregoing, certiorari, together with all pertinent records REFERRED to the Court of
Appeals for disposition.

Labor II – 1
 23.) [G.R. No. 143616. May 9, 2001.]

NEGROS ORIENTAL ELECTRIC COOPERATIVE 1 (NORECO 1), represented by ATTY. SUNNY

R.A. MADAMBA, as General Manager, Petitioner, v. THE SECRETARY OF THE DEPARTMENT
OF LABOR AND EMPLOYMENT (DOLE), and PACIWU-NACUSIP, NORECO 1 Chapter of
Bindoy, Negros Oriental, Respondents.

DECISION

GONZAGA-REYES, J.:

Petitioner assails the Decision of the Court of Appeals 1 dated August 20, 1999 dismissing its petition
for certiorari in C.A.-G.R. SP No. 50295 and the order denying its Motion for Reconsideration
therefrom. chanrob1es virtua1 1aw 1ibrary

The antecedents are recited by the Court of Appeals as follows: jgc:chanrobles.com.ph

"It appears that on December 4, 1997, some employees of the petitioner organized themselves into a
local chapter of the Philippine Agricultural Commercial and Industrial Workers’ Union–Trade Union
Congress of the Philippines (PACIWU-TUCP). The private respondent-union submitted its charter
certificate and supporting documents on the same date.

On December 10, 1997, PACIWU-TUCP filed a petition for certification election on behalf of the
NORECO 1 chapter, seeking to represent the seventy-seven (77) rank-and-file employees of NORECO
1. PACIWU-TUCP alleged in its petition that it had created a local chapter in NORECO 1 which had
been duly reported to the DOLE Regional Office (Region VII) on December 4, 1997. It was further
averred therein that NORECO 1 is an unorganized establishment, and that there is no other labor
organization presently existing at the said employer establishment.

The Med-Arbiter dismissed the petition in an order dated December 23, 1997, which stated that: chanrob1es virtual 1aw library

‘It appears in the records of this Office that the petitioner has just applied for registration. The
corresponding certificate has not yet been issued. Accordingly, it has not yet acquired the status of a
legitimate labor organization.

The instant petition, not having been filed by legitimate labor organization, the same is hereby
DENIED.

WHEREFORE, this case is DISMISSED.

SO ORDERED.’

PACIWU-TUCP filed a Motion for Reconsideration of the said order, which was treated as an appeal by
the public Respondent. On July 31, 1998, the public respondent rendered the assailed judgment as
previously quoted. 2 The petitioner filed a Motion for Reconsideration on August 24, 1998, but the
same was denied in a Resolution dated September 21, 1998." 3

The appellate court ruled that the Secretary of Labor properly treated PACIWU-TUCP’s Motion for
Reconsideration as an appeal, and held that the said chapter is deemed to have acquired legal
personality as of December 4, 1997 upon submission of the documents required under the Omnibus
Rules for the creation of a local chapter. The said court also dismissed petitioner’s contention
assailing the composition of the private respondent union.

Labor II – 1
Motion for Reconsideration of the above decision was denied. Hence this petition for review
on certiorari which submits the following arguments in support thereof: jgc:chanrobles.com.ph

"I. THE COURT OF APPEALS HAS DEPARTED FROM THE ACCEPTED PRINCIPLE THAT THE PERIOD TO
APPEAL CANNOT BE EXTENDED AND THUS THE RESPONDENT SECRETARY OF LABOR HAS NO
JURISDICTION TO REVERSE THE DECISION OF THE MED-ARBITER, BECAUSE THE APPEAL HAS NOT
BEEN PERFECTED ON TIME;

II. THE COURT OF APPEALS DECIDED THIS CASE CONTRARY TO THE DECISION OF THE SUPREME
COURT IN THE CASE OF TOYOTA MOTOR PHILIPPINES VS. TOYOTA MOTOR PHILIPPINES
CORPORATION UNION AND THE SECRETARY OF LABOR AND EMPLOYMENT, G.R. NO. 121084,
FEBRUARY 19, 1997, BY COMPLETELY IGNORING THE TOYOTA CASE WHICH IS ON FOUR SQUARE
WITH THIS CASE, WHEN THE COURT OF APPEALS SUSTAINED THE ORDER FOR CERTIFICATION
ELECTIONS IN SPITE OF THE EXISTENCE OF SUPERVISORY EMPLOYEES IN THE RANK AND FILE
UNION OF THE RESPONDENT PACIWU-NACUSIP NORECO 1 CHAPTER; chanrob1es virtua1 1aw 1ibrary

III. THE COURT OF APPEALS ERRED IN ALLOWING CERTIFICATION ELECTIONS WHEN ALL THE
MEMBERS OF THE UNION ARE MEMBERS OF THE COOPERATIVE." 4

The first contention was correctly resolved by the Court of Appeals. Petitioner reiterates that the
Motion for Reconsideration from the Decision of the Med-Arbiter was filed by PACIWU-NACUSIP out of
time, i.e. beyond the ten (10) days allowed for filing such motion for reconsideration. The allegation
of late filing is bare, it does not even specify the material dates, nor furnish substantiation of the said
allegation. The Court of Appeals noted that the original record does not disclose the actual date of
receipt by the private respondent of the order of the Med-Arbiter dismissing the petition for
certification election, and hence it "cannot conclude that the Med-Arbiter’s Decision had already
become final and executory pursuant to Section 14, Rule XI Book V of the Omnibus Implementing
Rules." Neither the present Petition or the Reply to Comment of Solicitor General for public
respondent attempts to supply the omission and we are accordingly constrained to dismiss this
assigned error concerning the timeliness of respondent’s appeal to the Secretary of Labor.

In its Petition for Certiorari filed in the Court of Appeals dated November 7, 1998, the allegation that
the Motion for Reconsideration filed by respondent PACIWU-NACUSIP was "filed out of time" was
similarly unsubstantiated. Moreover, the issue was raised below for the first time in the Motion for
Reconsideration filed by NORECO I (Motion dated August 22, 1998), and the Secretary of labor
rejected the petitioner’s contention for not having been seasonably filed; the DOLE Resolution stated
categorically that:jgc:chanrobles.com.ph

"there being no question as to the timeliness of the filing of appellant’s Motion for Reconsideration
which was elevated to us by the Regional Office, the same can be treated as an appeal . . .." 5

We find no cogent justification to reverse the finding on the basis of the records before us.

The second argument posited by petitioner is also without merit. Petitioner invokes Article 245 of the
Labor Code and the ruling in Toyota Motor Philippines Corp. v. Toyota Motor Philippines Corporation
Labor Union 6 which declare the ineligibility of managerial or supervisory employees to join any labor
organization consisting of rank and file employees for the reason that the concerns which involve
either group "are normally disparate and contradictory." Petitioner claims that it challenged the
composition of the union at the earliest possible time after the decision of the Med-Arbiter was set
aside by the DOLE; and that the list of the names of supervisory or confidential employees was
submitted with the petition for certiorari filed in the Court of Appeals, which did not consider the
same. Petitioner further argues that the failure of the Secretary of Labor and the Court of Appeals to
resolve this question constituted a denial of its right to due process.

The contentions are unmeritorious.

Labor II – 1
The issue was raised for the first time in petitioner’s Motion for Reconsideration of the Decision of the
Secretary of Labor dated July 13, 1998 which set aside the Order of the Med-Arbiter dated December
23, 1997 dismissing the PACIWU-TUCP’s petition for certification election. 7 In its Resolution dated
September 21, 1998, denying the Motion for Reconsideration, the Secretary of Labor categorically
stated:jgc:chanrobles.com.ph

"On the fourth ground, in the cited case of Toyota Motor Philippines Corporation v. Toyota Motor
Philippines Corporation Labor Union, 268 SCRA 573, the employer, since the beginning opposed the
petition indicating the specific names of the supervisory employees and their respective job
descriptions. In the instant case, movant not only belatedly raised the issue but miserably failed to
support the same. Hence, between the belated and bare allegation of movant that "there are
supervisory and confidential employees in the union" vis-a-vis the open and repeated declaration
under oath of the union members in the minutes of their organizational meeting and the ratification
of their Constitution and By-Laws that they are rank and file employees, we are inclined to give more
credence to the latter. Again, in Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, supra,
the Supreme Court held: chanrob1es virtual 1aw library

‘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.’

In the instant case, there is no persuasive evidence to show that there are indeed supervisory and
confidential employees in appellant union who under the law are disqualified to join the same." 8

The above finding was correctly upheld by the Court of Appeals, and we find no cogent basis to
reverse the same. Factual issues are not a proper subject for certiorari which is limited to the issue of
jurisdiction and grave abuse of discretion. chanrob1es virtua1 1aw 1ibrary

Indeed, the Court of Appeals cannot be expected to go over the list of alleged supervisory employees
attached to the petition before it and to pass judgment in the first instance on the nature of the
functions of each employee on the basis of the job description pertaining to him. As appropriately
observed by the said court, the determination of such factual issues is vested in the appropriate
Regional Office of the Department of Labor and Employment and pursuant to the doctrine of primary
jurisdiction, the Court should refrain from resolving such controversies. The doctrine of primary
jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the
jurisdiction over which is initially lodged with an administrative body of special competence. 9

The petitioner questions the remedy suggested by the Court of Appeals i.e., to file a petition for
cancellation of registration before the appropriate Regional Office arguing that the membership of
supervisory employees in the rank-and-file is not one of the grounds for cancellation of registration
under the Omnibus Rules. Whether the inclusion of the prohibited mix of rank-and-file and
supervisory employees in the roster of officers and members of the union can be cured by
cancellation of registration under Article 238 et seq. of the Labor Code vis-a-vis Rule VIII of the
Omnibus Rules, or by simple inclusion-exclusion proceedings in the pre-election conference, 10 the
fact remains that the determination of whether there are indeed supervisory employees in the roster
of members of the rank-and-file union has never been raised nor resolved by the appropriate fact
finding body, and the petition for certiorari filed in the Court of Appeals cannot cure the procedural
lapse. It bears notice that unlike in Toyota Motor Philippines Corp. v. Toyota Motor Philippines Corp.
Labor Union 11 where the objection that "the union was composed of both rank-and-file and
supervisory employees in violation of law" was promptly raised in the position paper to oppose the
petition for certification election, and this objection was resolved by the Med-Arbiter, this issue was
belatedly raised in the case at bar and was sought to be ventilated only before the Court of Appeals
in the petition for certiorari. Time and again, this Court has ruled that factual matters are not proper
subjects for certiorari. 12
Labor II – 1
The above observations are in point with respect to the last assigned error challenging the inclusion
of members of the cooperative in the union. The argument that NORECO I is a cooperative and most
if not all of the members of the petitioning union are members of the cooperative was raised only in
the Motion for Reconsideration from the Decision of the Secretary of Labor dated July 31, 1998. The
Secretary of Labor ruled that the argument should be rejected as it was not seasonably filed.
Nevertheless the DOLE resolved the question in this wise: jgc:chanrobles.com.ph

"On the third ground, while movant correctly cited Cooperative Bank of Davao City, Inc. v. Ferrer-
Calleja, 165 SCRA 725, that "an employee of a cooperative who is a member and co-owner thereof
cannot invoke the right to collective bargaining . . ." it failed to mention the proviso provided by the
Supreme Court in the same decision: chanrob1es virtual 1aw library

‘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 in so far as
it refers to the employees of petitioner who are not members or co-owners of petitioner.’

Not only did movant fail to show any proof that anyone of the union members are members or co-
owners of the cooperative. It also declared that not all members of the petitioning union are
members of the cooperative." 13

The ruling was upheld by the appellate court thus: jgc:chanrobles.com.ph

"The petitioner is indeed correct in stating that employees of a cooperative who are members-
consumers or members-owners, are not qualified to form, join or assist labor organizations for
purposes of collective bargaining, because of the principle that an owner cannot bargain with himself.
However, the petitioner failed to mention that the Supreme Court has also declared that 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. chanrob1es virtua1 1aw 1ibrary

The public respondent found that petitioner failed to show any proof that any member of the private
respondent was also a member or co-owner of the petitioner-cooperative. Hence the members of the
private respondent could validly form a labor organization." 14

In the instant petition, NORECO 1 fails to controvert the statement of the Court of Appeals that the
petitioner "failed to show any proof that any member of the private respondent was also a member
or co-owner of the petitioner cooperative." More important, the factual issue is not for the Court of
Appeals to resolve in a petition for certiorari. Finally, the instant petition ambiguously states that
"NORECO 1 is an electric cooperative and all the employees of the subject union are members of the
cooperative", but submitted "a certified list of employees who are members-co-owners of the
petitioner electric cooperative." Impliedly, there are rank-and-file employees of the petitioner who
are not themselves members-co-owners, or who are the ones qualified to form or join a labor
organization. Again, the core issue raises a question of fact that the appellate court correctly declined
to resolve in the first instance.

WHEREFORE, the petition is DENIED for lack of merit.

Labor II – 1
 24.) [G.R. NO. 150761 : May 19, 2004]

SMC QUARRY 2 WORKERS UNION FEBRUARY SIX MOVEMENT (FSM) LOCAL CHAPTER NO.
1564 (for and in behalf of its members), Petitioner, v. TITAN MEGABAGS INDUSTRIAL
CORPORATION, Respondent.

DECISION

SANDOVAL-GUTIERREZ, J.:

For resolution is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the Decision 1 dated July 31, 2001 and the Resolution2 dated
November 13, 2001 rendered by the Court of Appeals in CA-G.R. SP No. 64146, entitled Titan
Megabags Industrial Corporation v. The Honorable Office of the Secretary of Labor, Bureau of Labor
Relations and SMC Quarry 2 Workers Union-February Six Movement (FSM).

The controversy at bar arose from a petition for certification election filed with the Med-Arbitration
Section, Regional Office No. IV, Department of Labor and Employment (DOLE) at Calamba, Laguna
by petitioner SMC Quarry 2 Workers Union-February Six Movement (FSM) Local Chapter No. 1564,
docketed as Case No. RO400-9810-RU-002.

In its petition for certification election, petitioner alleged that it is a legitimate labor organization that
seeks to represent the regular rank-and-file workers at Titan Megabags Industrial Corporation,
respondent.

Respondent opposed the petition, contending that members of petitioner union are not its employees
but of Stitchers Multi-Purpose Cooperative (SMC), an independent contractor.Respondent claimed
that it engaged SMC to manufacture and sew its multi-purpose industrial bags.

In an Order dated July 13, 1999, the Med-Arbiter held that respondent is the employer of the
members of petitioner union and directed that a certification election be conducted by its regular
rank and file workers.

On appeal, the Office of the DOLE Secretary, in a Resolution dated April 13, 2000, affirmed in
toto the Med-Arbiters Order authorizing a certification election.

Respondent filed a motion for reconsideration but was denied by the Office of the DOLE Secretary in
a Resolution dated March 19, 2001 for being late by seven (7) days.

Respondent then filed a Petition for Certiorari with the Court of Appeals, alleging that the Office of
the DOLE Secretary committed grave abuse of discretion in finding that an employer-employee
relationship existed between respondent and members of petitioner union and in ordering a
certification election.

On July 31, 2001, the Court of Appeals promulgated its Decision setting aside the April 13, 2000 and
March 19, 2001 Resolutions of the Office of the DOLE Secretary and disallowing the conduct of a
certification election.

On November 13, 2001, the Court of Appeals issued a Resolution denying the petitioners motion for
reconsideration.

Labor II – 1
Petitioner, in the instant Petition for Review on Certiorari vigorously asserts that the Court of Appeals
erred (1) in setting aside the final and executory Resolutions of the Office of the DOLE Secretary; and
(2) in holding that SMC is an independent contractor and that no employer-employee relationship
exists between respondent and members of petitioner union that justifies the holding of a
certification election.

Under Article 259 of the Labor Code, as amended, any party to a certification election may appeal the
order of the Med-Arbiter directly to the Secretary of Labor who shall decide the same within fifteen
(15) calendar days.

Along this line, Section 15, Rule XI, Book V of the Omnibus Rules Implementing the Labor Code
provides that the Decision or Resolution of the Secretary of the DOLE on appeal shall be final and
executory.Upon finality of the Decision of the Secretary, the entire records of the case shall be
remanded to the office of origin for implementation of the Decision, unless restrained by the
appropriate court.

In National Federation of Labor v. Laguesma  ,3 we ruled that the remedy of an aggrieved party in a
Decision or Resolution of the Secretary of the DOLE is to timely file a motion for reconsideration as a
precondition for any further or subsequent remedy, and then seasonably file a special civil action
for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. And without a motion for
reconsideration seasonably filed within the ten-day reglementary period, the questioned Decision or
Resolution of the Secretary becomes final and executory. 4 Consequently, the merits of the case can
no longer be reviewed to determine if the Secretary could be faulted for grave abuse of discretion. 5  cralawred

Respondents failure to file its motion for reconsideration seasonably is jurisdictional and fatal to its
cause and has, in effect, rendered final and executory the April 13, 2000 and March 19, 2001
Resolutions of the Secretary of the DOLE.

Even if there was no procedural flaw on the part of respondent, still the Appellate Court should have
denied respondents Petition for Certiorari.We have held that in certification elections, the employer is
a bystander, it has no right or material interest to assail the certification election. 6 
cralawred

Thus, when a petition for certification election is filed by a legitimate labor organization, it is good
policy of the employer not to have any participation or partisan interest in the choice of the
bargaining representative.While employers may rightfully be notified or informed of petitions of such
nature, they should not, however, be considered parties thereto with an inalienable right to oppose
it.7 
cralawred

WHEREFORE, the petition is GRANTED.The Decision dated July 31, 2001and the Resolution dated
November 13, 2001 of the Court of Appeals are REVERSED.The Resolutions of the Office of the DOLE
Secretary dated April 13, 2000 and March 19, 2001 are AFFIRMED.

Labor II – 1
25.) G.R. No. 149434             June 3, 2004

PHILIPPINE APPLIANCE CORPORATION (PHILACOR), petitioner,

vs.
THE COURT OF APPEALS, THE HONORABLE SECRETARY OF LABOR BIENVENIDO E. LAGUESMA and
UNITED PHILACOR WORKERS UNION-NAFLU, respondents.

DECISION

YNARES-SANTIAGO, J.:

Before us is an appeal by certiorari under Rule 45 of the Rules of Court which seeks to set aside the decision1 of the
Court of Appeals in CA-G.R. SP No. 59011, denying due course to petitioner Philippine Appliance Corporation’s
partial appeal, as well as the Resolution2 of the same court, dated August 10, 2001, denying the motion for
reconsideration.

Petitioner is a domestic corporation engaged in the business of manufacturing refrigerators, freezers and washing
machines. Respondent United Philacor Workers Union-NAFLU is the duly elected collective bargaining
representative of the rank-and-file employees of petitioner. During the collective bargaining negotiations between
petitioner and respondent union in 1997 (for the last two years of the collective bargaining agreement covering the
period of July 1, 1997 to August 31, 1999), petitioner offered the amount of four thousand pesos (P4,000.00) to
each employee as an "early conclusion bonus". Petitioner claims that this bonus was promised as a unilateral
incentive for the speeding up of negotiations between the parties and to encourage respondent union to exert their
best efforts to conclude a CBA. Upon conclusion of the CBA negotiations, petitioner accordingly gave this early
signing bonus.3

In view of the expiration of this CBA, respondent union sent notice to petitioner of its desire to negotiate a new CBA.
Petitioner and respondent union began their negotiations. On October 22, 1999, after eleven meetings, respondent
union expressed dissatisfaction at the outcome of the negotiations and declared a deadlock. A few days later, on
October 26, 1999, respondent union filed a Notice of Strike with the National Conciliation and Mediation Board
(NCMB), Region IV in Calamba, Laguna, due to the bargaining deadlock.4

A conciliation and mediation conference was held on October 30, 1999 at the NCMB in Imus, Cavite, before
Conciliator Jose L. Velasco. The conciliation meetings started with eighteen unresolved items between petitioner
and respondent union. At the meeting on November 20, 1999, respondent union accepted petitioner’s proposals on
fourteen items,5 leaving the following items unresolved: wages, rice subsidy, signing, and retroactive bonus.6

Petitioner and respondent union failed to arrive at an agreement concerning these four remaining items. On January
18, 2000, respondent union went on strike at the petitioner’s plant at Barangay Maunong, Calamba, Laguna and at
its washing plant at Parañaque, Metro Manila. The strike lasted for eleven days and resulted in the stoppage of
manufacturing operations as well as losses for petitioner, which constrained it to file a petition before the
Department of Labor and Employment (DOLE). Labor Secretary Bienvenido Laguesma assumed jurisdiction over
the dispute and, on January 28, 2000, ordered the striking workers to return to work within twenty-four hours from
notice and directed petitioner to accept back the said employees.7

On April 14, 2000, Secretary Laguesma issued the following Order:8

In view of the foregoing, we fix the wage increases at P30 per day for the first year and P25 for the second
year.

The rice subsidy and retroactive pay base are maintained at their existing levels and rates.

Finally, this Office rules in favor of Company’s proposal on signing bonus. We believe that a P3,000 bonus is
fair and reasonable under the circumstances.

Labor II – 1
 WHEREFORE, premises considered, Philippine Appliance Corporation and United Philacor Workers Union-
NAFLU are hereby directed to conclude a Collective Bargaining Agreement for the period July 1, 1999 to
June 30, 2001. The agreement is to incorporate the disposition set forth above and includes other items
already agreed upon in the course of negotiation and conciliation.

SO ORDERED. (Emphasis supplied)

On April 27, 2000, petitioner filed a Partial Motion for Reconsideration9 stating that while it accepted the decision of
Secretary Laguesma, it took exception to the award of the signing bonus. Petitioner argued that the award of the
signing bonus was patently erroneous since it was not part of the employees’ salaries or benefits or of the collective
bargaining agreement. It is not demandable or enforceable since it is in the nature of an incentive. As no CBA was
concluded through the mutual efforts of the parties, the purpose for the signing bonus was not served. On May 22,
2000, Secretary Laguesma issued an Order10 denying petitioner’s motion. He ruled that while the bargaining
negotiations might have failed and the signing of the agreement was delayed, this cannot be attributed solely to
respondent union. Moreover, the Secretary noted that the signing bonus was granted in the previous CBA.

On June 2, 2000, petitioner filed a Petition for Certiorari with the Court of Appeals docketed as CA-G.R. SP No.
59011 which was dismissed. The Labor Secretary’s award of the signing bonus was affirmed since petitioner itself
offered the same as an incentive to expedite the CBA negotiations. This offer was not withdrawn and was still
outstanding when the dispute reached the DOLE. As such, petitioner can no longer adopt a contrary stand and
dispute its own offer.

Petitioner filed a Motion for Reconsideration but the same was denied. Hence this petition for review raising a lone
issue, to wit:

THE HONORABLE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF

DISCRETION WHEN IT RENDERED A DECISION NOT IN ACCORD WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT, SPECIFICALLY THE CALTEX DOCTRINE OF 1997.

The petition is meritorious.

Petitioner invokes the doctrine laid down in the case of Caltex v. Brillantes,11 where it was held that the award of the
signing bonus by the Secretary of Labor was erroneous. The said case involved similar facts concerning the CBA
negotiations between Caltex (Philippines), Inc. and the Caltex Refinery Employees Association (CREA). Upon
referral of the dispute to the DOLE, then Labor Secretary Brillantes ruled, inter alia:

Fifth, specifically on the issue of whether the signing bonus is covered under the "maintenance of existing
benefits" clause, we find that a clarification is indeed imperative. Despite the expressed provision for a
signing bonus in the previous CBA, we uphold the principle that the award for a signing bonus should
partake the nature of an incentive and premium for peaceful negotiations and amicable resolution of
disputes which apparently are not present in the instant case. Thus, we are constrained to rule that the
award of signing bonus is not covered by the "maintenance of existing benefits" clause.

On appeal to this Court, it was held:

Although proposed by [CREA], the signing bonus was not accepted by [Caltex Philippines, Inc.]. Besides, a
signing bonus is not a benefit which may be demanded under the law. Rather, it is now claimed by petitioner
under the principle of "maintenance of existing benefits" of the old CBA. However, as clearly explained by
[Caltex], a signing bonus may not be demanded as a matter of right. If it is not agreed upon by the parties or
unilaterally offered as an additional incentive by [Caltex], the condition for awarding it must be duly satisfied.
In the present case, the condition sine qua non for its grant—a non-strike— was not complied with.

In the case at bar, two things militate against the grant of the signing bonus: first, the non-fulfillment of the condition
for which it was offered, i.e., the speedy and amicable conclusion of the CBA negotiations; and second, the failure of
respondent union to prove that the grant of the said bonus is a long established tradition or a "regular practice" on
the part of petitioner. Petitioner admits, and respondent union does not dispute, that it offered an "early conclusion

Labor II – 1
bonus" or an incentive for a swift finish to the CBA negotiations. The offer was first made during the 1997 CBA
negotiations and then again at the start of the 1999 negotiations. The bonus offered is consistent with the very
concept of a signing bonus.

In the case of MERALCO v. The Honorable Secretary of Labor,12 we stated that the signing bonus is a grant
motivated by the goodwill generated when a CBA is successfully negotiated and signed between the employer and
the union. In that case, we sustained the argument of the Solicitor General, viz:

When negotiations for the last two years of the 1992-1997 CBA broke down and the parties sought the
assistance of the NCMB, but which failed to reconcile their differences, and when petitioner MERALCO
bluntly invoked the jurisdiction of the Secretary of Labor in the resolution of the labor dispute, whatever
goodwill existed between petitioner MERALCO and respondent union disappeared. . . .

Verily, a signing bonus is justified by and is the consideration paid for the goodwill that existed in the
negotiations that culminated in the signing of a CBA.13

In the case at bar, the CBA negotiation between petitioner and respondent union failed notwithstanding the
intervention of the NCMB. Respondent union went on strike for eleven days and blocked the ingress to and egress
from petitioner’s two work plants. The labor dispute had to be referred to the Secretary of Labor and Employment
because neither of the parties was willing to compromise their respective positions regarding the four remaining
items which stood unresolved. While we do not fault any one party for the failure of the negotiations, it is apparent
that there was no more goodwill between the parties and that the CBA was clearly not signed through their mutual
efforts alone. Hence, the payment of the signing bonus is no longer justified and to order such payment would be
unfair and unreasonable for petitioner.

Furthermore, we have consistently ruled that a bonus is not a demandable and enforceable obligation.14 True, it may
nevertheless be granted on equitable considerations as when the giving of such bonus has been the company’s
long and regular practice.15 To be considered a "regular practice," however, the giving of the bonus should have
been done over a long period of time, and must be shown to have been consistent and deliberate.16 The test or
rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving
the benefits knowing fully well that said employees are not covered by the law requiring payment
thereof.17 Respondent does not contest the fact that petitioner initially offered a signing bonus only during the
previous CBA negotiation. Previous to that, there is no evidence on record that petitioner ever offered the same or
that the parties included a signing bonus among the items to be resolved in the CBA negotiation. Hence, the giving
of such bonus cannot be deemed as an established practice considering that the same was given only once, that is,
during the 1997 CBA negotiation.

WHEREFORE, premises considered, the instant petition is GRANTED. The decision of the Court of Appeals in CA-
G.R. SP No. 59011 affirming the Order of the Secretary of Labor and Employment, directing petitioner Philippine
Appliance Corporation to pay each of its employees a signing bonus in the amount of Three Thousand Pesos
(P3,000.00), is hereby REVERSED and SET ASIDE. No pronouncement as to costs.

Labor II – 1
 26.) [G.R. NO. 149833 : June 29, 2004]

NOTRE DAME OF GREATER MANILA, Petitioner, v. Hon. BIENVENIDO E. LAGUESMA,

(Undersecretary of the Department of Labor and Employment); Med-Arbiter TOMAS
FALCONITIN; and NOTRE DAME OF GREATERMANILA TEACHERS AND EMPLOYEES
UNION, Respondents.

DECISION

PANGANIBAN,  J.:

Unless it has filed a petition for a certification election pursuant to Article 258 of the Labor Code, an
employer has no standing to question such election or to interfere therein.Being the sole concern of
the workers, the election must be free from the influence or reach of the company.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, challenging the March 31,
2000 Decision2 and the August 28, 2001 Resolution3 of the Court of Appeals (CA) in CA-GR SP No.
51287.The assailed Decision disposed as follows: chanroblesvirtua1awlibrary

In sum, the Court finds that public respondents did not commit any abuse of discretion in issuing the
assailed decision and order.There is no capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction and hence there is no room for the issuance of the equitable writ
of certiorari .

WHEREFORE, the instant petition is dismissed.4  cralawred

The challenged Resolution denied petitioners Motion for Reconsideration.

The Facts

The factual antecedents of the case are summarized by the CA as follows: chanroblesvirtua1awlibrary

On October 14, 1991, private respondent Notre Dame of Greater Manila Teachers & Employees Union
(NGMTEU for brevity) a legitimate labor organization duly accredited and registered with the
Department of Labor & Employment (DOLE) under Registration Certificate No. 9989 filed with the
Med-Arbitration Branch, National Capital Region, (DOLE) a petition for direct certification as the sole
and exclusive bargaining agent or certification election among the rank and file employees of
petitioner NDGM.

On November 18, 1991, Med-Arbiter Tomas F. Falconitin issued an order [granting the petition for
certification election and] directing Adelayda C. Francisco, Representation Officer, to undertake a pre-
election conference.The order reads: chanroblesvirtua1awlibrary

Considering the manifestation of petitioner its legal counsel praying that this case be submitted for
resolution; and considering further that the respondent failed to appear on November 13, 1991
scheduled hearing despite knowledge of said hearing; and considering furthermore [that] respondent
is [an] unorganized establishment within the purview of Art. 257 of the Labor Code, as amended, we
rule to grant certification election instead of direct certification as prayed for by petitioner, in order to
give each employee a fair chance to choose their bargaining agent.

Labor II – 1
Accordingly, the Representation Officer is hereby directed to conduct the usual pre-election
conference in connection thereof, taking into account the following choices: chanroblesvirtua1awlibrary

1.Notre Dame of Greater Manila Teachers and Employees Union (NDGMTEU); and cralawlibrary

2.No Union.

SO ORDERED.

On January 8, 1992, a pre-election conference was conducted wherein the parties agreed, among
others, that the certification election shall be conducted on January 18, 1992 from 10:00 oclock in
the morning to 2:00 oclock in the afternoon and that the eligible voters shall be those employees
appearing in the list submitted by management as agreed upon by the parties by affixing their
signatures on said list.

On January 13, 1992, petitioner NDGM registered a motion to include probationary and substitute
employees in the list of qualified voters.On the same day, respondent Med-Arbiter Falconitin denied
said motion by handwritten notation on the motion itself 1/13/92 The Rep. officer allow[s] only
regular employees to vote.

On January 17, 1992, petitioner NDGM filed an appeal from the said handwritten order dated January
13, 1992 of Med. Arbiter Falconitin in the form of a notation, in effect excluding probationary and
substitute employees from the list of voters.

On January 18, 1992, public respondent conducted a certification election with the following results:

YES.. 56

NO.. 23

Number of segregated

Ballots 4

Number of spoiled

Ballots 1_

Total84

On January 18, 1992, petitioner filed a written notice of protest against the conduct and results of
the certification of election, which was opposed by private respondent NDGMTEU.

On January 27, 1992, a motion to certify private respondent NDGMTEU as the exclusive bargaining
agent of petitioner was filed.

On March 16, 1992[,] Med-Arbiter Tomas Falconitin issued an order which certified private
respondent NDGMTEU as the sole and exclusive bargaining agent of all the rank-and-file employees
of petitioner and accordingly dismissed petitioners protest.

On March 30, 1992, petitioner lodged an appeal from the aforementioned March 16, 1992 Order of
Med-Arbiter Falconitin.

Labor II – 1
On July 23, 1992, respondent then Undersecretary Laguesma rendered the questioned decision
dismissing the appeal for lack of merit.

Petitioner filed a motion for reconsideration of the Decision which was rejected by public respondent
in his order dated October 12, 1992.

Dissatisfied, petitioner NDGM filed the instant petition asseverating on the following issues, viz: chanroblesvirtua1awlibrary

The issuance of the orders dated July 23, 1992 and October 12, 1992 is flagrantly contrary to and
violative of the provisions of the Labor Code of the Philippines.

1.On [o]rdering the [h]olding of the [c]ertification [e]lection on January 18, 1992 despite
[p]etitioners [p]erfected [a]ppeal on January 17, 1992 with the Office of the Secretary of the
Department.

2.On the [a]rbitrary, whimsical and capricious exclusion from the Qualified Voters List [p]robationary
and [s]ubstitute [e]mployees, contrary to law and established jurisprudence. 5

Ruling of the Court of Appeals

Ruling in favor of respondents, the appellate court held that Med-Arbiter Falconitins notation on
petitioners Motion to Include Probationary and Substitute Employees in the List of Qualified Voters
was not an order that could be the subject of an appeal to the Secretary of the Department of Labor
and Employment.Also, petitioner was deemed to have abandoned its appeal of the notation when it
filed another one on March 30, 1992, also with the labor secretary.Thus, the CA held that staying the
holding of the certification election was unnecessary.

The appellate court added that complaints regarding the conduct of the certification election should
have been raised with the registration officer before the close of the proceedings.Moreover, it held
that only complaints relevant to the election could be filed.Be that as it may, the pre-election
conference was deemed to have already dispensed with the issue regarding the qualification of the
voters.

Lastly, the CA ruled that petitioner had no standing to question the qualification of the workers who
should be included in the list of voters because, in the process of choosing their collective bargaining
representative, the employer was definitely an intruder.

Hence, this Petition.6

The Issues

In its Memorandum, petitioner raises these issues for our consideration: chanroblesvirtua1awlibrary

A .Whether or not Hon. Court of Appeals committed grave error in dismissing the petition which
petition alleged that Public Respondent Laguesma flagrantly violated the provisions of the Labor Code
of the Philippines in the issuance of Orders, dated July 23, 1992 and October 12, 1992[.]

B.Whether or not the Hon. Court of Appeals committed errors in fact and law[.] 7  cralawred

Simply put, the main issue is whether the holding of the certification election was stayed by
petitioners appeal of the med-arbiters notation on the Motion to Include the Probationary and
Substitute Employees in the List of Qualified Voters.

Labor II – 1
 This Courts Ruling

The Petition has no merit.

Main Issue:

Appeal of Med-Arbiters Handwritten

Denial of the Motion

The solution to the controversy hinges on the correct interpretation of Article 259 of the Labor Code,
which provides: chanroblesvirtua1awlibrary

Art 259. Appeal from certification election orders. Any party to an election may appeal the order or
results of the election as determined by the Med-Arbiter directly to the Secretary of Labor and
Employment on the grounds that the rules and regulations or parts thereof established by the
Secretary of Labor and Employment for the conduct of the election have been violated. Such appeal
shall be decided within fifteen (15) calendar days.

This provision is supplemented by Section 10 of Rule V of Book Five of the 1992 Omnibus Rules
Implementing the Labor Code.Stating that such appeal stays the holding of a certification election,
the later provision reads: chanroblesvirtua1awlibrary

Sec. 10. Decision of the Secretary final and inappealable. The Secretary shall have fifteen (15)
calendar days within which to decide the appeal from receipt of the records of the case.The filing of
the appeal from the decision of the Med-Arbiter stays the holding of any certification election.The
decision of the Secretary shall be final and inappealable.

Petitioner argues that the med-arbiters January 13, 1992 handwritten notation denying its Motion
was the order referred to by Article 259.Hence, petitioner insists that its appeal of the denial should
have stayed the holding of the certification election.

Petitioner is mistaken.Article 259 clearly speaks of the order x x x of the election. Hence, the Article
pertains, not just to any of the med-arbiters orders like the subject notation, but to the order
granting the petition for certification election -- in the present case, that which was issued on
November 18, 1991.8 This is an unmistakable inference from a reading of Sections 6 and 7 of the
implementing rules: chanroblesvirtua1awlibrary

SEC. 6. Procedure.  Upon receipt of a petition, the Regional Director shall assign the case to a Med-
Arbiter for appropriate action.The Med-Arbiter, upon receipt of the assigned petition, shall have
twenty (20) working days from submission of the case for resolution within which to dismiss or grant
the petition.In a petition filed by a legitimate organization involving an unorganized establishment,
the Med-Arbiter shall immediately order the conduct of a certification election.

In a petition involving an organized establishment or enterprise where the majority status of the
incumbent collective bargaining union is questioned through a verified petition by a legitimate labor
organization, the Med-Arbiter shall immediately order the certification election  by secret ballot if the
petition is filed x x x.

x x x x x x x x x.(Italics supplied) cralawlibrary

SEC. 7. Appeal. Any aggrieved party may appeal the order of the Med-Arbiter to the Secretary on the
ground that the rules and regulations or parts thereof established by the Secretary for the conduct of
election have been violated.
Labor II – 1
x x x. (Italics supplied) cralawlibrary

Not all the orders issued by a med-arbiter are appealable.In fact, [i]nterlocutory orders issued by the
med-arbiter prior to the grant or denial of the petition, including orders granting motions for
intervention issued after an order calling for a certification election, shall not be appealable.However,
any issue arising therefrom may be raised in the appeal on the decision granting or denying the
petition.9 
cralawred

The intention of the law is to limit the grounds for appeal that may stay the holding of a certification
election.This intent is manifested by the issuance of Department Order No. 40. 10 Under the new rules,
an appeal of a med-arbiters order to hold a certification election will not stay the holding thereof
where the employer company is an unorganized establishment, and where no union has yet been
duly recognized or certified as a bargaining representative.

This new rule, therefore, decreases or limits the appeals that may impede the selection by employees
of their bargaining representative.Expediting such selection process advances the primacy of free
collective bargaining, in accordance with the States policy to promote and emphasize the primacy of
free collective bargaining x x x; and to ensure the participation of workers in decision and policy-
making processes affecting their rights, duties and welfare. 11 cralawred

Consequently, the appeal of the med-arbiters January 13, 1992 handwritten notation -- pertaining to
the incidental matter of the list of voters -- should not stay the holding of the certification election.

More important, unless it filed a petition for a certification election pursuant to Article 258 of the
Labor Code,12 the employer has no standing to question the election, which is the sole concern of the
workers.The Labor Code states that any party to an election  may appeal the decision of the med-
arbiter.13 Petitioner was not such a party to the proceedings, but a stranger which had no right to
interfere therein.

In Joya v. PCGG,14 this Court explained that [l]egal standing means a personal and substantial
interest in the case such that the party has sustained or will sustain direct injury as a result of the x
x xact that is being challenged.The term interest is material interest, an interest in issue and to be
affected by the decree, as distinguished from mere interest in the question involved, or a mere
incidental interest.Moreover, the interest of the party plaintiff must be personal and not one based on
a desire to vindicate the constitutional right of some third and unrelated party. 15  cralawred

Clearly, petitioner did not and will not sustain direct injury as a result of the non-inclusion of some of
its employees in the certification election.Hence, it does not have any material interest in this
case.Only the employees themselves, being the real parties-in-interest, 16 may question their removal
from the voters list.

To buttress its locus standi to question the certification election, petitioner argues that it has the
support of all the excluded employees.This support was made known to the representation officer in
a letter stating the employees desire to participate in the certification election. 17 To lend plausibility
to its argument, petitioner cites Monark International v. Noriel,18 Eastland Manufacturing Company v.
Noriel19 and Confederation of Citizens Labor Union v. Noriel.20 It argues that in the instances therein,
management was allowed to interfere in certification elections.

All these cases, though, state precisely the opposite. True, as unequivocally stated in the law, 21 all
employees should be given an opportunity to make known their choice of who shall be their
bargaining representative.Such provision, however, does not clothe the employer with the
personality to question the certification election.In Monark International,22 in which it was also the
employer who questioned some incidents of one such election, the Court held: chanroblesvirtua1awlibrary

Labor II – 1
There is another infirmity from which the petition suffers.It was filed by the employer, the adversary
in the collective bargaining process. Precisely, the institution of collective bargaining is designed to
assure that the other party, labor, is free to choose its representative.To resolve any doubt on the
matter, certification election, to repeat, is the most appropriate means of ascertaining its will. It is
true that there may be circumstances where the interest of the employer calls for its being heard on
the matter.An obvious instance is where it invokes the obstacle interposed by the contract-bar
rule.This case certainly does not fall within the exception.Sound policy dictates that as much as
possible, management is to maintain a strictly hands-off policy.For [if] it does not, it may lend itself
to the legitimate suspicion that it is partial to one of the contending [choices in the election]. 23 
cralawred

This Court would be the last agency to support an attempt to interfere with a purely internal affair of
labor.24 The provisions of the Labor Code relating to the conduct of certification elections were
enacted precisely for the protection of the right of the employees to determine their own bargaining
representative.Employers are strangers to these proceedings.They are forbidden from influencing or
hampering the employees rights under the law.They should not in any way affect, much less stay,
the holding of a certification election by the mere convenience of filing an appeal with the labor
secretary.To allow them to do so would do violence to the letter and spirit of welfare legislations
intended to protect labor and to promote social justice.

WHEREFORE, the Petition is DENIED, and the assailed Resolution AFFIRMED.Costs against
petitioner.

Labor II – 1
27.)
• Kasapian ng Malayang Manggagawa sa Coca – Cola (KASAMMA-CCO)-CFW Local 245 v. CA, 487
SCRA 487 (2006)
• Republic of the Philippines, represented by DOLE, v. Kawashima Textile, July 23, 2008
• St. James School of Quezon City v. Smashing Manggagawa sa St. James, GR 151326, November 23,
2005
• Coastal Subic Bay Terminal v. DOLE, GR 157117, November 20, 2006
• DHL Phils. United Rank and File Association v. Buklod ng Manggagawa ng DHL Phils., July 22, 2004
• Sugbuanon Rural Bank, Inc. v. Laguesma, February 2, 2000
• Samahan Ng Mga Manggagawa Sa Samma–Lakas Sa Industriya Ng Kapatirang Haligi Ng Alyansa
(Samma–Likha) v. Samma Corporation, March 13, 2009
• Chris Garments Corporation v. Hon. Patricia A. Sto. Tomas and Chris Garments Workers Union-
PTGWO, January 12, 2009
• National Union Of Workers In Hotels, Restaurants And Allied Industries - Manila Pavilion Hotel
Chapter v. Secretary of Labor, July 31, 2009
• Eagle Ridge Golf and Country Club v. CA, March 18, 2010
• PICOP Resources, Inc. v. Tañeca, August 9, 2010
• Legend International Resorts v. Kilusang Manggagawa ng Legend, February 23, 2011
• Samahang Manggagawa Sa Charter Chemical (SMCC-SUPER) v. Charter Chemical and Coating Corp.,
March 16, 2011
• Heritage Hotel v. Secretary, July 23, 2014
• Ren Transport Corp. V. NLRC, June 27, 2016
• Hijo Resources Corporation v. Mejares, January 13, 2016
• Republic of the Philippines v. Namboku Peak, July 18, 2014
• T&H Shopfitters v. T&H Shopfitters Workers Union, February 26, 2014

Labor II – 1