1.) [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 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
Labor II – 1
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
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

Labor II – 1
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

The petition is unmeritorious.

Labor II – 1
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
2.)  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.

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
1

Nieves D. Confesor dismissing the appeal from the Order of 11 December 1990  of the Med-Arbiter which granted
2

the petition for certification 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
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

Labor II – 1
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
does 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 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.

Labor II – 1
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
 3.) [G.R. No. 77539. April 12, 1989.]

ASSOCIATED LABOR UNIONS (ALU)-TUCP, Petitioners, v. 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.

DECISION

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: jgc:chanrobles.com.ph

"Accordingly, let a certification election be conducted within twenty (20) days from receipt of this
Resolution, subject to the usual pre-election conference, with the following as choices: chanrob1es virtual 1aw library

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."
cralaw virtua1aw library

The undisputed facts of the case are as follows: chanrob1es virtual 1aw library

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). chanrobles virtual lawlibrary

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

Labor II – 1
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) file 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 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 require 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 organization in Japan (Rollo, p. 140).

On August 10, 1987, the petition was given due 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).
chanrobles virtual lawlibrary

Labor II – 1
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).

The issues raised by petitioner (Rollo, p. 212), are as follows: chanrob1es virtual 1aw library

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 DEMAND 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 MEMBERS 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 consideration, 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

Labor II – 1
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: chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

"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." cralaw virtua1aw library

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 Petitioner, Rollo, p. 217) not 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]). chanrobles virtual lawlibrary

"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 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: jgc:chanrobles.com.ph

"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 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 to the
prior to expiry date of such agreement." cralaw virtua1aw library

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 in 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.

Labor II – 1
In a recent decision, this Court interpreted the above in provision as follows: jgc:chanrobles.com.ph

"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 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 Local Chapter No. 1027) v. 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. chanrobles law library

On said subject, Rule V of the Omnibus Rules Implementing the Labor Code, provides: jgc:chanrobles.com.ph

"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." cralaw virtua1aw library

The new CBA negotiated by petitioners whether or no submitted to the MOLE in accordance with
Article 231 of the Labor Code cannot be deemed permanent, precluding commencement of
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) temporary restraining order issued by the Court on
March 9, 1987 is LIFTED permanently.

Labor II – 1
4.) 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.   As 5

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

Labor II – 1
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.

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
 5.) [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
Labor II – 1
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.

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
6.) 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
7.) 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
6

formalized within five days after a 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
Labor II – 1
 8.) 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 (NFL) 235

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

Petitioner moved for a reconsideration but its motion was denied in an order dated November 12,
1992. Hence, this petition.

Labor II – 1
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

Labor II – 1
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 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
9.) 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 [petitioner-then prevaililng BA] 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 [with petitioner] 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
8 9

Court declared:

. . . 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.

Labor II – 1
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
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
16

in an appropriate 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 18

Labor II – 1
agreement prematurely signed by the union and the company during the freedom period does not affect the
petition for certification election filed by another union.

(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. Laguesma,   this Court
22

declared that:

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
10.) 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, dated
1

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 annexes to the petition
2

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.

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.

Labor II – 1
 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

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-

Labor II – 1
 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,
14

the failure of petitioner to prove its affiliation with NAFLU-KMU cannot affect its 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-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.
Labor II – 1
 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 prematurely renewed CBA is not a bar to the holding
18

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 "[o]n a matter that should be the exclusive
19

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
11.) G.R. No. 104556 March 19, 1998

NATIONAL FEDERATION OF LABOR (NFL), petitioner,

vs.
THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO PLANTATION INC.,
(HPI), respondents.

MENDOZA, J.:

Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file employees of the
Hijo Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a certification election held on August 20, 1989.
Protests filed by the company and three other unions against the results of the election were denied by the
Department of Labor and Employment in its resolution dated February 14, 1991 but, on motion of the company
(HPI), the DOLE reconsidered its resolution and ordered another certification election to be held. The DOLE
subsequently denied petitioner NFL's motion for reconsideration.

The present petition is for certiorari to set aside orders of the Secretary of Labor and Employment dated August 29,
1991, December 26, 1991 and February 17, 1992, ordering the holding of a new certification election to be
conducted in place of the one held on August 20, 1989 and, for this purpose, reversing its earlier resolution dated
February 14, 1991 dismissing the election protests of private respondent and the unions.

The facts of the case are as follows:

On November 12, 1988, a certification election was conducted among the rank-and-file employees of the Hijo
Plantation, Inc. resulting in the choice of "no union." However, on July 3, 1989, on allegations that the
company intervened in the election, the Director of the Bureau of Labor Relations nullified the results of the
certification election and ordered a new one to be held.

The new election was held on August 20, 1989 under the supervision of the DOLE Regional Office in Davao City
with the following results:

Total Votes cast 1,012

Associated Trade Unions (ATU) 39

RUST KILUSAN 5

National Federation of Labor (NFL) 876

Southern Philippines Federation of Labor 4

SANDIGAN 6

UFW 15

No Union 55

Invalid 13

The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and General
Workers of the Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc. sought the
Labor II – 1
 nullification of the results of the certification election on the ground that it was conducted despite the
pendency of the appeals filed by Hijo Labor Union and ULGWP from the order, dated August 17, 1989, of the
Med-Arbiter denying their motion for intervention. On the other hand, HPI claimed that it was not informed or
properly represented at the pre-election conference. It alleged that, if it was represented at all in the pre-election
conference, its representative acted beyond his authority and without its knowledge. Private respondent also alleged
that the certification election was marred by massive fraud and irregularities and that out of 1,692 eligible voters,
913, representing 54% of the rank-and-file workers of private respondent, were not able to vote, resulting in a
failure of election.

On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter, Phibun D. Pura, to
investigate the company's claim that 54% of the rank-and-file workers were not able to vote in the certification
election.

In his Report and Recommendation, dated February 9, 1990, Pura stated:

1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989 because of
confusion caused by the announcement of the company that the election had been postponed in view of the
appeals of ULGWP and Hijo Labor Union (HLU) from the order denying their motions for intervention. In addition,
the election was held on a Sunday which was non-working day in the company.

2. There were irregularities committed in the conduct of the election. It was possible that some people could have
voted for those who did not show up. The election was conducted in an open and hot area. The secrecy of the ballot
had been violated. Management representatives were not around to identify the workers.

3. The total number of votes cast, as duly certified by the representation officer, did not tally with the 41-page listings
submitted to the Med-Arbitration Unit. The list contained 1,008 names which were checked or encircled (indicating
that they had voted) and 784 which were not, (indicating that they did not vote), or a total of 1,792. but according to
the representation officer the total votes cast in the election was 1,012.

Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not able to vote and
who were surprised to know that their names had been checked to indicate that they had voted.

But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of the
investigation conducted by Med-Arbiter Pura and so was not heard on its evidence. For this reason, the Med-Arbiter
was directed by the Labor Secretary to hear interested parties.

The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the annulment of the
results of the certification election. Hijo Labor Union manifested that it was joining private respondent HPI's appeal,
adopting as its own the documentary evidence presented by the company, showing fraud in the election of August
20, 1989. On the other hand, petitioner NFL reiterated its contention that management had no legal
personality to file an appeal because it was not a party to the election but was only a bystander which did
not even extend assistance in the election. Petitioner denied that private respondent HPI was not represented in
the pre-election conference, because the truth was that a certain Bartolo was present on behalf of the management
and he in fact furnished the DOLE copies of the list of employees, and posted in the company premises notices of
the certification election.

Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692
qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting to
all kinds of manipulation to frustrate the election and make the "Non Union" win.

In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election. With
respect to claim that election could not be held in view of the pendency of the appeals of the ULGWP and Hijo Labor
Union from the order of the Med-Arbiter denying their motions for intervention, the DOLE said: 1

. . . even before the conduct of the certification election on 12 November 1988 which was nullified, Hijo
Labor Union filed a motion for interventions. The same was however, denied for being filed unseasonably,

Labor II – 1
 and as a result it was not included as one of the choices in the said election. After it has been so disqualified
thru an order which has become final and executory, ALU filed a second motion for intervention when a
second balloting was ordered conducted. Clearly, said second motion is proforma and intended to delay the
proceedings. Being so, its appeal from the order of denial did not stay the election and the Med-Arbiter was
correct and did not violate any rule when he proceeded with the election even with the appeal. In fact, the
Med-Arbiter need not rule on the motion as it has already been disposed of with finality.

The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to the election on
September 1988 and its motion to withdraw was granted by the Med-Arbiter on October motion for
intervention filed before the conduct of a second balloting where the choices has already been pre-
determined.

Let it be stressed that ULGWP and HLU were disqualified to participate in the election through valid orders
that have become final and executory even before the first certification election was conducted.
Consequently, they may not be allowed to disrupt the proceeding through the filing of nuisance motions.
Much less are they possessed of the legal standing to question the results of the second election
considering that they are not parties thereto.

The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive
fraud and irregularities. Although affidavits were submitted showing that the election was held outside the company
premises and private vehicles were used as makeshift precincts, the DOLE found that this was because respondent
company did not allow the use of its premises for the purpose of holding the election, company guards were
allegedly instructed not to allow parties, voters and DOLE representation officers to enter the company premises,
and notice was posted on the door of the company that the election had been postponed.

Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been
disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been violated, first, because the
NFL was not given notice of the investigation nor the chance to present its evidence to dispute this finding and,
second, the Med Arbiter's report was not supported by the minutes of the proceedings nor by any record of the
interviews of the 315 workers. Moreover, it was pointed out that the report did not state the names of the persons
investigated, the questions asked and the answers given. The DOLE held that the report was "totally baseless."

The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the exclusive
bargaining representative is the sole concern of the workers. It said: "If indeed there were irregularities committed
during the election, the contending unions should have been the first to complain considering that they are the ones
which have interest that should be protected." 2

Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-
KILUSAN, HLU and the HPI and instead certified petitioner NFL as the sole and exclusive bargaining representative
of the rank-and-file employees of private respondent HPI.

However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of February
14, 1991. Petitioner NFL filed a motion for reconsideration but its motion was denied in an order, dated December
26, 1991. Petitioner's second motion for reconsideration was likewise denied in another order dated February 17,
1992. Hence, this petition.

First. Petitioner contends that certification election is the sole concern of the employees and the employer
is a mere bystander. The only instance wherein the employer may actively participate is when it files a petition for
certification election under Art. 258 of the Labor Code because it is requested to bargain collectively. Petitioner says
that this is not the case here and so the DOLE should not have given due course to private respondent's petition for
annulment of the results of the certification election.

In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier resolution
because "workers of Hijo Plantation, Inc. have deluged this Office with their letter-appeal, either made
singly or collectively expressing their wish to have a new certification election conducted" and that as a
result "the firm position we held regarding the integrity of the electoral exercise had been somewhat eroded by this
recent declaration of the workers, now speaking in their sovereign capacity."
Labor II – 1
It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not the
petition of the employer but the letter-appeals that the employees sent to his office denouncing the
irregularities committed during the August 20, 1989 certification election. The petition of private respondent
was simply the occasion for the employees to voice their protests against the election. Private respondent HPI
attached to its Supplemental Appeal filed on September 5, 1989 the affidavits and appeals of more or less 784
employees who claimed that they had been disfranchised, as a result of which they were not able to cast their votes
at the August 20, 1989 election. It was the protests of employees which moved the DOLE to reconsider its previous
resolution of February 14, 1991, upholding the election.

Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the
employer. The manner in which the election was held could make the difference between industrial strife and
industrial harmony in the company. What an employer is prohibited from doing is to interfere with the conduct of the
certification election for the purpose of influencing its outcome. But certainly an employer has an abiding interest in
seeing to it that the election is clean, peaceful, orderly and credible.

Second. The petitioner argues that any protest concerning the election should be registered and entered
into the minutes of the election proceedings before it can be considered. In addition, the protest should be
formalized by filing it within five (5) days. Petitioner avers that these requirements are condition precedents in
the filing of an appeal. Without these requisites the appeal cannot prosper. It cites the following provisions of Book
V, Rule VI of the Implementing Rules and Regulations of the Labor Code:

Sec. 3. Representation officer may rule on any on-the-spot question. — 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 protests shall be contained in the minutes of the
proceedings.

Sec. 4. Protest to be decided in twenty (20) working days. — Where the protest is formalized before the
med-arbiter within 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 its 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.

In this case, petitioner maintains that private respondent did not make any protest regarding the alleged
irregularities (e.g., massive disfranchisement of employees) during the election. Hence, the appeal and
motions for reconsideration of private respondent HPI should have been dismissed summarily.

The complaint in this case was that a number of employees were not able to cast their votes because they
were not properly notified of the date. They could not therefore have filed their protests within five (5) days.
At all events, the Solicitor General states, that the protests were not filed within five (5) days, is a mere
technicality which should not be allowed to prevail over the workers' welfare. 3 As this Court stressed in LVN
Pictures, Inc. v. Phil. Musicians Guild, 4 it is essential that the employees must be accorded an opportunity to freely
and intelligently determine which labor organization shall act in their behalf. The workers in this case were denied
this opportunity. Not only were a substantial number of them disfranchised, there were, in addition,
allegations of fraud and other irregularities which put in question the integrity of the election. Workers
wrote letters and made complaints protesting the conduct of the election. The Report of Med-Arbiter Pura who
investigated these allegations found the allegations of fraud and irregularities to be true.

In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in the
voting and bribery. 5 We hold the same in this case. The workers' right to self-organization as enshrined in both the
Constitution and Labor Code would be rendered nugatory if their right to choose their collective bargaining
representative were denied. Indeed, the policy of the Labor Code favors the holding of a certification election as the
most conclusive way of choosing the labor organization to represent workers in a collective bargaining unit. 6 In
case of doubt, the doubt should be resolved in favor of the holding of a certification election.

Labor II – 1
Third. Petitioner claims that the contending unions, namely, the Association of Trade Union (ATU), the Union of
Filipino Workers (UFW), as well as the representation officers of the DOLE affirmed the regularity of the conduct of
the election and they are now estopped from questioning the election.

In its comment, ATU-TUCP states,

. . . The representative of the Association of Trade Unions really attest to the fact that we cannot really
identify all the voters who voted on that election except some workers who were our supporters in the
absence of Hijo Plantation representatives. We also attest that the polling precinct were not conducive to
secrecy of the voters since it was conducted outside of the Company premises. The precincts were (sic) the
election was held were located in a passenger waiting shed infront of the canteen across the road; on the
yellow pick-up; at the back of a car; a waiting shed near the Guard House and a waiting shed infront of the
Guard House across the road. Herein private respondents also observed during the election that there were
voters who dictated some voters the phrase "number 3" to those who were casting their votes and those
who were about to vote. Number 3 refers to the National Federation of Labor in the official ballot.

ATU-TUCP explains that it did not file any protest because it expected workers who had been aggrieved by the
conduct of the election would file their protest since it was in their interests that they do so.

Fourth. Petitioner points out that the letter-appeals were written almost two years after the election and they bear the
same dates (May 7 and June 14, 1991); they are not verified; they do not contain details or evidence of intelligent
acts; and they do not explain why the writers failed to vote. Petitioner contends that the letter-appeals were obtained
through duress by the company.

We find the allegations to be without merit. The records shows that as early as August 22 and 30, 1989, employees
already wrote letters/affidavits/
manifestoes alleging irregularities in the elections and disfranchisement of workers. 7 As the Solicitor General says
in his Comment, 8 these affidavits and manifestoes, which were attached as Annexes "A" to "CC" and Annexes
"DD" to "DD-33" to private respondent's Supplemental Petition of September 5, 1989 — just 16 days after the
August 20, 1989 election. It is not true therefore that the employees slept on their rights.

As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were
prepared by private respondent HPI and employees were merely asked to sign them, suffice it to say that this is
plain speculation which petitioner has not proven by competent evidence.

As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases.

The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier letters 9 of
the workers already gave details of what they had witnessed during the election, namely the open balloting (with no
secrecy), and the use of NFL vehicles for polling precinct. These letters sufficiently give an idea of the irregularities
of the certification election. Similarly, the letters containing the signatures of those who were not able to vote are
sufficient. They indicate that the writers were not able to vote because they thought the election had been
postponed, especially given the fact that the two unions had pending appeals at the time from orders denying them
the right to intervene in the election.

WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary of Labor and
Employment are AFFIRMED.

Labor II – 1
12.) G.R. No. 143616       May 9, 2001

NEGROS ORIENTAL ELECTRIC COOPERATIVE 1 (NORECO1), represented by ATTY. SUNNY R.A.

MADAMBA, as General Manager, petitioner,
vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE), and PACIWU-NACUSIP,
NORECO 1 Chapter of Bindoy, Negros Oriental, respondents.

GONZAGA-REYES, J.:

Petitioner assails the Decision of the Court of Appeals1 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.

The antecedents are recited by the Court of Appeals as follows:

"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. 1âwphi1.nêt

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:

'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. 1âwphi1.nêt

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.

Motion for Reconsideration of the above decision was denied. Hence this petition for review on certiorari
which submits the following arguments in support thereof:

Labor II – 1
 "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 MOTOER
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;

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:

"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 xxx".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. vs. Toyota Motor Philippines Corporation Labor Union6 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.

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:

Labor II – 1
 "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-à-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. vs. Ferrer-Calleja, supra, the Supreme Court held:

'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.
1âwphi1.nêt

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-à-vis Rule VIII of the Omnibus Rules, or by simple inclusion-exclusion proceedings in
the pre-election conference, 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. vs. Toyota Motor Philippines Corp.
Labor Union11 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

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:

"On the third ground, while movant correctly cited Cooperative Bank of Davao City, Inc. vs. 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:

Labor II – 1
 '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:

"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.

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 "NORECO1 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.
1âwphi1.nêt

WHEREFORE, the petition is DENIED for lack of merit.

Labor II – 1
 13.) [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 Decision1 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
14.) 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 Reconsideration 9 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

Labor II – 1
tradition or a "regular practice" on the part of petitioner. Petitioner admits, and respondent union does not
dispute, that it offered an "early conclusion 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
 15.) [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 GREATER MANILA 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.

Labor II – 1
On March 30, 1992, petitioner lodged an appeal from the aforementioned March 16, 1992 Order
of Med-Arbiter Falconitin.

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[.]

Labor II – 1
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.

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.
Labor II – 1
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.

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
Labor II – 1
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

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
16.) G.R. No. 159828             April 19, 2006

KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA (KASAMMA-CCO)-CFW LOCAL 245, Petitioner,

vs.
THE HON. COURT OF APPEALS and COCA-COLA BOTTLERS’ PHILS., INC., Respondents.

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure assailing the
Decision1 of the Court of Appeals which affirmed the Decision2 of public respondent National Labor Relations
Commission (NLRC) dismissing petitioner’s complaint against private respondent for violations of the Memorandum
of Agreement (MOA)/Collective Bargaining Agreement (CBA), nonpayment of overtime pay and 13th month pay,
illegal dismissal, unfair labor practice, recovery of moral and exemplary damages and attorney’s fees.

On 30 June 1998, the CBA for the years 1995-1998 executed between petitioner union and private respondent
company expired. As the duly certified collective bargaining agent for the rank-and-file employees of private
respondent’s Manila and Antipolo plants, petitioner submitted its demands to the company for another round of
collective bargaining negotiations. However, said negotiations came to a gridlock as the parties failed to reach a
mutually acceptable agreement with respect to certain economic and non-economic issues.

Thereafter, petitioner filed a notice of strike on 11 November 1998 with the National Conciliation and Mediation
Board (NCMB), National Capital Region, on the ground of CBA negotiation deadlock. With the aim of resolving the
impasse, several conciliation conferences were conducted but to no avail as the parties failed to reach a settlement.
On 19 December 1998, petitioner held the strike in private respondent’s Manila and Antipolo plants.

Subsequently, through the efforts of NCMB Administrator Buenaventura Magsalin, both parties came to an
agreement settling the labor dispute. Thus, on 26 December 1998, both parties executed and signed a MOA
providing for salary increases and other economic and non-economic benefits. It likewise contained a provision for
the regularization of contractual, casual and/or agency workers who have been working with private respondent for
more than one year. Said MOA was later incorporated to form part of the 1998-2001 CBA and was thereafter ratified
by the employees of the company.

Pursuant to the provisions of the MOA, both parties identified 64 vacant regular positions that may be occupied by
the existing casual, contractual or agency employees who have been in the company for more than one year. Fifty-
eight (58)3 of those whose names were submitted for regularization passed the screening and were thereafter
extended regular employment status, while the other five failed the medical examination and were granted six
months within which to secure a clean bill of health. Within the six-month period, three4 of the five employees who
have initially failed in the medical examination were declared fit to work and were accorded regular employment
status. Consequently, petitioner demanded the payment of salary and other benefits to the newly regularized
employees retroactive to 1 December 1998, in accord with the MOA. However, the private respondent refused to
yield to said demands contending that the date of effectivity of the regularization of said employees were 1 May
1999 and 1 October 1999. Thus, on 5 November 1999, petitioner filed a complaint before the NLRC for the alleged
violations of the subject MOA by the private respondent.

Meanwhile, a certification election was conducted on 17 August 1999 pursuant to the order of the Department of
Labor and Employment (DOLE) wherein the KASAMMA-CCO Independent surfaced as the winning union and was
then certified by the DOLE as the sole and exclusive bargaining agent of the rank-and-file employees of private
respondent’s Manila and Antipolo plants for a period of five years from 1 July 1999 to 30 June 2004. On 23 August
1999, the KASAMMA-CCO Independent demanded the renegotiation of the CBA which expired on 30 June 1998.
Such request was denied by private respondent on the contention that there was no basis for said demand as there
was already an existing CBA which was negotiated and concluded between petitioner and private respondent, thus,
it was untimely to reopen the said CBA which was yet to expire on 30 June 2001.

Labor II – 1
On 9 December 1999, despite the pendency of petitioner’s complaint before the NLRC, private respondent closed
its Manila and Antipolo plants resulting in the termination of employment of 646 employees. On the same day, about
500 workers were given a notice of termination effective 1 March 2000 on the ground of redundancy. The affected
employees were considered on paid leave from 9 December 1999 to 29 February 2000 and were paid their
corresponding salaries. On 13 December 1999, four days after its closure of the Manila and Antipolo plants, private
respondent served a notice of closure to the DOLE.

As a result of said closure, on 21 December 1999, petitioner amended its complaint filed before the NLRC to include
"union busting, illegal dismissal/illegal lay-off, underpayment of salaries, overtime, premium pay for holiday, rest
day, holiday pay, vacation/sick leaves, 13th month pay, moral and exemplary damages and attorney’s fees."

On 14 January 2000, KASAMMA-CCO Independent filed a notice of strike due to unfair labor practice with the
NCMB-NCR. Failing to arrive at an amicable settlement of the labor dispute with the private respondent,
KASAMMA-CCO Independent held a strike from 9 March 2000 to 4 May 2000. On 4 May 2000, the Secretary of
Labor issued an order assuming jurisdiction over the labor dispute subject of the strike and certified the case to the
NLRC for compulsory arbitration.

On 9 July 2001, the NLRC rendered its Decision dismissing the complaint for lack of merit. According to the
Commission:

Evaluating, with utmost caution, both parties’ contrasting factual version, supporting proofs, related legal excerpts
and applicable jurisprudential citations, we discern that, under the Memorandum of Agreement (MOA) dated
December 26, 1998, the 61 regularized employees are not entitled to their claims for the P60.00 per day salary
increase, mid-year gratuity pay of P5,000.00, one sack of rice, and overtime and thirteenth month differentials
effective December 1, 1998 onward.

Initially, under the MOA, only the employees who were regular on July 1998 and continued being such upon the
signing of the MOA on December 26, 1998 deserve retroactive payment of the MOA benefits amounting to a lump
sum of P35,000.00.

This entitlement springs from the following pertinent provisions of the MOA:

"All covered employees who were regular as of July 1, 1998 and upon the signing of this Agreement shall
each be entitled to a lump sum in the amount of THIRTY FIVE THOUSAND PESOS (P35,000.00) which shall,
subject to the ratification of the employees within the bargaining unit, be released on or before 31 December 1998.

"The aforesaid amount shall be in lieu of the wage increase as well as THE Operation Performances
Incentive DESCRIBED UNDER Item 11(B) hereof, all premium pay, the 13th month and 14th month pay
differentials, sick leave and vacation leave credits for the period July 1, 1998 to December 31, 1999."
Underscoring supplied)

In the case at bar, since the 61 regularized employees were regularized only on May 1, 1999 and October 1, 1999,
as the case may be, they therefore have no right whatsoever to claim entitlement to the MOA benefits.

Moreover, CFW Local 245’s insistence that the 61 regularized employees became regular on December 1, 1998
is non sequitor. It merely flows from its specious interpretation of the MOA provisions. The MOA does not provide
that non-regular employees who would be deployed to fill up vacant plantilla positions covered by the 1998 and
1999 manpower budget of CCBPC should be automatically considered regular effective December 1, 1998. What
the MOA stipulates are that: 1) effective December 1, 1998, non-regular employees who have been occupying the
position to be filled up for at least one year shall be given priority in filling up the positions; and 2) that in that case,
they will not undergo the company’s regular recruitment procedures, like interviews and qualifying examinations.

The only importance of the date of December 1, 1998 is its being the reckoning date from which the one year
employment requirement should be computed. Consequently, under the MOA, only the non-regular employees who
had worked with the company for at least a year counted retroactively from December 1, 1998 should be given
priority in the filling up of vacant plantilla positions.

Labor II – 1
Anyway, even assuming ex gratia argumenti that the 61 regularized employees were regularized effective
December 1, 1998, they, still, are not entitled to the MOA benefits. As discussed above, only employees who were
regular on July 1, 1998 and were still so until the signing of the MOA on December 26, 1998 could be covered by
the retroactivity clause.

Furthermore, entitling the 61 regularized employees to the MOA benefits would certainly infringe the well-
entrenched principle of "no-work-no-pay". Since such employees started becoming regular only on May 1, 1999 and
October 1, 1999, as the case may be, it would thus be most unfair to require CCBPI to pay them for their unworked
period, for they would certainly, be unjustly enriched at the expense of CCBPI.

We also hold that the allegedly redundant six hundred thirty-nine (639) employees were not illegally dismissed.

Initially, there was just cause for the employees’ dismissal.

It bears to stress that, aimed at 1) attaining efficiency and cost effectiveness, 2) maximizing its production capacity
and 3) ensuring that its customers obtain products manufactured only under the most stringent quality standards of
CCBPI’s modern, technologically advanced production plants, CCBPI conducted an extensive study on the
operational mechanics of its Manila and Antipolo plants.

From this study, it was established that there was inadequate water supply at CCBPI’s Manila and Antipolo plants.
As a consequence, the company was constrained to transport water from several sources to its production line in
Manila in 1998 and 1999. Worse, it was discovered that the quality of water supply was fast deteriorating due to the
rise of its salt level. This reality prompted the company to reduce its production capacity. Moreover, the bottling
process of treating this water of decadent quality resulted in higher production costs. Under these twin conditions,
the company could not thus efficiently continue on with its operations.

The study also reveals the decadent state of the production equipment of CCBPI’s Manila and Antipolo Plants. Their
production lines were among the oldest and hence, had very low line efficiency. In comparison with the line
efficiency of 71.18% of the company’s other plants, the Manila and Antipolo Plants had only efficiency ratings of
61.09% and 58.39%, respectively. Whereas the other production lines had an average wastage rating of 1.01%, the
twin plants had a higher average wastage ratings of 2.05% and 1.77%, respectively. The company’s production
studies in 1998 and 1999 likewise reveal substantial issues on Good Manufacturing Practice (GMP) and process
control for such plants.

From this study, the impracticability of rehabilitating the twin plants was also found out. Although the problems cited
may be remedied by way of a major reconstruction, this would, however, entail an investment of huge capital.
Further, the congestion of the twin plants’ sites would render impracticable such a major reconstruction. Besides,
there was utter lack of effective solution to the retrograding water supply.

The foregoing significant facts are substantially evidenced by the Technical Evaluation of Production Requirements,
Annex "20", CCBPI’s Rejoinder; Affidavit of its Operations Manager dated 3 March 2000, Annex "1", its Position
Paper dated 20 July 2000; and Certification dated May 21, 2001 of Mr. Bruce A. Herbert, its Sur-Rejoinder.

To solve the problems cited, however, CCBPI, as soundly recommended by the study, integrated the production
capacities of the different CCBPI modern and technologically advanced production facilities. This imperative
integration indispensably prompted CCBPI to close, its production lines at the Manila and Antipolo Plants.

This measure taken by CCBPI indeed draws jurisprudential justification from the following sound pronouncement of
the Supreme Court:

"Business enterprises today are faced with the pressures of economic recession, stiff competition and labor unrest.
Thus, businessmen are always pressured to adopt certain changes and programs in order to enhance their profits
and protect their investments. Such changes may take various forms. Management may even choose to close a
branch, department, a plant, or a shop." (Philippine Engineering Corp. vs. CR, 41 SCRA 89)

Labor II – 1
Urgently propelled by this closure, CCBPI inevitably redundated the services of 639 employees based at the Manila
and Antipolo Plants. The fact that their services became superfluous or in excess of what were reasonably
demanded by the actual requirements of the company as a consequence of the closure certainly shows the
undertone of good faith on CCBPI’s part in resorting to the redundation measure.

Well in support of this urgent economic measure taken is the following postulation of the Supreme Court in the case
of Wiltshire File Co., Inc. vs. NLRC, et al., 193 SCRA 665:

"We believe that redundancy, for purposes of our Labor Code, exists where the services of an employee are in
excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a
position is redundant where it is a superfluity, and superfluity of a position or positions may be the outcome
of a number of facets, such as over hiring of workers, decreased volume of business, or dropping of a particular
product line or service activity previously manufactured or undertaken by the enterprises. The employer has no legal
obligation to keep in its payroll more employees than are necessary for the operation of its business.

"x x x.

"x x x The characterization of (the employee’s) service as no longer necessary or sustainable, and therefore
properly terminable, was an exercise of business judgment on the part of (the employer). The wisdom or soundness
of such characterizing or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the
NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown. X x x The
determination of the continuing necessity of a particular officer or position in a business corporation is
management’s prerogative, and the courts will not interfere with the exercise of such so long as no abuse of
discretion or merely arbitrary or malicious action on the part of management is shown."

Another reason why the dismissal of the 639 employees was legal is that the same was attended by the observance
of the requirements of due process. Indeed, as early as 9 December 1999, more than thirty (30) days prior to their
actual dismissal on 1 March 2000, CCBPI served on the affected employees a written notice informing them of the
closure of the two plants and subsequent redundation. Later, by 13 December 1999, CCBPI filed with the DOLE the
required written notice informing it of the subject closure and consequent redundation.

This finding is perfectly in line with the following applicable legal excerpts:

"ART. 283. Closure of establishment and reduction of personnel. ---The employer may also terminate the
employment of any employee due to ….redundancy…. or the closing or cessation of operation of the establishment
or undertaking …by serving a written notice on the workers and the Department of Labor and Employment at least
one (1) month before the intended date thereof." lawphil.net

"For termination of employment based on just causes defined in Article 282 of the Labor Code:

(i) A written notice served [on] the employee specifying the ground or grounds for termination, and giving
said employee reasonable opportunity within which to explain his side;

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so
desires is given opportunity to respond to the charge, present his evidence or rebut the evidence presented
against him; and

(iii) a written notice of termination served on the employee, indicating that upon, due consideration of all the
circumstances, grounds have been established to justify his termination.

"For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be
deemed complied with upon the service of a written notice to the employee and the appropriate Regional Office of
the Department of Labor and Employment at least thirty days before [effectivity] of the termination, specifically the
ground or grounds for termination." (Par. D, Section 2, Rule 1, Book VI, Omnibus Rules Implementing the Labor
Code)

Labor II – 1
Needless to state, having been lawfully redundated, as comprehensively discussed above, the affected employees
are entitled to payment of separation pay equivalent to one (1) month pay for every year of service, pursuant to
Article 283 of the Labor Code which provides:

"In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby
shall be entitled to separation pay equivalent to at least his one (1) month pay or to at least One (1) month pay for
every year of service, whichever is higher."

However, due to the economic adversity besetting our workers today brought about by the ever increasing
standards of living, CCBPI realized that such a legal package was no longer conformable with such on obtaining
economic reality. Accordingly, CCBPI granted the affected employees separation package much bigger than that
legal separation package. Specifically, CCBPI paid affected employees with less than fifteen (15) years of service
150% monthly salary for every year of service and those with fifteen (15) years and above of service 195%.

xxxx

We, moreover, view that CCBPI is not guilty of unfair labor practice.

Contrary to KASAMMA-CCO-Independent’s contention, CCBPI did not resort to the closure of Manila and Antipolo
plants and resultant redundation of their 637 employees just to prevent the renegotiation of the CBA entered into
between CCBPI and CFW Local 245. First, there is no substantial evidence on record supporting this claim.
Secondly, as exhaustively explained supra, CCBPI’s decision to undertake the subject closure and subsequent
redundation was due to legitimate business considerations, namely 1) the production lines at the two plants had
very low line efficiency; 2) the quality of water supply at such plants was rapidly deteriorating; and 3) the
rehabilitation of such plants was not feasible due to the huge capital investment required as well as the congestion
of their areas.

xxxx

WHEREFORE, premises considered, KASAMMA-CCO Independent, and CFW Local 245’s charges in the instant
labor dispute for non-grant of the CBA salary increase, mid-year gratuity, one sack of rice, overtime pay and
thirteenth (13th) month pay; illegal dismissal; unfair labor practice; and recovery of moral and exemplary damages
and attorney’s fees are hereby DISMISSED for lack of merit.

Petitioner Coca-Cola Bottlers Phils., Inc., however, is directed to grant the separation package adverted above to
the affected employees who have not yet received the same. Further, the company is ordered to accord the affected
employees priority in rehiring in the event the company needs, in the future, additional personnel.5

Petitioner’s motion for reconsideration was denied in a resolution dated 24 September 2001, thus on 22 November
2001 petitioner filed a petition for certiorari before the Court of Appeals, which was disposed by the appellate court
in this wise:

After painstaking efforts and a careful examination of the records, we rule against the contention of the petitioner.
The conflicting factual submissions of the parties in the case at bar cannot close our eyes to the fact that the instant
case pose upon an obligation on this Court to review and re-examine the factual findings and to re-evaluate the
pieces of evidence which supported the conclusion of the public respondent in its disposition of the present
controversy. This issue has already been settled in Deles, Jr. vs. NLRC [327 SCRA 540 (2000)], where the
Supreme Court ruled:

"On its face, petitioner’s contention would require the Court to delve into the findings of fact a quo. This we cannot
do. In the review of NLRC decisions through a special civil action for certiorari, we are confined only to issues of
want of jurisdiction and grave abuse of discretion on the part of the labor tribunal. We are precluded from inquiring
unto the correctness of the evaluation of that evidence that underpins the labor tribunal’s conclusion on matters of
fact. Nor could we examine the evidence, re-evaluate the credibility of the witnesses, nor substitute our findings of
fact for those of an administrative body which has the authority and expertise in its specialized field. Arguably, there
may even be an error in judgment. This however is not within the ambit of the extraordinary remedy of certiorari."

Labor II – 1
Moreover, the pronouncement of the High Tribunal in Dela Salle University v. Dela Salle University Employees
Association [330 SCRA 363 (2000)], citing established jurisprudence, has clarified the guidelines in the resolution of
petitions for certiorari involving labor cases in this wise:

"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 for certiorari involving labor cases.

First, the factual findings of quasi-judicial agencies (such as the DOLE), 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.

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

Third, in Flores vs. NLRC, we explained the role and function of Rule 65 as an 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 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 the factual findings based thereon, which are generally accorded not only
great respect but even finality."

In the light of the rulings established under the abovecited cases, we find no ground for disturbing the factual
findings of the public respondent vis-à-vis its resolution with regard to the issue of the validity of the claims of the
newly-regularized members of the petitioner union, as the same is supported by substantial evidence and in accord
with established jurisprudence herein cited. It must be stressed that factual findings of labor officials are conclusive
and binding on the Supreme Court when supported by substantial evidence.

Anent the issue of the closure of the Manila and Antipolo plants of the private respondent which resulted in the
termination from employment of 639 or 646 employees working under the said facilities, we find the same in order
and in accord with law.

xxxx

It must be noted that in sustaining the contention of the private respondent on the said issue, the public respondent
has relied on the grounds asserted by the private respondent as basis in effecting the closure and the resultant
cessation of business operations in the aforesaid plants. The recent accretion to the corpus of our jurisprudence is
the principle enunciated in National Federation of Labor vs. NLRC [327 SCRA 158 (2000)] which holds the view
that:

The closure of establishment contemplated under Article 283 of the Labor Code is a unilateral and voluntary act on
the part of the employer to close the business establishment as may be gleaned from the use of the word "may" – it
does not contemplate a situation where the closure of the business establishment is forced upon the employer and
ultimately for the benefit of the employees.

Although the Constitution provides for protection to labor, capital and management must also be protected under a
regime of justice and the rule of law.

Hence, the claim of the petitioner that the technical evaluation of the private respondent which served as basis for
the closure of the said facilities must be presented to the petitioner union first before the private respondent can
implement the said action is bereft of legal basis. The same fate must suffer with respect to the claim of the
petitioner that a prior consultation is a condition sine qua non as required under the Labor Code vis-à-vis the
Labor II – 1
provision on the participation of the employees in the decision-making processes of the employer private
respondent, before the latter can effectuate the said closure, is devoid of legal and jurisprudential basis.

As aptly stated by an authority in labor laws [Cesario A. Azucena, Jr., Everyone’s Labor Code, 2001 Edition, p. 302],
the author opined that even if the business is not losing but its owner, for reasons of his own, wants to stop doing
business, he can lawfully do so anytime provided he is in good faith. He further lamented in saying that "just as no
law forces anyone to go into business, no law compels anybody to stay in business."

Moreover, the private respondent has complied with the aforesaid requirements of the law when it decided to close
the said establishments. The records disclose that the alleged redundant, or more appropriately, separated
employees affected by the said closure were in fact individually served with a notice of termination. All of the subject
employees were offered and given a separation package by the private respondent more than what is provided by
the law and more than what is stipulated under their CBA, although, some refused to accept the said benefits, and
insisted on their being reinstated. We take note that as of the present, 546 of the 639 terminated or separated
employee-members of the petitioner union were ale to receive the said separation benefits. Moreover, the receipt of
the said separation benefits was admitted by the petitioner. The Department of Labor and Employment (DOLE) was
also notified of such closure through a letter sent by the private respondent dated December 10, 1999.

The petitioner claims that the private respondent failed to comply with the one-month notice requirement as required
under the said legal provision since the subject employees were no longer allowed to report for work effective
immediately upon receipt of their termination notice. However, they were still paid their salaries effective from
December 9, 1999 until February 29, 2000, although they did not anymore render service for the period.
Significantly, this peculiar fact which petitioner claims as an indirect circumvention of the said law has already been
addressed, albeit by analogy, in the recent case of Serrano v. NLRC [331 SCRA 341 (2000)]. In the said case, the
Supreme Court held:

In that case (Associate Labor Unions-VIMCONTU vs. NLRC [204 SCRA 913]), the employees and the then Ministry
of Labor and Employment (MOLE) were notified in writing on August 5, 1983 that the employees’ services would
cease on august 31, 1983 but that they would be paid their salaries and other benefits until September 5, 1983. It
was held that such written notice was "more than substantial compliance with the notice requirement of the Labor
Code."

Indeed, there was more than substantial compliance with the law in that case because, in addition to the advance
written notice required under Art. 284 (now Art. 283) of the Labor Code, the employees were paid for five days, from
September 1 to 5, 1993, even if they rendered no service for the period. 1avvphil.net

Had private respondent given a written notice to the petitioner on October 1, 1991, at the latest, that effective
October 31, 1991 his employment would cease although from October 1 he would no longer be required to work,
there would be basis for private respondent’s boast that ‘[p]ayment of this salary even [if he is] no longer working is
effective notice and is much better than 30 days formal notice but working until the end of the 30 days period." This
is not the case here, however. What happened here was that on October 11, 1991, petitioner was given a
memorandum terminating his employment effective on the same day on the ground of retrenchment (actually
redundancy).

xxx

WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The assailed decision
dated July 9, 2001 and the Order dated September 24, 2001 issued by public respondent National Labor Relations
Commission (NLRC) are hereby AFFIRMED. No costs.6

Petitioner’s motion for reconsideration was denied in a resolution dated 5 September 2003. Hence, the instant
petition.

Petitioner presents before this Court two issues for resolution, namely: 1) whether or not private respondent violated
the terms and conditions contained in the MOA dated 26 December 1998 when it did not recognize the

Labor II – 1
regularization of the 61 employees as effective on 1 December 1998; and 2) whether or not the closure of private
respondent’s Manila and Antipolo plants, resulting in the termination of employment of 646 employees, was legal.

In dismissing the petition before it, the Court of Appeals opined that the resolution of the validity of the claims of the
newly regularized employees would entail a review and re-examination of the factual findings and the re-evaluation
of the pieces of evidence which supported the conclusion of the NLRC in the latter’s disposition of the instant
controversy. We do not agree with the Court of Appeals. The said issue is not a question of fact which will
necessitate the appellate court to again examine the evidence. It is, rather, a question of law. There is a question of
law when the issue does not call for an examination of the probative value of evidence presented, the truth or
falsehood of facts being admitted and the doubt concerns the correct application of law and jurisprudence on the
matter.7 On the other hand, there is a question of fact when the doubt or controversy arises as to the truth or falsity
of the alleged facts. When there is no dispute as to fact, the question of whether or not the conclusion drawn
therefrom is correct is a question of law.8

What is necessary in determining whether the private respondent violated the provisions of the MOA with respect to
the date of regularization of the 61 employees is an interpretation of the pertinent provision of the MOA as agreed
upon by the parties. It must be noted that both parties admit the existence of said MOA and that they have
voluntarily entered into said agreement. Furthermore, neither of the parties deny that the 61 employees have indeed
been regularized by private respondent. Clearly, as the facts are admitted by the parties, the appellate court does
not have to inquire into the veracity of any fact in order to establish the rights of the parties. All that the Court of
Appeals must do is to interpret the provisions of the MOA and resolve whether said regularization must be made
retroactive to 1 December 1998, which according to petitioner is provided for under the said MOA. The MOA, being
a contract freely entered into by the parties, now constitute as the law between them, and the interpretation of its
contents purely involves an evaluation of the law as applied to the facts herein.

Thus, the issue being a question of law, this Court will now endeavor to resolve such matter. According to the
pertinent provision of the MOA:

1. Non-economic issues

A. Filling-up of vacant regular plantilla positions; regularization

The company shall fill-up all vacant plantilla positions covered by the 1998 manpower budget as already identified
by the Task Force created by the parties for the purpose following the following procedures:

1. Non-regular employee (casual, contractual or agency worker) who has already served the company and is
presently occupying or has occupied the position to be filled-up for at least one (1) year shall be given priority in
filling-up the position by converting his non-regular employment status to regular employment status, effective 01
December 1998 without need of undergoing through the company’s regular recruitment procedures such as
interview and qualifying examination. x x x9

It is the contention of petitioner that the date 1 December 1998 refers to the effective date of regularization of said
employees, while private respondent maintains that said date is merely the reckoning date from which the one year
employment requirement shall be computed. We agree with petitioner. It is erroneous for the NLRC to conclude that
the regularization of the 61 employees does not retroact to 1 December 1998. A fastidious reading of the above
quoted provision will clearly point to the conclusion that what is pertained to by the phrase "effective December 1,
1998" is the phrase immediately preceding it which is "converting his non-regular employment status to regular
employment status." It will be defying logic to adopt private respondent’s contention that the phrase "effective
December 1, 1998" designates the period when the non-regular employees will be given priority in filling-up the
positions, simply because the MOA was signed only on 26 December 1998. Therefore, it is logically absurd that the
company will only begin to extend priority to these employees on a date that has already passed, when in fact they
have already extended priority to these employees by agreeing to the contents of the MOA and signing said
agreement. Consequently, we hold that the effectivity date of the regularization of the 61 employees was 1
December 1998.

We, too, cannot agree with the NLRC’s rationale that entitling the 61 regularized employees to the MOA benefits
would certainly infringe the well-entrenched principle of "no-work-no-pay," since they only became regular,
Labor II – 1
according to private respondent, on 1 May 1999 and 1 October 1999. As stated in the MOA, only those who have
worked with the company for one year as of 1 December 1998 and are still working for the company as of the
signing of the MOA, will be considered for regularization. Evidently, it is erroneous for the NLRC to conclude that
extending to them the benefits of the MOA would violate the principle of "no-work-no-pay" as they are actually
rendering service to the company even before 1 December 1998, and continued to do so thereafter. Truly, they
were accorded the status of regular employees precisely because they were rendering service to the company for
the required period.

Moreover, at this point it must be stressed that under Article 280 of the Labor Code, any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment shall continue while such activity
exists. Also, under the law, a casual employee is only casual for one year, and it is the passage of time that gives
him a regular status. Hence, even without the subject MOA provision, the 61 employees must be extended regular
employment status after the lapse of one year. Even if we were to follow private respondent’s contention that the
date 1 December 1998 provided in the MOA is merely a reckoning date to determine who among the non-regular
employees have rendered one year of service as of said date, all those who have been with the company for one
year by said date must automatically be considered regular employees by operation of law. Therefore, contrary to
the interpretation of the NLRC, private respondent violated the provision of the MOA when it did not consider the
regularization of the 61 employees effective 1 December 1998, and accorded to them the full benefits of the MOA.

Relative to the issue of whether the closure of private respondent’s Manila and Antipolo plants was legal, we agree
in the conclusions of the NLRC and the Court of Appeals that the closure of said plants is for an authorized cause.

As correctly pointed out by the NLRC, the Court has already resolved that the characterization of the employee’s
service as no longer necessary or sustainable, and therefore properly terminable, is an exercise of business
judgment on the part of the employer.10 The wisdom or soundness of such characterizing or decision is not subject
to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or
merely arbitrary and malicious action is not shown.11 The determination of the continuing necessity of a particular
officer or position in a business corporation is management’s prerogative, and the courts will not interfere with the
exercise of such so long as no abuse of discretion or merely arbitrary or malicious action on the part of management
is shown.12 In the case at bar, the closure of the Manila and Antipolo plants and the resulting termination of the
employment of 646 employees is not tainted with bad faith. As found by the NLRC, the private respondent’s decision
to close the plant was a result of a study conducted which established that the most prudent course of action for the
private respondent was to stop operations in said plants and transfer production to other more modern and
technologically advanced plants of private respondent.

Other than its mere allegations, petitioner union failed to show that the closure of the two plants was without factual
basis and done in utter bad faith. No evidence was presented by petitioner to prove its assertion that private
respondent resorted to the closure of the Manila and Antipolo plants to prevent the renegotiations of the CBA
entered into between the parties. As adequately explained by the NLRC, the subject closure and the resulting
termination of the 639 employees was due to legitimate business considerations, as evidenced by the technical
study conducted by private respondent.

Anent the allegation that private respondent failed to comply with the notice requirements as provided by the Labor
Code in the cessation of its operations, we have already settled this matter in a similar case which was accordingly
cited by the appellate court. In the case of Serrano v. National Labor Relations Commission,13 we held that:

In that case [Associate Labor Unions-VIMCONTU v. NLRC (204 SCRA 913)], the employees and the then Ministry
of Labor and Employment (MOLE) were notified in writing on August 5, 1983 that the employees’ services would
cease on August 31, 1983 but that they would be paid their salaries and other benefits until September 5, 1983. It
was held that such written notice was "more than substantial compliance" with the notice requirement of the Labor
Code.

Indeed, there was "more than substantial compliance" with the law in that case because, in addition to the advance
written notice required under Art. 284 (now Art. 283) of the Labor Code, the employees were paid for five days, from
September 1 to 5, 1993, even if they rendered no service for the period. x x x Had private respondent given a
written notice to the petitioner on October 1, 1991, at the latest, that effective October 31, 1991 his employment
Labor II – 1
would cease although from October 1 he would no longer be required to work, there would be basis for private
respondent’s boast that ‘[p]ayment of this salary even [if he is] no longer working is effective notice and is much
better than 30 days formal notice but working until the end of the 30 days period." This is not the case here,
however. What happened here was that on October 11, 1991, petitioner was given a memorandum terminating his
employment effective on the same day on the ground of retrenchment (actually redundancy).14

In the instant case, the employees were served notice on 9 December 1999 that their employment were being
severed effective 1 March 2000; however they were no longer required to report for work but they will continue to
receive their salary up to 29 February 2000. Therefore, as enunciated in the ruling in Serrano v. NLRC, said act of
private respondent constitutes substantial compliance with the notice requirement of the Labor Code.

WHEREFORE, premises considered, the assailed Decisions of the Court of Appeals in CA-G.R. SP No. 67775 and
of the National Labor Relations Commission in NLRC Case No. 30-11-00466-99 and NLRC CC No. 000182-00 are
hereby AFFIRMED with MODIFICATION. The 61 subject employees are hereby declared regular employees as of 1
December 1998 and are entitled to the CBA salary increase, mid-year gratuity pay, one sack of rice, overtime pay
and thirteenth (13th) month pay as provided for in the Memorandum of Agreement. No costs.

Labor II – 1
17.) G.R. No. 160352               July 23, 2008

REPUBLIC OF THE PHILIPPINES, represented by Department of Labor and Employment (DOLE), Petitioner,

vs.
KAWASHIMA TEXTILE MFG., PHILIPPINES, INC., Respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

The Republic of the Philippines assails by way of Petition for Review on Certiorari under Rule 45 of the Rules of
Court, the December 13, 2002 Decision1 of the Court of Appeals (CA), which reversed the August 18, 2000
Decision2 of the Department of Labor and Employment (DOLE), and reinstated the May 17, 2000 Order3 of Med-
Arbiter Anastacio L. Bactin, dismissing the petition of Kawashima Free Workers Union-PTGWO Local Chapter No.
803 (KFWU) for the conduct of a certification election in Kawashima Textile Mfg. Phils., Inc. (respondent); and the
October 7, 2003 CA Resolution4 which denied the motion for reconsideration.

The relevant facts are of record.

On January 24, 2000, KFWU filed with DOLE Regional Office No. IV, a Petition for Certification Election to be
conducted in the bargaining unit composed of 145 rank-and-file employees of respondent.5 Attached to its petition
are a Certificate of Creation of Local/Chapter6 issued on January 19, 2000 by DOLE Regional Office No. IV, stating
that it [KFWU] submitted to said office a Charter Certificate issued to it by the national federation Phil. Transport &
General Workers Organization (PTGWO), and a Report of Creation of Local/Chapter.7

Respondent filed a Motion to Dismiss8 the petition on the ground that KFWU did not acquire any legal personality
because its membership of mixed rank-and-file and supervisory employees violated Article 245 of the Labor Code,
and its failure to submit its books of account contravened the ruling of the Court in Progressive Development
Corporation v. Secretary, Department of Labor and Employment. 9

In an Order dated May 17, 2000, Med-Arbiter Bactin found KFWU’s legal personality defective and dismissed its
petition for certification election, thus:

We scrutinize the facts and evidences presented by the parties and arrived at a decision that at least two (2)
members of [KFWU], namely: Dany I. Fernandez and Jesus R. Quinto, Jr. are supervisory employees, having a
number of personnel under them. Being supervisory employees, they are prohibited under Article 245 of the Labor
Code, as amended, to join the union of the rank and file employees. Dany I. Fernandez and Jesus R. Quinto, Jr.,
Chief Engineers of the Maintenance and Manufacturing Department, respectively, act as foremen to the line
engineers, mechanics and other non-skilled workers and responsible [for] the preparation and organization of
maintenance shop fabrication and schedules, inventory and control of materials and supplies and tasked to
implement training plans on line engineers and evaluate the performance of their subordinates. The above-stated
actual functions of Dany I. Fernandez and Jesus R. Quinto, Jr. are clear manifestation that they are supervisory
employees.

xxxx

Since petitioner’s members are mixture of rank and file and supervisory employees, petitioner union, at this
point [in] time, has not attained the status of a legitimate labor organization. Petitioner should first exclude
the supervisory employees from it membership before it can attain the status of a legitimate labor
organization. The above judgment is supported by the decision of the Supreme Court in the Toyota Case10 wherein
the High Tribunal ruled:

"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." (Underscoring omitted.)
Labor II – 1
xxxx

Furthermore, the commingling of rank and file and supervisory employees in one (1) bargaining unit cannot be
cured in the exclusion-inclusion proceedings [at] the pre-election conference. The above ruling is supported by the
Decision of the Supreme Court in Dunlop Slazenger (Phils.), Inc. vs. Honorable Secretary of Labor and
Employment, et al., G.R. No. 131248 dated December 11, 199811 x x x.

xxxx

WHEREFORE, premises considered, the petition for certification election is hereby dismissed for lack of requisite
legal status of petitioner to file this instant petition.

SO ORDERED.12 (Emphasis supplied)

On the basis of the aforecited decision, respondent filed with DOLE Regional Office No. IV a Petition for
Cancellation of Charter/Union Registration of KFWU,13 the final outcome of which, unfortunately, cannot be
ascertained from the records.

Meanwhile, KFWU appealed14 to the DOLE which issued a Decision on August 18, 2000, the dispositive portion of
which reads:

WHEREFORE, the appeal is GRANTED. The Order dated 17 May 2000 of the Med-Arbiter is REVERSED and SET
ASIDE. Accordingly, let the entire records of the case be remanded to the office of origin for the immediate conduct
of certification election, subject to the usual pre-election conference, among the rank-and-file employees of
Kawashima Textile Manufacturing Philippines, Inc. with the following choices:

1. Kawashima Free Workers Union-PTGWO Local Chapter No. 803; and

2. No union.

Pursuant to Rule XI, Section 11.1 of the New Implementing Rules, the employer is hereby directed to submit to the
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.15

The DOLE held that Med-Arbiter Bactin's reliance on the decisions of the Court in Toyota Motor Philippines
Corporation v. Toyota Motor Philippines Corporation Labor Union 16 and Dunlop Slazenger, Inc. v. Secretary of
Labor and Employment17 was misplaced, for while Article 245 declares supervisory employees ineligible for
membership in a labor organization for rank-and-file employees, the provision did not state the effect of such
prohibited membership on the legitimacy of the labor organization and its right to file for certification election. Neither
was such mixed membership a ground for cancellation of its registration. Section 11, Paragraph II, Rule XI of
Department Order No. 9 "provides for the dismissal of a petition for certification election based on lack of legal
personality of a labor organization only on the following grounds: (1) [KFWU] is not listed by the Regional Office or
the Bureau of Labor Relations in its registry of legitimate labor organizations; or (2) [KFWU's] legal personality has
been revoked or canceled with finality."18 The DOLE noted that neither ground existed; on the contrary, KFWU's
legal personality was well-established, for it held a certificate of creation and had been listed in the registry of
legitimate labor organizations.

As to the failure of KFWU to file its books of account, the DOLE held that such omission was not a ground for
revocation of union registration or dismissal of petition for certification election, for under Section 1, Rule VI of
Department Order No. 9, a local or chapter like KFWU was no longer required to file its books of account.19

Respondent filed a Motion for Reconsideration20 but the DOLE denied the same in its September 28, 2000
Resolution.21

Labor II – 1
However, on appeal by respondent, the CA rendered the December 13, 2002 Decision assailed herein, reversing
the August 18, 2000 DOLE Decision, thus:

Since respondent union clearly consists of both rank and file and supervisory employees, it cannot qualify
as a legitimate labor organization imbued with the requisite personality to file a petition for certification
election. This infirmity in union membership cannot be corrected in the inclusion-exclusion proceedings
during the pre-election conference.

Finally, contrary to the pronouncement of public respondent, the application of the doctrine enunciated in Toyota
Motor Philippines Corporation vs. Toyota Motor Philippines Corporation Labor Union was not construed in a way
that effectively denies the fundamental right of respondent union to organize and seek bargaining representation x x
x.

For ignoring jurisprudential precepts on the matter, the Court finds that the Undersecretary of Labor, acting under
the authority of the Secretary of Labor, acted with grave abuse of discretion amounting to lack or excess of
jurisdiction.

WHEREFORE, premises considered, the Petition is hereby GRANTED. The Decision dated 18 August 2000 of the
Undersecretary of Labor, acting under the authority of the Secretary, is hereby REVERSED and SET ASIDE. The
Order dated 17 May 2000 of the Med-Arbiter dismissing the petition for certification election filed by Kawashima
Free Workers Union-PTGWO Local Chapter No. 803 is REINSTATED.

SO ORDERED.22 (Emphasis supplied)

KFWU filed a Motion for Reconsideration23 but the CA denied it.

The Republic of the Philippines (petitioner) filed the present petition to seek closure on two issues:

First, whether a mixed membership of rank-and-file and supervisory employees in a union is a ground for the
dismissal of a petition for certification election in view of the amendment brought about by D.O. 9, series of 1997,
which deleted the phraseology in the old rule that "[t]he appropriate bargaining unit of the rank-and-file employee
shall not include the supervisory employees and/or security guards;" and

Second, whether the legitimacy of a duly registered labor organization can be collaterally attacked in a petition for a
certification election through a motion to dismiss filed by an employer such as Kawashima Textile Manufacturing
Phils., Inc.24

The petition is imbued with merit.

The key to the closure that petitioner seeks could have been Republic Act (R.A.) No. 9481.25 Sections 8 and 9
thereof provide:

Section 8. Article 245 of the Labor Code is hereby amended to read as follows:

"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 the collective bargaining unit of the rank-and-file employees but may join, assist or
form separate collective bargaining units and/or legitimate labor organizations of their own. The rank and file union
and the supervisors' union operating within the same establishment may join the same federation or national union."

Section 9. A new provision, Article 245-A is inserted into the Labor Code to read as follows:

"Art. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. - The inclusion as union
members of employees outside the bargaining unit shall not be a ground for the cancellation of the
registration of the union. Said employees are automatically deemed removed from the list of membership of
said union." (Emphasis supplied)
Labor II – 1
Moreover, under Section 4, a pending petition for cancellation of registration

will not hinder a legitimate labor organization from initiating a certification election, viz:

Sec. 4. A new provision is hereby inserted into the Labor Code as Article 238-A to read as follows:

"Art. 238-A. Effect of a Petition for Cancellation of Registration. - A petition for cancellation of union registration
shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for
certification election.

In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the
appropriate courts." (Emphasis supplied)

Furthermore, under Section 12 of R.A. No. 9481, employers have no personality to interfere with or thwart a petition
for certification election filed by a legitimate labor organization, to wit:

Sec. 12. A new provision, Article 258-A is hereby inserted into the Labor Code to read as follows:

"Art. 258-A. Employer as Bystander. - In all cases, whether the petition for certification election is filed by an
employer or a legitimate labor organization, the employer shall not be considered a party thereto with a
concomitant right to oppose a petition for certification election. The employer's participation in such
proceedings shall be limited to: (1) being notified or informed of petitions of such nature; and (2) submitting
the list of employees during the pre-election conference should the Med-Arbiter act favorably on the
petition." (Emphasis supplied)

However, R.A. No. 9481 took effect only on June 14, 2007;26 hence, it applies only to labor representation cases
filed on or after said date.27 As the petition for certification election subject matter of the present petition was filed by
KFWU on January 24, 2000,28 R.A. No. 9481 cannot apply to it. There may have been curative labor
legislations29 that were given retrospective effect,30 but not the aforecited provisions of R.A. No. 9481, for otherwise,
substantive rights and interests already vested would be impaired in the process.31

Instead, the law and rules in force at the time of the filing by KFWU of the petition for certification election on
January 24, 2000 are R.A. No. 6715,32 amending Book V of Presidential Decree (P.D.) No. 442 (Labor Code),33 as
amended, and the Rules and Regulations Implementing R.A. No. 6715,34 as amended by Department Order No. 9,
series of 1997.35

It is within the parameters of R.A. No. 6715 and the Implementing Rules that the Court will now resolve the two
issues raised by petitioner.

If there is one constant precept in our labor laws – be it Commonwealth Act No. 213 (1936),36 R.A. No. 875
(1953),37 P.D. No. 442 (1974), Executive Order (E.O.) No. 111 (1986)38 or R.A. No. 6715 (1989) - it is that only a
legitimate labor organization may exercise the right to be certified as the exclusive representative of all the
employees in an appropriate collective bargaining unit for purposes of collective bargaining.39 What has varied over
the years has been the degree of enforcement of this precept, as reflected in the shifting scope of administrative
and judicial scrutiny of the composition of a labor organization before it is allowed to exercise the right of
representation.

One area of contention has been the composition of the membership of a labor organization, specifically whether
there is a mingling of supervisory and rank-and-file employees and how such questioned mingling affects its
legitimacy.

It was in R.A. No. 875, under Section 3, that such questioned mingling was first prohibited,40 to wit:

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
Labor II – 1
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,41 the majority pronounced:

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.42 (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 290,43 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 Code44 (Omnibus Rules) merely provides in Section 11, Rule II, thus:

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 ma 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.
Sanchez45 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
rules46 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.47

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

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

"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.

Labor II – 1
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):

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:

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:

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,48 the Court, citing Article 245 of the
Labor Code, as amended by R.A. No. 6715, held:

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.49 (Emphasis supplied)

In Dunlop,50 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.51

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
Labor II – 1
has not been mingled with supervisory employees - was removed. Instead, what the 1997 Amended Omnibus Rules
requires is a plain description of the bargaining unit, thus:

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.52

In Pagpalain Haulers, Inc. v. Trajano, 53 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:

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-PGTWO54 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.55 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.56

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,57 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.58

More to the point is Air Philippines Corporation v. Bureau of Labor Relations,59 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:60 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.61 lavvphil

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.

Consequently, the Court reverses the ruling of the CA and reinstates that of the DOLE granting the petition for
certification election of KFWU.

Labor II – 1
Now to the second issue of whether an employer like respondent may collaterally attack the legitimacy of a labor
organization by filing a motion to dismiss the latter’s petition for certification election.

Except when it is requested to bargain collectively,62 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.63 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;64 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.65 The employer's only right in the
proceeding is to be notified or informed thereof.66

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

WHEREFORE, the petition is GRANTED. The December 13, 2002 Decision and October 7, 2003 Resolution of the
Court of Appeals and the May 17, 2000 Order of Med-Arbiter Anastacio L. Bactin
are REVERSED and SET ASIDE, while the August 18, 2000 Decision and September 28, 2000 Resolution of the
Department of Labor and Employment are REINSTATED.

Labor II – 1
18.) G.R. No. 151326 November 23, 2005

ST. JAMES SCHOOL OF QUEZON CITY, Petitioner,

vs.
SAMAHANG MANGGAGAWA SA ST. JAMES SCHOOL OF QUEZON CITY, Respondent.

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review1 assailing the 5 September 2001 Decision and 3 January 2002 Resolution of
the Court of Appeals2 in CA-G.R. SP No. 60197. The Court of Appeals sustained the Decision of the Department of
Labor and Employment ("DOLE") directing the opening of the challenged ballots cast during the certification
election.

The Antecedent Facts

The Samahang Manggagawa sa St. James School of Quezon City ("Samahang Manggagawa") filed a
petition for certification election to determine the collective bargaining representative of the motor pool,
construction and transportation employees of St. James School of Quezon City ("St. James"). On 26 June 1999, the
certification election was held at the DOLE office in Intramuros, Manila. There were 149 eligible voters and 84 voters
cast their votes. St. James filed a certification election protest challenging the 84 votes. St. James alleged
that it had 179 rank and file employees, none of whom voted in the certification election. St. James argued
that those who voted were not its regular employees but construction workers of an independent
contractor, Architect Conrado Bacoy ("Architect Bacoy").

In an Order dated 6 January 2000,3 Med-Arbiter Tomas F. Falconitin ("Med-Arbiter Falconitin") ruled that at the time
of the certification election, the 84 voters were no longer working at St. James. Med-Arbiter Falconitin supported his
ruling using the roster of rank and file employees submitted by St. James, which did not include the names of the 84
voters. Med-Arbiter Falconitin also ruled that since the construction projects have ceased, some of the workers were
no longer entitled to vote in the certification election. Finally, Med-Arbiter Falconitin ruled that even if the 84 workers
were to be included in the 179 rank and file employees of St. James, the total number of voters would be 263. Thus,
the 84 votes cast would not be sufficient to constitute a majority of all eligible voters to have a valid certification
election. The dispositive portion of the Order reads:

WHEREFORE, premises considered, the certification election protest is hereby given due course.

Accordingly, judgment is hereby rendered, declaring the certification election for the rank and file employees of
respondent/protestant St. James School of Quezon City conducted on June 26, 1999, a failure; and null and void ab
initio.

SO ORDERED.4

Samahang Manggagawa appealed to the Secretary of Labor. In its Decision5 dated 5 May 2000, the
DOLE6 reversed the ruling of Med-Arbiter Falconitin. The DOLE ruled that Samahang Manggagawa seeks to
represent the non-academic personnel or the rank and file employees from the motor pool, construction and
transportation departments, and not all the rank and file employees of St. James. According to the DOLE, Med-
Arbiter Falconitin erred in including all the rank and file employees of St. James, whether teaching or non-teaching
personnel, in the computation of the total number of employees. The DOLE ruled that the list submitted by St.
James contained only the administrative, teaching and office personnel of the school. The dispositive portion of the
Decision reads:

Labor II – 1
WHEREFORE, the appeal is hereby GRANTED and the order dated 06 January 2000 of the Med-Arbiter is
REVERSED and SET ASIDE. In lieu thereof, an order is hereby issued directing the Election Officer, Lilibeth
Cagara, DOLE-National Capital Region to open and canvass the 84 challenged ballots within ten (10) days from
receipt hereof, subject to usual notice and representation by the parties and thereafter to issue the corresponding
certification of the results.

SO DECIDED.7

St. James filed a motion for reconsideration. The DOLE8 denied the motion in its 19 June 2000 Resolution.9 St.
James filed a special civil action before the Court of Appeals.

In a Decision10 dated 5 September 2001, the Court of Appeals dismissed the petition and ruled that the DOLE did
not commit grave abuse of discretion in reversing the ruling of Med-Arbiter Falconitin. In its 3 January 2002
Resolution,11 the Court of Appeals denied St. James’ motion for reconsideration.

Hence, the petition before this Court.

The Issues

St. James questions the validity of the formation of the labor union and the validity of the certification
election.12

The Ruling of the Court

The petition has no merit.

The Validity of the Formation of the Labor Union

St. James argues that majority of the members of Samahang Manggagawa are not its employees but
employees of Architect Bacoy, an independent contractor.

St. James may no longer question the validity of the formation of the labor union.

The records13 show that prior to the holding of the certification election, St. James filed a petition for
cancellation of Samahang Manggagawa’s union registration. Among the grounds cited in the petition was
the lack of employer-employee relationship between St. James and Samahang Manggagawa’s members.
The Med-Arbiter recommended the cancellation of the union registration. DOLE Regional Director IV Romeo Young
("Director Young") adopted the Med-Arbiter’s recommendation and cancelled Samahang Manggagawa’s union
registration. Samahang Manggagawa filed an appeal before the Bureau of Labor Relations ("BLR"). In its
Decision14 dated 22 January 1998, the BLR15 reversed Director Young’s Decision. In its Resolution16 of 12 February
1998, the BLR denied St. James’ motion for reconsideration. St. James filed a special civil action before the Court of
Appeals. The case was docketed as CA-G.R. SP No. 50918. In its 9 February 2001 Decision,17 the Court of Appeals
dismissed St. James’ petition and affirmed the BLR’s Decision. The Court of Appeals ruled that the construction
workers are actually St. James’ regular employees in its motor pool, construction and transportation
departments. The Court of Appeals also ruled that Architect Bacoy is a labor-only contractor and thus an
agent of St. James, which is the real employer.

St. James filed a petition for certiorari before this Court. The case was docketed as G.R. No. 149648. In a
Resolution dated 10 October 2001, this Court denied the petition for St. James’ error in the choice or mode of
appeal.18 The Court’s 10 October 2001 Resolution closed any issue on the validity of the formation of the labor
union.

The Validity of the Certification Election

Section 13, Rule XII, Book V of the Omnibus Rules Implementing the Labor Code ("Omnibus Rules") provides:

Labor II – 1
Section 13. Proclamation and certification of results by election officer; when proper. – Upon completion of
the canvass there being a valid election, the election officer shall proclaim and certify as winner the union
which obtained a majority of the valid votes cast under any of the following conditions:

a) No protest had been filed or, even if one was filed, the same was not perfected within the five-day period
for perfection of the protest;

b) No challenge of eligibility issue was raised or even if one was raised, the resolution of the same will not
materially change the result.

For this purpose, the election officer shall immediately issue the corresponding certification, copy furnished all
parties, which shall form part of the records of the case. The winning union shall have the rights, privileges and
obligations of a duly certified collective bargaining representative from the time the certification is issued. The
proclamation and certification so issued shall not be appealable.

According to St. James, the certification election was conducted without quorum. St. James alleges that it
has 179 rank and file employees in its Quezon City Campus. When the certification election was held, none of these
qualified rank and file employees cast their votes because they were all on duty in the school premises. The 84
voters who cast their votes are employees of Architect Bacoy. St. James also alleges that it has 570 rank
and file employees in all its campuses. Even if the 84 voters are its employees, the votes do not constitute a
majority vote of its rank and file employees because the quorum should be based on its 570 rank and file
employees.

We cannot sustain the argument.

St. James has five campuses – the Philamlife and Scout Alcaraz, Quezon City campuses which are pre-schools; the
Parañaque City and Calamba, Laguna campuses which offer elementary, secondary and college education; and the
Tandang Sora, Quezon City campus which offers elementary and secondary education.19

The members of Samahang Manggagawa are employees in the Tandang Sora campus. Under its
constitution and by-laws, Samahang Manggagawa seeks to represent the motor pool, construction and
transportation employees of the Tandang Sora campus.20 Thus, the computation of the quorum should be based
on the rank and file motor pool, construction and transportation employees of the Tandang Sora campus and not on
all the employees in St. James’ five campuses.

Section 2, Rule XII, Book V of the Omnibus Rules provides:

Section 2. Qualification of voters; inclusion-exclusion proceedings. – All employees who are members of the
appropriate bargaining unit sought to be represented by the petitioner at the time of the certification or consent
election shall be qualified to vote. A dismissed employee whose dismissal is being contested in a pending case shall
be allowed to vote in the election.

In case of disagreement over the voters’ list or over the eligibility of voters, all contested voters shall be allowed to
vote. However, their votes shall be segregated and sealed in individual envelopes in accordance with Section 9 of
these Rules.

The motor pool, construction and transportation employees of the Tandang Sora campus had 149 qualified
voters at the time of the certification election. Hence, the 149 qualified voters should be used to determine
the existence of a quorum. Since a majority or 84 out of the 149 qualified voters cast their votes, a quorum
existed in the certification election.

St. James further alleges that the names of the 84 voters are not on the list of its rank and file employees. On this
score, we sustain the factual finding of the DOLE that the list submitted by St. James consists of its administrative,
teaching and office personnel. These administrative, teaching and office personnel are not members of Samahang
Manggagawa. They do not belong to the bargaining unit that Samahang Manggagawa seeks to represent. Hence,
the list submitted by St. James may not be used as basis to determine the members of Samahang Manggagawa.
Labor II – 1
WHEREFORE, we DENY the petition. We AFFIRM the 5 September 2001 Decision and the 3 January 2002
Resolution of the Court of Appeals in CA-G.R. SP No. 60197.

Labor II – 1
19.) G.R. No. 157117             November 20, 2006

COASTAL SUBIC BAY TERMINAL, INC., Petitioner,

vs.
DEPARTMENT OF LABOR and EMPLOYMENT – OFFICE OF THE SECRETARY, COASTAL SUBIC BAY
TERMINAL, INC. SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-
FILE UNION-ALU-TUCP, Respondents.

DECISION

QUISUMBING, J.:

For review on certiorari is the Court of Appeals’ Decision1 dated August 31, 2001, in CA-G.R. SP No. 54128 and the
Resolution2 dated February 5, 2003, denying petitioner’s motion for reconsideration. The Court of Appeals had
affirmed the Decision3 dated March 15, 1999 of the Secretary of the Department of Labor and Employment (DOLE)
reversing the Mediator Arbiter’s dismissal of private respondents’ petitions for certification election.

The facts are as follows:

On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTI-RFU) and
Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitions for certification election
before Med-Arbiter Eladio de Jesus of the Regional Office No. III. The rank-and-file union insists that it is a
legitimate labor organization having been issued a charter certificate by the Associated Labor Union (ALU), and the
supervisory union by the Associated Professional, Supervisory, Office and Technical Employees Union (APSOTEU).
Private respondents also alleged that the establishment in which they sought to operate was unorganized.

Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification election alleging that the
rank-and-file union and supervisory union were not legitimate labor organizations, and that the proposed bargaining
units were not particularly described.

Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, without prejudice to refiling,
both petitions which had been consolidated. The Med-Arbiter held that the ALU and APSOTEU are one and the
same federation having a common set of officers. Thus, the supervisory and the rank-and-file unions were in
effect affiliated with only one federation.4

The Med-Arbiter ruled as follows:

Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant petitions to be invalid
and unwarranted. Consequently, this Office has no recourse but to dismiss both petitions without prejudice to the
refiling of either.

WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are hereby DISMISSED.

SO ORDERED.5

Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of the Med-Arbiter.
The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU have separate legal
personalities to file their separate petitions for certification election. The Secretary held that APSOTEU is a
legitimate labor organization because it was properly registered pursuant to the 1989 Revised Rules and
Regulations implementing Republic Act No. 6715, the rule applicable at the time of its registration. It further ruled
that ALU and APSOTEU are separate and distinct labor unions having separate certificates of registration from the
DOLE. They also have different sets of locals. The Secretary declared CSBTI-RFU and CSBTI-SU as legitimate
labor organizations having been chartered respectively by ALU and APSOTEU after submitting all the requirements
with the Bureau of Labor Relations (BLR). Accordingly, the Secretary ordered the holding of separate certification
election, viz:
Labor II – 1
WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED. Let separate
certification elections be conducted immediately among the appropriate employees of CSBTI, after the usual pre-
election conference, with the following choices:

I. For all rank and file employees of CSBTI:

1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP; and

2. NO UNION.

II. For all supervisory employees of CSBTI:

1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-APSOTEU; and

2. NO UNION.

The latest payroll of the employer, including its payrolls for the last three months immediately preceding the
issuance of this decision, shall be the basis for determining the qualified list of voters.

SO DECIDED.6

The motion for reconsideration was also denied.7

On appeal, the Court of Appeals affirmed the decision of the Secretary.8 It held that there was no grave abuse of
discretion on the part of the Secretary; its findings are supported by evidence on record; and thus should be
accorded with respect and finality.9

The motion for reconsideration was likewise denied.10 Hence, the instant petition by the company anchored on the
following grounds:

THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989 REVISED RULES AND
REGULATIONS IMPLEMENTING RA 6715" AS BASIS TO RECOGNIZE PRIVATE RESPONDENT
APSOTEU’S REGISTRATION BY THE DOLE REGIONAL DIRECTOR.

II

THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC RESPONDENT’S

APPLICATION OF THE PRINCIPLE OF STARE DECISIS TO HASTILY DISPOSE OF THE LEGAL
PERSONALITY ISSUE OF APSOTEU.

III

THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW AND
JURISPRUDENCE WHEN IT AFFIRMED PUBLIC RESPONDENT’S APPLICATION OF THE "UNION
AUTONOMY" THEORY.

IV

IN AFFIRMING PUBLIC RESPONDENT’S FINDING THAT PRIVATE RESPONDENTS ARE "SEPARATE

FEDERATIONS," THE HONORABLE COURT OF APPEALS:

(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF A MED-ARBITER’S

FACTUAL FINDINGS; AND
Labor II – 1
 (2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL COMMINGLING."11

Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions for certification
election?; (2) Was the Secretary’s decision based on stare decisis correct?; and (3) Were private respondents
engaged in commingling?

The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU, its mother
federation.

Petitioner argues that APSOTEU improperly secured its registration from the DOLE Regional Director and not from
the BLR; that it is the BLR that is authorized to process applications and issue certificates of registration in
accordance with our ruling in Phil. Association of Free Labor Unions v. Secretary of Labor; 12 that the certificates of
registration issued by the DOLE Regional Director pursuant to the rules are questionable, and possibly even void ab
initio for being ultra vires; and that the Court of Appeals erred when it ruled that the law applicable at the time of
APSOTEU’s registration was the 1989 Revised Implementing Rules and Regulations of Rep. Act No. 6715.

Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot attain the status
of a legitimate labor organization to file a petition for certification election. It relies on Villar v. Inciong,13 where we
held therein that Amigo Employees Union was not a duly registered independent union absent any record of its
registration with the Bureau.

Pertinent is Article 23514 of the Labor Code which provides that applications for registration shall be acted upon by
the Bureau. "Bureau" as defined under the Labor Code means the BLR and/or the Labor Relations Division in the
Regional Offices of the Department of Labor.15 Further, Section 2, Rule II, Book V of the 1989 Revised Implementing
Rules of the Labor Code (Implementing Rules) provides that:

Section 2. Where to file application; procedure – Any national labor organization or labor federation or local union
may file an application for registration with the Bureau or the Regional Office where the applicant’s principal offices
is located. The Bureau or the Regional Office shall immediately process and approve or deny the application. In
case of approval, the Bureau or the Regional Office shall issue the registration certificate within thirty (30) calendar
days from receipt of the application, together with all the requirements for registration as hereinafter provided. 16

The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department Order No. 9, thus:

SECTION 1. Where to file applications. – The application for registration of any federation, national or industry
union or trade union center shall be filed with the Bureau. Where the application is filed with the Regional Office, the
same shall be immediately forwarded to the Bureau within forty-eight (48) hours from filing thereof, together with all
the documents supporting the registration.

The applications for registration of an independent union shall be filed with and acted upon by the Regional Office
where the applicant’s principal office is located ….

xxxx

The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further amending Book V of
the above implementing rules. The new implementing rules explicitly provide that applications for registration of
labor organizations shall be filed either with the Regional Office or with the BLR.17

Even after the amendments, the rules did not divest the Regional Office and the BLR of their jurisdiction over
applications for registration by labor organizations. The amendments to the implementing rules merely specified that
when the application was filed with the Regional Office, the application would be acted upon by the BLR.

The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly, the law applicable
at that time was Section 2, Rule II, Book V of the Implementing Rules, and not Department Order No. 9 which took
effect only on June 21, 1997. Thus, considering further that APSOTEU’s principal office is located in Diliman,
Quezon City, and its registration was filed with the NCR Regional Office, the certificate of registration is valid.
Labor II – 1
The petitioner misapplied Villar v. Inciong.18 In said case, there was no record in the BLR that Amigo Employees
Union was registered.19

Did the Court of Appeals err in its application of stare decisis when it upheld the Secretary’s ruling that APSOTEU is
a legitimate labor organization and its personality cannot be assailed unless in an independent action for
cancellation of registration certificate?20

We think not.

Section 5, Rule V, Book V of the Implementing Rules states:

Section 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 maybe questioned only in an independent petition for cancellation in
accordance with these Rules.21

Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to its affiliates.22 It may issue a
local charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is legitimate.

Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of the
commonalities between them? Are they commingled?

The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate fiction,
APSOTEU and ALU are the same federation. Private respondents disagree.

First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, it continues as
such until its certificate of registration is cancelled or revoked in an independent action for cancellation.23 In addition,
the legal personality of a labor organization cannot be collaterally attacked.24 Thus, when the personality of the labor
organization is questioned in the same manner the veil of corporate fiction is pierced, the action partakes the nature
of a collateral attack. Hence, in the absence of any independent action for cancellation of registration against either
APSOTEU or ALU, and unless and until their registrations are cancelled, each continues to possess a separate
legal personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and separate federations,
despite the commonalities of APSOTEU and ALU.

Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the charter
certificate issued by a duly registered federation or national union, and reported to the Regional Office in
accordance with the rules implementing the Labor Code.25 A local union does not owe its existence to the federation
with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its
members. Mere affiliation does not divest the local union of its own personality, neither does it give the mother
federation the license to act independently of the local union. It only gives rise to a contract of agency, where the
former acts in representation of the latter.26 Hence, local unions are considered principals while the federation is
deemed to be merely their agent.27 As such principals, the unions are entitled to exercise the rights and privileges of
a legitimate labor organization, including the right to seek certification as the sole and exclusive bargaining agent in
the appropriate employer unit. 1âwphi1

A word of caution though, under Article 245 of the Labor Code,28 supervisory employees are not eligible for
membership in a labor union of rank-and-file employees. The supervisory employees are allowed to form
their own union but they are not allowed to join the rank-and-file union because of potential conflicts of
interest.29 Further, to avoid a situation where supervisors would merge with the rank-and-file or where the
supervisors’ labor union would represent conflicting interests, a local supervisors’ union should not be
allowed to affiliate with the national federation of unions of rank-and-file employees where that federation
actively participates in the union activity within the company.30 Thus, the limitation is not confined to a case of
supervisors wanting to join a rank-and-file union. The prohibition extends to a supervisors’ local union applying for
membership in a national federation the members of which include local unions of rank-and-file employees.31 In De
La Salle University Medical Center and College of Medicine v. Laguesma, we reiterated the rule that for the
prohibition to apply, it is not enough that the supervisory union and the rank-and-file union are affiliated

Labor II – 1
with a single federation. In addition, the supervisors must have direct authority over the rank-and-file
employees.32

In the instant case, the national federations that exist as separate entities to which the rank-and-file and supervisory
unions are separately affiliated with, do have a common set of officers. In addition, APSOTEU, the supervisory
federation, actively participates in the CSBTI-SU while ALU, the rank-and-file federation, actively participates in the
CSBTI-RFU, giving occasion to possible conflicts of interest among the common officers of the federation of rank-
and-file and the federation of supervisory unions. For as long as they are affiliated with the APSOTEU and ALU, the
supervisory and rank-and-file unions both do not meet the criteria to attain the status of legitimate labor
organizations, and thus could not separately petition for certification elections.
1âwphi1

The purpose of affiliation of the local unions into a common enterprise is to increase the collective bargaining power
in respect of the terms and conditions of labor.33 When there is commingling of officers of a rank-and-file union with a
supervisory union, the constitutional policy on labor is circumvented. Labor organizations should ensure the freedom
of employees to organize themselves for the purpose of leveling the bargaining process but also to ensure the
freedom of workingmen and to keep open the corridor of opportunity to enable them to do it for themselves.

WHEREFORE, the petition is GRANTED. The Court of Appeals’ Decision dated August 31, 2001, in CA-G.R. SP
No. 54128 and the Resolution dated February 5, 2003 are SET ASIDE. The decision of the Med-Arbiter is
hereby AFFIRMED.

Labor II – 1
 20.) [G.R. NO. 152094. July 22, 2004]

DHL PHILIPPINES CORPORATION UNITED RANK AND FILE ASSOCIATION-FEDERATION

OF FREE WORKERS (DHL-URFA-FFW), Petitioner, v. BUKLOD NG MANGGAGAWA NG DHL
PHILIPPINES CORPORATION, Respondent.

DECISION

PANGANIBAN, J.:

False statements made by union officers before and during a certification election -- that the
union is independent and not affiliated with a national federation -- are material facts likely to
influence the election results.This principle finds application in the present case in which the
majority of the employees clearly wanted an independent union to represent them.Thus, after
the members learned of the misrepresentation, and after a majority of them disaffiliated
themselves from the union and formed another one, a new certification election should be held
to enable them to express their true will.

The late filing of the Petition for a new election can be excused under the peculiar facts of this
case, considering that the employees concerned did not sleep on their rights, but promptly acted
to protect their prerogatives.Petitioner should not be permitted to use legal technicalities to
perpetrate the betrayal foisted by its officers upon the majority of the employees.Procedural
technicalities should not be allowed to suppress the welfare of labor.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to annul the
December 17, 1999 Decision2 and the January 30, 2002 Resolution3 of the Court of Appeals (CA)
in CA-GR SP No. 53270.The assailed Decision disposed as follows: chanroblesvirtua1awlibrary

WHEREFORE, the petition is hereby given due course.Accordingly, the decision of Rosalinda
Dimapilis-[B]aldoz, Undersecretary of Labor, in behalf of [the] Secretary of Labor and
Employment, is hereby ANNULED and SET ASIDE and DECLARED to have NO
EFFECT whatsoever.

Public respondent and its representatives are hereby enjoined to refrain and desist from
implementing the said decision.4  cralawred

The challenged Resolution denied petitioners Motion for Reconsideration.

The Facts

On November 25, 1997, a certification election was conducted among the regular rank and file
employees in the main office and the regional branches of DHL Philippines Corporation. The
contending choices were petitioner and no union.

On January 19, 1998, on the basis of the results of the certification election, with petitioner
receiving 546 votes and no union garnering 348 votes, the election officer certified the former as
the sole and exclusive bargaining agent of the rank and file employees of the corporation.5  cralawred

Labor II – 1
Meanwhile, on December 19, 1997, Respondent Buklod ng Manggagawa ng DHL Philippines
Corporation (BUKLOD) filed with the Industrial Relations Division of the Department of Labor and
Employment (DOLE) a Petition for the nullification of the certification election. The officers of
petitioner were charged with committing fraud and deceit in the election proceedings,
particularly by misrepresenting to the voter-employees that it was an independent union, when
it was in fact an affiliate of the Federation of Free Workers (FFW).

This misrepresentation was supposedly the basis for their selection of petitioner in the
certification election. Allegedly supporting this claim was the fact that those whom it had misled
allegedly withdrew their membership from it and subsequently formed themselves into an
independent union. The latter union, BUKLOD, was issued a Certificate of Registration by DOLE
on December 23, 1997.

On May 18, 1998, Med-Arbiter Tomas F. Falconitin nullified the November 25, 1997 certification
election and ordered the holding of another one with the following contending choices:
petitioner, respondent, and no choice.

Setting aside the Decision of Med-Arbiter Falconitin, DOLE Undersecretary Rosalinda Dimapilis-
Baldoz held on appeal that the issue of representation had already been settled with finality in
favor of petitioner, and that no petitions for certification election would be entertained within one
year from the time the election officer had issued the Certification Order.

Ruling of the Court of Appeals

The CA held that the withdrawal of a great majority of the members of petitioner -- 704 out of
894 of them -- provided a compelling reason to conduct a certification election anew in order to
determine, once and for all, which union reflected their choice. Under the circumstances, the
issue of representation was not put to rest by the mere issuance of a Certification Order by the
election officer.

According to the appellate court, broader considerations should be accorded the disaffiliating
member-employees and a new election held to finally ascertain their will, consistent with the
constitutional and labor law policy of according full protection to labors right to self-organization.
The CA added that the best forum to determine the veracity of the withdrawal or retraction of
petitioners former members was another certification election.

The appellate court also held that the election officers issuance of a Certification Order on
January 19, 1998 was precipitate because, prior thereto, respondent had filed with the med-
arbiter a Petition for nullification of the election. Furthermore, the Certification was not in
accordance with Department Order No. 9 (DO 9), Series of 1997. The charges of fraud and
deceit, lodged immediately after the election by petitioners former members against their
officers, should have been treated as protests or issues of eligibility within the meaning of
Section 13 of DO 9.

Hence, this Petition.6

Issues

In its Memorandum, petitioner submits the following issues for our consideration:

Labor II – 1
Whether or not the Court of Appeals seriously erred and committed grave abuse of discretion
amounting to lack and/or excess of jurisdiction when it annul[l]ed, set aside, and declared to
have no effect whatsoever, the Decision of Undersecretary Rosalinda Dimapilis-Baldoz, which in
effect, reinstated and affirmed the Decision of the Med-Arbiter, nullifying the result of the
certification election as well as ordering the conduct of a new certification election at DHL
Philippines Corporation, considering that: chanroblesvirtua1awlibrary

(A) The Court of Appeals, as well as the Med-Arbiter, ignored the undisputed fact that
petitioner a quo (herein respondent) has not yet existed before, during and shortly after the
conduct of certification election on November 25, 1997, and not yet even registered at the time
of the filing of its Petition a quo on December 19, 1997, therefore, has no legal personality to
institute an action.

(B) The Court of Appeals, as well as the Med-Arbiter ignored and unjustifiably refused to apply
Section 13, Rule XII of Department Order No. 9, there being no protest nor challenge raised
before, during and even after five (5) days have lapsed from the conduct of the certification
election on November 25, 1997, as the Petition a quo was only filed on December 19, 1997 a
week before herein respondent was able to obtain its Certificate of Registration.

(C) The Court of Appeals ignored and unjustifiably refused to apply Section 3, Rule V of
Department Order No. 9, or commonly know[n] as the Certification-Year Rule, which means that
no certification election should be entertained within one (1) year from the time the Election
Officer issued the Certification Order.

II

Whether or not the Court of Appeals seriously erred and committed grave abuse of discretion,
amounting to lack and/or excess of jurisdiction in rendering the assailed Decision promulgated
on December 17, 1999, as the same was rendered without the [Office of the] Solicitor General
having filed its comment on the Petition a quo, despite having filed a Manifestation with Motion
to the effect of not having received the Petition filed by petitioner a quo, which [h]as remained
unacted upon; as well as the Resolution promulgated on January 30, 2002, which denied herein
petitioners Motion for Reconsideration, which was rendered without the required comment
thereon by the Petitioner a quo, thus, due process was violated.

III

Whether or not the Court of Appeals seriously erred and committed grave abuse of discretion
amounting to lack and/or excess of jurisdiction in holding that the resignation, withdrawal,
retraction of the great majority of the former members of United DHL should be treated as
disaffiliation from such union.

IV

Whether or not, the Court of Appeals seriously erred and committed grave abuse of discretion
amounting to lack and/or excess of jurisdiction in declaring that x x x while in the February 28,
1996 x x x decision of Med-Arbiter Tomas Falconitin provides for a certification election among
two (2) specific choices: the private respondent (then as petitioner), and No Union as the
contending choices, what was conducted on November 25, 1996 (sic) was a referendum on a
choice of yes or no and not certification order of the Election Officer reflecting the results in the
number of yes votes and no votes, without indicating the name of the contending choices.

Labor II – 1
 V

Whether or not the Court of Appeals placed both parties in Limbo, as the dispositive portion of
the Decision or the fallo, which x x x actually constitutes the judgment or resolution of the court,
failed to specify what should be done by the parties after the rendition of the said Decision and
Resolution, thus, there can be no subject of execution.7  cralawred

In simpler terms, the issues being raised are as follows: 1) the validity of the CA Decision and
Resolution; and 2) the validity of the certification election.

The Courts Ruling

The Petition lacks merit.

First Issue:

Validity of the CA Decision and Resolution

Petitioner assails the validity of the CA Decision for having been rendered without receipt of the
required comment of the Office of the Solicitor General (OSG) on respondents Petition; and the
CA Resolution for having been issued without receipt of respondents comment on petitioners
Motion for Reconsideration.

This contention is untenable.

The applicable provision is Section 8 of Rule 65 of the Rules of Court, which provides: chanroblesvirtua1awlibrary

SECTION 8. Proceedings after comment is filed. -- After the comment or other pleadings
required by the court are filed, or the time for the filing thereof has expired, the court may hear
the case or require the parties to submit memoranda.If after such hearing or submission of
memoranda or the expiration of the period for the filing thereof the court finds that the
allegations of the petition are true, it shall render judgment for the relief prayed for or to which
the petitioner is entitled. x x x. (Italics supplied)
cralawlibrary

From the foregoing provision, it is clear that the Petition may be resolved, notwithstanding the
failure of the adverse party to file a comment. Its failure to do so despite due notice is its own
lookout.Indeed, when a respondent fails to file its comment within the given period, the court
may decide the case on the basis of the records before it, specifically the petition and its
attachments.8  cralawred

Petitioner insists that the failure of the OSG to receive a copy of the Petition filed before the CA
was the reason for the OSGs failure to file a Comment thereon.Be that as it may, as correctly
pointed out by respondent, petitioner is not the proper party to invoke such failure.

At any rate, it is the duty of petitioner to defend its position, as well as those that upheld it --
the tribunal, the board and the officer -- because it is the party that is ultimately interested in
sustaining the correctness of the disposition or the validity of the proceedings.9  cralawred

Petitioner further assails the validity of the CA Decision, on the ground that its dispositive portion
or fallo  failed to specify what should be done by the parties after its promulgation.

Labor II – 1
All that the law requires is that the judgment must be definitive.That is, the rights of the parties
must be stated with finality by the decision itself, which must thus specifically deny or grant the
remedy sought by the action.10 For review by the CA was Undersecretary Dimapilis-Baldozs
Resolution reversing the Decision of Med-Arbiter Falconitin.

Parenthetically, the ultimate question presented before the appellate court was whether a new
certification election should be conducted among the employees of DHL Philippines
Corporation.As correctly pointed out by respondent, in reversing the undersecretarys Resolution,
the CA necessarily reinstated the med-arbiters earlier Decision to conduct a new certification
election.

A judgment is not confined to what appears on the face of the decision; it encompasses matters
necessarily included in or are necessary to such judgment.11 The Decision of Med-Arbiter
Falconitin and Undersecretary Dimapilis-Baldoz should be read in the context of and in relation
to the assailed Decision of the CA.The setting aside of the undersecretarys Resolution necessarily
implies the holding of a new certification election by the med-arbiter upon receipt of the records
of the case and the motion of the interested party.

Second Issue:

Validity of the Certification Election

Under Section 13 of the Rules Implementing Book V (Labor Relations) of the Labor Code,12 as
amended, the election officers authority to certify the results of the election is limited to
situations in which there has been no protest filed; or if there has been any, it has not been
perfected or formalized within five days from the close of the election proceedings.

Further, Section 14 of the same Rules provides that when a protest has been perfected, only the
med-arbiter can proclaim and certify the winner. Clearly, this rule is based on the election
officers function, which is merely to conduct and supervise certification elections.13 It is the med-
arbiter who is authorized to hear and decide representation cases.14 Consequently, the decision
whether to certify the results of an election or to set them aside due to incidents occurring
during the campaign is within the med-arbiters discretion.

Petitioner argues that the CA gravely erred in rendering its assailed Decision, considering that no
protest or challenge had been formalized within five days, or raised during the election
proceedings and entered in the minutes thereof. Petitioner adds that respondent did not file any
protest, either, against the alleged fraud and misrepresentation by the formers officers during
the election.

We disagree. When the med-arbiter admitted and gave due course to respondents Petition for
nullification of the election proceedings, the election officer should have deferred issuing the
Certification of the results thereof. Section 13 of the Implementing Rules cannot strictly be
applied to the present case.

Respondents contention is that a number of employees were lured by their officers into believing
that petitioner was an independent union. Since the employees had long desired to have an
independent union that would represent them in collective bargaining, they voted yes in favor of
petitioner. Having been misled, a majority of them eventually disaffiliated themselves from it
and formed an independent union, respondent herein, which thereafter protested the conduct of
the election. Having been formed just after such exercise by the defrauded employees who were

Labor II – 1
former members of petitioner, respondent could not have reasonably filed its protest within five
days from the close of the election proceedings.

Notably, after it had applied for registration with the Bureau of Labor Relations (BLR),
respondent filed its Petition to nullify the certification election. Petitioner insistently opposed the
Petition, as respondent had not yet been issued a certificate of registration at the time. Because
such certificate was issued in favor of the latter four days after the filing of the Petition, on
December 23, 1997, the misgivings of the former were brushed aside by the med-arbiter.
Indeed, the fact that respondent was not yet a duly registered labor organization when the
Petition was filed is of no moment, absent any fatal defect in its application for registration.

The circumstances in the present case show that the employees did not sleep on their rights.
Hence, their failure to follow strictly the procedural technicalities regarding the period for filing
their protest should not be taken against them. Mere technicalities should not be allowed to
prevail over the welfare of the workers.15 What is essential is that they be accorded an
opportunity to determine freely and intelligently which labor organization shall act on their
behalf.16 Having been denied this opportunity by the betrayal committed by petitioners officers in
the present case, the employees were prevented from making an intelligent and independent
choice.

False Statements of Union Officers

The making of false statements or misrepresentations that interfere with the free choice of the
employees is a valid ground for protest. A certification election may be set aside for
misstatements made during the campaign, where 1) a material fact has been misrepresented in
the campaign; 2) an opportunity for reply has been lacking; and 3) the misrepresentation has
had an impact on the free choice of the employees participating in the election.17 A
misrepresentation is likely to have an impact on their free choice, if it comes from a party who
has special knowledge or is in an authoritative position to know the true facts. This principle
holds true, especially when the employees are unable to evaluate the truth or the falsity of the
assertions.18  cralawred

The fact that the officers of petitioner especially its president, misrepresented it to the voting
employees as an independent union constituted a substantial misrepresentation of material facts
of vital concern to those employees. The materiality of such misrepresentation is self-evident.
The employees wanted an independent union to represent them in collective bargaining, free
from outside interference. Thus, upon knowing that petitioner was in fact an affiliate of the FFW,
the members disaffiliated from petitioner and organized themselves into an independent union.
Additionally, the misrepresentation came from petitioners recognized representative, who was
clearly in a position to hold himself out as a person who had special knowledge and was in an
authoritative position to know the true facts.

We are not easily persuaded by the argument of petitioner that the employees had sufficient
time between the misrepresentation and the election to check the truth of its claims. They could
hardly be expected to verify the accuracy of any statement regarding petitioner, made to them
by its officers. No less than its president stated that it was an independent union. At the time,
the employees had no reason to doubt him.

We sustain the following findings of Med-Arbiter Falconitin: chanroblesvirtua1awlibrary

x x x It must be noted at the outset that [respondent] has charged [petitioners] officers, agents
and representative with fraud or deception in encouraging its members to form or join and vote
Labor II – 1
for DHL Philippines Corporation United Rank-and-File Association which they represented as an
independent labor union not affiliated with any labor federation or national union. Such serious
allegations, supported with affidavits under oath executed by no less than seven hundred four
(704) DHL Philippines Corporations employees nationwide, cannot just be ignored.

xxx

Notwithstanding the fact that [petitioner] union was duly furnished copy of the petition and the
affidavits as its attachments, it surprisingly failed to question, much less contest, the veracity of
the allegations contained in such affidavits, more than just harping in general terms that the
allegations are simply incredible and [interposing] vehement denial. Being unassailed and
unrefuted, the allegations in the affidavits which are considered as x x x official documents must
be given weightand consideration by this Office. Furthermore, with the failure of [petitioner] to
rebut the affidavits, more than just denying the allegations, they give rise to the presumption
that [petitioner] has admitted such allegations in the affidavit and with the admission, it is
inescapable that indeed there was fraud or machination committed by the [petitioner] that
seriously affected the validity and legitimacy of the certification election conducted on November
25, 1997 which gives rise to a ground to annul or void the said election, having been marred by
fraud, deceptions and machinations.19  cralawred

This finding of fact of a quasi-judicial agency of DOLE is persuasive upon the courts.20  cralawred

Although petitioner won in the election, it is now clear that it does not represent the majority of
the bargaining employees, owing to the affiliation of its members with respondent. The present
uncertainty as to which union has their support to represent them for collective bargaining
purposes is a salient factor that this Court has seriously considered.

The bargaining agent must be truly representative of the employees.21 At the time of the filing
by respondent of the Petition for nullification, allegiances and loyalties of the employees were
like shifting sands that radically affected their choice of an appropriate bargaining
representative. The polarization of a good number of them followed their discovery of the fraud
committed by the officers of petitioner. At any rate, the claim that 704 of the employees are
affiliated with respondent is not sufficiently rebutted by any evidence on record.

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, in the affirmative case, by which one.22  cralawred

Once disaffiliation has been demonstrated beyond doubt, a certification election is the most
expeditious way of determining which union should be the exclusive bargaining representative of
the employees.23  cralawred

WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED.Costs against

petitioner.

Labor II – 1
21.) G.R. No. 116194           February 2, 2000

SUGBUANON RURAL BANK, INC., petitioner,

vs.
HON. UNDERSECRETARY BIENVENIDO E. LAGUESMA, DEPARTMENT OF LABOR AND EMPLOYMENT,
MED-ARBITER ACHILLES MANIT, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO.
7, CEBU CITY, AND SUGBUANON RURAL BANK, INC. — ASSOCIATION OF PROFESSIONAL,
SUPERVISORY, OFFICE, AND TECHNICAL EMPLOYEES UNION-TRADE UNIONS CONGRESS OF THE
PHILIPPINES, respondents.

QUISUMBING, J.:

In this special civil action for certiorari and prohibition, petitioner seeks the annulment of the April 27, 1994
Resolution of the Department of Labor and Employment, affirming the order of the Med-Arbiter, dated December 9,
1993, which denied petitioner's motion to dismiss respondent union's petition for certification election.

Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-registered banking institution with principal office
in Cebu City and a branch in Mandaue City. Private respondent SRBI Association of Professional, Supervisory,
Office, and Technical Employees Union (APSOTEU) is a legitimate labor organization affiliated with the Trade
Unions Congress of the Philippines (TUCP). 1âwphi1.nêt

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

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

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

On November 12, 1993, SRBI filed a motion to dismiss the union's petition. It sought to prevent the holding of a
certification election on two grounds. First, that the members of APSOTEU-TUCP were in fact managerial or
confidential employees. Thus, following the doctrine in Philips Industrial Development Corporation v. National Labor
Relations Commission,1 they were disqualified from forming, joining, or assisting any labor organization. Petitioner
attached the job descriptions of the employees concerned to its motion. Second, the Association of Labor
Unions-Trade Unions Congress of the Philippines or ALU-TUCP was representing the union. Since ALU-
TUCP also sought to represent the rank-and-file employees of SRBI, there was a violation of the principle of
separation of unions enunciated in Atlas Lithographic Services, Inc. v. Laguesma.2

The union filed its opposition to the motion to dismiss on December 1, 1993. It argued that its members were not
managerial employees but merely supervisory employees. The members attached their affidavits describing the
nature of their respective duties. The union pointed out that Article 245 of the Labor Code expressly allowed
supervisory employees to form, join, or assist their own unions.

On December 9, 1993, the Med-Arbiter denied petitioner's motion to dismiss. He scheduled the inclusion-exclusion
proceedings in preparation for the certification election on December 16, 1993.

SRBI appealed the Med-Arbiter's decision to the Secretary of Labor and Employment. The appeal was denied for
lack of merit. The certification election was ordered.

On June 16, 1994, the Med-Arbiter scheduled the holding of the certification election for June 29, 1994. His order
identified the following SRBI personnel as the voting supervisory employees in the election: the Cashier of the Main
Labor II – 1
Office, the Cashier of the Mandaue Branch, the Accountant of the Mandaue Branch, and the Acting Chief of the
Loans Department.

On June 17, 1994, SRBI filed with the Med-Arbiter an urgent motion to suspend proceedings. The Med-Arbiter
denied the same on June 21, 1994. SRBI then filed a motion for reconsideration. Two days later, the Med-Arbiter
cancelled the certification election scheduled for June 29, 1994 in order to address the motion for reconsideration.

The Med-Arbiter later denied petitioner's motion for reconsideration, SRBI appealed the order of denial to the DOLE
Secretary on December 16, 1993..

On December 22, 1993, petitioner proceeded to file a petition with the DOLE Regional Office seeking the
cancellation of the respondent union's registration. It averred that the APSOTEU-TUCP members were actually
managerial employees who were prohibited by law from joining or organizing unions.

On April 22, 1994, respondent DOLE Undersecretary denied SRBI's appeal for lack of merit. He ruled that
APSOTEU-TUCP was a legitimate labor organization. As such, it was fully entitled to all the rights and privileges
granted by law to a legitimate labor organization, including the right to file a petition for certification election. He also
held that until and unless a final order is issued cancelling APSOTEU-TUCP's registration certificate, it had the legal
right to represent its members for collective bargaining purposes. Furthermore, the question of whether the
APSOTEU-TUCP members should be considered as managerial or confidential employees should not be
addressed in the proceedings involving a petition for certification election but best threshed out in other appropriate
proceedings.

On May 25, 1994, SRBI moved for reconsideration of the Undersecretary's decision which was denied on July 7,
1994. The Med-Arbiter scheduled the holding of certification elections on August 12, 1994.

Hence the instant petition grounded on the following assignments of error:

RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF DISCRETION AND

PALPABLY ERRED:

A: IN HOLDING THAT ART. 257 OF THE LABOR CODE REQUIRES THE MED-ARBITER TO CONDUCT A
CERTIFICATION ELECTION IN ANY UNORGANIZED ESTABLISHMENT EVEN WHEN THE PETITIONING
UNION DOES NOT POSSESS THE QUALIFICATION FOR AN APPROPRIATE BARGAINING AGENT; AND

B. IN REFUSING TO ASSUME JURISDICTION OVER THE PETITIONER'S APPEAL AND TO DISMISS THE
RESPONDENT UNION'S PETITION FOR CERTIFICATION ELECTION.

II

RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF DISCRETION AND

PALPABLY ERRED IN DENYING THE PETITIONER'S APPEAL DESPITE THE FACT THAT:

A. THE ALLEGED MEMBERS OF RESPONDENT UNION ARE MANAGERIAL EMPLOYEES WHO ARE LEGALLY
DISQUALIFIED FROM JOINING ANY LABOR ORGANIZATION.

B. AT THE VERY LEAST, THE ALLEGED MEMBERS OF RESPONDENT UNION ARE OCCUPYING HIGHLY
CONFIDENTIAL POSITIONS IN PETITIONER AND, THUS, THE LEGAL DISQUALIFICATION OF MANAGERIAL
EMPLOYEES EQUALLY APPLY TO THEM.

III

Labor II – 1
IN ANY EVENT, THE CONCLUSIONS REACHED IN THE SUBJECT RESOLUTIONS ARE CONTRARY TO LAW
AND ARE DIAMETRICALLY OPPOSED TO RESPONDENT UNION'S RECORDED ADMISSIONS AND
REPRESENTATIONS.

Considering petitioner's assigned errors, we find two core issues for immediate resolution:

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

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

The other issues based on the assigned errors could be resolved easily after the core issues are settled.

Respecting the first issue, Article 212 (m) of the Labor Code defines the terms "managerial employee" and
"supervisory employees" as follows:

Art. 212. Definitions —

(m) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute
management policies and/or 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 (Emphasis supplied).

Petitioner submitted detailed job descriptions to support its contention that the union members are managerial
employees and/or confidential employees proscribed from engaging in labor activities.3 Petitioner vehemently
argues that the functions and responsibilities of the employees involved constitute the "very core of the bank's
business, lending of money to clients and borrowers, evaluating their capacity to pay, approving the loan and its
amount, scheduling the terms of repayment, and endorsing delinquent accounts to counsel for collection."4 Hence,
they must be deemed managerial employees. Petitioner cites Tabacalera Insurance Co. v. National Labor Relations
Commission,5 and Panday v. National Labor Relations Commission,6 to sustain its submission. In Tabacalera, we
sustained the classification of a credit and collection supervisor by management as a managerial/supervisory
personnel. But in that case, the credit and collection supervisor "had the power to recommend the hiring and
appointment of his subordinates, as well as the power to recommend any promotion and/or increase."7 For this
reason he was deemed to be a managerial employee. In the present case, however, petitioner failed to show that
the employees in question were vested with similar powers. At best they only had recommendatory powers subject
to evaluation, review, and final decision by the bank's management. The job description forms submitted by
petitioner clearly show that the union members in question may not transfer, suspend, lay-off, recall, discharge,
assign, or discipline employees. Moreover, the forms also do not show that the Cashiers, Accountants, and Acting
Chiefs of the Loans Department formulate and execute management policies which are normally expected of
management officers.

Petitioner's reliance on Panday is equally misplaced. There, we held that a branch accountant is a managerial
employee because the said employee had managerial powers, similar to the supervisor in Tabaculera. Their powers
included recommending the hiring and appointment of his subordinates, as well as the power to recommend any
promotion and/or increase.8

Here, we find that the Cashiers, Accountant, and Acting Chief of the Loans Department of the petitioner did not
possess managerial powers and duties. We are, therefore, constrained to conclude that they are not managerial
employees.

Labor II – 1
Now may the said bank personnel be deemed confidential employees? Confidential employees are those who (1)
assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate
management policies [specifically in the field of labor relations].9 The two criteria are cumulative, and both must be
met if an employee is to be considered a confidential employee — that is, the confidential relationship must exist
between the employee and his superior officer; and that officer must handle the prescribed responsibilities relating
to labor relations.10

Art. 245 of the Labor Code11 does not directly prohibit confidential employees from engaging in union activities.
However, under the doctrine of necessary implication, the disqualification of managerial employees equally applies
to confidential employees.12 The confidential-employee rule justifies exclusion of confidential employees because in
the normal course of their duties they become aware of management policies relating to labor relations.13 It must be
stressed, however, that when the employee does not have access to confidential labor relations information, there is
no legal prohibition against confidential employees from forming, assisting, or joining a union.14

Petitioner contends that it has only 5 officers running its day-to-day affairs. They assist in confidential capacities and
have complete access to the bank's confidential data. They form the core of the bank's management team.
Petitioner explains that:

. . . Specifically: (1) the Head of the Loans Department initially approves the loan applications before they
are passed on to the Board for confirmation. As such, no loan application is even considered by the Board
and approved by petitioner without his stamp of approval based upon his interview of the applicant and
determination of his (applicant's) credit standing and financial capacity. The same holds true with respect to
renewals or restructuring of loan accounts. He himself determines what account should be collected,
whether extrajudicially or judicially, and settles the problems or complaints of borrowers regarding their
accounts;

(2) the Cashier is one of the approving officers and authorized signatories of petitioner. He approves the
opening of accounts, withdrawals and encashment, and acceptance of check deposits. He deals with other
banks and, in the absence of the regular Manager, manages the entire office or branch and approves
disbursements of funds for expenses; and

(3) the Accountant, who heads the Accounting Department, is also one of the authorized signatories of
petitioner and, in the absence of the Manager or Cashier, acts as substitute approving officer and assumes
the management of the entire office. She handles the financial reports and reviews the debit/credit tickets
submitted by the other departments.15

Petitioner's explanation, however, does not state who among the employees has access to information specifically
relating to its labor to relations policies. Even Cashier Patricia Maluya, who serves as the secretary of the bank's
Board of Directors may not be so classified. True, the board of directors is responsible for corporate policies, the
exercise of corporate powers, and the general management of the business and affairs of the corporation. As
secretary of the bank's governing body. Patricia Maluya serves the bank's management, but could not be deemed to
have access to confidential information specifically relating to SRBI's labor relations policies, absent a clear showing
on this matter. Thus, while petitioner's explanation confirms the regular duties of the concerned employees, it shows
nothing about any duties specifically connected to labor relations.

As to the second issue. One of the rights of a legitimate labor organization under Article 242(b) of the Labor Code is
the right to be certified as the exclusive representative of all employees in an appropriate bargaining unit for
purposes of collective bargaining. Having complied with the requirements of Art. 234, it is our view that respondent
union is a legitimate labor union. Article 257 of the Labor Code mandates that a certification election
shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor
organization.16 Nothing is said therein that prohibits such automatic conduct of the certification election if the
management appeals on the issue of the validity of the union's registration. On this score, petitioner's appeal was
correctly dismissed.

Petitioner argues that giving due course to respondent union's petition for certification election would violate the
separation of unions doctrine.17 Note that the petition was filed by APSOTEU-TUCP, a legitimate labor organization.
It was not filed by ALU. Nor was it filed by TUCP, which is a national labor federation of with which respondent union
Labor II – 1
is affiliated. Petitioner says that respondent union is a mere alter ego of ALU. The records show nothing to this
effect. What the records instead reveal is that respondent union was initially assisted by ALU during its preliminary
stages of organization. A local union maintains its separate personality despite affiliation with a larger national
federation.18 Petitioner alleges that ALU seeks to represent both respondent union and the rank-and-file union.
Again, we find nothing in the records to support this bare assertion.

The law frowns on a union where the membership is composed of both supervisors and rank-and-file employees, for
fear that conflicts of interest may arise in the areas of discipline, collective bargaining, and strikes.19 However, in the
present case, none of the members of the respondent union came from the rank-and-file employees of the bank.

Taking into account the circumstances in this case, it is our view that respondent Undersecretary committed no
reversible error nor grave abuse of discretion when he found the order of the Med-Arbiter scheduling a certification
election in order. The list of employees eligible to vote in said certification election was also found in order, for none
was specifically disqualified from union membership. 1âwphi1.nêt

WHEREFORE, the instant petition is hereby DISMISSED. No pronouncement as to costs

Labor II – 1
22.) G.R. No. 167141               March 13, 2009

SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG

ALYANSA (SAMMA-LIKHA), Petitioner,
vs.
SAMMA CORPORATION, Respondent.

DECISION

This is a petition for review on certiorari1 of the August 31, 2004 decision2 and February 15, 2005 resolution3 of the
Court of Appeals (CA) in CA-G.R. SP No. 77156.

Petitioner Samahan ng mga Manggagawa sa Samma– Lakas sa Industriya ng Kapatirang Haligi ng Alyansa
(SAMMA-LIKHA) filed a petition for certification election on July 24, 2001 in the Department of Labor and
Employment (DOLE), Regional Office IV.4 It claimed that: (1) it was a local chapter of the LIKHA Federation, a
legitimate labor organization registered with the DOLE; (2) it sought to represent all the rank-and-file employees of
respondent Samma Corporation; (3) there was no other legitimate labor organization representing these rank-and-
file employees; (4) respondent was not a party to any collective bargaining agreement and (5) no certification or
consent election had been conducted within the employer unit for the last 12 months prior to the filing of the petition.

Respondent moved for the dismissal of the petition arguing that (1) LIKHA Federation failed to establish its legal
personality; (2) petitioner failed to prove its existence as a local chapter; (3) it failed to attach the certificate of non-
forum shopping and (4) it had a prohibited mixture of supervisory and rank-and-file employees.5

In an order dated November 12, 2002, med-arbiter Arturo V. Cosuco ordered the dismissal of the petition on the
following grounds: (1) lack of legal personality for failure to attach the certificate of registration purporting to show its
legal personality; (2) prohibited mixture of rank-and-file and supervisory employees and (3) failure to submit a
certificate of non-forum shopping.6

Petitioner moved for reconsideration on November 29, 2001. The Regional Director of DOLE Regional Office IV
forwarded the case to the Secretary of Labor. Meanwhile, on December 14, 2002, respondent filed a petition for
cancellation of petitioner’s union registration in the DOLE Regional Office IV.7

On January 17, 2003, Acting Secretary Manuel G. Imson, treating the motion for reconsideration as an appeal,
rendered a decision reversing the order of the med-arbiter. He ruled that the legal personality of a union cannot be
collaterally attacked but may only be questioned in an independent petition for cancellation of registration. Thus, he
directed the holding of a certification election among the rank-and-file employees of respondent, subject to the usual
pre-election conference and inclusion-exclusion proceedings.8

On January 23, 2003 or six days after the issuance of said decision, respondent filed its comment on the motion for
reconsideration of petitioner, asserting that the order of the med-arbiter could only be reviewed by way of appeal
and not by a motion for reconsideration pursuant to Department Order (D.O.) No. 9, series of 1997.9

On February 6, 2003, respondent filed its motion for reconsideration of the January 17, 2003 decision. In a
resolution dated April 3, 2003, Secretary Patricia A. Sto. Tomas denied the motion.10

Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr., Officer-in-Charge/Regional Director of DOLE Regional Office
IV, issued a resolution revoking the charter certificate of petitioner as local chapter of LIKHA Federation on the
ground of prohibited mixture of supervisory and rank-and-file employees and non-compliance with the attestation
clause under paragraph 2 of Article 235 of the Labor Code.11 On May 6, 2003, petitioner moved for the
reconsideration of this resolution.12

Respondent filed a petition for certiorari13 in the CA assailing the January 17, 2003 decision and April 3, 2003
resolution of the Secretary of Labor. In a decision dated August 31, 2004, the CA reversed the same.14 It denied
reconsideration in a resolution dated February 15, 2005. It held that Administrative Circular No. 04-94 which
Labor II – 1
required the filing of a certificate of non-forum shopping applied to petitions for certification election. It also ruled that
the Secretary of Labor erred in granting the appeal despite the lack of proof of service on respondent. Lastly, it
found that petitioner had no legal standing to file the petition for certification election because its members were a
mixture of supervisory and rank-and-file employees.15

Hence, this petition.

The issues for our resolution are the following: (1) whether a certificate for non-forum shopping is required in a
petition for certification election; (2) whether petitioner’s motion for reconsideration which was treated as an appeal
by the Secretary of Labor should not have been given due course for failure to attach proof of service on respondent
and (3) whether petitioner had the legal personality to file the petition for certification election.

Requirement of Certificate
Of Non-Forum Shopping
Is Not Required in a Petition
For Certification Election

In ruling against petitioner, the CA declared that under Administrative Circular No. 04-94,16 a certificate of non-forum
shopping was required in a petition for certification election. The circular states:

The complaint and other initiatory pleadings referred to and subject of this Circular are the original civil complaint,
counterclaim, cross-claim, third (fourth, etc.) party complaint, or complaint-in-intervention, petition, or
application wherein a party asserts his claim for relief. (Emphasis supplied)

According to the CA, a petition for certification election asserts a claim, i.e., the conduct of a certification election. As
a result, it is covered by the circular.17

We disagree.

The requirement for a certificate of non-forum shopping refers to complaints, counter-claims, cross-claims, petitions
or applications where contending parties litigate their respective positions regarding the claim for relief of the
complainant, claimant, petitioner or applicant. A certification proceeding, even though initiated by a "petition," is not
a litigation but an investigation of a non-adversarial and fact-finding character.18

Such proceedings are not predicated upon an allegation of misconduct requiring relief, but, rather, are
merely of an inquisitorial nature. The Board's functions are not judicial in nature, but are merely of an
investigative character. The object of the proceedings is not the decision of any alleged commission of wrongs nor
asserted deprivation of rights but is merely the determination of proper bargaining units and the ascertainment of the
will and choice of the employees in respect of the selection of a bargaining representative. The determination of the
proceedings does not entail the entry of remedial orders to redress rights, but culminates solely in an official
designation of bargaining units and an affirmation of the employees' expressed choice of bargaining
agent.19 (Emphasis supplied)

In Pena v. Aparicio,20 we ruled against the necessity of attaching a certification against forum shopping to a
disbarment complaint. We looked into the rationale of the requirement and concluded that the evil sought to be
avoided is not present in disbarment proceedings.

… [The] rationale for the requirement of a certification against forum shopping is to apprise the Court of the
pendency of another action or claim involving the same issues in another court, tribunal or quasi-judicial agency,
and thereby precisely avoid the forum shopping situation. Filing multiple petitions or complaints constitutes abuse of
court processes, which tends to degrade the administration of justice, wreaks havoc upon orderly judicial procedure,
and adds to the congestion of the heavily burdened dockets of the courts. Furthermore, the rule proscribing forum
shopping seeks to promote candor and transparency among lawyers and their clients in the pursuit of their cases
before the courts to promote the orderly administration of justice, prevent undue inconvenience upon the other
party, and save the precious time of the courts. It also aims to prevent the embarrassing situation of two or more
courts or agencies rendering conflicting resolutions or decisions upon the same issue.

Labor II – 1
It is in this light that we take a further look at the necessity of attaching a certification against forum shopping to a
disbarment complaint. It would seem that the scenario sought to be avoided, i.e., the filing of multiple suits
and the possibility of conflicting decisions, rarely happens in disbarment complaints considering that said
proceedings are either "taken by the Supreme Court motu proprio, or by the Integrated Bar of the Philippines (IBP)
upon the verified complaint of any person." Thus, if the complainant in a disbarment case fails to attach a
certification against forum shopping, the pendency of another disciplinary action against the same respondent may
still be ascertained with ease.21 (Emphasis supplied)

The same situation holds true for a petition for certification election. Under the omnibus rules implementing the
Labor Code as amended by D.O. No. 9,22 it is supposed to be filed in the Regional Office which has jurisdiction over
the principal office of the employer or where the bargaining unit is principally situated.23 The rules further provide that
where two or more petitions involving the same bargaining unit are filed in one Regional Office, the same shall be
automatically consolidated.24 Hence, the filing of multiple suits and the possibility of conflicting decisions will rarely
happen in this proceeding and, if it does, will be easy to discover.

Notably, under the Labor Code and the rules pertaining to the form of the petition for certification election, there is
no requirement for a certificate of non-forum shopping either in D.O. No. 9, series of 1997 or in D.O. No. 40-03,
series of 2003 which replaced the former.25

Considering the nature of a petition for certification election and the rules governing it, we therefore hold that the
requirement for a certificate of non-forum shopping is inapplicable to such a petition.

Treatment of Motion for Reconsideration as an Appeal

The CA ruled that petitioner’s motion for reconsideration, which was treated as an appeal by the Secretary of Labor,
should not have been given due course for lack of proof of service in accordance with the implementing rules as
amended by D.O. No. 9:

Section 12. Appeal; finality of decision. – The decision of the Med-Arbiter may be appealed to the Secretary for any
violation of these Rules. Interloculory orders issued by the Med-Arbiter prior to the grant or denial of the petition,
including order 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.

The appeal shall be under oath and shall consist of a memorandum of appeal specifically stating the grounds relied
upon by the appellant with the supporting arguments and evidence. The appeal shall be deemed not filed unless
accompanied by proof of service thereof to appellee.26 (Emphasis supplied)

In accepting the appeal, the Secretary of Labor stated:

[Petitioner’s] motion for reconsideration of the Med-Arbiter’s Order dated November 12, 2002 was verified under
oath by [petitioner’s] president Gil Dispabiladeras before Notary Public Wilfredo A. Ruiz on 29 November 2002, and
recorded in the Notarial Register under Document No. 186, Page No. 38, Book V, series of 2002. On page 7 of the
said motion also appears the notation "copy of respondent to be delivered personally with the name and signature of
one Rosita Simon, 11/29/02." The motion contained the grounds and arguments relied upon by [petitioner] for the
reversal of the assailed Order. Hence, the motion for reconsideration has complied with the formal requisites of
an appeal.

The signature of Rosita Simon appearing on the last page of the motion can be considered as compliance with the
required proof of service upon respondent. Rosita Simon’s employment status was a matter that should have
been raised earlier by [respondent]. But [respondent] did not question the same and slept on its right to oppose or
comment on [petitioner’s] motion for reconsideration. It cannot claim that it was unaware of the filing of the
appeal by [petitioner], because a copy of the indorsement of the entire records of the petition to the Office of the
Secretary "in view of the memorandum of appeal filed by Mr. Jesus B. Villamor" was served upon the employer and
legal counsels Atty. Ismael De Guzman and Atty. Anatolio Sabillo at the Samma Corporation Office, Main Avenue,
PEZA, Rosario, Cavite on December 5, 2002.27 (Emphasis supplied)

Labor II – 1
The motion for reconsideration was properly treated as an appeal because it substantially complied with the formal
requisites of the latter. The lack of proof of service was not fatal as respondent had actually received a copy of the
motion. Consequently, it had the opportunity to oppose the same. Under these circumstances, we find that the
demands of substantial justice and due process were satisfied.

We stress that rules of procedure are interpreted liberally to secure a just, speedy and inexpensive disposition of
every action. They should not be applied if their application serves no useful purpose or hinders the just and speedy
disposition of cases. Specifically, technical rules and objections should not hamper the holding of a certification
election wherein employees are to select their bargaining representative. A contrary rule will defeat the declared
policy of the State1avvphi1 .zw+

to promote the free and responsible exercise of the right to self-organization through the establishment of
a simplified mechanism for the speedy registration of labor organizations and workers’
associations, determination of representation status, and resolution of intra and inter-union disputes.28 xxx
(Emphasis supplied)

Legal Personality of Petitioner

Petitioner argues that the erroneous inclusion of one supervisory employee in the union of rank-and-file employees
was not a ground to impugn its legitimacy as a legitimate labor organization which had the right to file a petition for
certification election.

We agree.

LIKHA was granted legal personality as a federation under certificate of registration no. 92-1015-032-11638-FED-
LC. Subsequently, petitioner as its local chapter was issued its charter certificate no. 2-01.29 With certificates of
registration issued in their favor, they are clothed with legal personality as legitimate labor organizations:

Section 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.30

-0-

Section 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 the documentary requirements, the Regional Office or Bureau of Labor Relations shall
issue in favor of the local/chapter a certificate indicating that it is included in the roster of legitimate labor
organizations.31

Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an
independent petition for cancellation of certificate of registration.32 Unless petitioner’s union registration is cancelled
in independent proceedings, it shall continue to have all the rights of a legitimate labor organization, including the
right to petition for certification election.

Furthermore, the grounds for dismissal of a petition for certification election based on the lack of legal personality of
a labor organization are the following: (a) petitioner is not listed by the Regional Office or the Bureau of Labor
Relations in its registry of legitimate labor organizations or (b) its legal personality has been revoked or cancelled
with finality in accordance with the rules.33

As mentioned, respondent filed a petition for cancellation of the registration of petitioner on December 14, 2002. In a
resolution dated April 14, 2003, petitioner’s charter certificate was revoked by the DOLE. But on May 6, 2003,
petitioner moved for the reconsideration of this resolution. Neither of the parties alleged that this resolution revoking
petitioner’s charter certificate had attained finality. However, in this petition, petitioner prayed that its charter
certificate be "reinstated in the roster of active legitimate labor [organizations]."34 This cannot be granted here. To
Labor II – 1
repeat, the proceedings on a petition for cancellation of registration are independent of those of a petition for
certification election. This case originated from the latter. If it is shown that petitioner’s legal personality had already
been revoked or cancelled with finality in accordance with the rules, then it is no longer a legitimate labor
organization with the right to petition for a certification election.

A Final Note

Respondent, as employer, had been the one opposing the holding of a certification election among its rank-and-file
employees. This should not be the case. We have already declared that, in certification elections, the employer is a
bystander; it has no right or material interest to assail the certification election.35

[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. . .36

WHEREFORE, the petition is hereby GRANTED. Let the records of the case be remanded to the office of origin, the
Regional Office IV of the Department of Labor and Employment, for determination of the status of petitioner’s legal
personality. If petitioner is still a legitimate labor organization, then said office shall conduct a certification election
subject to the usual pre-election conference.

Labor II – 1
23.) G.R. No. 167426       January 12, 2009

CHRIS GARMENTS CORPORATION, petitioner,

vs.
HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS WORKERS UNION-PTGWO LOCAL CHAPTER No.
832, respondents.

QUISUMBING, J.:

Petitioner assails the Resolutions dated February 22, 20051 and March 16, 20052 of the Court of Appeals in CA-G.R.
SP No. 88444, which dismissed its petition for certiorari due to its failure to file a motion for reconsideration from the
Decision3 of the Secretary of the Department of Labor and Employment before filing the petition.

The relevant facts are as follows:

Petitioner Chris Garments Corporation is engaged in the manufacture and export of quality garments and apparel.

On February 8, 2002, respondent Chris Garments Workers Union–PTGWO, Local Chapter No. 832, filed a petition
for certification election with the Med-Arbiter. The union sought to represent petitioner’s rank-and-file employees not
covered by its Collective Bargaining Agreement (CBA) with the Samahan Ng Mga Manggagawa sa Chris Garments
Corporation–Solidarity of Union in the Philippines for Empowerment and Reforms (SMCGC-SUPER), the certified
bargaining agent of the rank-and-file employees. The union alleged that it is a legitimate labor organization with a
Certificate of Creation of Local/Chapter No. PTGWO-8324 dated January 31, 2002 issued by the Bureau of Labor
Relations.5

Petitioner moved to dismiss the petition. It argued that it has an existing CBA from July 1, 1999 to June 30, 2004
with SMCGC-SUPER which bars any petition for certification election prior to the 60-day freedom period. It also
contended that the union members are not its regular employees since they are direct employees of qualified and
independent contractors.6

The union countered that its members are regular employees of petitioner since: (1) they are engaged in activities
necessary and desirable to its main business although they are called agency employees; (2) their length of service
have spanned an average of four years; (3) petitioner controlled their work attitude and performance; and (4)
petitioner paid their salaries. The union added that while there is an existing CBA between petitioner and SMCGC-
SUPER, there are other rank-and-file employees not covered by the CBA who seek representation for collective
bargaining purposes. It also contended that the contract bar rule does not apply.7

The Med-Arbiter dismissed the petition. The Med-Arbiter ruled that there was no employer-employee relationship
between the parties since the union itself admitted that its members are agency employees. The Med-Arbiter also
held that even if the union members are considered direct employees of petitioner, the petition for certification
election will still fail due to the contract bar rule under Article 2328 of the Labor Code. Hence, a petition could only be
filed during the 60-day freedom period of the CBA or from May 1, 2004 to June 30, 2004. Nevertheless, the Med-
Arbiter ruled that the union may avail of the CBA benefits by paying agency fees to SMCGC-SUPER.9

In a Resolution10 dated December 27, 2002, the Secretary of Labor and Employment affirmed the decision of the
Med-Arbiter. She ruled that petitioner failed to prove that the union members are employees of qualified and
independent contractors with substantial capital or investment and added that petitioner had the right to control the
performance of the work of such employees. She also noted that the union members are garment workers who
performed activities directly related to petitioner’s main business. Thus, the union members may be considered part
of the bargaining unit of petitioner’s rank-and-file employees. However, she held that the petition could not be
entertained except during the 60-day freedom period. She also found no reason to split petitioner’s bargaining unit.

On May 16, 2003, the union filed a second petition for certification election. The Med-Arbiter dismissed the petition
on the ground that it was barred by a prior judgment. On appeal, the Secretary of Labor and Employment affirmed
the decision of the Med-Arbiter.11
Labor II – 1
On June 4, 2004, the union filed a third petition for certification election.12 The Med-Arbiter dismissed the petition on
the grounds that no employer-employee relationship exists between the parties and that the case was barred by a
prior judgment. On appeal, the Secretary of Labor and Employment granted the petition in a Decision13 dated
January 18, 2005. Thus:

WHEREFORE, the appeal filed by Chris Garment[s] Workers Union–PTGWO is hereby GRANTED. The 7 July
2004 Order of Med-Arbiter Tranquilino B. Reyes is hereby REVERSED and SET ASIDE. Accordingly, let the entire
records of the 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 regular rank-and-file employees of Chris Garments
Corporation, with the following choices:

1.    Chris Garments Workers Union – PTGWO Local Chapter No. 832;

2.    Samahan ng Manggagawa sa Chris Garments Corp. – SUPER; and

3.    No Union.

Pursuant to Section 13(e), Rule VIII of Department Order No. 40-03, the employer is hereby directed to submit to
the office of origin, within ten (10) days from receipt hereof, the certified list of its employees in the bargaining unit or
when necessary a copy of its payroll covering the same employees for the last three (3) months preceding the
issuance of this Decision.

SO DECIDED.14

Petitioner received a copy of the decision on January 25, 2005. On February 4, 2005, petitioner filed a petition for
certiorari with the Court of Appeals which was dismissed due to its failure to file a motion for reconsideration of the
decision before filing the petition.

Incidentally, a certification election was conducted on June 21, 2005 among petitioner’s rank-and-file employees
where SMCGC-SUPER emerged as the winning union. On January 20, 2006, the Med-Arbiter certified SMCGC-
SUPER as the sole and exclusive bargaining agent of all the rank-and-file employees of petitioner.15

Petitioner now comes before us arguing that:

I.

THE COURT OF APPEALS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION IN
DISMISSING THE PETITION [FOR CERTIORARI] ON THE SOLE GROUND THAT THE COMPANY DID NOT
FILE A MOTION FOR RECONSIDERATION DESPITE SECTION 21, RULE VIII OF DEPARTMENT ORDER NO.
43-03, . . . SERIES OF 2003, [WHICH] PROHIBITS THE FILING OF A MOTION FOR RECONSIDERATION FROM
A DECISION OF THE SECRETARY OF LABOR.

II.

THE COURT OF APPEALS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION IN
REFUSING TO RESOLVE THE MERITS OF THE PETITION AS IT DISMISSED THE SAME BY MERE, ALBEIT,
BASELESS TECHNICALITY WHICH ONLY FRUSTRATED RATHER THAN PROMOTED SUBSTANTIAL JUSTICE
...

III.

PUBLIC RESPONDENT SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION IN

REVERSING THE DECISION OF THE MED-ARBITER AND GIVING [DUE] COURSE TO THE PETITION FOR
CERTIFICATION ELECTION FILED BY PRIVATE RESPONDENT CGWU-PTGWO DESPITE THE ABSENCE OF
ANY EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE COMPANY AND ITS MEMBERS.

Labor II – 1
 IV.

PUBLIC RESPONDENT SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION IN

REVERSING THE FINDINGS OF THE MED-ARBITER THAT THE PETITION FOR CERTIFICATION ELECTION
WAS BARRED BY RES JUDICATA AND/OR THE PRINCIPLE OF CONCLUSIVENESS OF JUDGMENT.

V.

PUBLIC RESPONDENT SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION IN NOT
DISMISSING OUTRIGHT THE APPEAL OF PRIVATE RESPONDENT FOR FAILURE TO SUBMIT A
CERTIFICATION AGAINST FORUM SHOPPING.16

The principal issues are: (1) Is a motion for reconsideration necessary before a party can file a petition for certiorari
from the decision of the Secretary of Labor and Employment? (2) Is the case barred by res judicata or
conclusiveness of judgment? and (3) Is there an employer-employee relationship between petitioner and the union
members?

First.  It is settled that the filing of a motion for reconsideration is a prerequisite to the filing of a special civil action for
certiorari to give the lower court the opportunity to correct itself.17 This rule, however, admits of exceptions, such as
when a motion for reconsideration would be useless under the circumstances.18

Under Department Order No. 40-03, Series of 2003,19 the decision of the Secretary of Labor and Employment shall
be final and executory after ten days from receipt thereof by the parties and that it shall not be subject of a motion
for reconsideration.

In this case, the Decision dated January 18, 2005 of the Secretary of Labor and Employment was received by
petitioner on January 25, 2005. It would have become final and executory on February 4, 2005, the tenth day from
petitioner’s receipt of the decision. However, petitioner filed a petition for certiorari with the Court of Appeals on even
date. Clearly, petitioner availed of the proper remedy since Department Order No. 40-03 explicitly prohibits the filing
of a motion for reconsideration. Such motion becomes dispensable and not at all necessary.

Second.  The doctrine of res judicata provides that a final judgment or decree on the merits by a court of competent
jurisdiction is conclusive of the rights of the parties or their privies in all later suits on points and matters determined
in the former suit.20 The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2)
the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the
disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second
action, identity of parties, subject matter, and causes of action.21

Res judicata has a dual aspect: first, "bar by prior judgment" which is provided in Rule 39, Section 47(b)22 of the
1997 Rules of Civil Procedure and second, "conclusiveness of judgment" which is provided in Section 47(c)23 of the
same Rule.

There is "bar by prior judgment" when, as between the first case where the judgment was rendered, and the second
case that is sought to be barred, there is identity of parties, subject matter, and causes of action.24 In this instance,
the judgment in the first case constitutes an absolute bar to the second action. Otherwise put, the judgment or
decree of the court of competent jurisdiction on the merits concludes the litigation between the parties, as well as
their privies, and constitutes a bar to a new action or suit involving the same cause of action before the same or any
other tribunal.25

On the other hand, the doctrine of "conclusiveness of judgment" provides that issues actually and directly resolved
in a former suit cannot again be raised in any future case between the same parties involving a different cause of
action. Under this doctrine, identity of causes of action is not required but merely identity of issues. Otherwise
stated, conclusiveness of judgment bars the relitigation of particular facts or issues in another litigation between the
same parties on a different claim or cause of action.26

Labor II – 1
In the instant case, there is no dispute as to the presence of the first three elements of res judicata. The Resolution
dated December 27, 2002 of the Secretary of Labor and Employment on the first petition for certification election
became final and executory. It was rendered on the merits and the Secretary of Labor and Employment had
jurisdiction over the case. Now, is the fourth element – identity of parties, subject matter, and causes of action
between the first and third petitions for certification election – present? We hold in the negative.

The Secretary of Labor and Employment dismissed the first petition as it was filed outside the 60-day freedom
period. At that time therefore, the union has no cause of action since they are not yet legally allowed to challenge
openly and formally the status of SMCGC-SUPER as the exclusive bargaining representative of the bargaining unit.
Such dismissal, however, has no bearing in the instant case since the third petition for certification election was filed
well within the 60-day freedom period. Otherwise stated, there is no identity of causes of action to speak of since in
the first petition, the union has no cause of action while in the third, a cause of action already exists for the union as
they are now legally allowed to challenge the status of SMCGC-SUPER as exclusive bargaining representative.

Third.  The matter of employer-employee relationship has been resolved with finality by the Secretary of Labor and
Employment in the Resolution dated December 27, 2002. Since petitioner did not appeal this factual finding, then, it
may be considered as the final resolution of such issue. To reiterate, "conclusiveness of judgment" has the effect of
preclusion of issues.27

WHEREFORE, the instant petition is DENIED for lack of merit.

Labor II – 1
 24.) [G.R. NO. 181531 : July 31, 2009]

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIES -

MANILA PAVILION HOTEL CHAPTER, Petitioner, v. SECRETARY OF LABOR AND
EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN MANILA PAVILION HOTEL
LABOR UNION AND ACESITE PHILIPPINES HOTEL CORPORATION, Respondents.

DECISION

CARPIO MORALES, J.:

National Union of Workers in Hotels, Restaurants and Allied Industries - Manila Pavilion Hotel Chapter
(NUWHRAIN-MPHC), herein petitioner, seeks the reversal of the Court of Appeals November 8, 2007
Decision1 and of the Secretary of Labor and Employment's January 25, 2008 Resolution2 in OS-A-9-
52-05 which affirmed the Med-Arbiter's Resolutions dated January 22, 20073 and March 22, 2007.4

A certification election was conducted on June 16, 2006 among the rank-and-file employees of
respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following results:

EMPLOYEES IN VOTERS' LIST = 353

TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22

In view of the significant number of segregated votes, contending unions, petitioner, NUHWHRAIN-
MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union (HIMPHLU), referred the case
back to Med-Arbiter Ma. Simonette Calabocal to decide which among those votes would be opened
and tallied. Eleven (11) votes were initially segregated because they were cast
by dismissed employees, albeit the legality of their dismissal was still pending before the Court of
Appeals. Six other votes were segregated because the employees who cast them were already
occupying supervisory positions at the time of the election. Still five other votes were segregated
on the ground that they were cast by probationary employees and, pursuant to the
existing Collective Bargaining Agreement (CBA), such employees cannot vote. It bears
noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a probationary
employee, was counted.

By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 out of the 22
segregated votes, specially those cast by the 11 dismissed employees and those cast by the six
supposedly supervisory employees of the Hotel.

Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE),
arguing that the votes of the probationary employees should have been opened considering that
probationary employee Gatbonton's vote was tallied. And petitioner averred that respondent
HIMPHLU, which garnered 169 votes, should not be immediately certified as the bargaining agent, as
Labor II – 1
the opening of the 17 segregated ballots would push the number of valid votes cast to 338 (151 +
169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered would be one vote short of the
majority which would then become 169.

By the assailed Resolution of January 22, 2007, the Secretary of Labor and Employment (SOLE),
through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiter's Order. It held that
pursuant to Section 5, Rule IX of the Omnibus Rules Implementing the Labor Code on exclusion and
inclusion of voters in a certification election, the probationary employees cannot vote, as at the time
the Med-Arbiter issued on August 9, 2005 the Order granting the petition for the conduct of the
certification election, the six probationary employees were not yet hired, hence, they could not vote.

The SOLE further held that, with respect to the votes cast by the 11 dismissed employees, they could
be considered since their dismissal was still pending appeal.

As to the votes cast by the six alleged supervisory employees, the SOLE held that their votes should
be counted since their promotion took effect months after the issuance of the above-said August 9,
2005 Order of the Med-Arbiter, hence, they were still considered as rank-and-file.

Respecting Gatbonton's vote, the SOLE ruled that the same could be the basis to include the votes of
the other probationary employees, as the records show that during the pre-election conferences,
there was no disagreement as to his inclusion in the voters' list, and neither was it timely challenged
when he voted on election day, hence, the Election Officer could not then segregate his vote.

The SOLE further ruled that even if the 17 votes of the dismissed and supervisory employees were to
be counted and presumed to be in favor of petitioner, still, the same would not suffice to overturn the
169 votes garnered by HIMPHLU.

In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent was
proper.

Petitioner's motion for reconsideration having been denied by the SOLE by Resolution of March 22,
2007, it appealed to the Court of Appeals.

By the assailed Decision promulgated on November 8, 2007, the appellate court affirmed the ruling
of the SOLE. It held that, contrary to petitioner's assertion, the ruling in Airtime Specialist, Inc. v.
Ferrer Calleja5 stating that in a certification election, all rank-and-file employees in the appropriate
bargaining unit, whether probationary or permanent, are entitled to vote, is inapplicable to the case
at bar. For, the appellate court continued, the six probationary employees were not yet employed by
the Hotel at the time the August 9, 2005 Order granting the certification election was issued. It thus
held that Airtime Specialist applies only to situations wherein the probationary employees
were already employed as of the date of filing of the petition for certification election.

Respecting Gatbonton's vote, the appellate court upheld the SOLE's finding that since it was not
properly challenged, its inclusion could no longer be questioned, nor could it be made the basis to
include the votes of the six probationary employees.

The appellate court brushed aside petitioner's contention that the opening of the 17 segregated votes
would materially affect the results of the election as there would be the likelihood of a run-off
election in the event none of the contending unions receive a majority of the valid votes cast. It held
that the "majority" contemplated in deciding which of the unions in a certification election is the
winner refers to the majority of valid votes cast, not the simple majority of votes cast, hence, the
SOLE was correct in ruling that even if the 17 votes were in favor of petitioner, it would still be
insufficient to overturn the results of the certification election.

Labor II – 1
Petitioner's motion for reconsideration having been denied by Resolution of January 25, 2008, the
present recourse was filed.

Petitioner's contentions may be summarized as follows:

1. Inclusion of Jose Gatbonton's vote but excluding the vote of the six other probationary employees
violated the principle of equal protection and is not in accord with the ruling in Airtime Specialists,
Inc. v. Ferrer-Calleja;

2. The time of reckoning for purposes of determining when the probationary employees can be
allowed to vote is not August 9, 2005 - the date of issuance by Med-Arbiter Calabocal of the Order
granting the conduct of certification elections, but March 10, 2006 - the date the SOLE Order
affirmed the Med-Arbiter's Order.

3. Even if the votes of the six probationary employees were included, still, HIMPHLU could not be
considered as having obtained a majority of the valid votes cast as the opening of the 17 ballots
would increase the number of valid votes from 321 to 338, hence, for HIMPHLU to be certified as the
exclusive bargaining agent, it should have garnered at least 170, not 169, votes.

Petitioner justifies its not challenging Gatbonton's vote because it was precisely its position that
probationary employees should be allowed to vote. It thus avers that justice and equity dictate that
since Gatbonton's vote was counted, then the votes of the 6 other probationary employees should
likewise be included in the tally.

Petitioner goes on to posit that the word "order" in Section 5, Rule 9 of Department Order No. 40-03
reading "[A]ll employees who are members of the appropriate bargaining unit sought to be
represented by the petitioner at the time of the issuance of the order granting the conduct of
certification election shall be allowed to vote" refers to an order which has already become final and
executory, in this case the March 10, 2002 Order of the SOLE.

Petitioner thus concludes that if March 10, 2006 is the reckoning date for the
determination of the eligibility of workers, then all the segregated votes cast by the
probationary employees should be opened and counted, they having already been working
at the Hotel on such date.

Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner argues that the
same was not proper for if the 17 votes would be counted as valid, then the total number of votes
cast would have been 338, not 321, hence, the majority would be 170; as such, the votes garnered
by HIMPHLU is one vote short of the majority for it to be certified as the exclusive bargaining agent.

The relevant issues for resolution then are first, whether employees on probationary
status at the time of the certification elections should be allowed to vote, and second,
whether HIMPHLU was able to obtain the required majority for it to be certified as the
exclusive bargaining agent.

On the first issue, the Court rules in the affirmative.

The inclusion of Gatbonton's vote was proper not because it was not questioned but because
probationary employees have the right to vote in a certification election. The votes of the six other
probationary employees should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-
Calleja holds:

In a certification election, all rank and file employees in the appropriate bargaining unit,
whether probationary or permanent are entitled to vote. This principle is clearly stated in Art.
Labor II – 1
255 of the Labor Code which states that the "labor organization designated or selected by the
majority of the employees in an appropriate bargaining unit shall be the exclusive representative of
the employees in such unit for purposes of collective bargaining." Collective bargaining covers all
aspects of the employment relation and the resultant CBA negotiated by the certified union binds all
employees in the bargaining unit. Hence, all rank and file employees, probationary or permanent,
have a substantial interest in the selection of the bargaining representative. The Code makes no
distinction as to their employment status as basis for eligibility in supporting the petition
for certification election. The law refers to "all" the employees in the bargaining unit. All
they need to be eligible to support the petition is to belong to the "bargaining unit."
(Emphasis supplied) cralawlibrary

Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of the
Omnibus Rules Implementing the Labor Code, provides:

Rule II

Section 2. Who may join labor unions and workers' associations. - All persons employed in
commercial, industrial and agricultural enterprises, including employees of government owned or
controlled corporations without original charters established under the Corporation Code, as well as
employees of religious, charitable, medical or educational institutions whether operating for profit or
not, shall have the right to self-organization and to form, join or assist labor unions for purposes of
collective bargaining: provided, however, that supervisory employees shall not be eligible for
membership in a labor union of the rank-and-file employees but may form, join or assist separate
labor unions of their own. Managerial employees shall not be eligible to form, join or assist any labor
unions for purposes of collective bargaining. Alien employees with valid working permits issued by
the Department may exercise the right to self-organization and join or assist labor unions for
purposes of collective bargaining if they are nationals of a country which grants the same or similar
rights to Filipino workers, as certified by the Department of Foreign Affairs.

For purposes of this section, any employee, whether employed for a definite period or not, shall
beginning on the first day of his/her service, be eligible for membership in any labor organization.

All other workers, including ambulant, intermittent and other workers, the self-employed, rural
workers and those without any definite employers may form labor organizations for their mutual aid
and protection and other legitimate purposes except collective bargaining. (Emphasis supplied) cralawlibrary

The provision in the CBA disqualifying probationary employees from voting cannot override
the Constitutionally-protected right of workers to self-organization, as well as the
provisions of the Labor Code and its Implementing Rules on certification elections and
jurisprudence thereon.

A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not
contrary to law, morals, good customs, public order or public policy.6

Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to support their
position that probationary employees hired after the issuance of the Order granting the petition for
the conduct of certification election must be excluded, should not be read in isolation and must be
harmonized with the other provisions of D.O. Rule XI, Sec. 5 of D.O. 40-03, viz:

Rule XI

x   x   x

Labor II – 1
Section 5. Qualification of voters; inclusion-exclusion. - All employees who are members of the
appropriate bargaining unit sought to be represented by the petitioner at the time of the issuance of
the order granting the conduct of a certification election shall be eligible to vote. An employee who
has been dismissed from work but has contested the legality of the dismissal in a forum of
appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification
election shall be considered a qualified voter, unless his/her dismissal was declared valid in a final
judgment at the time of the conduct of the certification election. (Emphasis supplied) cralawlibrary

x   x   x

Section 13. Order/Decision on the petition. - Within ten (10) days from the date of the last hearing,
the Med-Arbiter shall issue a formal order granting the petition or a decision denying the same. In
organized establishments, however, no order or decision shall be issued by the Med-Arbiter during
the freedom period.

The order granting the conduct of a certification election shall state the following:

(a) the name of the employer or establishment;

(b) the description of the bargaining unit;

(c) a statement that none of the grounds for dismissal enumerated in the succeeding paragraph
exists;

(d) the names of contending labor unions which shall appear as follows: petitioner union/s in the
order in which their petitions were filed, forced intervenor, and no union; and cralawlibrary

(e) a directive upon the employer and the contending union(s) to submit within ten (10) days from
receipt of the order, the certified list of employees in the bargaining unit, or where necessary, the
payrolls covering the members of the bargaining unit for the last three (3) months prior to the
issuance of the order. (Emphasis supplied) cralawlibrary

x   x   x

Section 21. Decision of the Secretary. - The Secretary shall have fifteen (15) days from receipt of the
entire records of the petition within which to decide the appeal. The filing of the memorandum of
appeal from the order or decision of the Med-Arbiter stays the holding of any certification election.

The decision of the Secretary shall become final and executory after ten (10) days from receipt
thereof by the parties. No motion for reconsideration of the decision shall be entertained. (Emphasis
supplied) cralawlibrary

In light of the immediately-quoted provisions, and prescinding from the principle that all
employees are, from the first day of their employment, eligible for membership in a labor
organization, it is evident that the period of reckoning in determining who shall be
included in the list of eligible voters is, in cases where a timely appeal has been
filed from the Order of the Med - Arbiter, the date when the Order of the Secretary of Labo
r and Employment, whether affirming or denying the appeal, becomes final and executory.

The filing of an appeal to the SOLE from the Med-Arbiter's Order stays its execution, in
accordance with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to furnish
him/her with the list of eligible voters pending the resolution of the appeal.

Labor II – 1
During the pendency of the appeal, the employer may hire additional employees. To exclude the
employees hired after the issuance of the Med-Arbiter's Order but before the appeal has been
resolved would violate the guarantee that every employee has the right to be part of a labor
organization from the first day of their service.

In the present case, records show that the probationary employees, including Gatbonton,
were included in the list of employees in the bargaining unit submitted by the Hotel
on May 25, 2006 in compliance with the directive of the Med-Arbiter after the appeal and
subsequent motion for reconsideration have been denied by the SOLE, rendering the Med-
Arbiter's August 22, 2005 Order final and executory 10 days after the March 22, 2007
Resolution (denying the motion for reconsideration of the January 22 Order denying the
appeal), and rightly so. Because, for purposes of self-organization, those employees are, in
light of the discussion above, deemed eligible to vote.

A certification election is the process of determining the sole and exclusive bargaining agent of the
employees in an appropriate bargaining unit for purposes of collective bargaining. Collective
bargaining, refers to the negotiated contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other terms and conditions of employment in a
bargaining unit.7

The significance of an employee's right to vote in a certification election cannot thus be

overemphasized. For he has considerable interest in the determination of who shall represent him in
negotiating the terms and conditions of his employment.

Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the Order of the
Med-Arbiter, experience shows that it sometimes takes months to be resolved. To rule then that only
those employees hired as of the date of the issuance of the Med-Arbiter's Order are qualified to vote
would effectively disenfranchise employees hired during the pendency of the appeal. More
importantly, reckoning the date of the issuance of the Med-Arbiter's Order as the cut-off date would
render inutile the remedy of appeal to the SOLE. ςηαñrοblεš  νιr†υαl  lαω lιbrαrÿ

But while the Court rules that the votes of all the probationary employees should be included, under
the particular circumstances of this case and the period of time which it took for the appeal to be
decided, the votes of the six supervisory employees must be excluded because at the time the
certification elections was conducted, they had ceased to be part of the rank and file, their promotion
having taken effect two months before the election.

As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court
rules in the negative. It is well-settled that under the so-called "double majority rule," for
there to be a valid certification election, majority of the bargaining unit must have voted
AND the winning union must have garnered majority of the valid votes cast.

Prescinding from the Court's ruling that all the probationary employees' votes should be deemed
valid votes while that of the supervisory employees should be excluded, it follows that the number of
valid votes cast would increase - from 321 to 337. Under Art. 256 of the Labor Code, the union
obtaining the majority of the valid votes cast by the eligible voters shall be certified as the sole and
exclusive bargaining agent of all the workers in the appropriate bargaining unit. This majority is 50%
+ 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.

HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not
able to obtain a majority vote. The position of both the SOLE and the appellate court that the
opening of the 17 segregated ballots will not materially affect the outcome of the certification election
as for, so they contend, even if such member were all in favor of petitioner, still, HIMPHLU would
win, is thus untenable.

Labor II – 1
It bears reiteration that the true importance of ascertaining the number of valid votes cast
is for it to serve as basis for computing the required majority, and not just to determine
which union won the elections. The opening of the segregated but valid votes has thus become
material. To be sure, the conduct of a certification election has a two-fold objective: to determine
the appropriate bargaining unit and to ascertain the majority representation of the
bargaining representative, if the employees desire to be represented at all by anyone. It is
not simply the determination of who between two or more contending unions won, but
whether it effectively ascertains the will of the members of the bargaining unit as to
whether they want to be represented and which union they want to represent them.

Having declared that no choice in the certification election conducted obtained the required majority,
it follows that a run-off election must be held to determine which between HIMPHLU and
petitioner should represent the rank-and-file employees.

A run-off election refers to an election between the labor unions receiving the two (2)
highest number of votes in a certification or consent election with three (3) or more
choices, where such a certified or consent election results in none of the three (3) or more
choices receiving the majority of the valid votes cast; provided that the total number of
votes for all contending unions is at least fifty percent (50%) of the number of votes
cast.8 With 346 votes cast, 337 of which are now deemed valid and HIMPHLU having only garnered
169 and petitioner having obtained 151 and the choice "NO UNION" receiving 1 vote, then the
holding of a run-off election between HIMPHLU and petitioner is in order.

WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and Resolution dated
January 25, 2008 of the Court of Appeals affirming the Resolutions dated January 22, 2007 and
March 22, 2007, respectively, of the Secretary of Labor and Employment in OS-A-9-52-05 are
ANNULLED and SET ASIDE.

The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to cause the
holding of a run-off election between petitioner, National Union of Workers in Hotels, Restaurants and
Allied Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-MPC), and respondent Holiday Inn Manila
Pavilion Hotel Labor Union (HIMPHLU).

Labor II – 1
25.) EAGLE RIDGE GOLF & COUNTRY CLUB v. CA & EAGLE RIDGE EMPLOYEES UNION
(EREU) GR NO. 178989 | MARCH 18, 2010 J. VELASCO, J.R. Topic: EFFECT OF MEMBERS’
RETRACTION ON PETITION

Summary: At least 20% of Eagle Ridge's rank-and-file employees had a meeting where they organized
themselves into an independent labor union "Eagle Ridge Employees Union, elected a set of officers, and
ratified their constitution and by-laws. They applied and was issued a certificate of registration by the DOLE.
Petitioner filed for cancellation of the Union’s registration alleging that the union declared in its application for
registration having 30 members, when the minutes of its December 6, 2005 organizational meeting showed it
only had 26 members and that 5 members who attended the meeting had manifested their desire to withdraw
from the union. Thus, the union membership reduced to 20 or 21, either of which is below the mandatory
minimum 20% membership requirement under Art. 234 (c) of the Labor Code. Reckoned from 112 rank-and-
file employees of Eagle Ridge, the required number would be 22 or 23 employees. The issue was w/n there was
abona fide compliance with the registration requirements? The fact that six union members, indeed, expressed
the desire to withdraw their membership through their affidavits of retraction will not cause the cancellation of
registration on the ground of violation of Art. 234 (c) of the Labor Code requiring the mandatory minimum 20%
membership of rank-and-file employees in the employees' union. When the EREU filed its application for
registration on December 19, 2005, there were clearly 30 union members. Thus, when the certificate of
registration was granted, there is no dispute that the Union complied with the mandatory 20% membership
requirement

FACTS:
 Eagle Ridge is a corporation engaged in the business of maintaining golf courses. It had, at the end of CY
2005, around 112 rank-and-file employees.
 On December 6, 2005, at least 20% of Eagle Ridge’s rank- and-file employees— the percentage threshold
required under Article 234(c) of the Labor Code for union registration—had a meeting where they organized
themselves into an independent labor union, named "Eagle Ridge Employees Union" (EREU or Union), elected
a set of officers, and ratified their constitution and by- laws.
 On December 19, 2005, EREU formally applied for registration before the DOLE Regional Office IV. In
time, DOLE RO IV granted the application. The EREU then filed a petition for certification election in Eagle
Ridge Golf & Country Club. Eagle Ridge opposed this petition, followed by its filing of a petition for the
cancellation of the application.
 Eagle Ridge’s petition ascribed misrepresentation, false statement, or fraud to EREU in connection with the
adoption of its constitution and by-laws, the numerical composition of the Union, and the election of its officers.
◦ It alleged that the EREU declared in its application for registration having 30 members, when the minutes of
its December 6, 2005 organizational meeting showed it only had 26 members. ◦ The misrepresentation was
exacerbated by the discrepancy between the certification issued by the Union secretary and president that 25
members actually ratified the constitution and by-laws on December 6, 2005 and the fact that 26 members
affixed their signatures on the documents, making one signature a forgery.

◦ It contended that five employees who attended the organizational meeting had manifested the desire to
withdraw from the union. The five executed individual affidavits or Sinumpaang Salaysay on February 15,
2006, attesting that they arrived late at said meeting which they claimed to be drinking spree; that they did not
know that the documents they signed on that occasion pertained to the organization of a union; and that they
now wanted to be excluded from the Union.

◦ The withdrawal of the five, Eagle Ridge maintained, effectively reduced the union membership to 20 or
21, either of which is below the mandatory minimum 20% membership requirement under Art. 234(c) of
the Labor Code. Reckoned from 112 rank-and-file employees of Eagle Ridge, the required number would be 22
or 23 employees.

Labor II – 1
 EREU alleged that: ◦ discrepancies are not real because before filing of its application on December 19, 2005,
four additional employees joined the union on December 8, 2005, thus raising the union membership to 30
members as of December 19, 2005 ◦ the understatement by one member who ratified the constitution and by-
laws was a typographical error, which does not make it either grave or malicious warranting the cancellation of
the union’s registration ◦ the retraction of 5 union members should not be given any credence for the reasons
that: the sworn statements of the five retracting union members sans other affirmative evidence presented hardly
qualify as clear and credible evidence considering the joint affidavits of the other members attesting to the
orderly conduct of the organizational meeting;
▪ the retracting members did not deny signing the union documents;
▪ it can be presumed that "duress, coercion or valuable consideration" was brought to bear on the
retracting members; and
▪ 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.

 After due proceedings, the DOLE Regional Director, focusing on the question of misrepresentation, issued an
Order finding for Eagle Ridge. Aggrieved, the Union appealed to the BLR, which affirmed the appealed order
of the DOLE Regional Director. EREU then interposed a motion for reconsideration which was granted. Eagle
Ridge sought but was denied reconsideration. Eagle Ridge thereupon went to the CA, which dismissed the
petition for certiorari. The CA later denied Eagle Ridge’s motion for reconsideration, hence the recourse with
the SC.

1. Whether or not there was fraud in the application to merit the cancellation of the EREU’s registration? NO,
a scrutiny of the records fails to show any misrepresentation, false statement, or fraud committed by EREU to
merit cancellation of its registration.

The members of the EREU totaled 30 employees when it applied on December 19, 2005 for registration. The
Union thereby complied with the mandatory minimum 20% membership requirement under Art. 234(c). Of note
is the undisputed number of 112 rank-and-file employees in Eagle Ridge, as shown in the Sworn Statement of
the Union president and secretary and confirmed by Eagle Ridge in its petition for cancellation.

The fact that six union members, indeed, expressed the desire to withdraw their membership through their
affidavits of retraction will not cause the cancellation of registration on the ground of violation of Art. 234(c) of
the Labor Code requiring the mandatory minimum 20% membership of rank-and-file employees in the
employees’ union.

 The six retracting union members clearly severed and withdrew their union membership. SC held that such
separation from the Union cannot detrimentally affect the registration of the Union.

 Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of
at least 22 employees (112 x 205 = 22.4). When the EREU filed its application for registration on December 19,
2005, there were clearly 30 union members. Thus, when the certificate of registration was granted, there is no
dispute that the Union complied with the mandatory 20% membership requirement. With the withdrawal of six
union members, there is still compliance with the mandatory membership requirement under Art. 234(c), for the
remaining 24 union members constitute more than the 20% membership requirement of 22 employees

Evidently, as the Union persuasively argues, the withdrawal of six member-employees from the Union will
affect neither the Union’s registration nor its petition for certification election, as their affidavits of
retraction were executed after the Union’s petition for certification election had been filed. The initial five
Labor II – 1
affidavits of retraction were executed on February 15, 2006; the sixth, on March 15, 2006. Indisputably, all six were
executed way after the filing of the petition for certification election on January 10, 2006.

In Eastland Manufacturing Company, Inc. v. Noriel,52 the Court emphasized, and reiterated its earlier rulings,53 that
"even if there were less than 30% [the required percentage of minimum membership then] of the employees asking
for a certification election, that of itself would not be a bar to respondent Director ordering such an election provided,
of course, there is no grave abuse of discretion."54 Citing Philippine Association of Free Labor Unions v. Bureau of
Labor Relations,55 the Court emphasized that a certification election is the most appropriate procedure for the
desired goal of ascertaining which of the competing organizations should represent the employees for the purpose
of collective bargaining.56

Indeed, where the company seeks the cancellation of a union’s registration during the pendency of a
petition for certification election, the same grounds invoked to cancel should not be used to bar the
certification election. A certification election is the most expeditious and fairest mode of ascertaining the will of a
collective bargaining unit as to its choice of its exclusive representative.57 It is the fairest and most effective way of
determining which labor organization can truly represent the working force. It is a fundamental postulate that the will
of the majority, if given expression in an honest election with freedom on the part of the voters to make their choice,
is controlling.58

The Court ends this disposition by reproducing the following apt excepts from its holding in S.S. Ventures
International, Inc. v. S.S. Ventures Labor Union (SSVLU) on the effect of the withdrawal from union membership
right before or after the filing of a petition for certification election:

We are not persuaded. As aptly noted by both the BLR and CA, these mostly undated written statements submitted
by Ventures on March 20, 2001, or seven months after it filed its petition for cancellation of registration, partake of
the nature of withdrawal of union membership executed after the Union’s filing of a petition for certification election
on March 21, 2000. We have in precedent cases said that the employees’ withdrawal from a labor union
made before the filing of the petition for certification election is presumed voluntary, while withdrawal after
the filing of such petition is considered to be involuntary and does not affect the same. Now then, if
a withdrawal from union membership done after a petition for certification election has been filed does not
vitiate such petition, is it not but logical to assume that such withdrawal cannot work to nullify the
registration of the union? Upon this light, the Court is inclined to agree with the CA that the BLR did not abuse its
discretion nor gravely err when it concluded that the affidavits of retraction of the 82 members had no evidentiary
weight.59 (Emphasis supplied.)

WHEREFORE, premises considered, we DISMISS the instant petition for lack of merit.

Petition dismissed

Labor II – 1
26.) PICOP Resources Inc. v Taneca Contract Bar Rule | G.R. No. 160828 | August 9, 2010 | Peralta, J. |
Emma

FACTS:
1. On February 13, 2001, respondents Tañeca and 14 others filed a Complaint for unfair labor practice, illegal
dismissal and money claims against petitioner PICOP Resources , Inc. (PRI). Respondents were regular rank-
and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines
Federation of Labor (NAMAPRISPFL), which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI.

2. PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5) years from
May 22, 1995 until May 22, 2000.

3. On May 16, 2000, Atty. Proculo P. Fuentes, VP of PRI sent a letter to the management of PRI demanding the
termination of employees who allegedly campaigned for, supported and signed the Petition for Certification
Election of the Federation of Free Workers Union (FFW) during the effectivity of the CBA.

4. NAMAPRI-SPFL considered said act of campaigning for and signing the petition for certification election of
FFW as an act of disloyalty and a valid basis for termination for a cause in accordance with its Constitution and
By-Laws, and the terms and conditions of the CBA.

5. On October 16, 2000, PRI served notices of termination for causes to the 31 out of the 46 employees whom
NAMAPRIL-SPFL sought to be terminated on the ground of "acts of disloyalty" committed against it. A Notice
was also served on the DOLE, Caraga Region.

6. Respondents alleged that none of them ever withdrew their membership or submitted to PRI any union dues
and check-off disauthorizations against NAMAPRISPFL. They claimed that they continue to remain on record
as bona fide members. They insisted that mere affixation of signature on such authorization was not per se an
act of disloyalty. They claimed that while it may be true that they signed the said authorization before the start
of the freedom period, the petition of FFW was only filed with the DOLE on May 18, 2000, or 58 days after the
start of the freedom period.

7. Respondents, likewise, argued that at the time NAMAPRI-SPFL demanded their termination, it was no
longer the bargaining representative of the rank and-file workers of PRI, because the CBA had already expired
on May 22, 2000. Hence, there could be no justification in PRI's act of dismissing respondents due to acts of
disloyalty.

8. Respondents asserted that the act of PRI in giving in to the wishes of the Union in discharging them on the
ground of disloyalty to the Union amounted to interference with, restraint or coercion of respondents' exercise
of their right to self-organization. The act indirectly required petitioners to support and maintain their
membership with NAMAPRI-SPFL as a condition for their continued employment.

9. The Labor Arbiter declared the respondents' dismissal to be illegal and ordered PRI to reinstate respondents
to their former or equivalent positions without loss of seniority rights and to jointly and solidarily pay their
backwages.

10. PRI and NAMAPRI-SPFL appealed to the NLRC which reversed the decision of the Labor Arbiter; thus,
declaring the dismissal of respondents from employment as legal. Respondents filed a motion for
reconsideration, but it was denied for lack of merit. Respondents filed a petition for certiorari under Rule 65
before the CA.

Labor II – 1
11. The CA reversed and set aside the assailed Resolutions of the NLRC and reinstated the Decision of the
Labor Arbiter.

ISSUE/RATIO: (WON THERE ARE GROUNDS TO EXPEL RESPONDENTS FROM THE UNION BC OF
SUPPORTING ANOTHER UNION, BY SIGNING AN AUTHORIZATION TO PETITION FOR CE)
COURT RULED NO

Whether or not a CBA can be given its effectivity in all its Terms and Conditions, even beyond the 5-year
period when no CBA has yet been entered into, possessing just cause to terminate on the grounds herein

However, as to the third requisite, there is no sufficient evidence to support the decision of PRI to terminate the
employment of the respondents.

 The Court is unconvinced by PRI’s allegation that respondents were terminated based on the alleged acts of
disloyalty. It contends that their acts are a violation of the Union Security Clause, as provided in their CBA.

We are in consonance with the Court of Appeals when it held that the mere signing of the authorization
in support of the Petition for Certification Election of FFW on March 19, 20 and 21, or before the
"freedom period," is not sufficient ground to terminate the employment of respondents inasmuch as the
petition itself was actually filed during the freedom period. Nothing in the records would show that
respondents failed to maintain their membership in good standing in the Union. Respondents did not resign or
withdraw their membership from the Union to which they belong. Respondents continued to pay their union
dues and never joined the FFW.

Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization
letter to file a petition for certification election as they signed it outside the freedom period. However, we are
constrained to believe that an "authorization letter to file a petition for certification election" is different
from an actual "Petition for Certification Election." Likewise, as per records, it was clear that the actual
Petition for Certification Election of FFW was filed only on May 18, 2000.17 Thus, it was within the ambit of
the freedom period which commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is
prohibited is the filing of a petition for certification election outside the 60-day freedom period.18 This is not the
situation in this case. If at all, the signing of the authorization to file a certification election was merely
preparatory to the filing of the petition for certification election, or an exercise of respondents’ right to
self-organization.

 The mere signing of the authorization in support of the Petition before the "freedom period," is not sufficient
ground to terminate the employment

An "authorization letter to file a petition for certification election" is different from an actual "Petition
for Certification Election ."

Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW was filed within
the ambit of the freedom period. Strictly speaking, what is prohibited is the filing of a petition for certification
election outside the 60-day freedom period.

Applying the same provision, it can be said that while it is incumbent for the employer to continue to recognize the
majority status of the incumbent bargaining agent even after the expiration of the freedom period, they could only do
so when no petition for certification election was filed. The reason is, with a pending petition for certification, any
such agreement entered into by management with a labor organization is fraught with the risk that such a labor
union may not be chosen thereafter as the collective bargaining representative.20 The provision for status quo is

Labor II – 1
conditioned on the fact that no certification election was filed during the freedom period. Any other view would
render nugatory the clear statutory policy to favor certification election as the means of ascertaining the true
expression of the will of the workers as to which labor organization would represent them.21

In the instant case, four (4) petitions were filed as early as May 12, 2000. In fact, a petition for certification election
was already ordered by the Med-Arbiter of DOLE Caraga Region on August 23, 2000.22 Therefore, following Article
256, at the expiration of the freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the incumbent
bargaining agent does not hold true when petitions for certification election were filed, as in this case.

Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic
provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute
a bar to a filing of a petition for certification election. When there is a representational issue, the status quo provision
in so far as the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd
situation where the union members will be forced to maintain membership by virtue of the union security clause
existing under the CBA and, thereafter, support another union when filing a petition for certification election. If we
apply it, there will always be an issue of disloyalty whenever the employees exercise their right to self-organization.
The holding of a certification election is a statutory policy that should not be circumvented,23 or compromised. 1avvphi

Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their freedom
to choose who should be their bargaining representative is of paramount importance. The fact that there already
exists a bargaining representative in the unit concerned is of no moment as long as the petition for certification
election was filed within the freedom period. What is imperative is that by such a petition for certification election the
employees are given the opportunity to make known of who shall have the right to represent them thereafter. Not
only some, but all of them should have the right to do so. What is equally important is that everyone be given a
democratic space in the bargaining unit concerned.24

We will emphasize anew that the power to dismiss is a normal prerogative of the employer. This, however, is not
without limitations. The employer is bound to exercise caution in terminating the services of his employees
especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement.
Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee,
because it affects not only his position but also his means of livelihood. Employers should, therefore, respect and
protect the rights of their employees, which include the right to labor.25

An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If
reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally
dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for
every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no
longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the
decision. Moreover, respondents, having been compelled to litigate in order to seek redress for their illegal
dismissal, are entitled to the award of attorney’s fees equivalent to 10% of the total monetary award.26

Petition denied.

Labor II – 1
26.) G.R. No. 169754               February 23, 2011

LEGEND INTERNATIONAL RESORTS LIMITED, Petitioner,

vs.
KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT), Respondent.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari assails the September 18, 2003 Decision of the Court of Appeals in CA-G.R.
SP No. 72848 which found no grave abuse of discretion on the part of the Office of the Secretary of the Department
of Labor and Employment (DOLE) which ruled in favor of Kilusang Manggagawa ng Legenda (KML). Also assailed
is the September 14, 2005 Resolution denying petitioner’s motion for reconsideration.

Factual Antecedents

On June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando, Pampanga, a Petition for
Certification Election1 docketed as Case No. RO300-0106-RU-001. KML alleged that it is a legitimate labor
organization of the rank and file employees of Legend International Resorts Limited (LEGEND). KML claimed that it
was issued its Certificate of Registration No. RO300-0105-UR-002 by the DOLE on May 18, 2001.

LEGEND moved to dismiss2 the petition alleging that KML is not a legitimate labor organization because its
membership is a mixture of rank and file and supervisory employees in violation of Article 245 of the Labor Code.
LEGEND also claimed that KML committed acts of fraud and misrepresentation when it made it appear that certain
employees attended its general membership meeting on April 5, 2001 when in reality some of them were either at
work; have already resigned as of March 2001; or were abroad.

In its Comment,3 KML argued that even if 41 of its members are indeed supervisory employees and therefore
excluded from its membership, the certification election could still proceed because the required number of the total
rank and file employees necessary for certification purposes is still sustained. KML also claimed that its legitimacy
as a labor union could not be collaterally attacked in the certification election proceedings but only through a
separate and independent action for cancellation of union registration. Finally, as to the alleged acts of
misrepresentation, KML asserted that LEGEND failed to substantiate its claim.

Ruling of the Med-Arbiter

On September 20, 2001, the Med-Arbiter4 rendered judgment5 dismissing for lack of merit the petition for certification
election. The Med-Arbiter found that indeed there were several supervisory employees in KML’s membership. Since
Article 245 of the Labor Code expressly prohibits supervisory employees from joining the union of rank and file
employees, the Med-Arbiter concluded that KML is not a legitimate labor organization. KML was also found to have
fraudulently procured its registration certificate by misrepresenting that 70 employees were among those who
attended its organizational meeting on April 5, 2001 when in fact they were either at work or elsewhere.

KML thus appealed to the Office of the Secretary of the DOLE.

Ruling of the Office of the Secretary of DOLE

On May 22, 2002, the Office of the Secretary of DOLE rendered its Decision6 granting KML’s appeal thereby
reversing and setting aside the Med-Arbiter’s Decision. The Office of the Secretary of DOLE held that KML’s
legitimacy as a union could not be collaterally attacked, citing Section 5,7 Rule V of Department Order No. 9, series
of 1997.

Labor II – 1
The Office of the Secretary of DOLE also opined that Article 245 of the Labor Code merely provides for the
prohibition on managerial employees to form or join a union and the ineligibility of supervisors to join the union of the
rank and file employees and vice versa. It declared that any violation of the provision of Article 245 does not ipso
facto render the existence of the labor organization illegal. Moreover, it held that Section 11, paragraph II of Rule XI
which provides for the grounds for dismissal of a petition for certification election does not include mixed
membership in one union.

The dispositive portion of the Office of the Secretary of DOLE’s Decision reads:

WHEREFORE, the appeal is hereby GRANTED and the order of the Med-Arbiter dated 20 September 2001 is
REVERSED and SET ASIDE.

Accordingly, let the entire record of the case be remanded to the regional office of origin for the immediate conduct
of the certification election, subject to the usual pre-election conference, among the rank and file employees of
LEGEND INTERNATIONAL RESORTS LIMITED with the following choices:

1. KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT); and

2. NO UNION.

Pursuant to Rule XI, Section II.1 of D.O. No. 9, the employer is hereby directed to submit to the office of origin,
within ten days from receipt of the decision, the certified list of employees in the bargaining unit for the last three (3)
months prior to the issuance of this decision.

SO DECIDED.8

LEGEND filed its Motion for Reconsideration9 reiterating its earlier arguments. It also alleged that on August 24,
2001, it filed a Petition10 for Cancellation of Union Registration of KML docketed as Case No. RO300-0108-CP-001
which was granted11 by the DOLE Regional Office No. III of San Fernando, Pampanga in its Decision12 dated
November 7, 2001.

In a Resolution13 dated August 20, 2002, the Office of the Secretary of DOLE denied LEGEND’s motion for
reconsideration. It opined that Section 11, paragraph II(a), Rule XI of Department Order No. 9 requires a final order
of cancellation before a petition for certification election may be dismissed on the ground of lack of legal personality.
Besides, it noted that the November 7, 2001 Decision of DOLE Regional Office No. III of San Fernando, Pampanga
in Case No. RO300-0108-CP-001 was reversed by the Bureau of Labor Relations in a Decision dated March 26,
2002.

Ruling of the Court of Appeals

Undeterred, LEGEND filed a Petition for Certiorari14 with the Court of Appeals docketed as CA-G.R. SP No. 72848.
LEGEND alleged that the Office of the Secretary of DOLE gravely abused its discretion in reversing and setting
aside the Decision of the Med-Arbiter despite substantial and overwhelming evidence against KML.

For its part, KML alleged that the Decision dated March 26, 2002 of the Bureau of Labor Relations in Case No.
RO300-0108-CP-001 denying LEGEND’s petition for cancellation and upholding KML’s legitimacy as a labor
organization has already become final and executory, entry of judgment having been made on August 21, 2002.15

The Office of the Secretary of DOLE also filed its Comment16 asserting that KML’s legitimacy cannot be attacked
collaterally. Finally, the Office of the Secretary of DOLE stressed that LEGEND has no legal personality to
participate in the certification election proceedings.

On September 18, 2003, the Court of Appeals rendered its Decision17 finding no grave abuse of discretion on the
part of the Office of the Secretary of DOLE. The appellate court held that the issue on the legitimacy of KML as a
labor organization has already been settled with finality in Case No. RO300-0108-CP-001. The March 26, 2002
Decision of the Bureau of Labor Relations upholding the legitimacy of KML as a labor organization had long become
Labor II – 1
final and executory for failure of LEGEND to appeal the same. Thus, having already been settled that KML is a
legitimate labor organization, the latter could properly file a petition for certification election. There was nothing left
for the Office of the Secretary of DOLE to do but to order the holding of such certification election.

The dispositive portion of the Decision reads:

WHEREFORE, in view of the foregoing, and finding that no grave abuse of discretion amounting to lack or excess of
jurisdiction has been committed by the Department of Labor and Employment, the assailed May 22, 2002 Decision
and August 20, 2002 Resolution in Case No. RO300-106-RU-001 are UPHELD and AFFIRMED. The instant petition
is DENIED due course and, accordingly, DISMISSED for lack of merit.18

LEGEND filed a Motion for Reconsideration19 alleging, among others, that it has appealed to the Court of Appeals
the March 26, 2002 Decision in Case No. RO300-0108-CP-001 denying its petition for cancellation and that it is still
pending resolution.

On September 14, 2005, the appellate court denied LEGEND’s motion for reconsideration.

Hence, this Petition for Review on Certiorari raising the lone assignment of error, viz:

WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN THE

APPLICATION OF LAW IN DENYING THE PETITIONER’S PETITION FOR CERTIORARI.20

Petitioner’s Arguments

LEGEND submits that the Court of Appeals grievously erred in ruling that the March 26, 2002 Decision denying its
Petition for Cancellation of KML’s registration has already become final and executory. It asserts that it has
seasonably filed a Petition for Certiorari21 before the CA docketed as CA-G.R. SP No. 72659 assailing said Decision.
In fact, on June 30, 2005, the Court of Appeals granted the petition, reversed the March 26, 2002 Decision of the
Bureau of Labor Relations and reinstated the November 7, 2001 Decision of the DOLE Regional Office III ordering
the cancellation of KML’s registration.

Finally, LEGEND posits that the cancellation of KML’s certificate of registration should retroact to the time of its
issuance.22 It thus claims that the petition for certification election and all of KML’s activities should be nullified
because it has no legal personality to file the same, much less demand collective bargaining with LEGEND.23

LEGEND thus prays that the September 20, 2001 Decision of the Med-Arbiter dismissing KML’s petition for
certification election be reinstated.24

Respondent’s Arguments

In its Comment filed before this Court dated March 21, 2006, KML insists that the Decision of the Bureau of Labor
Relations upholding its legitimacy as a labor organization has already attained finality25 hence there was no more
hindrance to the holding of a certification election. Moreover, it claims that the instant petition has become moot
because the certification election sought to be prevented had already been conducted.

Our Ruling

The petition is partly meritorious.

LEGEND has timely appealed the March 26, 2002 Decision of the Bureau of Labor Relations to the Court of
Appeals.

We cannot understand why the Court of Appeals totally disregarded LEGEND’s allegation in its Motion for
Reconsideration that the March 26, 2002 Decision of the Bureau of Labor Relations has not yet attained finality
considering that it has timely appealed the same to the Court of Appeals and which at that time is still pending

Labor II – 1
resolution. The Court of Appeals never bothered to look into this allegation and instead dismissed outright
LEGEND’s motion for reconsideration. By doing so, the Court of Appeals in effect maintained its earlier ruling that
the March 26, 2002 Decision of the Bureau of Labor Relations upholding the legitimacy of KML as a labor
organization has long become final and executory for failure of LEGEND to appeal the same.

This is inaccurate. Records show that (in the cancellation of registration case) LEGEND has timely filed on
September 6, 2002 a petition for certiorari26 before the Court of Appeals which was docketed as CA-G.R. SP No.
72659 assailing the March 26, 2002 Decision of the Bureau of Labor Relations. In fact, KML received a copy of said
petition on September 10, 200227 and has filed its Comment thereto on December 2, 2002.28 Thus, we find it quite
interesting for KML to claim in its Comment (in the certification petition case) before this Court dated March 21,
200629 that the Bureau of Labor Relations’ Decision in the petition for cancellation case has already attained finality.
Even in its Memorandum30 dated March 13, 2007 filed before us, KML is still insisting that the Bureau of Labor
Relations’ Decision has become final and executory.

Our perusal of the records shows that on June 30, 2005, the Court of Appeals rendered its Decision31 in CA-G.R. SP
No. 72659 reversing the March 26, 2002 Decision of the Bureau of Labor Relations and reinstating the November 7,
2001 Decision of the Med-Arbiter which canceled the certificate of registration of KML.32 On September 30, 2005,
KML’s motion for reconsideration was denied for lack of merit.33 On November 25, 2005, KML filed its Petition for
Review on Certiorari34 before this Court which was docketed as G.R. No. 169972. However, the same was denied in
a Resolution35 dated February 13, 2006 for having been filed out of time. KML moved for reconsideration but it was
denied with finality in a Resolution36 dated June 7, 2006. Thereafter, the said Decision canceling the certificate of
registration of KML as a labor organization became final and executory and entry of judgment was made on July 18,
2006.37

The cancellation of KML’s certificate of registration should not retroact to the time of its issuance.

Notwithstanding the finality of the Decision canceling the certificate of registration of KML, we cannot subscribe to
LEGEND’s proposition that the cancellation of KML’s certificate of registration should retroact to the time of its
issuance. LEGEND claims that KML’s petition for certification election filed during the pendency of the petition for
cancellation and its demand to enter into collective bargaining agreement with LEGEND should be dismissed due to
KML’s lack of legal personality.

This issue is not new or novel. In Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor,38 we already ruled that:

Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial question to the petition for
certification election, the following ruling in the case of Association of the Court of Appeals Employees (ACAE) v.
Hon. Pura Ferrer-Calleja, x x x is in point, to wit:

x x x It is well-settled rule that ‘a certification proceedings is not a litigation in the sense that the term is
ordinarily understood, but an investigation of a non-adversarial and fact finding character.’ (Associated
Labor Unions (ALU) v. Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v.
NLRC, 183 SCRA 451 [1990]. Thus, the technical rules of evidence do not apply if the decision to grant it proceeds
from an examination of the sufficiency of the petition as well as a careful look into the arguments contained in the
position papers and other documents.

At any rate, the Court applies the established rule correctly followed by the public respondent that an order to hold a
certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal
personality to perform such act absent an order directing the cancellation.39 (Emphasis supplied.)

In Capitol Medical Center, Inc. v. Hon. Trajano,40 we also held that "the pendency of a petition for cancellation of
union registration does not preclude collective bargaining."41 Citing the Secretary of Labor, we held viz:

That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a petition

Labor II – 1
to cancel the union’s registration certificate x x x more so should the collective bargaining process continue despite
its pendency. 42 (Emphasis supplied.)

In Association of Court of Appeals Employees v. Ferrer-Calleja,43 this Court was tasked to resolve the issue of
whether "the certification proceedings should be suspended pending [the petitioner’s] petition for the cancellation of
union registration of the UCECA44."45 The Court resolved the issue in the negative holding that "an order to hold a
certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal
personality to perform such act absent an order directing a cancellation."46 We reiterated this view in Samahan ng
Manggagawa sa Pacific Plastic v. Hon. Laguesma47 where we declared that "a certification election can be
conducted despite pendency of a petition to cancel the union registration certificate. For the fact is that at the time
the respondent union filed its petition for certification, it still had the legal personality to perform such act absent an
order directing its cancellation."48

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

The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election.

We agree with the ruling of the Office of the Secretary of DOLE that the legitimacy of the legal personality of KML
cannot be collaterally attacked in a petition for certification election proceeding. This is in consonance with our ruling
in Laguna Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor and
Employment49 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."50 We further held therein that:

This is categorically prescribed by Section 5, Rule V of the Implementing Rules of Book V, which states as follows:

SEC. 5.51 Effect of registration. – The labor organization or worker’s 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.

Hence, to raise the issue of the respondent union’s legal personality is not proper in this case.  The pronouncement
1avvphi1

of the Labor Relations Division Chief, that the respondent union acquired a legal personality x x x 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 a 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.52

Labor II – 1
"[T]he legal personality of a legitimate labor organization x x x cannot be subject to a collateral attack. The law is
very clear on this matter. x x x The Implementing Rules stipulate that a labor organization shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of registration. Once a certificate
of registration is issued to a union, its legal personality cannot be subject to a collateral attack. In may be questioned
only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing
Rules."53

WHEREFORE, in view of the foregoing, the petition is PARTLY GRANTED. The Decision of the Court of Appeals
dated September 18, 2003 in CA-G.R. SP No. 72848 insofar as it affirms the May 22, 2002 Decision and August 20,
2002 Resolution of the Office of the Secretary of Department of Labor and Employment is AFFIRMED. The Decision
of the Court of Appeals insofar as it declares that the March 26, 2002 Decision of the Bureau of Labor Relations in
Case No. RO300-0108-CP-001 upholding that the legitimacy of KML as a labor organization has long become final
and executory for failure of LEGEND to appeal the same, is REVERSED and SET ASIDE.

Labor II – 1
27.) G.R. No. 169717               March 16, 2011

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR

EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union
President, Petitioner,
vs.
CHARTER CHEMICAL and COATING CORPORATION, Respondent.

DECISION

DEL CASTILLO, J.:

The right to file a petition for certification election is accorded to a labor organization provided that it complies with
the requirements of law for proper registration. The 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. We apply these principles to this case.

This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeal’s March 15, 2005
Decision1 in CA-G.R. SP No. 58203, which annulled and set aside the January 13, 2000 Decision2 of the
Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16,
2005 Resolution3 denying petitioner union’s motion for reconsideration.

Factual Antecedents

On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for
Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-
file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration
Unit of the DOLE, National Capital Region.

On April 14, 1999, respondent company filed an Answer with Motion to Dismiss4 on the ground that petitioner union
is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by
law, and (2) the inclusion of supervisory employees within petitioner union.5

Med-Arbiter’s Ruling

On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision6 dismissing the petition for certification
election. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter
Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and "Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under oath and
certified by the union secretary and attested to by the union president as required by Section 235 of the Labor
Code7 in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union registration was,
thus, fatally defective.

The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman, mill operator
and leadman who performed supervisory functions. Under Article 245 of the Labor Code, said supervisory
employees are prohibited from joining petitioner union which seeks to represent the rank-and-file employees of
respondent company.

As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification
election for the purpose of collective bargaining.

Department of Labor and Employment’s Ruling

Labor II – 1
On July 16, 1999, the DOLE initially issued a Decision8 in favor of respondent company dismissing petitioner union’s
appeal on the ground that the latter’s petition for certification election was filed out of time. Although the DOLE ruled,
contrary to the findings of the Med-Arbiter, that the charter certificate need not be verified and that there was no
independent evidence presented to establish respondent company’s claim that some members of petitioner union
were holding supervisory positions, the DOLE sustained the dismissal of the petition for certification after it took
judicial notice that another union, i.e., Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating
Corporation, previously filed a petition for certification election on January 16, 1998. The Decision granting the said
petition became final and executory on September 16, 1998 and was remanded for immediate implementation.
Under Section 7, Rule XI of D.O. No. 9, series of 1997, a motion for intervention involving a certification election in
an unorganized establishment should be filed prior to the finality of the decision calling for a certification election.
Considering that petitioner union filed its petition only on February 14, 1999, the same was filed out of time.

On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its January 13, 2000 Decision, the
DOLE found that a review of the records indicates that no certification election was previously conducted in
respondent company. On the contrary, the prior certification election filed by Pinag-isang Lakas Manggagawa sa
Charter Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter and, on appeal, was dismissed
by the DOLE for being filed out of time. Hence, there was no obstacle to the grant of petitioner union’s petition for
certification election, viz:

WHEREFORE, the motion for reconsideration is hereby GRANTED and the decision of this Office dated 16 July
1999 is MODIFIED to allow the certification election among the regular rank-and-file employees of Charter Chemical
and Coating Corporation with the following choices:

1. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the Philippines for Empowerment

and Reform (SMCC-SUPER); and

2. No Union.

Let the 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.

SO DECIDED.9

Court of Appeal’s Ruling

On March 15, 2005, the CA promulgated the assailed Decision, viz:

WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution dated January 13, 2000
and February 17, 2000 are hereby [ANNULLED] and SET ASIDE.

SO ORDERED.10

In nullifying the decision of the DOLE, the appellate court gave credence to the findings of the Med-Arbiter that
petitioner union failed to comply with the documentation requirements under the Labor Code. It, likewise, upheld the
Med-Arbiter’s finding that petitioner union consisted of both rank-and-file and supervisory employees. Moreover, the
CA held that the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition for
certification election and the infirmity in the membership of petitioner union cannot be remedied through the
exclusion-inclusion proceedings in a pre-election conference pursuant to the ruling in Toyota Motor Philippines v.
Toyota Motor Philippines Corporation Labor Union. 11 Thus, considering that petitioner union is not a legitimate labor
organization, it has no legal right to file a petition for certification election.

Issues

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Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction
in granting the respondent [company’s] petition for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the
issues subject of the respondent company[’s] petition was already settled with finality and barred from being re-
litigated.

II

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction
in holding that the alleged mixture of rank-and-file and supervisory employee[s] of petitioner [union’s] membership is
[a] ground for the cancellation of petitioner [union’s] legal personality and dismissal of [the] petition for certification
election.

III

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction
in holding that the alleged failure to certify under oath the local charter certificate issued by its mother federation and
list of the union membership attending the organizational meeting [is a ground] for the cancellation of petitioner
[union’s] legal personality as a labor organization and for the dismissal of the petition for certification election.12

Petitioner Union’s Arguments

Petitioner union claims that the litigation of the issue as to its legal personality to file the subject petition for
certification election is barred by the July 16, 1999 Decision of the DOLE. In this decision, the DOLE ruled that
petitioner union complied with all the documentation requirements and that there was no independent evidence
presented to prove an illegal mixture of supervisory and rank-and-file employees in petitioner union. After the
promulgation of this Decision, respondent company did not move for reconsideration, thus, this issue must be
deemed settled.

Petitioner union further argues that the lack of verification of its charter certificate and the alleged illegal composition
of its membership are not grounds for the dismissal of a petition for certification election under Section 11, Rule XI of
D.O. No. 9, series of 1997, as amended, nor are they grounds for the cancellation of a union’s registration under
Section 3, Rule VIII of said issuance. It contends that what is required to be certified under oath by the local union’s
secretary or treasurer and attested to by the local union’s president are limited to the union’s constitution and by-
laws, statement of the set of officers, and the books of accounts.

Finally, the legal personality of petitioner union cannot be collaterally attacked but may be questioned only in an
independent petition for cancellation pursuant to Section 5, Rule V, Book IV of the Rules to Implement the Labor
Code and the doctrine enunciated in Tagaytay Highlands International Golf Club Incoprorated v. Tagaytay
Highlands Empoyees Union-PTGWO.13

Respondent Company’s Arguments

Respondent company asserts that it cannot be precluded from challenging the July 16, 1999 Decision of the DOLE.
The said decision did not attain finality because the DOLE subsequently reversed its earlier ruling and, from this
decision, respondent company timely filed its motion for reconsideration.

On the issue of lack of verification of the charter certificate, respondent company notes that Article 235 of the Labor
Code and Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997,
expressly requires that the charter certificate be certified under oath.

It also contends that petitioner union is not a legitimate labor organization because its composition is a mixture of
supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Respondent company
maintains that the ruling in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union 14 continues to be
good case law. Thus, the illegal composition of petitioner union nullifies its legal personality to file the subject
petition for certification election and its legal personality may be collaterally attacked in the proceedings for a petition
for certification election as was done here.
Labor II – 1
 Our Ruling

The petition is meritorious.

The issue as to the legal personality of petitioner union is not barred by the July 16, 1999 Decision of the DOLE.

A review of the records indicates that the issue as to petitioner union’s legal personality has been timely and
consistently raised by respondent company before the Med-Arbiter, DOLE, CA and now this Court. In its July 16,
1999 Decision, the DOLE found that petitioner union complied with the documentation requirements of the Labor
Code and that the evidence was insufficient to establish that there was an illegal mixture of supervisory and rank-
and-file employees in its membership. Nonetheless, the petition for certification election was dismissed on the
ground that another union had previously filed a petition for certification election seeking to represent the same
bargaining unit in respondent company.

Upon motion for reconsideration by petitioner union on January 13, 2000, the DOLE reversed its previous ruling. It
upheld the right of petitioner union to file the subject petition for certification election because its previous decision
was based on a mistaken appreciation of facts.15 From this adverse decision, respondent company timely moved for
reconsideration by reiterating its previous arguments before the Med-Arbiter that petitioner union has no legal
personality to file the subject petition for certification election.

The July 16, 1999 Decision of the DOLE, therefore, never attained finality because the parties timely moved for
reconsideration. The issue then as to the legal personality of petitioner union to file the certification election was
properly raised before the DOLE, the appellate court and now this Court.

The charter certificate need not be certified under oath by the local union’s secretary or treasurer and attested to by
its president.

Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 948116 which took effect on June 14,
2007.17 This law introduced substantial amendments to the Labor Code. However, since the operative facts in this
case occurred in 1999, we shall decide the issues under the pertinent legal provisions then in force (i.e., R.A. No.
6715,18 amending Book V of the Labor Code, and the rules and regulations19 implementing R.A. No. 6715, as
amended by D.O. No. 9,20

series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.21

In the main, the CA ruled that petitioner union failed to comply with the requisite documents for registration under
Article 235 of the Labor Code and its implementing rules. It agreed with the Med-Arbiter that the Charter Certificate,
Sama-samang Pahayag ng Pagsapi at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong at
mga Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath. Thus, petitioner union cannot
be accorded the status of a legitimate labor organization.

We disagree.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of
1997, provides:

Section 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

Labor II – 1
 (c) The local/chapter’s constitution and by-laws provided that where the local/chapter’s constitution and by-
laws [are] the same as [those] 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.

As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that
need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization.
As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union
concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Corporation
Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),22 which was decided under the auspices of
D.O. No. 9, Series of 1997, we ruled –

In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it
was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id. While this
ruling was based on the interpretation of the previous Implementing Rules provisions which were
supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that
the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make
sense to have the local/chapter’s officers x x x certify or attest to a document which they had no hand in the
preparation of.23 (Emphasis supplied)

In accordance with this ruling, petitioner union’s charter certificate need not be executed under oath. Consequently,
it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate,24 (2) the
names of its officers, their addresses, and its principal office,25 and (3) its constitution and by-laws26— the last two
requirements having been executed under oath by the proper union officials as borne out by the records.

The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a
legitimate labor organization.

The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However,
petitioner union sought to represent the bargaining unit consisting of rank-and-file employees. Under Article 24527 of
the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file
employees. Thus, the appellate court ruled that petitioner union cannot be considered a legitimate labor
organization pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor
Union28 (hereinafter Toyota).

Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by the
appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory
employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after
respondent company submitted in evidence the job descriptions29 of the aforesaid employees. The job descriptions
indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary
but require the use of independent judgment, hence, falling within the definition of supervisory employees under
Article 212(m)30 of the Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld by
the appellate court, that petitioner union consisted of both rank-and-file and supervisory employees.

Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status
as a legitimate labor organization. The appellate court’s reliance on Toyota is misplaced in view of this Court’s
subsequent ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.31 (hereinafter Kawashima).
In Kawashima, we explained at length how and why the Toyota doctrine no longer holds sway under the altered
state of the law and rules applicable to this case, viz:

R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the co-mingling of
supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization.

Labor II – 1
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):

"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:

"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:

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:

"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

Labor II – 1
employees has not been mingled with supervisory employees – was removed. Instead, what the 1997 Amended
Omnibus Rules requires is a plain description of the bargaining unit, thus:

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:

"Section. 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-PGTWO 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.32 [Underline supplied]

Labor II – 1
The applicable law and rules in the instant case are the same as those in Kawashima because the present petition
for certification election was filed in 1999 when D.O. No. 9, series of 1997, was still in effect.
Hence, Kawashima applies with equal force here. As a result, petitioner union was not divested of its status as a
legitimate labor organization even if some of its members were supervisory employees; it had the right to file the
subject petition for certification election.

The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification
election proceedings.

Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election
proceedings. As we explained in Kawashima:

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.33

WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16, 2005 Resolution of the
Court of Appeals in CA-G.R. SP No. 58203 are REVERSED and SET ASIDE. The January 13, 2000 Decision of the
Department of Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED.

Labor II – 1
 28.) G.R. No. 172132, July 23, 2014

THE HERITAGE HOTEL MANILA, ACTING THROUGH ITS OWNER, GRAND PLAZA HOTEL

CORPORATION, Petitioner, v. SECRETARY OF LABOR AND EMPLOYMENT; MED-ARBITER
TOMAS F. FALCONITIN; AND NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT
AND ALLIED INDUSTRIES–HERITAGE HOTEL MANILA SUPERVISORS
CHAPTER (NUWHRAIN-HHMSC), Respondents.

DECISION

BERSAMIN, J.:

Although case law has repeatedly held that the employer was but a bystander in respect of the
conduct of the certification election to decide the labor organization to represent the employees in
the bargaining unit, and that the pendency of the cancellation of union registration brought against
the labor organization applying for the certification election should not prevent  the conduct of the
certification election, this review has to look again at the seemingly never-ending quest of the
petitioner employer to stop the conduct of the certification election on the ground of the pendency of
proceedings to cancel the labor organization’s registration it had initiated on the ground that the
membership of the labor organization was a mixture of managerial and supervisory employees with
the rank-and-file employees.

Under review at the instance of the employer is the decision promulgated on December 13,
2005,1 whereby the Court of Appeals (CA) dismissed its petition for certiorari to assail the resolutions
of  respondent Secretary of Labor and Employment sanctioning the conduct of the certification
election initiated by respondent labor organization.2
cralawlawlibrary

Antecedents

On October 11, 1995, respondent National Union of Workers in Hotel Restaurant and Allied
Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC) filed a petition
for certification election,3 seeking to represent all the supervisory employees of Heritage
Hotel Manila. The petitioner filed its opposition, but the opposition was deemed denied on February
14, 1996 when Med-Arbiter Napoleon V. Fernando issued his order for the conduct of the certification
election.

The petitioner appealed the order of Med-Arbiter Fernando, but the appeal was also denied. A pre-
election conference was then scheduled. On February 20, 1998, however, the pre-election conference
was suspended until further notice because of the repeated non-appearance of NUWHRAIN-
HHMSC.4 cralawlawlibrary

On January 29, 2000, NUWHRAIN-HHMSC moved for the conduct of the pre-election

conference. The petitioner primarily filed its comment on the list of employees submitted
by NUWHRAIN-HHMSC, and simultaneously sought the exclusion of some from the list of
employees for occupying either confidential or managerial positions.5 The petitioner filed a
motion to dismiss on April 17, 2000,6 raising the prolonged lack of interest of NUWHRAIN-HHMSC to
pursue its petition for certification election.

On May 12, 2000, the petitioner filed a petition for the cancellation of NUWHRAIN-HHMSC’s
registration as a labor union for failing to submit its annual financial reports and an
updated list of members as required by Article 238 and Article 239 of the Labor Code, docketed as
Case No. NCR-OD-0005-004-IRD entitled The Heritage Hotel Manila, acting through its owner, Grand
Plaza Hotel Corporation v. National Union of Workers in the Hotel, Restaurant and Allied Industries-

Labor II – 1
Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHSMC).7 It filed another motion on June 1,
2000 to seek either the dismissal or the suspension of the proceedings on the basis of its pending
petition for the cancellation of union registration.8 cralawlawlibrary

The following day, however, the Department of Labor and Employment (DOLE) issued a notice
scheduling the certification elections on June 23, 2000.9 cralawlawlibrary

Dissatisfied, the petitioner commenced in the CA on June 14, 2000 a special civil action
for certiorari,10 alleging that the DOLE gravely abused its discretion in not suspending the certification
election proceedings. On June 23, 2000, the CA dismissed the petition for  certiorari  for non-
exhaustion of administrative remedies.11 cralawlawlibrary

The certification election proceeded as scheduled, and NUWHRAIN-HHMSC obtained the

majority vote of the bargaining unit.12 The petitioner filed a protest (with motion to defer
the certification of the election results and the winner), 13 insisting on the illegitimacy of
NUWHRAIN-HHMSC.

Ruling of the Med-Arbiter

On January 26, 2001, Med-Arbiter Tomas F. Falconitin issued an order,14 ruling that the petition for
the cancellation of union registration was not a bar to the holding of the certification election, and
disposing thusly:chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, respondent employer/protestant’s protest with motion to defer

certification of results and winner is hereby dismissed for lack of merit.

Accordingly, this Office hereby certify pursuant to the rules that petitioner/protestee, National Union
of Workers in Hotels, Restaurants and Allied Industries-Heritage Hotel Manila Supervisory Chapter
(NUWHRAIN-HHSMC) is the sole and exclusive bargaining agent of all supervisory employees of the
Heritage Hotel Manila acting through its owner, Grand Plaza Hotel Corporation for purposes of
collective bargaining with respect to wages, and hours of work and other terms and conditions of
employment.

SO ORDERED.

The petitioner timely appealed to the DOLE Secretary claiming that: (a) the membership of
NUWHRAIN-HHMSC consisted of managerial, confidential, and rank-and-file employees; (b)
NUWHRAIN-HHMSC failed to comply with the reportorial requirements; and (c) Med-Arbiter Falconitin
simply brushed aside serious questions on the illegitimacy of NUWHRAIN-HHMSC.15 It contended
that a labor union of mixed membership of supervisory and rank-and-file employees had
no legal right to petition for the certification election pursuant to the pronouncements
in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union 16(Toyota
Motor) and  Dunlop Slazenger (Phils.) v. Secretary of Labor and Employment 17(Dunlop Slazenger).

Ruling of the DOLE Secretary

On August 21, 2002, then DOLE Secretary Patricia A. Sto. Tomas issued a resolution denying the
appeal,18 and affirming the order of Med-Arbiter Falconitin, viz: chanRoblesvirtualLawlibrary

WHEREFORE, the appeal is DENIED. The order of the Med-Arbiter dated 26 January 2001 is hereby
AFFIRMED.

SO RESOLVED.

DOLE Secretary Sto. Tomas observed that the petitioner’s reliance on Toyota Motor and Dunlop

Labor II – 1
Slazenger was misplaced because both rulings were already overturned by SPI Technologies, Inc. v.
Department of Labor and Employment,19 to the effect that once a union acquired a legitimate status
as a labor organization, it continued as such until its certificate of registration was cancelled or
revoked in an independent action for cancellation.

The petitioner moved for reconsideration.

In denying the motion on October 21, 2002, the DOLE Secretary declared that the mixture or co-
mingling of employees in a union was not a ground for dismissing a petition for the certification
election under Section 11, par. II, Rule XI of Department Order No. 9; that the appropriate remedy
was to exclude the ineligible employees from the bargaining unit during the inclusion-exclusion
proceedings;20 that the dismissal of the petition for the certification election based on the legitimacy
of the petitioning union would be inappropriate because it would effectively allow a collateral attack
against the union’s legal personality; and that a collateral attack against the personality of the labor
organization was prohibited under Section 5, Rule V of Department Order No. 9, Series of 1997.21 cralawlawlibrary

Upon denial of its motion for reconsideration, the petitioner elevated the matter to the CA by petition
for certiorari.22 cralawlawlibrary

Ruling of the CA

On December 13, 2005,23 the CA dismissed the petition for certiorari, giving its following
disquisition: chanRoblesvirtualLawlibrary

The petition for certiorari filed by the petitioner is, in essence, a continuation of the debate on the
relevance of the Toyota Motor, Dunlop Slazenger and  Progressive Development cases to the issues
raised.

Toyota Motor and Dunlop Slazenger are anchored on the provisions of Article 245 of the Labor Code
which prohibit managerial employees from joining any labor union and permit supervisory employees
to form a separate union of their own.  The language naturally suggests that a labor organization
cannot carry a mixture of supervisory and rank-and-file employees.  Thus, courts have held that a
union cannot become a legitimate labor union if it shelters under its wing both types of employees. 
But there are elements of an elliptical reasoning in the holding of these two cases that a petition for
certification election may not prosper until the composition of the union is settled therein. Toyota
Motor, in particular, makes the blanket statement that a supervisory union has no right to file a
certification election for as long as it counts rank-and-file employees among its ranks.  More than
four years after  Dunlop Slazenger, the Court clarified in Tagaytay Highlands International Golf Club
Inc vs Tagaytay Highlands Employees Union-PTGWO that while Article 245 prohibits supervisory
employees from joining a rank-and-file union, it does not provide what the effect is if a rank-and-file
union takes in supervisory employees as members, or vice versa. Toyota Motor and Dunlop
Slazenger jump into an unnecessary conclusion when they foster the notion that Article 245 carries
with it the authorization to inquire collaterally into the issue wherever it rears its ugly head.

Tagaytay Highlands proclaims, in the light of Department Order 9, that after a certificate of

registration is issued to a union, its legal personality cannot be subject to a collateral attack.  It may
be questioned only in an independent petition for cancellation. In fine, Toyota and Dunlop
Slazenger are a spent force. Since Tagaytay Highlands was handed down after these two cases, it
constitutes the latest expression of the will of the Supreme Court and supersedes or overturns
previous rulings inconsistent with it.  From this perspective, it is needless to discuss whether SPI
Technologies as a mere resolution of the Court may prevail over a full-blown decision that Toyota
Motor or Dunlop Slazenger was.  The ruling in SPI Technologies  has been echoed in Tagaytay
Highlands, for which reason it is with Tagaytay Highlands, not SPI Technologies, that the petitioner
must joust.

Labor II – 1
The fact that the cancellation proceeding has not yet been resolved makes it obvious that the legal
personality of the respondent union is still very much in force.  The DOLE has thus every reason to
proceed with the certification election and commits no grave abuse of discretion in allowing it to
prosper because the right to be certified as collective bargaining agent is one of the legitimate
privileges of a registered union.  It is for the petitioner to expedite the cancellation case if it wants to
put an end to the certification case, but it cannot place the issue of the union’s legitimacy in the
certification case, for that would be tantamount to making the collateral attack the DOLE has
staunchly argued to be impermissible.

The reference made by the petitioner to another Progressive Development  case that it would be
more prudent for the DOLE to suspend the certification case until the issue of the legality of the
registration is resolved, has also been satisfactorily answered.  Section 11, Rule XI of Department
Order 9 provides for the grounds for the dismissal of a petition for certification election, and the
pendency of a petition for cancellation of union registration is not one of them.  Like Toyota
Motor and Dunlop Slazenger, the second Progressive case came before Department Order 9.

IN VIEW OF THE FOREGOING, the disputed resolutions of the Secretary of Labor and Employment
are AFFIRMED, and the petition is DISMISSED.

SO ORDERED.

The petitioner sought reconsideration,24 but its motion was denied.

Issues

Hence, this appeal, with the petitioner insisting that: chanRoblesvirtualLawlibrary

THE COURT OF APPEALS ERRED IN RULING THAT TAGAYTAY HIGHLANDS APPLIES TO THE CASE AT

BAR

II

[THE HONORABLE COURT OF APPEALS] SERIOUSLY ERRED WHEN IT DISREGARDED PROGRESSIVE

DEVELOPMENT CORPORATION – PIZZA HUT V. LAGUESMA  WHICH HELD THAT IT WOULD BE
MORE PRUDENT TO SUSPEND THE CERTIFICATION CASE UNTIL THE ISSUE OF THE
LEGALITY OF THE REGISTRATION OF THE UNION IS FINALLY RESOLVED

III

BECAUSE OF THE PASSAGE OF TIME, RESPONDENT UNION NO LONGER POSSESSES THE MAJORITY
STATUS SUCH THAT A NEW CERTIFICATION ELECTION IS IN ORDER25 chanrobleslaw

The petitioner maintains that the ruling in Tagaytay Highlands International Golf Club Inc
v. Tagaytay Highlands Employees Union-PTGWO26 (Tagaytay Highlands) was inapplicable
because it involved the co-mingling of supervisory and rank-and-file employees in one
labor organization, while the issue here related to the mixture of membership between
two employee groups — one vested with the right to self-organization (i.e., the rank-and-
file and supervisory employees), and the other deprived of such right (i.e., managerial and
confidential employees); that suspension of the certification election was appropriate because a
finding of “illegal mixture” of membership during a petition for the cancellation of union registration
determined whether or not the union had met the 20% representation requirement under Article
234(c) of the Labor Code; 27 and that in holding that mixed membership was not a ground for
canceling the union registration, except when such was done through misrepresentation, false

Labor II – 1
representation or fraud under the circumstances enumerated in Article 239(a) and (c) of the Labor
Code, the CA completely ignored the 20% requirement under Article 234(c) of the Labor Code.

The petitioner posits that the grounds for dismissing a petition for the certification election under
Section 11, Rule XI of Department Order No. 9, Series of 1997, were not exclusive because the other
grounds available under the Rules of Court could be invoked; that in Progressive Development
Corporation v. Secretary, Department of Labor and Employment,28 the Court ruled that prudence
could justify the suspension of the certification election proceedings until the issue of the legality of
the union registration could be finally resolved; that the non-submission of the annual financial
statements and the list of members in the period from 1996 to 1999 constituted a serious challenge
to NUWHRAIN-HHMSC’s right to file its petition for the certification election; and that from the time
of the conduct of the certification election on June 23, 2000, the composition of NUWHRAIN-HHMSC
had substantially changed, thereby necessitating another certification election to determine the true
will of the bargaining unit.

In short, should the petition for the cancellation of union registration based on mixed
membership of supervisors and managers in a labor union, and the non-submission of
reportorial requirements to the DOLE justify the suspension of the proceedings for the
certification elections or even the denial of the petition for the certification election?

Ruling

We deny the petition for review on certiorari.

Basic in the realm of labor union rights is that the certification election is the sole concern of the
workers,29 and the employer is deemed an intruder as far as the certification election is
concerned.30 Thus, the petitioner  lacked the legal personality to assail the proceedings for the
certification election,31 and should stand aside as a mere bystander who could not oppose the
petition, or even appeal the Med-Arbiter’s orders relative to the conduct of the certification
election.32 As the Court has explained in Republic v. Kawashima Textile Mfg., Philippines,
Inc.33 (Kawashima): chanRoblesvirtualLawlibrary

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 petitioner’s meddling in the conduct of the certification election among its employees unduly
gave rise to the suspicion that it intended to establish a company union.34 For that reason, the
challenges it posed against the certification election proceedings were rightly denied.

Under the long established rule, too, the filing of the petition for the cancellation of
NUWHRAIN-HHMSC’s registration should not bar the conduct of the certification
election.35 In that respect, only a final order for the cancellation of the registration would
have prevented NUWHRAIN-HHMSC from continuing to enjoy all the rights conferred on it
as a legitimate labor union, including the right to the petition for the certification
election.36 This rule is now enshrined in Article 238-A of the Labor Code, as amended by Republic
Act No. 9481,37 which reads: chanRoblesvirtualLawlibrary

Labor II – 1
Article 238-A. Effect of a Petition for Cancellation of Registration. – A petition for cancellation of
union registration shall not suspend the proceedings for certification election nor shall it prevent the
filing of a petition for certification election.

xxxx

Still, the petitioner assails the failure of NUWHRAIN-HHMSC to submit its periodic financial reports
and updated list of its members pursuant to Article 238 and Article 239 of the Labor Code. It
contends that the serious challenges against the legitimacy of NUWHRAIN-HHMSC as a union raised
in the petition for the cancellation of union registration should have cautioned the Med-Arbiter
against conducting the certification election.

The petitioner does not convince us.

In The Heritage Hotel Manila v. National Union of Workers in the Hotel, Restaurant and Allied
Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC), 38 the Court declared that
the dismissal of the petition for the cancellation of the registration of NUWHRAIN-HHMSC was proper
when viewed against the primordial right of the workers to self-organization, collective bargaining
negotiations and peaceful concerted actions, viz: chanRoblesvirtualLawlibrary

xxxx

[Articles 238 and 239 of the Labor Code] give the Regional Director ample discretion in dealing with a
petition for cancellation of a union's registration, particularly, determining whether the union still
meets the requirements prescribed by law. It is sufficient to give the Regional Director license to
treat the late filing of required documents as sufficient compliance with the requirements of the law.
After all, the law requires the labor organization to submit the annual financial report and list of
members in order to verify if it is still viable and financially sustainable as an organization so as to
protect the employer and employees from fraudulent or fly-by-night unions. With the submission of
the required documents by respondent, the purpose of the law has been achieved, though belatedly.

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

Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of
union registration, lest they be accused of interfering with union activities. In resolving the petition,
consideration must be taken of the fundamental rights guaranteed by Article XIII, Section 3 of the
Constitution, i.e., the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities. Labor authorities should bear in mind that registration confers upon
a union the status of legitimacy and the concomitant right and privileges granted by law to a
legitimate labor organization, particularly the right to participate in or ask for certification election in
a bargaining unit. Thus, the cancellation of a certificate of registration is the equivalent of snuffing
out the life  of a labor organization. For without such registration, it loses - as a rule - its rights under
the Labor Code.

It is worth mentioning that the Labor Code's provisions on cancellation of union registration and on
reportorial requirements have been recently amended by Republic Act (R.A.) No. 9481,  An Act
Strengthening the Workers’ Constitutional Right to Self-Organization, Amending for the Purpose
Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines,
which lapsed into law on May 25, 2007 and became effective on June 14, 2007. The amendment
sought to strengthen the workers’ right to self-organization and enhance the Philippines' compliance
with its international obligations as embodied in the International Labor Organization (ILO)
Labor II – 1
Convention No. 87, pertaining to the non-dissolution of workers’ organizations by administrative
authority. Thus, R.A. No. 9481 amended Article 239 to read: chanRoblesvirtualLawlibrary

ART. 239. Grounds for Cancellation of Union Registration.--The following may constitute grounds for
cancellation of union registration: chanRoblesvirtualLawlibrary

(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members
who took part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of
the election of officers, and the list of voters;

(c) Voluntary dissolution by the members.

R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides: chanroblesvirtuallawlibrary

ART. 242-A. Reportorial Requirements.--The following are documents required to be submitted to the
Bureau by the legitimate labor organization concerned: chanRoblesvirtualLawlibrary

(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification of the constitution and by-laws within thirty (30) days from
adoption or ratification of the constitution and by-laws or amendments thereto;

(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days
from election;

(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and

(d) Its list of members at least once a year or whenever required by the Bureau.

Failure to comply with the above requirements shall not be a ground for cancellation of
union registration but shall subject the erring officers or members to suspension,
expulsion from membership, or any appropriate penalty.

xxxx

The ruling thereby wrote finis to the challenge being posed by the petitioner against the illegitimacy
of NUWHRAIN-HHMSC.

The remaining issue to be resolved is which among Toyota Motor, Dunlop

Slazenger and Tagaytay Highlands applied in resolving the dispute arising from the mixed
membership in NUWHRAIN-HHMSC.

This is not a novel matter. In Kawashima,39 we have reconciled our rulings in Toyota Motor, Dunlop
Slazenger and Tagaytay Highlands by emphasizing on the laws prevailing at the time of filing of the
petition for the certification election.

Toyota Motor and  Dunlop Slazenger involved petitions for certification election filed on November 26,
1992 and September 15, 1995, respectively. In both cases, we applied the Rules and Regulations
Implementing R.A. No. 6715 (also known as the 1989 Amended Omnibus Rules), the prevailing rule
then.

The 1989 Amended Omnibus Rules was amended on June 21, 1997 by Department Order No. 9,
Series of 1997. Among the amendments was the removal of the requirement of indicating in the
petition for the certification election that there was no co-mingling of rank-and-file and supervisory
employees in the membership of the labor union. This was the prevailing rule when the Court
Labor II – 1
promulgated Tagaytay Highlands, declaring therein that mixed membership should have no
bearing on the legitimacy of a registered labor organization, unless the co-mingling was
due to misrepresentation, false statement or fraud as provided in Article 239 of the Labor
Code.40 cralawlawlibrary

Presently, then, the mixed membership does not result in the illegitimacy of the registered labor
union unless the same was done through misrepresentation, false statement or fraud according to
Article 239 of the Labor Code. In Air Philippines Corporation v. Bureau of Labor Relations, 41 we
categorically explained that—

Clearly, then, for the purpose of de-certifying a union, it is not enough to establish that the rank-
and-file union includes ineligible employees in its membership. Pursuant to Article 239 (a) and (c) of
the Labor Code, it must be shown that there was misrepresentation, false statement or fraud in
connection with the adoption or ratification of the constitution and by-laws or amendments thereto,
the minutes of ratification, or in connection with the election of officers, minutes of the election of
officers, the list of voters, or failure to submit these documents together with the list of the newly
elected-appointed officers and their postal addresses to the BLR.

We note that NUWHRAIN-HHMSC filed its petition for the certification election on October
11, 1995. Conformably with Kawashima, the applicable law was the 1989 Amended
Omnibus Rules, and the prevailing rule was the pronouncement in Toyota
Motor and Dunlop Slazenger to the effect that a labor union of mixed membership was not
possessed with the requisite personality to file a petition for the certification election.

Nonetheless, we still rule in favor of NUWHRAIN-HHMSC. We expound.

In both Toyota Motor and Dunlop Slazenger, the Court was convinced that the concerned labor
unions were comprised by mixed rank-and-file and supervisory employees. In Toyota Motor, the
employer submitted the job descriptions of the concerned employees to prove that there
were supervisors in the petitioning union for rank-and-file employees. In Dunlop Slazenger,
the Court observed that the labor union of supervisors included employees occupying positions that
apparently belonged to the rank-and-file. In both Toyota Motor and Dunlop Slazenger, the
employers were able to adduce substantial evidence to prove the existence of the mixed
membership. Based on the records herein, however, the petitioner failed in that respect. To recall,
it raised the issue of the mixed membership in its comment on the list of members submitted by
NUWHRAIN-HHMSC, and in its protest. In the comment, it merely identified the positions that
were either confidential or managerial, but did not present any supporting evidence to
prove or explain the identification. In the protest, it only enumerated the positions that
were allegedly confidential and managerial, and identified two employees that belonged to
the rank-and-file, but did not offer any description to show that the positions belonged to
different employee groups.

Worth reiterating is that the actual functions of an employee, not his job designation, determined
whether the employee occupied a managerial, supervisory or rank-and-file position.42 As to
confidential employees who were excluded from the right to self-organization, they must (1) assist or
act in a confidential capacity, in regard (2) to persons who formulated, determined, and effectuated
management policies in the field of labor relations.43 In that regard, mere allegations sans
substance would not be enough, most especially because the constitutional right of
workers to self-organization would be compromised.

At any rate, the members of NUWHRAIN-HHSMC had already spoken, and elected it as the
bargaining agent. As between the rigid application of Toyota Motors  and Dunlop Slazenger, and the
right of the workers to self-organization, we prefer the latter. For us, the choice is clear and settled.
“What is important is that there is an unmistakeable intent of the members of [the] union to exercise
their right to organize. We cannot impose rigorous restraints on such right if we are to give meaning
Labor II – 1
to the protection to labor and social justice clauses of the Constitution.” 44 cralawlawlibrary

WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision

promulgated on December 13, 2005 by the Court of Appeals; and ORDERS the petitioner to pay the
costs of suit.

Labor II – 1
 29.) G.R. No. 188020, June 27, 2016

REN TRANSPORT CORP. AND/OR REYNALDO PAZCOGUIN III, Petitioners, v. NATIONAL

LABOR RELATIONS COMMISSION (2ND DIVISION), SAMAHANG MANGGAGAWA SA REN
TRANSPORT-ASSOCIATION OF DEMOCRATIC LABOR ASSOCIATIONS (SMART-ADLO)
REPRESENTED BY ITS PRESIDENT NESTOR FULMINAR, Respondents.

G.R. No. 188252

SAMAHANG MANGGAGAWA SA REN TRANSPORT-ASSOCIATION OF DEMOCRATIC LABOR

ASSOCIATIONS (SMART-ADLO) REPRESENTED BY NESTOR FULMINAR, Petitioner, v. REN
TRANSPORT CORP. AND/OR REYNALDO PAZCOGUIN III, Respondents.

DECISION

SERENO, C.J.:

Before this Court are consolidated Rule 45 petitions challenging the Decision1 and the
Resolution2 issued by the Court of Appeals (CA) in CA-G.R. SP No. 100722.

THE FACTS

Samahan ng Manggagawa sa Ren Transport (SMART) is a registered union, which had a

five-year collective bargaining agreement (CBA) with Ren Transport Corp. (Ren Transport)
set to expire on 31 December 2004.3 The 60-day freedom period of the CBA passed without a
challenge to SMART'S majority status as bargaining agent.4 SMART thereafter conveyed its
willingness to bargain with Ren Transport, to which it sent bargaining proposals. Ren
Transport, however, failed to reply to the demand.5 chanrobleslaw

Subsequently, two members of SMART wrote to the Department of Labor and Employment -
National Capital Region (DOLE-NCR). The office was informed that a majority of the members of
SMART had decided to disaffiliate from their mother federation to form another union, Ren
Transport Employees Association (RTEA).6 SMART contested the alleged disaffiliation through a
letter dated 4 April 2005.7
chanrobleslaw

During the pendency of the disaffiliation dispute at the DOLE-NCR, Ren Transport stopped
the remittance to SMART of the union dues that had been checked off from the salaries of
union workers as provided under the CBA.8 Further, on 19 April 2005, Ren Transport
voluntarily recognized RTEA as the sole and exclusive bargaining agent of the rank-and-
file employees of their company.9 chanrobleslaw

On 6 July 2005, SMART filed with the labor arbiter a complaint for unfair labor practice against Ren
Transport.10

THE LABOR ARBITER'S RULING

The labor arbiter rendered a decision11 finding Ren Transport guilty of acts of unfair labor
practice. The former explained that since the disaffiliation issue remained pending, SMART
continued to be the certified collective bargaining agent; hence, Ren Transport's refusal to send a
counter-proposal to SMART was not justified. The labor arbiter also held that the company's failure to
remit the union dues to SMART and the voluntary recognition of RTEA were clear indications of
interference with the employees' exercise of the right to self-organize.

Labor II – 1
Both parties elevated the case to the National Labor Relations Commission (NLRC). SMART contested
only the failure of the labor arbiter to award damages.

Ren Transport challenged the entire Decision, assigning four errors in its Memorandum of Appeal,
namely: (1) SMART was no longer the exclusive bargaining agent; (2) Ren Transport did not fail to
bargain collectively with SMART; (3) Ren Transport was not obliged to remit dues to SMART; and (4)
SMART lacked the personality to sue Ren Transport.12 All the assigned errors were based on the
assertion that SMART had lost its majority status.

The appeals were consolidated.

THE NLRC RULING

The NLRC issued a decision13 affirming the labor arbiter's finding of unfair labor practice on
the part of Ren Transport. Union dues were ordered remitted to SMART.

The NLRC also awarded moral damages to SMART, saying that Ren transport's refusal to bargain was
inspired by malice or bad faith. The precipitate recognition of RTEA evidenced such bad faith,
considering that it was done despite the pendency of the disaffiliation dispute at the DOLE-NCR.

Ren Transport filed a motion for reconsideration14 alleging, among others, that the NLRC failed to
resolve all the arguments the former had raised in its memorandum of appeal.

The NLRC denied the motion for reconsideration,15 prompting Ren Transport to file a Rule 65 petition
with the CA.16 chanrobleslaw

THE CA RULING

On 30 January 2009, the CA rendered a decision17 partially granting the petition. It deleted the award
of moral damages to SMART, but affirmed the NLRC decision on all other matters. The CA ruled that
SMART, as a corporation, was not entitled to moral damages.18 chanrobleslaw

On the contention that the NLRC decided the case without considering all the arguments of Ren
Transport, the CA found that the latter had passed upon the principal issue of the existence of unfair
labor practice.

Hence, both parties appealed to this Court.

THE ISSUES

Based on the foregoing facts and arguments raised in the petitions, the threshold issues to be
resolved are the following: (1) whether Ren Transport committed acts of unfair labor practice; (2)
whether the decision rendered by the NLRC is valid on account of its failure to pass upon all the
errors assigned by Ren Transport; and (3) whether SMART is entitled to moral damages.

OUR RULING

We deny the petitions for lack of merit.

Ren Transport committed acts of unfair labor practice.

Ren Transport violated its duty to bargain collectively with SMART.

Labor II – 1
Ren Transport concedes that it refused to bargain collectively with SMART. It claims, though, that the
latter ceased to be the exclusive bargaining agent of the rank-and-file employees because of the
disaffiliation of the majority of its members.19
chanrobleslaw

The argument deserves no consideration.

Violation of the duty to bargain collectively is an unfair labor practice under Article 258(g) of the
Labor Code. An instance of this practice is the refusal to bargain collectively as held in General Milling
Corp. v. CA.20 In that case, the employer anchored its refusal to bargain with and recognize the union
on several letters received by the former regarding the withdrawal of the workers' membership from
the union. We rejected the defense, saying that the employer had devised a flimsy excuse by
attacking the existence of the union and the status of the union's membership to prevent any
negotiation.21 chanrobleslaw

It bears stressing that Ren Transport had a duty to bargain collectively with SMART. Under
Article 263 in relation to Article 267 of the Labor Code, it is during the freedom period — or
the last 60 days before the expiration of the CBA — when another union may challenge the
majority status of the bargaining agent through the filing of a petition for a certification
election. If there is no such petition filed during the freedom period, then the employer
"shall continue to recognize the majority status of the incumbent bargaining agent where
no petition for certification election is filed." 22 chanrobleslaw

In the present case, the facts are not up for debate. No petition for certification election
challenging the majority status of SMART was filed during the freedom period, which was
from November 1 to December 31, 2004 — the 60-day period prior to the expiration of the
five-year CBA. SMART therefore remained the exclusive bargaining agent of the rank-and-
file employees.

Given that SMART continued to be the workers' exclusive bargaining agent, Ren Transport
had the corresponding duty to bargain collectively with the former. Ren Transport's refusal
to do so constitutes an unfair labor practice.

Consequently, Ren Transport cannot avail itself of the defense that SMART no longer represents the
majority of the workers. The fact that no petition for certification election was filed within the
freedom period prevented Ren Transport from challenging SMART'S existence and membership.

Moreover, it must be stressed that, according to the labor arbiter, the purported disaffiliation from
SMART was nothing but a convenient, self-serving excuse.23 This factual finding, having been
affirmed by both the CA and the NLRC, is now conclusive upon the Court.24 We do not see any patent
error that would take the instant case out of the general rule.

Ren Transport interfered with the exercise of the employees' right to self-organize.

Interference with the employees' right to self-organization is considered an unfair labor practice
under Article 258 (a) of the Labor Code. In this case, the labor arbiter found that the failure to remit
the union dues to SMART and the voluntary recognition of RTEA were clear indications of interference
with the employees' right to self-organization.25  It must be stressed that this finding was affirmed by
cralawred

the NLRC and the CA; as such, it is binding on the Court, especially when we consider that it is not
tainted with any blatant error. As aptly pointed out by the labor arbiter, these acts were ill-timed in
view of the existence of a labor controversy over membership in the union.26 chanrobleslaw

Ren Transport also uses the supposed disaffiliation from SMART to justify the failure to remit union
dues to the latter and the voluntary recognition of RTEA. However, for reasons already discussed,
this claim is considered a lame excuse that cannot validate those acts.

Labor II – 1
 II.

The NLRC decision is valid.

Ren Transport next argues that the decision rendered by the NLRC is defective considering that it has
failed to resolve all the issues in its Memorandum of Appeal.27 chanrobleslaw

We do not agree.

Section 14, Article VIII of the 1987 Constitution, states that "[n]o decision shall be rendered by any
court without expressing therein clearly and distinctly the facts and the law on which it is based." It
has been held that the constitutional provision does not require a "point-by-point consideration and
resolution of the issues raised by the parties."28 chanrobleslaw

In the present case, the decision shows that the NLRC resolved the focal issue raised by Ren
Transport: whether or not SMART remained the exclusive bargaining agent, such that Ren Transport
could be found guilty of acts of unfair labor practice. We quote the NLRC discussion: ChanRoblesVirtualawlibrary

At the outset, let it be stated that insofar as the principal issue of whether unfair labor practice was
committed by respondents, there is no occasion to find, or even entertain, doubts that the findings
and conclusion of the Labor Arbiter that unfair labor practice (ULP) was committed against the
complainants, are infused with serious errors. We quote: ChanRoblesVirtualawlibrary

[I]t is our considered view that the respondents committed acts of unfair labor practice even if the
CBA between the complainant union and respondent company already expired and majority of the
workers of the existing bargaining agent disaffiliated therefrom, formed its own union and have it
registered as an independent one, still the respondent Company has the duty to bargain collectively
with the existing bargaining agent. It bears stressing that the disaffiliation issue of the members of
the complainant union is still pending before the DOLE and has not yet attained its finality; that there
is no new bargaining agent certified yet by the DOLE, there is no legal basis yet for the respondent
company to disregard the personality of the complainant union and refused or ignored the agent for
renewal of its CBA. It is still the certified collective bargaining agent of the workers, because there
was no new [u]nion yet being certified by the DOLE as the new bargaining agent of the workers.
The above discourse shows the factual and legal bases for the NLRC's resolution of the issue of
whether Ren Transport committed unfair labor practice and thereby satisfies the constitutional
provision on the contents of a decision. The NLRC succeeded in disposing of all the arguments raised
by Ren Transport without going through every argument, as all the assigned errors hinged on the
majority status of SMART.29 All of these errors were addressed and settled by the NLRC by finding
that SMART was still the exclusive bargaining agent of the employees of Ren Transport.

As aptly stated by the CA, a court or any other tribunal is not required to pass upon all the errors
assigned by Ren Transport; the resolution of the main question renders the other issues academic or
inconsequential.30 chanrobleslaw

At this juncture, it is well to note that addressing every one of the errors assigned would not be in
keeping with the policy of judicial economy. Judicial economy refers to "efficiency in the operation of
the courts and the judicial system; especially the efficient management of litigation so as to minimize
duplication of effort and to avoid wasting the judiciary's time and resources."31 In Salud v. Court of
Appeals,32 the Court remarked that judicial economy is a "strong [norm] in a society in need of swift
justice."33 Now, more than ever, the value of brevity in the writing of a decision assumes greater
significance, as we belong to an age in which dockets of the courts are congested and their resources
limited.

III.

SMART is not entitled to an award of moral damages.

Labor II – 1
We now address the petition of SMART, which faults the CA for deleting the grant of moral
damages.34 chanrobleslaw

We hold that the CA correctly dropped the NLRC's award of moral damages to SMART. Indeed, a
corporation is not, as a general rule, entitled to moral damages. Being a mere artificial being, it is
incapable of experiencing physical suffering or sentiments like wounded feelings, serious anxiety,
mental anguish or moral shock.35 chanrobleslaw

Although this Court has allowed the grant of moral damages to corporations in certain situations,36 it
must be remembered that the grant is not automatic. The claimant must still prove the factual basis
of the damage and the causal relation to the defendant's acts.37 In this case, while there is a showing
of bad faith on the part of the employer in the commission of acts of unfair labor practice, there is no
evidence establishing the factual basis of the damage on the part of SMART.

WHEREFORE, premises considered, the petitions are DENIED. The Decision dated 30 January 2009
and the Resolution dated 20 May 2009 issued by the Court of Appeals in CA-G.R. SP No. 100722
are AFFIRMED.

Labor II – 1
 30.) G.R. No. 208986, January 13, 2016

HIJO RESOURCES CORPORATION, Petitioner, v. EPIFANIO P. MEJARES, REMEGIO C.

BALURAN, JR., DANTE SAYCON, AND CECILIO CUCHARO, REPRESENTED BY NAMABDJERA-
HRC, Respondents.

[Issue in this case is whether the ruling of te Med-Arbiter stating that there is no EE-ER
relationship between respondents and petitioner is a final determination and is binding to
the case of illegal dismissal filed by respondents? Court ruled No. While Med-Arb has
authority to determine EE-ER relationship in petition for CE, such is not controlling. It does
not foreclose all questions of EE-ER hence res judicata will not apply. Further, respondents
had no standing anymore to challenge that decision of the Med-Arb, hence they can still
question that question.]

DECISION

CARPIO, J.:

The Case

This petition for review1 assails the 29 August 2012 Decision2 and the 13 August 2013 Resolution3 of
the Court of Appeals in CA-G.R. SP No. 04058-MIN. The Court of Appeals reversed and set aside the
Resolutions dated 29 June 2009 and 16 December 2009 of the National Labor Relations Commission
(NLRC) in NLRC No. MIC-03-000229-08 (RAB XI-09-00774-2007), and remanded the case to the
Regional Arbitration Branch, Region XI, Davao City for further proceedings.

The Facts

Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr., Dante Saycon, and Cecilio Cucharo
(respondents) were among the complainants, represented by their labor union named "Nagkahiusang
Mamumuo ng Bit, Djevon, at Raquilla Farms sa Hijo Resources Corporation" (NAMABDJERA-HRC),
who filed with the NLRC an illegal dismissal case against petitioner Hijo Resources Corporation (HRC).

Complainants (which include the respondents herein) alleged that petitioner HRC, formerly known as
Hijo Plantation Incorporated (HPI), is the owner of agricultural lands in Madum, Tagum, Davao del
Norte, which were planted primarily with Cavendish bananas. In 2000, HPI was renamed as HRC. In
December 2003, HRC's application for the conversion of its agricultural lands into agri-industrial use
was approved. The machineries and equipment formerly used by HPI continued to be utilized by HRC.

Complainants claimed that they were employed by HPI as farm workers in HPI's
plantations occupying various positions as area harvesters, packing house workers,
loaders, or labelers. In 2001, complainants were absorbed by HRC, but they were working
under the contractor-growers: Buenaventura Tano (Bit Farm); Djerame Pausa (Djevon Farm);
and Ramon Q. Laurente (Raquilla Farm). Complainants asserted that these contractor-growers
received compensation from HRC and were under the control of HRC. They further alleged that the
contractor-growers did not have their own capitalization, farm machineries, and equipment.

On 1 July 2007, complainants formed their union NAMABDJERA-HRC, which was later
registered with the Department of Labor and Employment (DOLE). On 24 August 2007,
NAMABDJERA-HRC filed a petition for certification election before the DOLE.

When HRC learned that complainants formed a union, the three contractor-growers filed
with the DOLE a notice of cessation of business operations. In September 2007,

Labor II – 1
complainants were terminated from their employment on the ground of cessation of
business operations by the contractor-growers of HRC. On 19 September 2007,
complainants, represented by NAMABDJERA-HRC, filed a case for unfair labor practices,
illegal dismissal, and illegal deductions with prayer for moral and exemplary damages and
attorney's fees before the NLRC.

On 19 November 2007, DOLE Med-Arbiter Lito A. Jasa issued an Order, 4 dismissing

NAMABDJERA-HRC's petition for certification election on the ground that there was no
employer-employee relationship between complainants (members of NAMABDJERA-HRC) and
HRC. Complainants did not appeal the Order of Med-Arbiter Jasa but pursued the illegal
dismissal case they filed.

On 4 January 2008, HRC filed a motion to inhibit Labor Arbiter Maria Christina S. Sagmit and moved
to dismiss the complaint for illegal dismissal. The motion to dismiss was anchored on the following
arguments: (1) Lack of jurisdiction under the principle of res judicata; and (2) The Order of the Med-
Arbiter finding that complainants were not employees of HRC, which complainants did not appeal,
had become final and executory.

The Labor Arbiter's Ruling

On 5 February 2008, Labor Arbiter Sagmit denied the motion to inhibit. Labor Arbiter Sagmit
likewise denied the motion to dismiss in an Order dated 12 February 2008. Labor Arbiter Sagmit
held that res judicata does not apply. Citing the cases of Manila Golf & Country Club, Inc. v.
IAC5 and Sandoval Shipyards, Inc. v. Pepito,6 the Labor Arbiter ruled that the decision of the Med-
Arbiter in a certification election case, by the nature of that proceedings, does not foreclose further
dispute between the parties as to the existence or non-existence of employer-employee relationship
between them. Thus, the finding of Med-Arbiter Jasa that no employment relationship exists between
HRC and complainants does not bar the Labor Arbiter from making his own independent finding on
the same issue. The non-litigious nature of the proceedings before the Med-Arbiter does not prevent
the Labor Arbiter from hearing and deciding the case. Thus, Labor Arbiter Sagmit denied the motion
to dismiss and ordered the parties to file their position papers.

HRC filed with the NLRC a petition for certiorari with a prayer for temporary restraining order,
seeking to nullify the 5 February 2008 and 12 February 2008 Orders of Labor Arbiter Sagmit.

The Ruling of the NLRC

The NLRC granted the petition, holding that Labor Arbiter Sagmit gravely abused her
discretion in denying HRC's motion to dismiss. The NLRC held that the Med-Arbiter Order dated
19 November 2007 dismissing the certification election case on the ground of lack of employer-
employee relationship between HRC and complainants (members of NAMABDJERA-HRC)
constitutes res judicata under the concept of conclusiveness of judgment, and thus, warrants the
dismissal of the case. The NLRC ruled that the Med-Arbiter exercises quasi-judicial power and the
Med-Arbiter's decisions and orders have, upon their finality, the force and effect of a final judgment
within the purview of the doctrine of res judicata.

On the issue of inhibition, the NLRC found it moot and academic in view of Labor Arbiter Sagmit's
voluntary inhibition from the case as per Order dated 11 March 2009.

The Ruling of the Court of Appeals

The Court of Appeals found the ruling in the Sandoval case more applicable in this case. The Court of
Appeals noted that the Sandoval case, which also involved a petition for certification election and an
illegal dismissal case filed by the union members against the alleged employer, is on all fours with
this case. The issue in Sandoval on the effect of the Med-Arbiter's findings as to the existence of

Labor II – 1
employer-employee relationship is the very same issue raised in this case. On the other hand, the
case of Chris Garments Corp. v. Hon. Sto. Tomas7 cited by the NLRC, which involved three petitions
for certification election filed by the same union, is of a different factual milieu.

The Court of Appeals held that the certification proceedings before the Med-Arbiter are non-
adversarial and merely investigative. On the other hand, under Article 217 of the Labor Code, the
Labor Arbiter has original and exclusive jurisdiction over illegal dismissal cases. Although the
proceedings before the Labor Arbiter are also described as non-litigious, the Court of Appeals noted
that the Labor Arbiter is given wide latitude in ascertaining the existence of employment relationship.
Thus, unlike the Med-Artbiter, the Labor Arbiter may conduct clarificatory hearings and even avail of
ocular inspection to ascertain facts speedily.

Hence, the Court of Appeals concluded that the decision in a certification election case does not
foreclose further dispute as to the existence or non-existence of an employer-employee relationship
between HRC and the complainants.

On 29 August 2012, the Court of Appeals promulgated its Decision, the dispositive portion of which
reads: chanRoblesvirtualLawlibrary

WHEREFORE, the petition is hereby GRANTED and the assailed Resolutions dated June 29, 2009 and
December 16, 2009 of the National Labor Relations Commission are hereby REVERSED AND SET
ASIDE. Let NLRC CASE No. RAB-XI-09-00774-0707 be remanded to the Regional Arbitration Branch,
Region XI, Davao City for further proceedings.

SO ORDERED.8
cralawlawlibrary
ChanRoblesVirtualawlibrary

The Issue

Whether the Court of Appeals erred in setting aside the NLRC ruling and remanding the
case to the Labor Arbiter for further proceedings.

The Ruling of the Court

We find the petition without merit.

There is no question that the Med-Arbiter has the authority to determine the existence of
an employer-employee relationship between the parties in a petition for certification
election. As held in M. Y. San Biscuits, Inc. v. Acting Sec. Laguesma:9 chanroblesvirtuallawlibrary

Under Article 226 of the Labor Code, as amended, the Bureau of Labor Relations (BLR), of which the
med-arbiter is an officer, has the following jurisdiction -
"ART. 226. Bureau of Labor Relations. - The Bureau of Labor Relations and the Labor Relations
Divisionfs] in the regional offices of the Department of Labor shall have original and exclusive
authority to act, at their own initiative or upon request of either or both parties, on all inter-union
and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-
management relations in all workplaces whether agricultural or non-agricultural, except those arising
from the implementation or interpretation of collective bargaining agreements which shall be the
subject of grievance procedure and/or voluntary arbitration.

The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension
by agreement of the parties." (Italics supplied)

From the foregoing, the BLR has the original and exclusive jurisdiction to inter alia, decide all
disputes, grievances or problems arising from or affecting labor-management relations in all
workplaces whether agricultural or non-agricultural. Necessarily, in the exercise of this
Labor II – 1
jurisdiction over labor-management relations, the med-arbiter has the authority, original
and exclusive, to determine the existence of an employer-employee relationship between
the parties.

Apropos to the present case, once there is a determination as to the existence of such a relationship,
the med-arbiter can then decide the certification election case. As the authority to determine the
employer-employee relationship is necessary and indispensable in the exercise of jurisdiction by the
med-arbiter, his finding thereon may only be reviewed and reversed by the Secretary of Labor who
exercises appellate jurisdiction under Article 259 of the Labor Code, as amended, which provides -
"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 ground 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."10
cralawlawlibrary

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

The Court is tasked to resolve the issue of whether the Labor Arbiter, in the illegal
dismissal case, is bound by the ruling of the Med-Arbiter regarding the existence or non-
existence of employer-employee relationship between the parties in the certification
election case.

The Court rules in the negative. As found by the Court of Appeals, the facts in this case are very
similar to those in the Sandoval case, which also involved the issue of whether the ruling in a
certification election case on the existence or non-existence of an employer-employee relationship
operates as res judicata in the illegal dismissal case filed before the NLRC. In Sandoval,  the DOLE
Undersecretary reversed the finding of the Med-Arbiter in a certification election case and ruled that
there was no employer-employee relationship between the members of the petitioner union and
Sandoval Shipyards, Inc. (SSI), since the former were employees of the subcontractors.
Subsequently, several illegal dismissal cases were filed by some members of the petitioner union
against SSI. Both the Labor Arbiter and the NLRC ruled that there was no employer-employee
relationship between the parties, citing the resolution of the DOLE Undersecretary in the certification
election case. The Court of Appeals reversed the NLRC ruling and held that the members of the
petitioner union were employees of SSI. On appeal, this Court affirmed the appellate court's decision
and ruled that the Labor Arbiter and the NLRC erred in relying on the pronouncement of the DOLE
Undersecretary that there was no employer-employee relationship between the parties. The Court
cited the ruling in the Manila Golf11 case that the decision in a certification election case,
by the very nature of that proceeding, does not foreclose all further dispute between the
parties as to the existence or non-existence of an employer-employee relationship
between them.

This case is different from the Chris Garments  case cited by the NLRC where the Court held that the
matter of employer-employee relationship has been resolved with finality by the DOLE Secretary,
whose factual findings were not appealed by the losing party. As mentioned earlier, the Med-
Arbiter's order in this case dismissing the petition for certification election on the basis of
non-existence of employer-employee relationship was issued after the members of the
respondent union were dismissed from their employment. The purpose of a petition for
Labor II – 1
certification election is to determine which organization will represent the employees in their
collective bargaining with the employer.12The respondent union, without its member-
employees, was thus stripped of its personality to challenge the Med-Arbiter's decision in
the certification election case. Thus, the members of the respondent union were left with
no option but to pursue their illegal dismissal case filed before the Labor Arbiter. To dismiss
the illegal dismissal case filed before the Labor Arbiter on the basis of the pronouncement of the
Med-Arbiter in the certification election case that there was no employer-employee relationship
between the parties, which the respondent union could not even appeal to the DOLE Secretary
because of the dismissal of its members, would be tantamount to denying due process to the
complainants in the illegal dismissal case. This, we cannot allow.

WHEREFORE, we DENY the petition.  We AFFIRM the 29 August 2012 Decision and the 13 August
2013 Resolution of the Court of Appeals in CA-G.R. SP No. 04058-MIN.

Labor II – 1
31.) G.R. No.169745               July 18, 2014

REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE SECRETARY OF LABOR AND

EMPLOYMENT (DOLE), Petitioner,
vs.
NAMBOKU PEAK, INC., Respondent.

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

G.R. No.170091

PHIL-JAPAN WORKERS UNIONSOLIDARITY OF UNIONS IN THE PIDLIPPINES FOR EMPOWERMENT AND

REFORMS (P JWU-SUPER), MEDARBITER CLARISSA G. BELTRANLERIOS and SECRETARY PATRICIA A.
STO. TOMAS OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, Petitioners,
vs.
PHIL-JAPAN INDUSTRIAL MANUFACTURING CORPORATION, Respondent.

[THE ISSUE HERE IS WHETHER THE CA DECISION NULLIFYING THE IRR RULE THAT NO APPEAL CAN BE
HAD FROM AN ORDER OF THE MED-ARB TO CONDUCT CE IN AN UNORGANIZED ESTABLISHMENT IS
VALID?] [COURT RULED THAT THE PETITIONERS ARE NOT THE PROPER PARTIES WHO HAVE
STANDING TO QUESTION THE DECISION. IT SHOULD HAVE BEEN THE UNIONS]

DECISION

DEL CASTILLO, J.:

The court or tribunal exercising quasi-judicial functions is bereft of any right or personality to question the decision of
an appellate court reversing its decision.1

These consolidated Petitions for Review on Certiorari  assail the Decisions of the Court of Appeals (CA)issued in
2

two separate petitions, but involving the same issue of whether Section 17, Rule VIII of Department Order No. 40-03
is unconstitutional. The first is the Decision  dated March 18, 2005 in CA-G.R. SP No. 80603, which granted the
3

Petition for Certiorari  filed by herein respondent Namboku Peak, Inc. (Namboku) challenging the October 22, 2003
4

letter-resolution  of Secretary of Labor and Employment Patricia A. Sto. Tomas. Said letter-resolution affirmedthe
5

Med-Arbiter’s Order  dated June 17, 2003 denying Namboku’s motion to defer the conduct of certification election
6

pending resolution of its appeal.

The second is the Decision  dated January 19, 2005 in CA-G.R. SP. No. 80106, which granted the Petition for
7

Certiorari  filed by hereinrespondent PhilJapan Industrial Manufacturing Corporation (Phil-Japan) seeking to declare
8

Section 17, Rule VIII of Department Order No. 40-03 unconstitutional for unduly depriving it of its right to appeal the
August 25, 2003 Decision  of the MedArbiter. Said Decision of the Med-Arbiter, in turn, granted the Petition 10 of
9

PhilJapan Workers Union-Solidarity of Unionsin the Philippines for Empowerment and Reforms (PJWU-SUPER)
seeking to determine the exclusive bargaining representative in Phil-Japan and ordered the conduct of certification
election.

Factual Antecedents

The facts, insofar as G.R. No. 169745 is concerned and as culled from the records, are as follows:

Namboku is a domestic corporation engaged in the business of providing manpower services to various
clients, mainly airline companies. On April 28, 2003, the Philippine Aircraft Loaders and Cargo Employees
Association Solidarity of Unions in the Philippines for Empowerment and Reforms (PALCEA-SUPER) filed a
Petition  for direct certification election before the Med-Arbiter seeking to represent the rank-and-file
11

employees of Namboku assigned at the Cargo and Loading Station of the Philippine Airlines (PAL) in Ninoy
Aquino International Airport. In support of its Petition, PALCEA-SUPER alleged that it is a local chapter affiliate of
Labor II – 1
Solidarity of Unions in the Philippines for Empowerment and Reforms; that its members are composed of regular
rank-and-file employees of Namboku assigned at said Cargo and Loading Station of PAL; that out of the 155 regular
rank-and-file employees of Namboku, 122 or 78% are its members; and, that Namboku is an unorganized
establishment.

Namboku opposed the Petition  on the ground of inappropriateness. It claimed that the members of the
12

PALCEA-SUPER are project employees. Hence, they cannot represent its regular rank-and-file employees. It
emphasized that their individual Project Employee Contract clearly provides that their employment is for a fixed
period of time and dependent upon its Services Agreement  with PAL. However, PALCEA-SUPER misrepresented
13

the status of its members by claiming that they are regular employees of Namboku.

On June 17, 2003, the Med-Arbiter issued an Order  holding that the members of PALCEA-SUPER are
14

regular employees of Namboku. She explained that while Namboku informed them at the time of their
engagement that their employment is for a fixed period of time, it did not, however, apprise them that the
same is for a specific activity, nor was the completion or termination made known to them at the time
oftheir engagement. Also, asopposed to the nature of its business, the tasks for which Namboku engaged their
services do not appear to be separate and independent activities with pre-determined duration or completion. The
Med-Arbiter thus granted the Petition and ordered the conduct of certification election. The dispositive portion of the
Order reads:

WHEREFORE, premises considered, certification election is hereby ordered among the regular rank and file
employees of NAMBOK[U] PEAK, INC., subject to pre-election conference, with the following choices:

1. Philippine Aircraft Loaders and Cargo Employees Association – Solidarity of Unions in the Philippines for
Empowerment and Reforms (PALCEA-SUPER); and

2. No Union.

Accordingly, Employer and Petitioner are hereby directed to submit within ten (10) days from receipt hereof, the
certified list of employees in the bargaining unit, or where necessary, the payrolls covering the members of the
bargaining unit for the last three months prior to this issuance.

SO ORDERED. 15

Namboku appealed  the Med-Arbiter’s Order to the Secretary of the Labor, maintaining that the members of
16

PALCEA-SUPER are mere project employees. It insisted that the combination of project and regular
employees would render a bargaining unit inappropriate for lack of substantial-mutual interest.

In the meantime, on July 29, 2003, Namboku received a summons setting the pre-election conference on July 31,
2003 and stating that the Order granting the conduct of a certification election in an unorganized establishment is
not appealable.17

Whereupon, Namboku filed a Manifestation and Motion,  as well as a Supplemental Motion and
18

Manifestation,  seeking to suspend the conduct of certification election pending resolution of its appeal. It
19

contended that Section 17,  Rule VIII of Department Order No. 40-03 prohibiting the filing of an appeal from
20

an order granting the conduct of a certification election in an unorganized establishment is unconstitutional

because it runs counter to Article 259  of the Labor Code.
21

In a letter-resolution dated October 22, 2003, however, the Secretary of Labor denied the appeal and affirmed the
Med-Arbiter’s June 17, 2003 Order. In rejecting Namboku’s contention that Section 17, Rule VIII of Department
Order No. 40-03 is unconstitutional, the Secretary of Labor ratiocinated that unless said Department Order is
declared by a competent court as unconstitutional, her office would treat the same as valid.

Undeterred, Namboku filed before the CA a Petition for Certiorari,  which was docketed as CA-G.R. SP No. 80630.
23

Namboku imputed grave abuse of discretion on the part of the Secretary ofLabor in (i) not resolving the issue of
appropriateness and (ii) rejecting its appeal based on an invalid provision of Department Order 40-03.
Labor II – 1
With regard to G.R. No. 170091, an examination of the records reveals the following facts:

Phil-Japan is a domestic corporation engaged in manufacturing mufflers, chassis and other car accessories for local
and international markets. On June 6, 2003, PJWU-SUPER filed before the Med-Arbiter a Petition  seeking to
24

determine the sole and exclusive bargaining representative of rank-and-file employees in Phil-Japan. PJWU-SUPER
alleged that it is a legitimate labor organization; that out of the 100 rank-and-file employeesof Phil-Japan, 69 or 69%
are members of PJWU-SUPER; that Phil-Japan is an unorganized establishment; and, that there has been no
certification election conducted during the last 12 months prior to the filing of its Petition.

Phil-Japan opposed the Petition,  claiming that the members of PJWUSUPER are not its employees. It alleged that
25

the listed members of PJWUSUPER have either resigned, finished their contracts, or are employees of its job
contractors CMC Management and PEPC Management Services. It thus prayed for the dismissal of the Petition or,
inthe alternative, suspension of the proceedings pending determination of the existence of employer-employee
relationship.

On August 25, 2003, the Med-Arbiter rendered a Decision  ordering the conduct of certification election. It held,
26

among others, that the documents submitted are not sufficient to resolve the issue of the existence of employer
employee relationship. Considering, however, that Section 15,Rule VIII of the Rules Implementing Book V of the
Labor Code prohibits the suspension of proceedings based on the pendency of such issue, she allowed the
employees to vote. Their votes, however, shall be segregated, and the determination of whether the number of such
segregated ballots is material to the outcome of the election shall be made after the conduct of the election. The
dispositive portion of the Decision reads:

WHEREFORE, premises considered, this petition for certification election is hereby GRANTED. Certification
election is hereby ordered conducted among the regular rank-and-file workers of Phil-Japan Ind. Mfg. Corporation
with the following choices:

1. Phil-Japan Workers Union-Solidarityof Unions in the Philippines for Empowerment and Reforms (PJWU-
SUPER); and

2. No Union.

Accordingly, Employer and Petitioner are hereby directed to submit within ten (10) days from receipt hereof, the
certified list of employees in the bargaining unit, or where necessary, the payrolls covering the members of the
bargaining unit for the last three months prior to this issuance.

SO ORDERED. 27

Aggrieved, Phil-Japan appealed  the Decision of the Med-Arbiter to the Office of the Secretary of Labor
28

asserting that the Med-Arbiter gravely abused her discretion in not resolving the issue of whether employer-
employee relationship existed between the parties.

In a hearing held on October 7, 2003, Hearing Officer Lourdes T. Ching informed Phil-Japan that its appeal will
not be acted upon pursuant to Section 17, Rule VIII of Department Order No. 40-03 and that the certification
election will proceed accordingly.

Undaunted, Phil-Japan filed before the CA a Petition for Certiorari,  which was docketed asCA-G.R. SP No. 80106.
29

Phil-Japan ascribed grave abuse of discretion on the part of the Med-Arbiter in refusing torule on the existence of
employer-employee relationship despite the presence of sufficient evidence on the matter. It also claimed that the
Secretary of Labor gravely abused her discretion in refusing to act on its appeal despite the existence of such right.
As to the Secretary of Labor’s reliance on Section 17, Rule VIII of Department Order No. 40-03, PhilJapan
asserted that the same cannot overturn the clear provision of Article 259 of the Labor Code.

Rulings of the Court of Appeals

Labor II – 1
On March 18, 2005, the CA issued its Decision  in CA-G.R. SP No. 80603 (now subject of G.R. No. 169745)
30

granting Namboku’s Petition and reversing the October 22, 2003 letter-resolution of the Secretary of Labor.
It sustained Namboku’s position that the members of PALCEA-SUPER are project employees and, hence, they are
not similarly situated with the company’s regular rank-and-file employees. The CA also nullified Section 17, Rule
VIII of Department Order No. 40-03 for being in conflict with Article 259 of the Labor Code.

The Secretary of Labor filed a Motion for Reconsideration.  This prompted Namboku to file a Motion to Expunge  on
31 32

the ground that the Secretary of Labor is a mere nominal party who has no legal standing to participate or prosecute
the case. It argued that the Secretary of Labor should have refrained from filing the said Motion for Reconsideration
and should havemaintained the cold neutrality of an impartial judge.

On September 15, 2005, the CA issued a Resolution  denying the Secretary of Labor’s Motion for Reconsideration
33

on the ground, among others, that she is merely a nominal party to the case and has no personal interest therein.

Anent CA-G.R. No. 80106 (now subject of G.R.170091), the CA, in its January 19, 2005 Decision,  reversed and set
34

aside the ruling of the Med-Arbiter. It likewise agreed with Phil-Japan that before extending labor benefits, the
determination of whether an employer-employee relationship exists is a primordial consideration. And based on the
documents submitted, the CA was convinced that out of the 69 members of PJWU-SUPER, 67 were not employees
of Phil-Japan.

The CA further declared that for being violative of Article 259 of the Labor Code, Section 17, Rule VIII of Department
Order No. 40-03 has no legal force and effect.

PJWU-SUPER and DOLE filed separate Motions for Reconsideration.  On September 12, 2005, the CA issued a
35

Resolution  denying both motions and upholding its January 19, 2005 Decision.
36

Issues

On November 3, 2005, the Secretary of Labor filed before this Court a Petition for Review on Certiorari docketed as
G.R. No. 170091 assailing the January 19, 2005 Decision in CA-G.R. SP No. 80106. She avers that:

THE COURT OF APPEALS ERRED IN DECLARING AS OF NO LEGAL FORCE AND EFFECT SECTION 17,
RULE VIII OFD.O. 40-03. 37

Then on November 11, 2005,the Secretary of Laborfiled another Petition for Review on Certiorari docketed as G.R.
No. 169745 challenging the March 18, 2005 Decision in CA-G.R. SP No. 80603. She anchors her Petition on the
following issues:

I.

WHETHER X X X THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DECLARING SECTION 17, RULE
VIII OF DEPARTMENT ORDER NO. 40-03 NULL AND VOID FOR BEING IN CONFLICT WITH ARTICLE 259 OF
THE LABOR CODE, AS AMENDED.

II.

WHETHER PROJECT EMPLOYEES MAY BE INCLUDED IN THE PETITION FOR CERTIFICATION ELECTION
INVOLVING REGULAR EMPLOYEES. 38

Since both Petitions seek to uphold the validity of Section 17, Rule VIII of Department Order No. 40-03, this
Court ordered their consolidation. 39

Secretary of Labor’s Arguments

Labor II – 1
The Secretary of Labor insists that Section 17, Rule VIII of Department Order No. 40-03 is in harmony with
Article 259 of the Labor Code for it does not deny the aggrieved party in an unorganized establishment the
right to appeal. It merely defers the exercise of such right until after the certification election shall have
been conducted. In the meantime, the aggrieved party may raise any issue arising therefrom as a protest.
Such rule, according to the Secretary of Labor, is in consonance with the policy of the State to encourage the
workers to organize and with the mandate ofthe Med-Arbiter to automatically conduct a certification election.

The Secretary of Labor likewise argues that Article 259 applies only when there is a violation of the rules
and regulations in the conduct of the certification election. It does not cover the order oft he Med-Arbiter
granting the conduct of certification election. Moreover, the appeal contemplated under Article 259 must be filed
by a party to the certification election proceedings, to which the employer, Namboku, is a mere stranger.

The Secretary of Labor further contends that the combination of regular rank-and-file employees and project
employees in a certified bargaining unit does not pose any legal obstacle.

Namboku’s Arguments

In opposing the Petition, Namboku questions the locus standi of the Secretary of Labor, insisting that she is merely
a nominal party in the Petitions for Certiorari filed with the CA. Namboku strongly stresses that as a quasi-judicial
officer, the Secretary of Labor should detach herself from cases where her decision is appealed to a higher court for
review. Besides, her office never participated or defended the validity of Section 17 before the CA. It was only after
the CA rendered its Decision nullifying the subject provision of Department Order No. 40-03 that the Secretary of
Labor took an active stance to defend the validity thereof.

With respect to the substantive aspect, Namboku remains steadfast in its position that Section 17, Rule VIII of
Department Order No. 40-03 is unconstitutional for it unduly restricts the statutory right of the management
to appeal the decision of the Med-Arbiter to the Secretary of Labor in an unorganized establishment. It
created a distinction that does not appear in Article 259 of the Labor Code that it seeks to implement.

Namboku likewise echoes the ruling of the CA that there exists a statutory difference between regular and project
employees.  They have divergent duties, responsibilities, and status and duration of employment. They do not
1âwphi1

receive the same benefits. Hence, they cannot unite into a homogenous or appropriate bargaining unit.

Phil-Japan’s Arguments

In defending the Decision of the CA, Phil-Japan argues that Section 17, Rule VIII of Department Order No. 40-03
restricting the statutory right of the employer to appeal will not stand judicial scrutiny. It stresses that the authority of
the Med-Arbiter to determine the existence of an employer-employee relationship and the right of a party to appeal
the former’s decision thereon to the Secretary of Labor are already settled. Phil-Japan insists that under Article
259 of the Labor Code the remedy of appeal is available to any party for the purpose of assailing the
disposition of the Med-Arbiter allowing the conduct of certification election without any distinction whether
the establishment concerned is organized or unorganized.

Our Ruling

The Petitions are denied. The Secretary of Labor is not the real party-ininterest vested with personality to
file the present petitions. A real party-in-interest is the party who stands to be benefited or injured by the judgment
in the suit, or the party entitled to the avails of the suit.  As thus defined, the real parties-in-interest in these
40

cases would have been PALCEA-SUPER and PJWU-SUPER. It would have been their duty to appear and defend
the ruling of the Secretary of Labor for they are the ones who were interested that the same be sustained. Of
course, they had the option not to pursue the case before a higher court, as what they did in these cases. As to the
Secretary of Labor, she was impleaded in the Petitions for Certiorari filed before the CA as a nominal party
because one of the issues involved therein was whether she committed an error of jurisdiction. But that
does not make her a real party-in-interest or vests her with authority to appeal the Decisions of the CA in
case it reverses her ruling. Under Section 1,  Rule 45 of the Rules of Court, only real parties-in-interest who
41

participated in the litigation of the case before the CA can avail of an appeal by certiorari. In Judge Santiago

Labor II – 1
v. Court of Appeals,  Judge Pedro T. Santiago rejected the amicable settlement submitted by the parties in an
42

expropriation proceeding pending before his sala for being manifestly iniquitous to the government. When the CA
reversed his decision, Judge Santiago, apparently motivated by his sincere desire to protect the government, filed a
petition before this Court seeking the reinstatement of his ruling. In denying his petition, this Court ruled that:

x x x Section 1 of Rule 45 allows a party to appeal by certiorari from a judgment of the Court of Appeals by filing
withthis Court a petition for review on certiorari. But petitioner judge was not a party either in the expropriation
proceedings or in the certiorari proceeding in the Court of Appeals. His being named as respondent in the Court of
Appeals was merely to comply with the rule that in original petitions for certiorari, the court or the judge, in his
capacity as such, should be named as party respondent because the question in such a proceeding is the
jurisdiction of the court itself. (See Mayol v. Blanco, 61 Phil. 547 [1935], cited in Commentson the Rules of Court,
Moran, Vol. II, 1979 ed., p. 471). "In special proceedings, the judge whose order is under attack is merely a nominal
party; wherefore, a judge in his official capacity, should not be made to appear as a party seeking reversal of a
decision that is unfavorable to the action taken by him. A decent regard for the judicial hierarchy bars a judge from
suing against the adverse opinion of a higher court, x x x." (Alcasid v. Samson, 102 Phil. 735, 740 [1957]). 43

A similar ruling was arrived at in Government Service Insurance System v. The Hon. Court of Appeals (8th Div.).  In 44

that case, upon petition of GSIS, the Securities and Exchange Commission (SEC) issued a cease and desist order
restraining the use of proxies during the scheduled annual stockholders’ meeting of Manila Electric Company.When
the private respondents therein filed a petition for certiorari and prohibition, the CA invalidated the SEC’s cease and
desist order. Uncomfortable with the CA’s ruling, SEC appealed to this Court. In denying SEC’s appeal, this Court
ratiocinated as follows:

x x x Under Section 1 of Rule 45, which governs appeals by certiorari, the right to file the appeal is restricted to "a
party," meaning that only the real parties-ininterest who litigated the petition for certiorari before the Court of
Appeals are entitled to appeal the same under Rule 45. The SEC and its two officers may have been designated as
respondents in the petition for certiorari filed with the Court of Appeals, but under Section 5 ofRule 65 they are not
entitled to be classified as real parties-in-interest. Under the provision, the judge, court, quasijudicial agency,
tribunal, corporation, board, officer or person to whom grave abuse of discretion is imputed (the SEC and its two
officers in this case) are denominated only as public respondents.The provision further states that "public
respondents shall not appear in or file an answer or comment to the petition or any pleading therein." Justice
Regalado explains:

[R]ule 65 involves an original special civil action specifically directed against the person, court, agency or party a
quo which had committed not only a mistake of judgment but an error of jurisdiction, hence should be made public
respondents in that action brought to nullify their invalid acts. It shall, however be the duty of the party litigant,
whether in an appeal under Rule 45 or in a special civil action in Rule65, to defend in his behalf and the party whose
adjudication is assailed, as he is the one interested in sustaining the correctness of the disposition or the validity of
the proceedings. 45

It does not escape the attention of this Court that G.R. No. 170091 was cleverly captioned as "Phil-Japan Workers
Union Solidarity of Unions in the Philippines for Empowerment and Reforms (PJWU-SUPER), Med-Arbiter Clarissa
G. Beltran-Lerios and Secretary Patricia Sto.Tomas of the Department of Labor and Employment, petitioners,
versus Court of Appeals  and Phil-Japan Industrial Manufacturing Corporation." But the same was actually filed by
46

the Secretary of Labor all by herself. The body of the Petition does not include PJWU-SUPER as one of the parties.
Neither did its agent or representative sign the verification and certification against forum-shopping. In other words,
PJWUSUPER had no participation in the preparation and filing of the Petition in G.R. No. 170091.

Another reason that heavily militates against entertaining these Petitions is that the Secretary of Labor should have
remained impartial and detached from the cases she has decided even if the same are appealed to a higher court
for review.

In Pleyto v. PNP-Criminal Investigation & Detection Group,  the Ombudsman ordered the dismissal of Salvador A.
47

Pleyto from the service. When Pleyto filed a Petition for Review questioning his dismissal before the CA, the
Ombudsman intervened. The Ombudsman argued that as a competent disciplining body, it has the right "to defend
its own findings of factand law relative to the imposition of its decisions and ensure that its judgments
inadministrative disciplinary cases [are] upheld by the appellate court."  Further, as "the agency which rendered the
48

Labor II – 1
assailed Decision, it is bestequipped with the knowledgeof the facts, laws and circumstances that led to the finding
of guilt against petitioner."  The CA allowed the Ombudsman to intervene and admitted the latter’s Comment and
49

Memorandum.

In ruling that the CA erred in allowing the Ombudsman to actively participate in the case, this Court declared that:

It is a well-known doctrine that a judge should detach himself from cases where his decision is appealed toa higher
court for review. The raison d'etrefor such doctrine is the fact that a judgeis not an active combatant in such
proceeding and must leave the opposing parties to contend their individual positions and the appellate court to
decide the issues without his active participation. When a judge actively participates in the appeal of his judgment,
he, in a way, ceases to be judicial and has become adversarial instead.

The court or the quasi-judicial agency must be detached and impartial, not only when hearing and resolving the
case before it, but even when its judgment is brought on appeal before a higher court. The judge of a court or the
officer of a quasi-judicial agency must keep in mind thathe is an adjudicator who must settle the controversies
between parties in accordance with the evidence and the applicable laws, regulations, and/or jurisprudence. His
judgment should already clearly and completely state his findings of fact and law. There must be no more need for
him to justify further his judgment when it is appealed before appellate courts. When the court judge orthe quasi-
judicial officer intervenes as a party in the appealed case, he inevitably forsakes his detachment and impartiality,
and his interest in the case becomes personal since his objective now is no longer only to settle the controversy
between the original parties (which he had already accomplished by rendering his judgment), but more significantly,
to refute the appellant’s assignment of errors, defend his judgment, and prevent it from being overturned on appeal. 50

But the Secretary of Labor next contends that with the nullification of Department Order No. 40-03, she has now
become a party adversely affected by the CA ruling. In support of her contention, the Secretary of Labor poses the
question: who may now appeal the Decisions of the CA to the Supreme Court? Certainly, neither Namboku nor Phil-
Japan would appeal a favorable decision.

The National Appellate Board v. P/Insp. Mamauag  provides the complete answer. Thus:
51

However, the government party that can appeal is not the disciplining authority or tribunal which previously heard
the case and imposed the penalty of demotion or dismissal from the service. The government party appealing must
be one that is prosecuting the administrative case against the respondent. Otherwise, an anomalous situation will
result where the disciplining authority or tribunal hearing the case, instead of being impartial and detached,
becomes an active participant in prosecuting the respondent. Thus, in Mathay, Jr. v. Court of Appeals, decided after
Dacoycoy, the Court declared:

To be sure, when the resolutions of the Civil Service Commission were brought before the Court of Appeals, the
Civil Service Commission was included only as a nominal party. As a quasi-judicial body, the Civil Service
Commission can be likened to a judge who should "detach himself from cases where his decision is appealed to a
higher court for review."

In instituting G.R. No. 126354, the Civil Service Commission dangerously departed from its role as adjudicator and
became an advocate. Its mandated function is to "hear and decide administrative cases instituted by or brought
before it directly or on appeal, including contested appointments and to review decisions and actions of its offices
and agencies," not to litigate.52

Here, both cases emanated from the petitions for certification election filed with the Med-Arbiter and subsequently
appealed to the Secretary of Labor. She had occasion to hear the parties’ respective contentions and rule thereon.
As the officer who rendered the decision now subject of these cases, the Secretary of Labor should have remained
impartial and detached from the time the cases reached her until the same were being scrutinized on appeal. 53

True, the issue of whether Section 17, Rule VIII of Department Order No. 40-03 is unconstitutional is a matter
of great concern and deserves everyone’s attention. But this Court cannot pass upon and resolve the same
in these Petitions. Otherwise, it will countenance the objectionable actions of the Secretary of Labor and run afoul

Labor II – 1
of the abovecited settled decisions. WHEREFORE, for the foregoing reasons, the Petitions in G.R. Nos. 169745
and 170091 are DENIED.

Labor II – 1
 32.) G.R. No. 191714, February 26, 2014

T & H SHOPFITTERS CORPORATION/GIN QUEEN CORPORATION, STINNES HUANG, BEN

HUANG AND ROGELIO MADRIAGA, Petitioners, v. T & H SHOPFITTERS CORPORATION/GIN
QUEEN WORKERS UNION, ELPIDIO ZALDIVAR, DARIOS GONZALES, WILLIAM DOMINGO,
BOBBY CASTILLO, JIMMY M. PASCUA, GERMANO M. BAJO, RICO L. MANZANO, ALLAN L.
CALLORINA, ROMEO BLANCO, GILBERT M. GARCIA, CARLOS F. GERILLO, EDUARDO A.
GRANDE, EDILBRANDO MARTICIO, VIVENCIO SUSANO, ROLANDO GARCIA, JR., MICHAEL
FABABIER, ROWELL MADRIAGA, PRESNIL TOLENTINO, MARVIN VENTURA, FRANCISCO
RIVARES, PLACIDO TOLENTINO AND ROLANDO ROMERO, Respondents.

DECISION

MENDOZA, J.:

Assailed in this petition for review on  certiorari  under Rule 45 of the Rules of Court are: 1) the
November 12, 2009 Decision1 of the Court of Appeals (CA), in CA–G.R. SP No. 107188, which
affirmed the July 24, 2007 and November 13, 2008 Decision2 of the National Labor Relations
Commission (NLRC); and 2) its March 24, 2010 Resolution3 denying reconsideration of its decision.

The Facts

On September 7, 2004, the T&H Shopfitters Corporation/Gin Queen Corporation workers

union (THS–GQ Union) and Elpidio Zaldivar,4 Darios Gonzales, William Domingo, Bobby Castillo,
Jimmy M. Pascua, Germano M. Bajo,5 Rico L. Manzano, Allan L. Callorina,6 Romeo Blanco, Gilbert M.
Garcia, Carlos F. Gerillo, Eduardo A. Grande, Edilbrando Marticio, Vivencio Susano, Rolando Garcia,
Jr., Michael Fababier, Rowell Madriaga, Presnil Tolentino, Marvin Ventura, Francisco Rivares, Placido
Tolentino, and Rolando Romero (respondents), all of whom are officers and/or members of THS–GQ
union, filed their Complaint7 for Unfair Labor Practice (ULP) by way of union busting, and
Illegal Lockout, with moral and exemplary damages and attorney’s fees, against T&H Shopfitters
Corporation (T&H Shopfitters) and Gin Queen Corporation (Gin Queen) (collectively
referred to as “petitioners”), before the Labor Arbiter (LA).

Respondents treated T&H Shopfitters and Gin Queen as a single entity and their sole employer. In
their desire to improve their working conditions, respondents and other employees of petitioners
held their first formal meeting on November 23, 2003 to discuss the formation of a union.
The following day or on November 24, 2003, seventeen (17) employees were barred from
entering petitioners’ factory premises located in Castillejos, Zambales, and ordered to transfer to
T&H Shopfitters’ warehouse at Subic Bay Freeport Zone (SBFZ) purportedly because of its expansion.
Afterwards, the said seventeen (17) employees were repeatedly ordered to go on forced leave due to
the unavailability of work.

On December 18, 2003, the Department of Labor and Employment (DOLE), Regional Office No. III
issued a certificate of registration in favor of THS–GQ Union.

Respondents contended that the affected employees were not given regular work assignments, while
subcontractors were continuously hired to perform their functions. This development prompted
respondents to seek the assistance of the National Conciliation and Mediation Board. Subsequently,
an agreement between petitioners and THS–GQ Union was reached. Petitioners agreed to give
priority to regular employees in the distribution of work assignments. Respondents averred, however,
that petitioners never complied with its commitment but instead hired contractual workers.

Labor II – 1
On March 24, 2004, THS–GQ Union filed a petition for certification election. On July 12, 2004,
an order was issued to hold the certification election in both T&H Shopfitters and Gin
Queen. Eventually, the certification election was scheduled on October 11, 2004.

Meanwhile, through a memorandum, dated August 17, 2004, petitioner Ben Huang (Huang), Director
for Gin Queen, informed its employees of the expiration of the lease contract between Gin Queen and
its lessor in Castillejos, Zambales and announced the relocation of its office and workers to
Cabangan, Zambales. Some of the respondents, who visited the site in Cabangan, discovered that it
was a “talahiban” or grassland. Later, the said union officers and members were made to work as
grass cutters in Cabangan, under the supervision of a certain Barangay Captain Greg Pangan. Due to
these circumstances, the employees assigned in Cabangan did not report for work. As a
consequence, the THS–GQ Union president was made to explain why he should not be terminated for
insubordination. The other employees who likewise failed to report in Cabangan were meted out with
suspension.

On October 10, 2004, petitioners sponsored a field trip to Iba, Zambales, for its employees.
The officers and members of the THS–GQ Union were purportedly excluded from the field
trip. On the evening of the field trip, a certain Angel Madriaga, a sales officer of
petitioners, campaigned against the union in the forthcoming certification election.

The following day or on October 11, 2004, the employees were escorted from the field trip to
the polling center in Zambales to cast their votes. On October 13, 2004, the remaining
employees situated at the SBFZ plant cast their votes as well. Due to the heavy pressure exerted
by petitioners, the votes for “no union” prevailed. On October 14, 2004, the THS–GQ Union
filed its protest with respect to the certification election proceedings.

Respondents averred that the following week after the certification elections were held,
petitioners retrenched THG–GQ Union officers and members assigned at the Zambales
plant. Respondents claimed that the work weeks of those employees in the SBFZ plant were
drastically reduced to only three (3) days in a month.

In its defense, Gin Queen, claiming that it is a corporation separate and distinct from T&H
Shopfitters, stressed that respondents were all employees. Gin Queen claimed that due to the
decrease in orders from its customers, they had to resort to cost cutting measures to avoid
anticipated financial losses. Thus, it assigned work on a rotational basis. It was of the impression that
the employees, who opposed its economic measures, were merely motivated by spite in filing the
complaint for ULP against it.

In addition, Gin Queen explained that its transfer from Castillejos, Zambales to Cabangan, Zambales
was a result of the expiration of its lease agreement with Myra D. Lumibao (Myra), its lessor. Since
the Cabangan site was bare and still required construction, Gin Queen offered work, to employees
who opted to stay, on rotation as well.

In its Decision,8 dated December 21, 2005, the LA dismissed respondents’ complaint and all their
money claims for lack of merit.

In dismissing the complaint, the LA explained:

x x x x.

In the case at bar, we carefully examined the grounds raised by the complainants [herein
respondents] as basis for claiming that the respondents [herein petitioners] committed unfair labor
practices by way of illegal lockout, one of which is the alleged transfer of 17 workers to Subic Bay
Freeport Zone, however, we are dismay (sic) to know that not even one of these 17 workers is a
Labor II – 1
complainant in these cases. While the labor union may represent its members in filing cases before
this Office, at least these members must show their intention to file a case by signing in the
complaint to prove that they have grievances against their employer which was lacking in these
cases. Further, there was no showing that the transfer of these 17 workers is considered an unfair
labor practice of the respondents considering that their transfer was effected long before the union
was organized.

We also analyzed the allegations of the complainants that the transfer of the working cite (sic) of the
respondent Gin Queen Corporation was a part of the unfair labor practices committed by the
respondents, however, the complainants failed miserably to controvert the documentary evidence
adduced by the respondent Gin Queen Corporation that the lease contract agreement of the place
had already expired and it was the management prerogative to transfer as a cost cutting measures.
Again the transfer of the place of work would not be considered as unfair labor practice.

Complainants alleged that the respondents committed unfair labor practices by means of ‘lockout’
wherein the respondents should have temporarily refused to provide work to the complainants by a
result of labor or industrial dispute. Complainants failed to show that the rotation of work for them is
considered an unfair labor practice and considered a ‘Lockout’. Complainants rather submitted
several notices showing that the company has no sufficient orders coming from clients and does not
have enough raw materials for production as basis for these complainants not to render work and be
rotated, and thus controvert their allegations that there was ‘lockout’ committed by the respondents.
Further, the documentary evidences adduced by the complainants clearly show that respondents
never terminated the complainants when they were given their notices of suspension negating the
claim that there was ‘lockout’ committed by respondents.

x x x x.9

Aggrieved, respondents appealed to the NLRC. In its July 24, 2007 Decision, the NLRC  reversed
the LA decision and ruled in favor of respondents. The dispositive portion of the said decision
reads:

WHEREFORE, the decision appealed from is hereby REVERSED.

Respondents T & H Shopfitters Corp., Gin Queen Corp. (or ‘MDL’, as it is now called), Stennis Huang,
as well as the presidents of the respondent corporations as of November 2003 and the date of the
execution of this decision are hereby ordered to pay each of the complainants moral and exemplary
damages amounting to P50,000.00 and P35,000.00 respectively. In addition, they shall pay the
complainants attorney’s fees equivalent to ten percent (10%) of the total judgment award.

SO ORDERED.

In granting the appeal, the NLRC reasoned:

Based on the above–mentioned affidavits,10 it may be concluded that the respondents [herein
petitioners] committed unfair labor practice acts consisting in interfering with the exercise of the
employees’ right to self–organization (specifically, sponsoring a field trip on the day preceding the
certification election, warning the employees of dire consequences should the union prevail, and
escorting them to the polling center) and discriminating in regard to conditions of employment in
order to discourage union membership (assigning union officers and active union members as grass
cutters on rotation basis).

xxxx

Labor II – 1
Furthermore, it is noteworthy that, based on their Articles of Incorporation, T & H Corporation and
Gin Queen Corporation are engaged in the same line of business.

It should also be noted that respondents did not controvert the allegations to the effect that Myra D.
Lumibao, the supposed lessor of respondent corporations, is the wife of respondent Stennis Huang,
and that Gin Queen Corporation has been renamed ‘MDL’, but still carries on the same business in
the same premises using the same machines and facilities. These circumstances, together with the
supposed assignment of respondent Stennis Huang’s interest in Gin Queen Corporation to a third
party are badges of fraud that justify the piercing of the veil of corporate fiction. x x x

Thus, based on the foregoing, respondents T & H Shopfitters Corporation, Gin Queen Corporation
(now known as ‘MDL’) and Stennis Huang, as well as the presidents of the respondent corporations
as of November 2003 and the date of execution of this decision may be held liable for unfair labor
practice and the corresponding award of moral and exemplary damages.11

Petitioners filed a motion for reconsideration but the NLRC denied the same in its November 13, 2008
Decision.

Dissatisfied with the adverse ruling, petitioners instituted a petition for certiorari under Rule 65 of the
Rules of Court before the CA arguing grave abuse of discretion on the part of the NLRC in reversing
the LA decision.

In its Decision, dated November 12, 2009, the CA  sustained the NLRC ruling. The  fallo of which
reads:

WHEREFORE, premises considered, the petition for certiorari is DENIED. The NLRC Decisions dated
July 24, 2007 and November 13, 2008 in NLRC NCR CA NO. 048258 (NLRC RAB III–09–7882–04,
NLRC RAB III–09–7980–04) are AFFIRMED.

SO ORDERED.

The CA held that errors of judgment are not within the province of a special civil action for certiorari.
It declared that factual findings of quasi–judicial agencies that had acquired expertise in matters
entrusted to their jurisdiction were accorded not only respect but finality if they were supported by
substantial evidence. The CA noted that the NLRC considered the evidence and applied the law in this
case, thus, no grave abuse of discretion could be imputed on the part of the NLRC in reversing the LA
ruling.

Petitioners moved for reconsideration but the same was denied by the CA in its March 24, 2010
Resolution.

Not in conformity with the ruling of the CA, petitioners seek relief with this Court raising the following

ISSUES

I. WHETHER OR NOT PETITIONERS T & H SHOPFITTERS CORPORATION AND GIN

QUEEN CORPORATION ARE ONE AND THE SAME CORPORATION.
   
II. WHETHER OR NOT PETITIONER GIN QUEEN CORPORATION IS LIABLE TO THE
RESPONDENTS FOR UNFAIR LABOR PRACTICE.
   
III. WHETHER OR NOT THE AWARD OF MORAL AND EXEMPLARY DAMAGES IN FAVOR
OF THE RESPONDENTS IS PROPER.
Labor II – 1
   
IV. WHETHER OR NOT THE AWARD OF TEN PERCENT (10%) ATTORNEY’S FEES IN FAVOR
OF THE RESPONDENT IS PROPER.12

Simply put, the issue for the Court’s resolution is whether ULP acts were committed by
petitioners against respondents in the case at bench.

In support of their position, petitioners stress that T&H Shopfitters and Gin Queen are corporations
separate and distinct from each other. Consequently, T&H Shopfitters and Stinnes Huang, an officer
of T&H Shopfitters, cannot be held liable for ULP for the reason that there is no employer–employee
relationship between the former and respondents. Further, Gin Queen avers that its decision to
implement an enforced rotation of work assignments for respondents was a management prerogative
permitted by law, justified by the decrease in the orders it received from its customers. It explains
that its failure to present concrete proof of its decreasing orders was due to the impossibility of
proving a negative assertion. It also asserts that the transfer from Castillejos to Cabangan was made
in good faith and solely because of the expiration of its lease contract in Castillejos.

The Court’s Ruling

As to the issue of ULP, petitioners’ argument is utterly without merit.

In the case at bench, petitioners are being accused of violations of paragraphs (a), (c), and (e) of
Article 257 (formerly Article 248) of the Labor Code,13 to wit:

Article 257. Unfair labor practices of employers.––It shall be unlawful for an employer to commit any
of the following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self–organization;

xxxx

(c) To contract out services or functions being performed by union members when such will interfere
with, restrain, or coerce employees in the exercise of their right to self–organization;

xxxx

(e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment
in order to encourage or discourage membership in any labor organization. x x x

The concept of ULP is embodied in Article 256 (formerly Article 247) of the Labor Code,14 which
provides:

Article 256. Concept of unfair labor practice and procedure for prosecution thereof.––Unfair labor
practices violate the constitutional right of workers and employees to self–organization, are inimical
to the legitimate interests of both labor and management, including their right to bargain collectively
and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor–management relations.

xxxx

In essence, ULP relates to the commission of acts that transgress the workers’ right to organize. As
specified in Articles 248 [now Article 257] and 249 [now Article 258] of the Labor Code, the
prohibited acts must necessarily relate to the workers’ right to self–organization x x x.15
Labor II – 1
In the case of Insular Life Assurance Co., Ltd. Employees Association – NATU v. Insular Life
Assurance Co. Ltd.,16 this Court had occasion to lay down the test of whether an employer has
interfered with and coerced employees in the exercise of their right to self–organization, that is,
whether the employer has engaged in conduct which, it may reasonably be said, tends to interfere
with the free exercise of employees’ rights; and that it is not necessary that there be direct evidence
that any employee was in fact intimidated or coerced by statements of threats of the employer if
there is a reasonable inference that anti–union conduct of the employer does have an adverse effect
on self–organization and collective bargaining.

The questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its employees,
to the exclusion of union members, before the scheduled certification election; 2) the active
campaign by the sales officer of petitioners against the union prevailing as a bargaining agent during
the field trip; 3) escorting its employees after the field trip to the polling center; 4) the continuous
hiring of subcontractors performing respondents’ functions; 5) assigning union members to the
Cabangan site to work as grass cutters; and 6) the enforcement of work on a rotational basis for
union members, all reek of interference on the part of petitioners.

Indubitably, the various acts of petitioners, taken together, reasonably support an inference that,
indeed, such were all orchestrated to restrict respondents’ free exercise of their right to self–
organization. The Court is of the considered view that petitioners’ undisputed actions prior and
immediately before the scheduled certification election, while seemingly innocuous, unduly meddled
in the affairs of its employees in selecting their exclusive bargaining representative. In Holy Child
Catholic School v. Hon. Patricia Sto. Tomas,17 the Court ruled that a certification election was the sole
concern of the workers, save when the employer itself had to file the petition x x x, but even after
such filing, its role in the certification process ceased and became merely a bystander. Thus,
petitioners had no business persuading and/or assisting its employees in their legally protected
independent process of selecting their exclusive bargaining representative. The fact and peculiar
timing of the field trip sponsored by petitioners for its employees not affiliated with THS–GQ Union,
although a positive enticement, was undoubtedly extraneous influence designed to impede
respondents in their quest to be certified. This cannot be countenanced.

Not content with achieving a “no union” vote in the certification election, petitioners launched a
vindictive campaign against union members by assigning work on a rotational basis while
subcontractors performed the latter’s functions regularly. Worse, some of the respondents were
made to work as grass cutters in an effort to dissuade them from further collective action. Again, this
cannot be countenanced.

More importantly, petitioners’ bare denial of some of the complained acts and unacceptable
explanations, a mere afterthought at best, cannot prevail over respondents’ detailed narration of the
events that transpired. At this juncture, it bears to emphasize that in labor cases, the quantum of
proof necessary is substantial evidence,18 or that amount of relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even if other minds, equally reasonable, might
conceivably opine otherwise.19

In fine, mindful of the nature of the charge of ULP, including its civil and/or criminal consequences,
the Court finds that the NLRC, as correctly sustained by the CA, had sufficient factual and legal bases
to support its finding of ULP.

Anent the issue on the award of attorney’s fess, the applicable law concerning the grant thereof in
labor cases is Article 11120 of the Labor Code. Pursuant thereto, the award of 10% attorney’s fees is
limited to cases of unlawful withholding of wages. In this case, however, the Court cannot find any
claim or proof that petitioners unlawfully withheld the wages of respondents. Consequently, the grant
of 10% attorney’s fees in favor of respondents is not justified under the circumstances. Accordingly,
the Court deems it proper to delete the same.

Labor II – 1
WHEREFORE, the November 12, 2009 Decision of the Court of Appeals and its March 24, 2010
Resolution, in CA–G.R. SP No. 107188, are AFFIRMED, except with respect to the award of
attorney’s fees which is hereby DELETED.

Labor II – 1
33.) G.R. No. L-67485 April 10, 1992

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)-

TUCP, petitioner,
vs.
DIR. CRESENCIANO B. TRAJANO, Bureau of Labor Relations, Ministry of Labor and Employment, Manila,
FEDERATION OF UNIONS OF RIZAL (FUR)-TUCP, and CALINOG REFINERY CORPORATION
(NASUREFCO), respondents.

MEDIALDEA, J.:

This petition for certiorari seeks to annul and set aside the decision rendered by the respondent Director
Cresenciano B. Trajano of the Bureau of Labor Relations, Ministry of Labor and Employment, dated November 18,
1983 affirming the order of Med-Arbiter Demetrio Correa dated May 2, 1983 giving due course to the petition for
certification election filed by private respondent Federation of Unions of Rizal (FUR)-TUCP; and the order dated
March 21, 1984 denying the motion for reconsideration for lack of merit.

The antecedent facts are as follows:

Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP)-TUCP is the certified
exclusive bargaining representative of the rank and file workers of Calinog Refinery Corporation. Private respondent
Federation of Unions of Rizal (FUR)-TUCP is a labor organization duly registered with the Department of Labor and
Employment while private respondent Calinog Refineries Employees Union (CREU)-NACUSIP is the certified
exclusive bargaining representative of the rank and file workers of the private respondent Calinog Refinery
Corporation by virtue of the certification election held on March 30, 1981.

On June 21, 1982, petitioner union filed a petition for deadlock in collective bargaining with the Ministry of Labor and
Employment (now Department of Labor and Employment). In order to obviate friction and tension, the parties
agreed to submit the petition for deadlock to compulsory arbitration on July 14, 1982 and was docketed as RAB
Case No. VI-0220-82.

On July 21, 1982, private respondent FUR-TUCP filed with the Regional Office No. VI, MOLE (now DOLE), Iloilo
City a petition for certification election among the rank and file employees of private respondent company, alleging
that: (1) about forty-five percent (45%) of private respondent company's employees had disaffiliated from petitioner
union and joined private respondent union; (2) no election had been held for the past twelve (12) months; and (3)
while petitioner union had been certified as the sole collective bargaining agent, for over a year it failed to
conclude a collective bargaining agreement with private respondent company. Petitioner union filed a motion
to intervene in the petition for certification election filed by private respondent union.

By order dated July 23, 1982, the Acting Med-Arbiter Pacifico V. Militante dismissed the petition for certification
election for lack of merit since the petition is barred by a pending bargaining deadlock.

On August 25, 1982, private respondent union filed an appeal to the Bureau of Labor Relations, Manila.

The Bureau of Labor Relations through respondent Director Cresenciano B. Trajano rendered a decision on
September 30, 1982 setting aside the order of the Acting Med-Arbiter and remanding the case to Regional Office VI,
Iloilo City for hearing and reception of evidence.

On May 2, 1983, Honorable Med-Arbiter Demetrio Correa issued an order in LRD Case No. 4293 giving due course
to the petition of private respondent FUR-TUCP and ordering that an election be held within 20 days from receipt of
the order.

From the order of Med-Arbiter Correa, petitioner interposed an appeal to the Bureau of Labor Relations.
Labor II – 1
During the pendency of the appeal or on September 10, 1983, a collective bargaining agreement was entered and
executed by the management of the National Sugar Refineries Co., Inc. and petitioner union and was subsequently
ratified by a majority of the rank and file employees. On the basis of the concluded CBA, the Honorable Executive
Labor Arbiter Celerino Grecia II issued an award dated September 12, 1983 adopting the submitted agreement as
the CBA between the parties.

On November 18, 1983, respondent Director Trajano rendered a decision affirming with qualification the order of
Med-Arbiter Correa dated May 2, 1983, the pertinent portions of which provide as follows:

It appears that the Calinog Refinery Employees, Union-NACUSIP-TUCP no longer commands the
support of the majority of the employees. This observation is buttressed by the fact that more than
seventy five percent (75%) of the workers have disaffiliated from the intervenor and joined the ranks
of the petitioner. Thus, intervenor's status as sole and exclusive bargaining representative is now of
doubtful validity.

For the above-mentioned reason, we stand obliged to resort to the most expeditious, practical and
democratic option open to us, that is, the conduct of a certification election. Through this forum, the
true sentiments of the workers as to which labor organization deserves their loyalty can be fairly
ascertained. In any event, it is our view that the 10 September 1983 collective agreement should be
respected by the union that shall prevail in the election not only because it is an arbitration award but
also because substantial benefits are provided thereunder. Otherwise stated, the winning union shall
administer said agreement. In passing, it may be pointed out that CAREFCO has been included as
one of the contending parties in the election. We feel that it is error for the acting Med-Arbiter to do
so considering that the company is a mere bystander in this representation dispute.

WHEREFORE, as above qualified, the Order dated 2 May 1983 is affirmed.

SO DECIDED. (Rollo, pp. 40-41)

From the decision of respondent Director Trajano, petitioner filed a motion for reconsideration dated December 6,
1983.

The respondent Director in his order dated March 21, 1984 denied the motion for reconsideration for lack of merit
and affirmed the Bureau's decision of November 18, 1983.

Hence, this petition.

This Court in a resolution dated December 10, 1984 resolved to grant the urgent motion of petitioner for the
issuance of a restraining order and issued a temporary restraining order enjoining the respondents from conducting
and holding the certification election on December 17, 1984 among the rank and file employees of respondent
company (see Rollo, p. 99).

Petitioner maintains that respondent Director Trajano committed grave abuse of discretion amounting to lack of
jurisdiction when it rendered a decision affirming the order of Med-Arbiter Correa finding that the deadlock is
"nothing but a mere subterfuge to obstruct the exercise of the workers of their legitimate right to self-organization, a
last minute maneuver to deny the workers the exercise of their constitutional rights" (Rollo, p. 28) and ordering a
certification election among the rank and file workers of respondent company.

Furthermore, petitioner stresses that the finding that the contract (deadlock) bar rule has no room for application in
the instant case, runs counter to the provision of Section 3 of the Rules Implementing Batas Pambansa Blg. 130
which prohibits the filing of a petition for certification election during the pendency of a bargaining deadlock.

In conformity with the petitioner's contentions, the Solicitor General insists that the respondent Director has acted
arbitrarily in issuing the assailed decision and order. In addition, it argues that the CBA concluded on September 10,
1983 has a life span of three (3) years and constitutes a bar to the petition for certification election pursuant to
Section 3 of the Rules Implementing Batas Pambansa Blg. 130.
Labor II – 1
The pivotal issue therefore, is whether or not a petition for certification election may be filed during the
pendency of a bargaining deadlock submitted to arbitration or conciliation.

After a careful review of the records of this case, the Court finds the petition meritorious and holds that the
respondent Director gravely abused his discretion when he affirmed the order of Med-Arbiter Correa calling
for a certification election among the rank and file workers of private respondent company.

The law on the matter is Section 3, Book V, Rule V of the Omnibus Rules Implementing the Labor Code, to wit:

Sec. 3. When to file. — In the absence of a collective bargaining agreement duly registered in
accordance with Article 231 of the Code, a petition for certification election may be filed at
any time. However, no certification election may be held within one year from the date of
issuance 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 valid notice or strike or lockout.

If 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.

The clear mandate of the aforequoted section is that a petition for certification election may be filed at any
time, in the absence of a collective bargaining agreement. Otherwise put, the rule prohibits the filing of a
petition for certification election in the following cases:

(1) during the existence of a collective bargaining agreement except within the freedom period;

(2) within one (1) year from the date of issuance of declaration of a final certification election result; or

(3) during the existence of a bargaining deadlock to which an incumbent or certified bargaining agent is a
party and which had been submitted to conciliation or arbitration or had become the subject of a valid
notice of strike or lockout.

The Deadlock Bar Rule simply provides that a petition for certification election can only be entertained if there is no
pending bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid notice of
strike or lockout. The principal purpose is to ensure stability in the relationship of the workers and the management.

In the case at bar, a bargaining deadlock was already submitted to arbitration when private respondent FUR-TUCP
filed a petition for certification election. The same petition was dismissed for lack of merit by the Acting Med-Arbiter
in an order dated July 23, 1982 on the sole ground that the petition is barred by a pending bargaining deadlock.
However, respondent Director set aside the same order and subsequently affirmed an order giving due course to
the petition for certification election and ordering that an election be held.

The law demands that the petition for certification election should fail in the presence of a then pending bargaining
deadlock.

A director of the Bureau of Labor Relations, by the nature of his functions, acts in a quasi-judicial capacity. We find
no reason why his decision should be beyond this Court's review. Administrative officials, like the director of the
Bureau of Labor Relations are presumed to act in accordance with law but this Court will not hesitate to pass upon
their work where there is a showing of abuse of authority or discretion in their official acts or when their decisions or
orders are tainted with unfairness or arbitrariness.

Noteworthy is the fact that a certification was issued by Executive Labor Arbiter Celerino Grecia II on October 21,
1982 certifying that the petition for deadlock in RAB Case No. VI-0220-82 was forwarded to the Executive Labor
Arbiter for compulsory arbitration (see Rollo, p. 19). The respondent Director erred in finding that the order issued by
the Med-Arbiter dismissing the petition for certification election was irregular and was merely based on information.
Labor II – 1
All premises considered, the Court is convinced that the assailed decision and order of the respondent Director is
tainted with arbitrariness that would amount to grave abuse of discretion.

ACCORDINGLY, the petition is GRANTED; the decision dated November 18, 1983 and order dated March 21, 1984
of the respondent Director Cresenciano B. Trajano are hereby nullified and the order of Med-Arbiter Militante dated
July 23, 1982 dismissing the petition for certification election is hereby reinstated.

Labor II – 1
34.) G.R. No. 118915 February 4, 1997

CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE WORKERS, (CMC-

ACE-UFSW), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and Employment; CAPITOL
MEDICAL CENTER EMPLOYEES ASSOCIATION-ALLIANCE OF FILIPINO WORKERS AND CAPITOL
MEDICAL CENTER INCORPORATED AND DRA. THELMA CLEMENTE, President, respondents.

HERMOSISIMA, JR., J.:

This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November 18, 1994 of
public respondent Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment in Case
No. OS.-A-136-94   which dismissed the petition for certification election filed by petitioner for lack of merit and
1

further directed private respondent hospital to negotiate a collective bargaining agreement with respondent union,
Capitol Medical Center Employees Association-Alliance of Filipino Workers.

The antecedent facts are undisputed.

On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent union's petition
for certification election among the rank-and-file employees of the Capitol Medical Center.  Respondent CMC
2

appealed the Order to the Office of the Secretary by questioning the legal status of respondent union's affiliation
with the Alliance of Filipino Workers (AFW). To correct any supposed infirmity in its legal status, respondent union
registered itself independently and withdrew the petition which had earlier been granted. Thereafter, it filed another
petition for certification election.

On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification
election.  Respondent CMC again appealed to the Office of the Secretary which affirmed  the Order of the Med-
3 4

Arbiter granting the certification election.

On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in favor of no
union and 8 spoiled ballots out of a total of 380 votes cast. Thereafter, on January 4, 1993, Med-Arbiter Cruz issued
an Order certifying respondent union as the sole and exclusive bargaining representative of the rank and file
employees at CMC.  5

Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the Secretary of
Labor which appeal was denied on February 26, 1993.  A subsequent motion for reconsideration filed by respondent
6

CMC was likewise denied on March 23, 1993. 7

Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of
respondent union's certificate of registration in Case No. NCR-OD-M-92211-028. In the said case, Med-
Arbiter Paterno Adap issued an Order dated February 4, 1993 which declared respondent union's certificate
of registration as null and void.  However, this order was reversed on appeal by the Officer-in-Charge of the
8

Bureau of Labor Relations in her Order issued on April 13, 1993. The said Order dismissed the motion for
cancellation of the certificate of registration of respondent union and declared that it was not only a bona fide affiliate
or local of a federation (AFW), but a duly registered union as well. Subsequently, this case reached this Court
in Capitol Medical Center, Inc. v. Hon. Perlita Velasco, G.R. No. 110718, where we issued a Resolution dated
December 13, 1993, dismissing the petition of CMC for failure to sufficiently show that public respondent
committed grave abuse of discretion.  The motion for reconsideration filed by CMC was likewise denied in our
9

Resolution dated February 2, 1994.   Thereafter, on March 23, 1994, we issued an entry of judgment certifying that
10

the Resolution dated December 13, 1993 has become final and executory.  11

Labor II – 1
Respondent union, after being declared as the certified bargaining agent of the rank-and-file employees of
respondent CMC by Med-Arbiter Cruz, presented economic proposals for the negotiation of a collective bargaining
agreement (CBA). However, respondent CMC contended that CBA negotiations should be suspended in view of the
Order issued on February 4, 1993 by Med-Arbiter Adap declaring the registration of respondent union as null and
void. In spite of the refusal of respondent CMC, respondent union still persisted in its demand for CBA negotiations,
claiming that it has already been declared as the sole and exclusive bargaining agent of the rank-and-file employees
of the hospital.

Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on March 1, 1993.
After complying with the other legal requirements, respondent union staged a strike on April 15, 1993. On April 16,
1993, the Secretary of Labor assumed jurisdiction over the case and issued an order certifying the same to the
National Labor Relations Commission for compulsory arbitration where the said case is still pending.  12

It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election among the
regular rank-and-file employees of the Capitol Medical Center Inc. It alleged in its petition that: 1) three hundred
thirty one (331) out of the four hundred (400) total rank-and-file employees of respondent CMC signed a petition to
conduct a certification election; and 2) that the said employees are withdrawing their authorization for the said union
to represent them as they have joined and formed the union Capitol Medical Center Alliance of Concerned
Employees (CMC-ACE). They also alleged that a certification election can now be conducted as more that 12
months have lapsed since the last certification election was held. Moreover, no certification election was conducted
during the twelve (12) months prior to the petition, and no collective bargaining agreement has as yet been
concluded between respondent union and respondent CMC despite the lapse of twelve months from the time the
said union was voted as the collective bargaining representative.

On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended that it is the
certified bargaining agent of the rank-and-file employees of the Hospital, which was confirmed by the Secretary of
Labor and Employment and by this Court. It also alleged that it was not remiss in asserting its right as the certified
bargaining agent for it continuously demanded the negotiation of a CBA with the hospital despite the latter's
avoidance to bargain collectively. Respondent union was even constrained to strike on April 15, 1993, where the
Secretary of Labor intervened and certified the dispute for compulsory arbitration. Furthermore, it alleged that
majority of the signatories who supported the petition were managerial and confidential employees and not
members of the rank-and-file, and that there was no valid disaffiliation of its members, contrary to petitioner's
allegations.

Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification election as more
than twelve (12) months had lapsed since respondent union was certified as the exclusive bargaining agent and no
CBA was as yet concluded. It also claimed that the other issues raised could only be resolved by conducting
another certification election.

In its surrejoinder, respondent union alleged that the petition to conduct a certification election was improper,
immoral and in manifest disregard of the decisions rendered by the Secretary of Labor and by this Court. It claimed
that CMC employed "legal obstructionism's" in order to let twelve months pass without a CBA having been
concluded between them so as to pave the way for the entry of petitioner union.

On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for certification election
among the rank and file employees.   It ruled that the issue was the majority status of respondent union. Since no
13

certification election was held within one year from the date of issuance of a final certification election result and
there was no bargaining deadlock between respondent union and the employees that had been submitted to
conciliation or had become the subject of a valid notice of strike or lock out, there is no bar to the holding of a
certification election. 
14

Respondent union appealed from the said Order, alleging that the Med-Arbiter erred in granting the petition for
certification election and in holding that this case falls under Section 3, Rule V Book V of the Rules Implementing the
Labor Code.   It also prayed that the said provision must not be applied strictly in view of the facts in this case.
15

Petitioner union did not file any opposition to the appeal.

Labor II – 1
On November 18, 1994, public respondent rendered a Resolution granting the appeal.   He ratiocinated that while
16

the petition was indeed filed after the lapse of one year form the time of declaration of a final certification result, and
that no bargaining deadlock had been submitted for conciliation or arbitration, respondent union was not remiss on
its right to enter into a CBA for it was the CMC which refused to bargain collectively.  17

CMC and petitioner union separately filed motions for reconsideration of the said Order.

CMC contended that in certification election proceedings, the employer cannot be ordered to bargain collectively
with a union since the only issue involved is the determination of the bargaining agent of the employees.

Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a certification
election would result in the denial of their substantial rights and interests. Moreover,it contended that public
respondent's "indictment" that petitioner "capitalize (sic) on the ensuing delay which was caused by the
Hospital, . . ." was unsupported by the facts and the records.

On January 11, 1995, public respondent issued a Resolution which denied the two motions for reconsideration
hence this petition. 
18

The pivotal issue in this case is whether or not public respondent committed grave abuse of discretion in dismissing
the petition for certification election, and in directing the hospital to negotiate a collective bargaining agreement with
the said respondent union.

Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it ruled against the
holding of a certification election. It further claims that the denial of due process can be gleaned from the manner by
which the assailed resolution was written, i.e., instead of the correct name of the mother federation UNIFIED, it was
referred to as UNITED; and that the respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO.
Petitioner maintains that such errors indicate that the assailed resolution was prepared with "indecent haste."

We do not subscribe to petitioner's contention.

The errors pointed to by petitioner can be classified as mere typographical errors which cannot materially alter the
substance and merit of the assailed resolution.

Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a reversal of the
questioned resolution. As correctly observed by the Solicitor General, petitioner is merely "nit-picking vainly trying to
make a monumental issue out of a negligible error of the public respondent."  19

Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing delay which was
caused by the hospital and which resulted in the non-conclusion of a CBA within the certification year.''   It further
20

argues that the denial of its motion fro a fair hearing was clear case of denial of its right to due process.

Such contention of petitioner deserves scant consideration.

A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for respondent union's
appeal.

It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.

Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules Implementing the
Labor Code where a certification election should be conducted, viz: (1) that one year had lapsed since the issuance
of a final certification result; and (2) that there is no bargaining deadlock to which the incumbent or certified
bargaining agent is a party has been submitted to conciliation or arbitration, or had become the subject of a valid
notice of strike or lockout, are present in this case. It further claims that since there is no evidence on record that
there exists a CBA deadlock, the law allowing the conduct of a certification election after twelve months must be
given effect in the interest of the right of the workers to freely choose their sole and exclusive bargaining agent.

Labor II – 1
While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final
certification result, and that there is no collective bargaining deadlock, public respondent did not commit
grave abuse of discretion when it ruled in respondent union's favor since the delay in the forging of the
CBA could not be attributed to the fault of the latter.

A scrutiny of the records will further reveal that after respondent union was certified as the bargaining agent of CMC,
it invited the employer hospital to the bargaining table by submitting its economic proposal for a CBA. However,
CMC refused to negotiate with respondent union and instead challenged the latter's legal personality through a
petition for cancellation of the certificate of registration which eventually reached this Court. The decision affirming
the legal status of respondent union should have left CMC with no other recourse but to bargain collectively; but still
it did not. Respondent union was left with no other recourse but to file a notice of strike against CMC for unfair labor
practice with the National Conciliation and Mediation Board. This eventually led to a strike on April 15, 1993.

Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994, filed the subject
petition for certification election on March 24, 1994, claiming that twelve months had lapsed since the last
certification election.

Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner of a
petition for certification election, which had been submitted to conciliation or had become the subject of a
valid notice of strike or lockout?

In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment,   we had the occasion to
21

define what a deadlock is, viz:\

A "deadlock" is . . . the counteraction of things producing entire stoppage; . . . . There is a

deadlock when there is a complete blocking or stoppage resulting from the action of equal
and opposed forces . . . . The word is synonymous with the word impasse, which . . "presupposes
reasonable effort at good faith bargaining which, despite noble intentions, does not conclude
in agreement between the parties."

Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this
case nor "reasonable effort at good faith bargaining," such can be attributed to CMC's fault as the
bargaining proposals of respondent union were never answered by CMC. In fact, what happened in this
case is worse than a bargaining deadlock for CMC employed all legal means to block the certification of
respondent union as the bargaining agent of the rank-and-file; and use it as its leverage for its failure to
bargain with respondent union. Thus, we can only conclude that CMC was unwilling to negotiate and reach
an agreement with respondent union. CMC has not at any instance shown willingness to discuss the
economic proposals given by respondent union.  22

As correctly ratiocinated by public respondent, to wit:

For herein petitioner to capitalize on the ensuing delay which was caused by the hospital and which
resulted in the non-conclusion of a CBA within the certification year, would be to negate and render
a mockery of the proceedings undertaken before this Department and to put an unjustified premium
on the failure of the respondent hospital to perform its duty to bargain collectively as mandated in
Article 252 of the Labor Code, as amended, which states".

"Article 252. Meaning of duty to bargain collectively — the duty to bargain collectively
means the performance of a mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement with respect
to wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievance or questions arising under such agreement
and executing a contract incorporating such agreements if requested by either party
but such duty does not compel any party to agree to a proposal or to make any
concession."

Labor II – 1
 The duly certified bargaining agent, CMCEA-AFW, should not be made to further bear the brunt
flowing from the respondent hospital's reluctance and thinly disguised refusal to bargain.  23

If the law proscribes the conduct of a certification election when there is a bargaining deadlock submitted
to conciliation or arbitration, with more reason should it not be conducted if, despite attempts to bring an
employer to the negotiation table by the "no reasonable effort in good faith" on the employer certified
bargaining agent, there was to bargain collectively.

In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned by Chief Justice
Andres R. Narvasa, the factual milieu of which is similar to this case, this Court allowed the holding of a certification
election and ruled that the one year period known as the "certification year" has long since expired. We also ruled,
that:

. . . prior to the filing of the petition for election in this case, there was no such "bargaining deadlock .
. (which) had been submitted to conciliation or arbitration or had become the subject of a valid notice
of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to
bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance,
and unfulfilled promises to bargain collectively; but there is no proof that it had taken tiny action to
legally coerce VIRON to comply with its statutory duty to bargain collectively. It could have charged
VIRON with unfair labor practice; but it did not. It could have gone on a legitimate strike in protest
against VIRON's refusal to bargain collectively and compel it to do so; but it did not. There are
assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by continuing
challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is
no adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining
process between it and VIRON.  24

Although the statements pertinent to this case are merely obiter, still the fact remains that in the Kaisahan case,
NAFLU was counselled by this Court on the steps that it should have undertaken to protect its interest, but which it
failed to do so.

This is what is strikingly different between the Kaisahan case and the case at bench for in the latter case, there was
proof that the certified bargaining agent, respondent union, had taken an action to legally coerce the employer to
comply with its statutory duty to bargain collectively, i.e., charging the employer with unfair labor practice and
conducting a strike in protest against the employer's refusal to bargain.   It is only just and equitable that the
25

circumstances in this case should be considered as similar in nature to a "bargaining deadlock" when no certification
election could be held. This is also to make sure that no floodgates will be opened for the circumvention of the law
by unscrupulous employers to prevent any certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule
V, Book V of the Implement Rules should be interpreted liberally so as to include a circumstance, e.g. where a CBA
could not be concluded due to the failure of one party to willingly perform its duty to bargain collectively.

The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.

WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is AFFIRMED and the
instant petition is hereby DISMISSED.

Labor II – 1
35.) G.R. No. 89609 January 27, 1992

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)-

TUCP, petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of Labor Relations; and the
NATIONAL FEDERATION OF SUGAR WORKERS (NFSW)-FGT-KMU, respondents.

Zoilo V. De la Cruz, Jr., Beethoven R. Buenaventura and Pedro E. Jimenez for petitioner.

Manlapao, Drilon, Ymballa and Chavez for private respondent.

MEDIALDEA, J.:

This is a petition for certiorari seeking the nullification of the resolution issued by the respondent Director of the
Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside the order of the Med-Arbiter dated
February 8, 1989 denying the motion to dismiss the petition and directing the conduct of a certification election
among the rank and file employees or workers of the Dacongcogon Sugar and Rice Milling Co. situated at
Kabankalan, Negros Occidental.

The antecedent facts giving rise to the controversy at bar are as follows:

Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP) is a legitimate
national labor organization duly registered with the Department of Labor and Employment. Respondent Honorable
Pura Ferrer-Calleja is impleaded in her official capacity as the Director of the Bureau of Labor Relations of the
Department of Labor and Employment, while private respondent National Federation of Sugar Workers (NFSW-
FGT-KMU) is a labor organization duly registered with the Department of Labor and Employment.

Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros Occidental employs
about five hundred (500) workers during milling season and about three hundred (300) on off-milling season.

On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon entered into a
collective bargaining agreement (CBA) for a term of three (3) years, which was to expire on November 14,
1987.

When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for its renewal.
The CBA was extended for another three (3) years with reservation to negotiate for its amendment, particularly
on wage increases, hours of work, and other terms and conditions of employment.

However, a deadlock in negotiation ensued on the matter of wage increases and optional retirement. In order to
obviate friction and tension, the parties agreed on a suspension to provide a cooling-off period to give them time to
evaluate and further study their positions. Hence, a Labor Management Council was set up and convened, with a
representative of the Department of Labor and Employment, acting as chairman, to resolve the issues.

On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or certification
election among the rank and file workers of Dacongcogon.

On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the following
grounds, to wit:

Labor II – 1
 The Petition was filed out of time;

II

There is a deadlocked (sic) of CBA negotiation between forced intervenor and respondent-central.
(Rollo, p. 25)

On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed.

By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by private respondent
NFSW-FGT-KMU and directed the conduct of certification election among the rank and file workers of
Dacongcogon, the dispositive portion of which provides as follows:

WHEREFORE, premises considered, the Motion to Dismiss the present petition is, as it is hereby
DENIED. Let therefore a certification election among the rank and file employees/workers of the
Dacongcogon Sugar and Rice Milling Co., situated at Kabankalan, Neg. Occ., be conducted with the
following choices:

(1) National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-
TUCP);

(2) National Federation of Sugar Workers (NFSW);

(3) No Union.

The designated Representation Officer is hereby directed to call the parties for 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 latest payroll shall be used to
determine the list of qualified voters.

SO ORDERED. (Rollo, p. 34)

On February 9, 1989, private respondent filed a motion for reconsideration and/or appeal alleging that the
Honorable Med-Arbiter misapprehended the facts and the law applicable amounting to gross incompetence. Hence,
private respondent prayed that the order of the Med-Arbiter be set aside and the motion to dismiss be reconsidered.

On February 27, 1989, petitioner filed its opposition to the motion for reconsideration praying that the motion for
reconsideration and/or appeal be denied for lack of merit.

On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a resolution reversing the
order of the Med-Arbiter, to wit:

WHEREFORE, premises considered, the Order of the Med-Arbiter dated 8 February 1989 is hereby
set aside and vacated, and a new one issued dismissing the above-entitled petition for being filed
out of time.

SO ORDERED. (Rollo, p. 46)

Hence, this petition raising four (4) issues, to wit:

I. RESPONDENT HON. PURA FERRER-CALLEJA, IN HER CAPACITY AS DIRECTOR OF THE

BUREAU OF LABOR RELATIONS, COMMITTED GRAVE ABUSE OF DISCRETION IN
RENDERING HER RESOLUTION DATED 26 JUNE 1989 REVERSING THE ORDER DATED
FEBRUARY 8, 1989 OF MED-ARBITER FELIZARDO SERAPIO.

Labor II – 1
 II. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT PURA
FERRER-CALLEJA IS CONTRARY TO LAW AND JURISPRUDENCE.

III. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT DIRECTOR
PURA FERRER-CALLEJA DENIES THE RANK AND FILE EMPLOYEES OF THE
DACONGCOGON SUGAR & RICE MILLING COMPANY, AND THE HEREIN PETITIONER
NACUSIP-TUCP, THEIR LEGAL AND CONSTITUTIONAL RIGHTS.

IV. THAT RESPONDENT DIRECTOR PURA FERRER-CALLEJA, IN RENDERING HER SAID

RESOLUTION DATED 26 JUNE 1989 WAS BIASED AGAINST PETITIONER NACUSIP-TUCP.
(Rollo,
p. 2)

The controversy boils down to the sole issue of whether or not a petition for certification election may be
filed after the 60-day freedom period.

Petitioner maintains that respondent Director Calleja committed grave abuse of discretion amounting to excess of
jurisdiction in rendering the resolution dated June 26, 1989 setting aside, vacating and reversing the order dated
February 8, 1989 of Med-Arbiter Serapio, in the following manner:

1) by setting aside and vacating the aforesaid Order dated February 8, 1989 of Med-Arbiter
Felizardo Serapio and in effect dismissing the Petition for Direct or Certification Election of Petitioner
NACUSIP-TUCP (Annex "A" hereof) without strong valid, legal and factual basis;

2) by giving a very strict and limited interpretation of the provisions of Section 6, Rule V, Book V of
the Implementing Rules and Regulations of the Labor Code, as amended, knowing, as she does,
that the Labor Code, being a social legislation, should be liberally interpreted to afford the workers
the opportunity to exercise their legitimate legal and constitutional rights to self-organization and to
free collective bargaining;

3) by issuing her questioned Resolution of June 26, 1989 knowing fully well that upon the effectivity
of Rep. Act No. 6715 on 21 March 1989 she had no longer any appellate powers over decisions of
Med-Arbiters in cases of representation issues or certification elections;

4) by ignoring intentionally the applicable ruling of the Honorable Supreme Court in the case
of Kapisanan ng Mga Manggagawa sa La Suerte-FOITAF vs. Noriel, L-45475, June 20, 1977;

5) by clearly failing to appreciate the significance (sic) of the fact that for more than four (4) years
there has been no certification election involving the rank and file workers of the Company; and,

6) by frustrating the legitimate desire and will of the workers of the Company to determine their sole
and exclusive collective bargaining representative through secret balloting. (Rollo, pp. 9-10)

However, the public respondent through the Solicitor General stresses that the petition for certification election was
filed out of time. The records of the CBA at the Collective Agreements Division (CAD) of the Bureau of Labor
Relations show that the CBA between Dacongcogon and private respondent NFSW-FGT-KMU had expired on
November 14, 1987, hence, the petition for certification election was filed too late, that is, a period of more than one
(1) year after the CBA expired.

The public respondent maintains that Section 6 of the Rules Implementing Executive Order No. 111
commands that the petition for certification election must be filed within the last sixty (60) days of the CBA
and further reiterates and warns that any petition filed outside the 60-day freedom period "shall be dismissed
outright." Moreover, Section 3, Rule V, Book V of the Rules Implementing the Labor Code enjoins the filing of a
representation question, if before a petition for certification election is filed, a bargaining deadlock to which the
bargaining agent is a party is submitted for conciliation or arbitration.

Labor II – 1
Finally, the public respondent emphasizes that respondent Director has jurisdiction to entertain the motion for
reconsideration interposed by respondent union from the order of the Med-Arbiter directing a certification election.
Public respondent contends that Section 25 of Republic Act No. 6715 is not applicable, "(f)irstly, there is as yet no
rule or regulation established by the Secretary for the conduct of elections among the rank and file of employer
Dacongcogon; (s)econdly, even the mechanics of the election which had to be first laid out, as directed in the Order
dated February 8, 1989 of the Med-Arbiter, was aborted by the appeal therefrom interposed by respondent union;
and (t)hirdly, petitioner is estopped to question the jurisdiction of respondent Director after it filed its opposition to
respondent union's Motion for Reconsideration (Annex
'F,' Petition) and without, as will be seen, in any way assailing such jurisdiction. . . ." (Rollo, p.66)

We find the petition devoid of merit.

A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code, as amended by the
rules implementing Executive Order No. 111 provides that:

Sec. 6. Procedure — . . .

In a petition involving an organized establishment or enterprise where the majority status of

the incumbent collective bargaining union is questioned by a legitimate labor organization,
the Med-Arbiter shall immediately order the conduct of a certification election if the petition is
filed during the last sixty (60) days of the collective bargaining agreement. Any petition filed
before or after the sixty-day freedom period shall be dismissed outright.

The sixty-day freedom period based on the original collective bargaining agreement shall not be
affected by any amendment, extension or renewal of the collective bargaining agreement for
purposes of certification election.

x x x           x x x          x x x

The clear mandate of the aforequoted section is that the petition for certification election filed by the
petitioner NACUSIP-TUCP should be dismissed outright, having been filed outside the 60-day freedom
period or a period of more than one (1) year after the CBA expired.

It is a rule in this jurisdiction that only a certified collective bargaining agreement — i.e., an agreement duly
certified by the BLR may serve as a bar to certification elections. (Philippine Association of Free Labor Unions
(PAFLU) v. Estrella, G.R. No. 45323, February 20, 1989, 170 SCRA 378, 382) It is noteworthy that the Bureau of
Labor Relations duly certified the November 14, 1984 collective bargaining agreement. Hence, the contract-
bar rule as embodied in Section 3, Rule V, Book V of the rules implementing the Labor Code is applicable.

This rule simply provides that a petition for certification election or a motion for intervention can only be entertained
within sixty 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 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. (Associated Labor Unions (ALU-TUCP) v. Trajano, G.R. No. 77539, April 12, 1989, 172 SCRA 49,
57 citing Associated Trade Unions (ATU v. Trajano, G.R. No. L-75321, 20 June 1988, 162 SCRA 318, 322-323)

Anent the petitioner's contention that since the expiration of the CBA in 1987 private respondent NFSW-
FGT-KMU and Dacongcogon had not concluded a new CBA, We need only to stress what was held in the case
of Lopez Sugar Corporation v. Federation of Free Workers, Philippine Labor Union Association (G.R. No. 75700-01,
30 August 1990, 189 SCRA 179, 191) quoting Article 253 of the Labor Code that "(i)t shall be the duty of both
parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is reached by the parties." Despite the lapse of
the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a
new CBA shall have been validly executed. Hence, the contract bar rule still applies.

Labor II – 1
Besides, it should be emphasized that Dacongcogon, in its answer stated that the CBA was extended for another
three (3) years and that the deadlock was submitted to the Labor Management Council.

All premises considered, the Court is convinced that the respondent Director of the Bureau of Labor Relations did
not commit grave abuse of discretion in reversing the order of the Med-Arbiter.

ACCORDINGLY, the petition is DENIED and the resolution of the respondent Director of the Bureau of Labor
Relations is hereby AFFIRMED.

Labor II – 1
36.) .R. No. L-77282 May 5, 1989

ASSOCIATED LABOR UNIONS (ALU) petitioner,

vs.
HON. PURA FERRER-CALLEJA, as Director of the Bureau of Labor Relations, Ministry of Labor and
Employment; PHILIPPINE SOCIAL SECURITY LABOR UNION (PSSLU); SOUTHERN PHILIPPINES
FEDERATION OF LABOR (SPFL) and GAW TRADING, INC., respondents.

Romeo S. Occena, Leonard U. Sawal, Edgemelo C. Rosales and Ernesto Carreon for petitioner.

Henrick F. Gingoyon for respondent SPFL.

Wilfredo L. Orcullo for respondent Southern Philippines Federation of Labor.

Miguel A. Enrique, Jr. for respondent GAW Trading, Inc.

[Petitioner sent a letter to PR Gaw Trading asserting that majority of the employees chose them as their rep.
Gaw Trading then sent a letter back to recognize them and told them to negotiate. They negotiated and
signed a CBA. Meanwhile, the other respondents filed for a petition for CE to represent the employees of
GAW. Public respondent Calleja ordered for the CE. Petitioner asserts that since there is an existing CBA,
then it should have barred the CE. Hence this petition. Issue is WON the CBA should have barred the CE?
Court ruled no. Court ruled that for the rule to apply, the CBA should be made with the representative of the
majority of the employees which has been duly established. In this case, there is no support other than their
self-serving assertions that they have the support of the majority. Also the CBA was defective because
there was no posting of notice to its ratification 5 days before the ratification. Further, the employees
themselves questioned such CBA. Because of this, there was defect in the CBA. Hence it should not bar the
CE]

REGALADO, J.:

Petitioner Associated Labor Unions (ALU, for brevity) instituted this special civil action for certiorari and prohibition to
overturn the decision of the respondent direcstor   dated December 10, 1986, which ordered the holding of a
1

certification election among the rank-and-file workers of the private respondent GAW Trading, Inc. The averments in
the petition therefor, which succinctly but sufficiently detail the relevant factual antecedents of this proceedings,
justify their being quoted in full, thus:

1. The associated Labor Unions (ALU) thru its regional Vice-Presidents Teofanio C. Nuñez, in a
letter dated May 7, 1986 (ANNEX C) informed GAW Trading, Inc. that majority of the latter's
employees have authorized ALU to be their sole and exclusive bargaining representative, and
requested GAW Trading Inc., in the same Letter for a conference for the execution of an initial
Collective Bargaining Agreement (CBA);

2. GAW Trading Inc. received the Letter of ALU aforesaid on the same day of May 7, 1986 as
acknowledged thereunder and responded (sic) ALU in a letter dated May 12, 1986 (Annex D)
indicating its recognition of ALU as the sole and exclusive bargaining agent for the majority of its
employees and for which it set the time for conference and/or negotiation at 4:00 P.M. on May 12,
1986 at the Pillsbury Office, Aboitiz Building Juan Luna Street, Cebu City;

3. On the following day of May13, 1986, ALU in behalf of the majority of the employees of GAW
Trading Inc. signed and excuted the Collective Bargaining (ANNEX F) ...

4. On May 15, 1986, ALU in behalf of the majority of the employees of GAW Trading Inc. and GAW
Trading Inc. signed and executed the Collective Bargaining Agreements (ANNEX F) . . . .

Labor II – 1
 5. In the meantime, at about 1:00 P.M. of May 9, 1986, the Southern Philippines Federation of Labor
(SPFL) together with Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a ... Strike ... after it
failed to get the management of GAW Trading Inc. to sit for a conference respecting its demands
presented at 11: A.M. on the same day in an effort to pressure GAW Trading Inc. to make a
turnabout of its standign recognition of ALU as the sole and exclusive bargaining representative of
its employees, as to which strike GAW Trading Inc. filed a petition for Restraining Order/Preliminary
Injunction, dfated June 1, 1986 (Annex H) and which strike Labor Arbiter Bonifacio B. Tumamak held
as illegal in a decision dated August 5, 1986 (ANNEX I);

6. On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU) Federation ... filed a Certification
Election petition (ANNEX J), but as found by Med-Arbiter Candido M. Cumba in its (sic) Order dated
Ju ne 11, 1986 (ANNEX K), without having complied (sic) the subscription requirement for which it
was merely considered an intervenor until compliance thereof in the other petition for direct
recogbnition as bargaining agent filed on MAy 28, 1986 by southern Philippines Federation of Labor
(SPFL) as found in the same order (ANNEX K);

7. Int he meantime, the Collective Bargaining Agreement executed by ALU and GAW Trading Inc.
(ANNEX F) was duly filed May 27, 1986 with the Ministry of Labor and Employment in Region VII,
Cebu city;

8. Nevertheless, Med-Arbiter Candido M. Cumba in his order of June 11, 1986 (Annex K) ruled for
the holding of a ceritfication election in all branches of GAW Trading Inc. in Cebu City, as to which
ALU filed a Motion for Reconsideration dated June 19, 1986 (ANNEX L) which was treated as an
appeal on that questioned Order for which reason the entire record of subject certification case was
forwarded for the Director, Bureau of LAbor Relations, Ministry of Labor and Employment, Manila
(ANNEX M);

9. Bureau of Labor Relations Director Cresencio B. Trajano, rendered a Decision on August 13,
1986 (Annex B) granting ALU's appeal (Motion for Reconsideration) and set aside the questioned
Med-Arbiter Order of June 11, 1986 (Annex K), on the ground that the CBA has been effective and
valid and the contract bar rule applicable;

10. But the same Decision of Director Crecensio B. Trajano was sought for reconsideratrion both by
Southern Philippines Federation of Labor (SPFL) on August 26, 1986 (ANNEX N), supplemented by
the 'SUBMISSION OD ADDITIONAL EVIDENCE' dated September 29, 1986 (ANNEX O), and the
Philppine Social Security Labor Union (PSSLU) on October 2, 1986 (ANNEX P), which were
opposed by both GAW Trading, Inc. on September 2, 1986 (ANNEX Q) and ALU on September 12,
1986 (ANNEX R);  2

The aforesaid decision of then Director Trajano was thereafter reversed by respondent director in her aforecited
decision which is now assailed in this action. A motion for reconsideration of ALU   appears to have been
3

disregarded, hence, its present resort grounded on grave abuse of discretion by public respondent.

Public respondent ordered the holding of a certification election ruling that the "contract bar rule" relied
upon by her predecessor does not apply in the present controversy. According to the decision of said
respondent, the collective bargaining agreement involved herein is defective because it "was not duly
submitted in accordance with Section I, Rule IX, Book V of the Implementing Rules of Batas Pambansa Blg.
130." It was further observed that "(t)here is no proof tending to show that the CBA has been posted in at
least two conspicuous places in the 1 establishment at least five days before its ratification and that it has
been ratified by the majority of the employees in the bargaining unit."

We find no reversible error in the challenged decision of respondent director. A careful consideration of the facts
culled from the records of this case, especially the allegations of petitioner itself as hereinabove quoted, yields the
conclusion that the collective bargaining agreement in question is indeed defective hence unproductive of the
legal effects attributed to it by the former director in his decision which was subsequently and properly reversed.

Labor II – 1
We have previously held that the mechanics of collective bargaining are set in motion only when the
following jurisdictional preconditions are present, namely, (1) possession of the status of majority
representation by the employees' representative in accordance with any of the means of selection and/or
designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to
bargain under Article 251, paragraph (a), of the New Labor Code.   In the present case, the standing of
4

petitioner as an exclusive bargaining representative is dubious, to say the least. It may be recalled that
respondent company, in a letter dated May 12, 1986 and addressed to petitioner, merely indicated that it was "not
against the desire of (its) workers" and required petitioner to present proof that it was supported by the majority
thereof in a meeting to be held on the same date.   The only express recognition of petitioner as said
5

employees' bargaining representative that We see in the records is in the collective bargaining agreement
entered into two days thereafter.   Evidently, there was precipitate haste on the part of respondent company in
6

recognizing petitioner union, which recognition appears to have been based on the self-serving claim of the latter
that it had the support of the majority of the employees in the bargaining unit. Furthermore, at the time of the
supposed recognition, the employer was obviously aware that there were other unions existing in the unit. As earlier
stated, respondent company's letter is dated May 12, 1986 while the two other unions, Southern Philippine
Federation of Labor (hereafter, SPFL and Philippine Social Security Labor Union (PSSLU, for short), went on strike
earlier on May 9, 1986. The unusual promptitude in the recognition of petitioner union by respondent company as
the exclusive bargaining representative of the workers in GAW Trading, Inc. under the fluid and amorphous
circumstances then obtaining, was decidedly unwarranted and improvident.

It bears mention that even in cases where it was the then Minister of Labor himself who directly certified the union
as the bargaining representative, this Court voided such certification where there was a failure to properly determine
with legal certainty whether the union enjoyed a majority representation. In such a case, the holding of a
certification election at a proper time would not necessarily be a mere formality as there was a compelling
reason not to directly and unilaterally certify a union.  7

An additional infirmity of the collective bargaining agreement involved was the failure to post the same in at
least two (2) conspicuous places in the establishment at least five days before its ratification.   Petitioners
8

rationalization was that "(b)ecause of the real existence of the illegal strike staged by SPFL in all the stores of GAW
Trading, Inc. it had become impossible to comply with the posting requirement in so far as the realization of tits
purpose is concerned as there were no impartial members of the unit who could be appraised of the CBA's
contents. "   This justification is puerile and unacceptable.
9

In the first place, the posting of copies of the collective bargaining agreement is the responsibility of the employer
which can easily comply with the requirement through a mere mechanical act. The fact that there were "no impartial
members of the unit" is immaterial. The purpose of the requirement is precisely to inform the employees in the
bargaining unit of the contents of said agreement so that they could intelligently decide whether to accept the same
or not. The assembly of the members of ALU wherein the agreement in question was allegedly explained does not
cure the defect. The contract is intended for all employees and not only for the members of the purpoted
representative alone. It may even be said the the need to inform the non-members of the terms thereof is more
exigent and compelling since, in all likehood, their contact with the persons who are supposed to represent them is
limited. Moreover, to repeat, there was an apparent and suspicious hurry in the formulation and finalization of said
collective bargaining accord. In the sforementioned letter where respondent company required petitioner union to
present proof of its support by the employees, the company already suggested that petitioner ALU at the same time
submit the proposals that it intended to embody in the projected agreement. This was on May 12, 1986, and
prompltly on thre following day the negoltiation panel; furnish respondent company final copies of the desired
agreement whcih, with equal dispatch, was signed on May 15, 1986.

Another potent reason for annulling the disputed collective bargaining is the finding of respondent director
that one hundred eighty-one( 181) of the two hundred eighty-one (281) workers who "ratified" the same now
" strongly and vehemently deny and/or repudiate the alleged negotiations and ratification of the CBA.
"   Although petitioner claims that only sev en (7) of the repudiating group of workers belong to the total number who
10

allegedly ratified the agreement, nevertheless such substantiated contention weighed against the factujal that the
controverted contract will not promote industrial stability . The Court has long since declared that:

... Basic to the contract bar rule is the proposition that the delay of the right to select representatives
can be justified only where stability is deemed paramount. Excepted from the contract which do not

Labor II – 1
 foster industrial stability, such as contracts where the identity of the representative is in doubt. Any
stability derived from such contracts must be subordinated to the employees' freedom of choice
because it does not establish the type of industrial peace contemplated by the law.  11

At this juncture, petitioner should be reminded that the technical rules of rpocedure do not strictly apply in the
adjudication of labor disputes.   Consequently, its objection that the evidence with respect to the aforesaid
12

repudiiation of the supposed collective bargaining agreement cannot be considered for the first time on appeal on
the Bureau of Labor Relations should be disregarded, especially considering the weighty significance thereof.

Both petitioner and private respondent GAW Trading, Inc. allege that the employees of the latter are now enjoying
the benefits of the collective bargaining agreement that both parties had forged. However, We cannot find sufficient
evidence of record to support this contention. The only evidence cited by petitioner is supposed payment of union
fees by said employees, a premise too tenuous to sustain the desired conclusion. Even the actual number of
workers in the respondent company is not clear from the records. Said private respondent claims that it is two
hundred eighty-one (281)  but petitioner suggests that it is more than that number. The said parties should be aware
13

that this Court is not an adjudicator of facts. Worse, to borrow a trite but apt phrase, they would heap the Ossa of
confusion upon the Pelion of uncertainty and still expect a definitive ruling on the matter thus confounded.

Additionally, the inapplicability of the contract bar rule is further underscored by the fact that when the disputed
agreement was filed before the Labor Regional Office on May 27, 1986, a petition for certification election had
already been filed on May 19, 1986. Although the petition was not supported by the signatures of thirty percent
(30%) of the workers in the bargaining unit, the same was enough to initiate said certification election.

WHEREFORE, the order of the public respondent for the conduct of a certification election among the rank-and-file
workers of respondent GAW Trading Inc. is AFFIRMED. The temporary restraining order issued in this case
pursuant to the Resolution of March 25, 1987 is hereby lifted.

Labor II – 1
37.) G.R. No. L-45513-14 January 6, 1978

IN THE MATTER OF PETITION FOR DIRECT CERTIFICATION OR CERTIFICATION ELECTION. FIRESTONE

TIRE & RUBBER COMPANY EMPLOYEES' UNION (FEU), petitioner,
vs.
THE HON. FRANCISCO L. ESTRELLA, as Acting Director of the Bureau of Labor Relations, FIRESTONE
TIRE & RUBBER COMPANY OF THE PHILIPPINES and ASSOCIATED LABOR UNIONS (ALU), respondents.

FIRESTONE TIRE & RUBBER COMPANY EMPLOYEES UNION, represented by Romulo Ramos as
President, petitioner,
vs.
THE HON. FRANCISCO L. ESTRELLA, as Acting Director of the Bureau of Labor Relations, and
ASSOCIATED LABOR UNIONS (ALU), respondents.

Avelino D. Latosa for petitioner.

Venerando B. Briones for private respondent.

[Respondent Union ALU and respondent employer had an existing 3-year CBA. A year after its signing, they
agreed on extending it for 1 more year. This extension was not filed with the DOLE. Subsequently when the
original date of expiration of the CBA came, members of ALU withdrawn from such union and formed
petitioner union. They then filed a petition for CE. This was granted by Med-Arb but was reversed by BLR on
the ground that there is an existing CBA. Hence the issue, WON the existing CBA which was extended
should bar a petition for CE? Court ruled no. They ruled that the better rule is that if the CBA does not
promote industrial stability anymore and it is in the best interest of the employees to choose another
representative, then the CBA should not bar a petition for CE. In this case the Court found that the
upholding of the CBA would not foster industrial peace because the employees have already disaffiliated
with the supposed majority representative. Since there is doubt as to the majority status of ALU, the best
way to determine if they could still represent the workers is through a CE. Further, since the CBA was not
filed, then it should not bar a petition for CE]

ANTONIO, J.:

Petition to set aside two Resolutions issued by respondent Acting Director Francisco L. Estrella of the Bureau of
Labor Relations in BLR Cases Nos. A-070-76 and 2106-76.

The petition alleges that on June 21, 1973, the National Labor Relations Commission certified a three-year collective
bargaining agreement between respondents Associated Labor Union (ALU) and Firestone Tire & Rubber Company
of the Philippines. Said collective bargaining agreement was to be effective from February 1, 1973 to January 31,
1976.

On February 1, 1974, the aforementioned respondents entered into a "Supplemental Agreement" extending the fife
of the collective bargaining agreement for one year, making it effective up to January 31, 1977. The extension was
not ratified by the covered employees nor submitted to the Department of Labor for classification.

Within the sixty-day period prior to the original expiry date of the agreement, some 233 out of about 400
rank-and-file employees of respondent Company resigned from respondent ALU. subsequently, the number of
these employees who resigned from the union was increased to 276 and, by way of letter to the Director of the
Bureau of Labor Relations, they requested for the issuance of a certificate of registration in favor of
petitioner Firestone Tire & Rubber Company Employees' Union (FEU).

On January 28, 1976, Registration Permit No. 8571-IP was issued to petitioner FEU. On February 10, 1976, ten (10)
days after the original expiry date of the collective bargaining agreement, petitioner FEU filed a petition with the
Bureau of Labor Relations for direct certification or certification election,   with the written consent of 308
1

employees, or 77% of the 400-man bargaining unit.

Labor II – 1
On February 20, 1976, respondent ALU filed with the Bureau of Labor Relations a petition for the cancellation of the
registration certificate of petitioner FEU,   alleging that at the time of FEU's registration, respondent ALU was the
2

recognized and certified collective bargaining agent in the unit, and that FEU had not submitted the required sworn
statement that there is no recognized or certified collective bargaining agent therein.

On February 23, 1976, respondent ALU prayed for the dismissal of R04-MED-143-76 on the grounds, among
others, that it has a pending petition for the cancellation of FEU's registration certificate and that there is an
existing collective bargaining agreement, due to expire on January 31, 1977, which constitutes a valid bar to
the holding of a certification election.

Respondent Company likewise opposed the holding of a certification election on the ground, however, that the
petition therefor was filed late, considering that it was filed ten (10) days after the expiry date of the collective
bargaining agreement.

On April 6, 1976, the Med-Arbiter issued an Order granting the petition for certification election, Respondents ALU
and the Company filed separate appeals from the order before the Bureau of Labor Relations.

The Order of the Med-Arbiter was affirmed by the Honorable Director Carmelo C. Noriel on September 23, 1976,
and Motions for Reconsideration were filed by ALU and the Company on October 1, 1976.

On January 25, 1977, respondent Acting BLR Director Francisco L. Estrella issued a Resolution reversing the Order
of the Med-Arbiter which was affirmed by Director Noriel, and holding:

... that there indeed exists a prejudicial question involving the very legal personality of the petitioner
union. In BLR Case No. 210676, the validity of the registration certificate of petitioner is at issue. It is
therefore obvious that the present representation question should wait for the final disposition of the
issue on petitioner's legal personality, if only to forestall what may prove to be unnecessary
proceedings.  3

The issue of whether or not there was an existing collective bargaining agreement which serves as a bar to
the holding of a certification election was not resolved by respondent Acting Director Francisco L. Estrella.

On June 8, 1976, BLR Case No. 2106-76 for the cancellation of petitioner FEU's certificate of registration was
dismissed by the Med-Arbiter. Respondents ALU and the Company appealed to the Bureau of Labor Relations, but
the appeals were dismissal by Director Carmelo C. Noriel. Motions for Reconsideration were filed by the same
respondents and on January 25, 1977, respondent Acting Director Franco L. Estrella entered a Resolution reversing
the decision of Director Noriel and revoking the certificate of registration of petitioner FEU. Respondent Acting
Director Estrella ruled that according to Section 4, Rule II, Book V of the Rules of Implementing the Labor Code, no
union may be registered when there is in the bargaining unit a or certified collective bargaining agent. The Acting
Director found that there was such a bargaining agent in the unit (ALU), and that there was in fact a collective
bargaining agreement which was yet to expire on January 31, 1977. On that score, it was held that FEU's
application for registration was premature, and that it should have waited for the expiration of the collective
bargaining agreement.

The two Resolution issued by Respondent Acting Director Francisco L. Estrella are subject of the instant petition for
review by way of certiorari.

It is petitioner's contention that the issue of whether or not there was an existing contract or collective agreement to
validity bar the holding of a certification election should have been resolved by respondent Acting Director in BLR
Case No. A-070-76, as it was already intertwined with the issue of petitioner's legal personality as assailed in BLR
Case No. 2106-76. According to petitioner, 'if the petition for certification election in this case is not barred by the
contract in question, then the registration certificate of petitioner, acquired as it was within the sixty-day freedom
period of such contract must, of necessity, be likewise not barred or denied as premature." Likewise, petitioner
alleges that 'there being no pronouncement on the applicability of the 'contract bar' rule in this case, the cancellation
of the registration certificate of petitioner is devoid of legal basis, hence it was done by the respondent BLR Acting
Director in grave abuse of discretion."

Labor II – 1
Further, it is petitioner's stand that the Acting Director erred in concluding that the collective bargaining agreement
was to expire on January 31, 1977, for which n he held that petitioner's application for registration was premature.
The expiry date of January 31, 1977, according to petitioner, was unauthorized because the extension of the
contract for a period of one year was not certified by the Department of Labor and was "used to foil the constitutional
right of the workers to self-organization and to engage in collective bargaining."

The petition prays that the Resolutions of respondent Acting Director, both dated January 25, 1977, be set aside,
and the orders/decisions of Director Carmelo C. Noriel, dated September 23, 1976 and October 8, 1976, be
affirmed.

Respondent Firestone Tire and Rubber Company of the Philippines filed its Comment to the instant petition,
contending, mainly, that petitioner FEU had no legal personality as a union because its non-compliance with Section
4, Rule 11, Book V of the Rules and Regulations Implementing the Labor Code is sufficient ground for the
cancellation of its registration certificate.

Respondent ALU likewise filed its Comment, reiterating the contention that FEU had no legal personality to ask for a
direct certification or certification election because its certificate of registration was obtained fraudulently and has, in
fact, been cancelled.

In the meantime, due to the fact that the collective bargaining agreement had already expired, respondent ALU
demanded that respondent Company negotiate with it for a new agreement. The Company requested for specific
advice on the proper course of action from the department of Labor. In response to the request, the Department
answered that "in the absence of any adjudication from competent authority and in accordance with existing
jurisprudence

... there is no legal impediment for (the) Company to negotiate a new collective bargaining
agreement with the Associated Labor Unions.

Accordingly, a new collective bargaining agreement was entered into between ALU and the Company on April 1,
1977.

It appears that on January 31, 1977, FEU filed with Regional Office No. 4 Case No. R04-MED-808-77, a petition for
direct certification/certification election, utilizing its questioned Registration Permit No. 8571-IP, dated January 26,
1976.

We find this petition meritorious. In BLR Case No. 2160-76, Director Carmelo C. Noriel, resolving the pivotal
issue of whether or not the failure of FEU to submit "a sworn statement ... to the effect that there is no recognized or
certified collective bargaining agent in the bargaining unit condemned warrants the revocation of its registration,
said:

This Bureau answers in the negative.

... notwithstanding the existence of a certified or recognized collective bargaining agent, the
policy of this Office sanctions a registration of new union during the freedom period
especially if it has become apparent that a substantial number of union members has
decide(, to form a new labor organization, as aptly illustrated in the case at bar. If the rule were
otherwise, no recourse whatsoever hall be accorded to members of a bargaining unit who would like
to make a free choice of their bargaining representative, thereby placing the constitutional rights of
the workers to self-organization and collective bargaining in mockery, if not, in utter illusion.

This view is supported by precedents, it seems to be the better view that a contract does not operate as a bar to
representation proceedings, where it is shown that because of a schism in the union the contract can no
longer serve to promote industrial stability, and the direction of the election is in the interest of industrial
stability as well as in the interest of the employees' right in the selection of their bargaining
representatives.   Basic to the contract bar rule is the proposition that the delay of the right to select
4

representatives can be justified only where stability is deemed paramount. Excepted from the contract bar

Labor II – 1
rule are certain types of contracts which do not foster industrial stability, such as contracts where the
Identity of the representative is in doubt. Any stability derived from such contracts must be subordinated to
the employees' freedom of choice because it does not establish the type of industrial peace contemplated
by the law. 5

In the case at bar, it is doubtful if any contract that may have been entered into between respondent ALU
and respondent Company will foster stability in the bargaining unit, in view of the fact that a substantial
number of the employees therein have resigned from ALU and joined petitioner FEU. At any rate, this is a
matter that must be finally determined by means of a certification election.

In Foamtex Labor Union-TUPAS vs. Noriel,   We said:

6

... The question of whether or not the disaffiliation was validly made appears not to be of much
significance, considering that the petition for direct certification is supported by eighty (80) out of a
total of one hundred twenty (120) of the rank and file employees of the unit. Pursuant to Article 256
of the Labor Code, 'if there is any reasonable doubt as to whom the employees have chosen as their
representative for the purpose of collective bargaining, the Bureau shall order a secret ballot election
to be conducted by the Bureau to ascertain who is the freely chosen representative of the
employees concerned, ... It is very clear from the aforementioned circumstances that there is
actually a reasonable doubt as to whom the employees have chosen as their representative for the
purpose of collective bargaining.

As to whether or not the disaffiliation was actually and validly made, or whether Foamtex Labor
Union of respondent Belga is the true collective bargaining representative of the employee are
questions that need not be resolved independently of each other. Such questions may be answered
once and for all the moment is determined, by means of the secret ballot election, the union to which
the majority of the employees have really reposed their allegiance. The important factor here is the
true choice of the employees, and . the most expeditious and effective manner of determining this is
by means of the certification election, as it is for this very reason that such procedure has been
incorporated in the law. To order that a separate secret ballot election be conducted for the purpose
of determining the question of policy, i.e., whether or not the majority of the employees desire to
disaffiliate from the mother union, should be merely a circuitous way of ascertaining the majority's
true choice.

As observed PAFLU v. Bureau of labor Relation (69 SCRA 132, 139), a certification election for the
collective bargaining process is one of the fairest and most effective way of determining which labor
organization can truly represent the working force. It is a fundamental postulate that the will of the
majority, if given in an honest election with freedom on the part of the voters to make their choice, is
controlling. No better device can assure the institution of industrial democracy with the two parties to
a business enterprise, management and labor, establishing a regime of self-rule.

Similarly, in Philippine Labor Alliance Council (PLAC) vs. Bureau of Labor Relations, et al.,   it was held that once
7

the fact of disaffiliation has been demonstrated beyond doubt, a certification election is the most
expeditious way of determining which labor organization is to be the exclusive bargaining representative.

It appearing that the extension of the life of the collective bargaining agreement for a period of one year was
not certified by the Bureau of Labor Relations, it cannot, therefore, also bar the certification election. Only a
certified collective bargaining agreement would serve as a bar to such election.  8

Corollarily, therefore, petitioner's application for registration was not premature, as it need not have waited for the
expiration of the one-year extension, the agreement having expired on January 31, 1976.

WHEREFORE the instant petition for certiorari is granted. The two Resolutions, both dated January 25, 1977 in BLR
Cases Nos. A060-76 and 2106-76 are hereby REVERSED and set aside. Costs against private respondents.

Labor II – 1
38.) G.R. No. L-46562 March 31, 1978

VASSAR INDUSTRIES EMPLOYEES UNION (VIEU), petitioner,

vs.
HON. FRANCISCO L. ESTRELLA; as Acting Director of the Bureau of Labor Relations, ASSOCIATED LABOR
UNIONS (ALU), and VASSAR INDUSTRIES, INC., respondents.

Jose C. Espinas for petitioner.

Abraham B. Drapiza for respondent Unions.

Maria de la Paz Singson, for respondent Vassar Industries, Inc.

Acting Solicitor General Vicente V. Mendoza, Assistant Solicitor General Reynato S. Puno and Solicitor Ramon A.
Barcelona for respondent The Hon. Francisco L. Estrella, etc.

[Issue in this case is whether the CBA signed by ALU and Vassar on September 1977 should prohibit the
petition for CE which was filed by petiton on May 1977. Coincidentally the old CBA expired May 1977. It was
also at the date that petitioner union was formed out of the resigning members of ALU; Court ruled that the
CBA should not bar. Such move was motivated to render this petition CE]

FERNANDO, J.:

There appears to be as yet a failure to grasp the scope and amplitude of the constitutional right to freedom of
association.   That seems to be the only explanation but certainly not the justification, for the refusal of respondent
1

Francisco L. Estrella, then the Acting Director of the Bureau of Labor Relations, to register petitioner Vassar
Industries Employees Union.   His communication to that effect is worded thus: "We are hereby returning the
2

application for registration of the [Vassar Industries Employees Union] together with all the accompanying
documents with the information that the application is denied on the ground that there is already a registered
collective bargaining agent in the company."   Petitioners prayed that a restraining order be issued, and, after
3

hearing, that its application for registration be given due course. Accordingly, in a resolution dated August 29, 1977,
this Court issued such restraining order and required comment from the respondents. The comment of the then
Acting Solicitor General Vicente V. Mendoza,   after setting forth the pertinent facts, submitted this conclusion;
4

"From the aforestated undisputed facts, it is the considered opinion of this representation that the actuation of the
then Acting [Bureau of Labor Relations] Director cannot be sustained for the following reasons: a) the ground for the
denial of the registration of petitioner union is the existence of a registered collective bargaining agent, but this is
erroneous since the CBA expired on May 15, 1977, and the records do not show that [the Associated Labor Union]
has been certified anew.
b) Besides, the registration of a labor union is not solely for the purpose of qualifying the union as the exclusive
collective bargaining agent since it is entitled to other rights and prerogatives as enumerated in Art. 243 of the Labor
Code. c) As long as an applicant union complies with all of the legal requirements for registration, it becomes the
BIR's ministerial duty to so register the union. d) No hearing, whatsoever, was conducted to ascertain the existence
of a collective bargaining agent, thus depriving petitioner union of its day in court."   His recommendation is "that the
5

case be ordered remanded to the BLR for the registration of the petitioner union."   The other private respondents
6

also submitted their comments but failed to meet squarely the issue of the failure to comply with the constitutional
mandate of freedom of association. It is thus obvious that the petition is impressed with merit.

There is no dispute on the facts. There was in existence a collective bargaining agreement between private
respondents Associated Labor Unions and Vassar Industries, Inc. which expired on May 15, 1977. Prior to
such date, 111 of a total number of 150 employees of such firm disaffiliated from the former labor
organization and formed their own union. Thereafter, they filed an application for registration of their union
with the Bureau of Labor Relations, complying with an the requirements of both the Labor Code and its
implementing regulations. While such application was pending, petitioner Union filed a petition for
certification as bargaining agent for the rank-and-file employees of the company. The Med-Arbiter, on May 24,
1977, denied their plea on the ground that the union was not duly registered with the Department of Labor.

Labor II – 1
Then came a motion for reconsideration praying that the dismissal be set aside until action be taken on its
pending application for registration. On July 5, 1977, respondent Estrella, then Acting Director of the Bureau
of Labor Relations, denied, as previously noted, the application for registration "on the ground that there is
a registered collective bargaining agent in the company." Hence this petition. It should also be noted that there
is this submission in the comment of the then Acting Solicitor General Vicente V. Mendoza: "It may not be amiss to
mention herein that before filing the instant comment, prior consultation was made with Director Carmelo C. Noriel
of the Bureau of Labor Relations, and he shares our view on the matter leaving it to the undersigned to make the
appropriate recommendation in the premises to this Honorable Court."  7

The petition, to repeat, is impressed with merit. certiorari lies.

1. In U.E. Automotive Employees and Workers Union v. Noriel,   reference was made to the fact that a notable
8

feature of our Constitution is that "freedom of association is explicitly ordained; it is not merely derivative, peripheral
or penumbral, as is the case in the United States. It can trace its origin to the Malolos Constitution."   An earlier
9

decision, Federacion Obrera v. Noriel,   sets forth the scope and amplitude of such right: "Clearly, what is at stake is
10

the constitutional right to freedom of association on the part of employees. Petitioner labor union was in the past
apparently able to enlist the allegiance of the working force in the Anglo-American Tobacco Corporation. Thereafter,
a number of such individuals joined private respondent labor union. That is a matter clearly left to their sole
uncontrolled judgment. There is this excerpt from Pan American World Airways, Inc. v. Pan American Employees
Association: "There is both a constitutional and statutory recognition that laborers have the right to form unions to
take care of their interests vis-a-viz their employees. Their freedom to form organizations would be rendered
nugatory if they could not choose their own leaders to speak on their behalf and to bargain for them." It cannot be
otherwise, for the freedom to choose which labor organization to join is an aspect of the constitutional mandate of
protection to labor. Prior to the Industrial Peace Act, there was a statute setting for the guidelines for the registration
of labor unions. As implied in Manila Hotel Co. v. Court of Industrial Relations, it was enacted pursuant to what is
ordained in the Constitution. Thus, in Umali v. Lovina, it was held that mandamus lies to compel the registration of a
labor organization. There is this apt summary of what is signified in Philippine Land-Air-Sea Labor Union v. Court of
Industrial Relations, "to allow a labor union to organize itself and acquire a personality distinct and separate from its
members and to serve as an instrumentality to conclude collective bargaining agreements ... ." It is no coincidence
that in the first decision of this Court citing the Industrial Peace Act, Pambujan United Mine Workers v. Samar
Mining Company, the role of a labor union as the agency for the expression of the collective will affecting its
members both present and prospective, was stressed. That statute certainly was much more emphatic as to the vital
aspect of such a right as expressly set forth in the policy of the law. What is more, there is in such enactment this
categorical provision on the right of employees 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." The new Labor Code is equally explicit on the matter.
Thus: "The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure and
just and humane conditions of work."  11

2. Equally so, whatever question may arise from the disaffiliation was set at rest by a recent decision of this Court
in Philippine Labor Alliance Council v. Bureau of Labor Relations. 12 Thus: "It is indisputable that the present
controversy would not have arisen if there were no mass disaffiliation from petitioning union. Such a phenomenon is
nothing new in the Philippine labor movement. Nor is it open to any legal objection. It is implicit in the freedom of
association explicitly ordained by the Constitution. There is then the incontrovertible right of any individual to join an
organization of his choice. That option belongs to him. A workingman is not to be denied that liberty. He may be, as
a matter of fact, more in need of it the institution of collective bargaining as an aspect of industrial democracy is to
succeed. No obstacle that may possibly thwart the desirable objective of militancy in labor's struggle for better terms
and conditions is then to be placed on his way. Once the fact of disaffiliation has been demonstrated beyond
doubt, as in this case, a certification election is the most expeditious way of determining which labor
organization is to be the exclusive bargaining representative. It is as simple as that." 13

3. The only novel feature of this case then is the fact that, as noted in the comment of private respondent
Associated Labor Unions, there was subsequently entered into a collective bargaining agreement with the
other private respondent Vassar Industries, Inc. on September 26, 1977, allegedly containing "substantial
benefits for the employees, which contract (CBA) was approved and ratified by the majority of the general
membership or employees of the Vassar Industries, Inc. ... ."   It is on that basis that a dismissal of the petition
14

Labor II – 1
is sought. It may be stated at the outset that while such collective bargaining agreement was entered into during
the pendency of a restraining order issued by this Court as far back as August 29, 1977, it may be argued that there
is no technical violation as the restraining order sought by petitioner labor union was limited to preventing the two
private respondents "from continuing to check-off the petitioner's members who disaffiliated from the ALU of union
dues and other assessments, until further orders from this Honorable Court ...   Nonetheless, it is quite obvious
15

that when the two parties entered into such a collective bargaining agreement, such a move was motivated
by the desire to impart a moot and academic aspect to this petition. It should not therefore elicit the approval of
this Court, especially so as upon the expiration oil the collective contract, it is made "the duty of both parties to keep
the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the
sixty-day period and/or until a new agreement is reached by the parties."   With a pending petition for
16

certification, any such agreement entered into by management with a labor organization is fraught with the
risk that such a labor union may not be chosen thereafter as the collective bargaining representative. That
is the situation that is confronted by private respondents. Any other view would render nugatory the clear
statutory policy to favor certification election as the means of ascertaining a true expression of the will of
the workers as to which labor organization would represent them.  17

4. Now for the appropriate remedy. The prayer in the petition is limited to ordering respondent official to give due
course to petitioner's application for registration.   As this is a certiorari proceeding, equitable in character, this Court
18

is empowered to grant the relief adequate and suitable under the circumstances so that justice in all its fullness
could be achieved. There is this affirmation in the comment of the then Acting Solicitor General Vicente V. Mendoza
as counsel for respondent Estrella: "As long as an applicant union complies with all of the legal requirements for
registration, it becomes the BLR's ministerial duty to so register the union."   It suffices then to order that petitioner
19

Union be registered, there being no legal obstacle to such a step and the duty of the Bureau of Labor Relations
being clear. Then there is this ruling in Philippine Labor Alliance Council v. Bureau of Labor Relations   that calls for
20

application that "once the fact of disaffiliation has been demonstrated beyond doubt, as in this case, a certification
election is the most expeditious way of determining which labor organization is to be the exclusive bargaining
representative."   In the meanwhile, if as contended by private respondent labor union the interim collective
21

bargaining agreement, which it engineered and entered into on September 26, 1977, has much more favorable
terms for the workers of private respondent Vassar Industries, then it should continue in full force and effect until the
appropriate bargaining representative is chosen and negotiations for a new collective bargaining agreement
thereafter concluded. This is one way of assuring that both the social justice,   and the protection to labor
22

provisions   would be effectively implemented without sanctioning an attempt to frustrate the exercise of this Court's
23

jurisdiction in a pending case.

WHEREFORE, the writ of certiorari is granted and the Bureau of Labor Relations ordered to conduct at the earliest
practicable date of a certification election with petitioner labor union, Vassar Industries Labor Union, and private
respondent labor union, Associated Labor Unions, participating therein to determine the exclusive bargaining
representative of the workers employed in Vassar Industries, Inc. This decision is immediately executory.

Labor II – 1
 39.) [G.R. No. 51337. March 22, 1984.]

UNITED CMC TEXTILE WORKERS UNION, Petitioner, v. BUREAU OF LABOR RELATIONS,

HON. CARMELO NORIEL, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, (JULY
CONVENTION), Respondents.

Jose L. Simon for Petitioner.

Wilfredo Y. Guevarra and Edward P. David for Private Respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR LAWS; BUREAU OF LABOR RELATIONS; PENDENCY OF
UNFAIR LABOR PRACTICE CASE, A PREJUDICIAL QUESTION TO CERTIFICATION ELECTION; CASE AT
BAR. — Under settled jurisprudence, the pendency of a formal charge of company domination is a
prejudicial question that, until decided, bars proceedings for a certification election, the reason being
that the votes of the members of the dominated union would not be free. The ULP Case herein was
filed on August 31, 1978, or anterior to the Certification Case, which was presented on September 5,
1978. The pendency of the charge was known to respondent public official by virtue of the Motion to
Dismiss filed by petitioner as intervenor in the Certification Case. No allegation has been made that
said ULP Case was instituted in bad faith to forestall the Certification Case.

[Petition was the incumbent CBA representative of RNF employees of CENTEX. They filed a ULP case
against CENTEX alleging that they had helped another union to form PAFLU. While this case was
pending, PAFLU filed a petition for CE which was ordered by the Med-Arb. Hence this petition.
Petitioner union asserts that the question of a ULP based on company-dominated union is a prejudicial
question before a CE could be ordered. Issue is WON ULP case bars the CE? Court ruled yes. Company-
dominated union allegations if found true would mean that the voting would not be free. Petition granted.
Wait for ULP case.]
DECISION

MELENCIO-HERRERA, J.:

The question to resolve is whether or not public respondent acted with grave abuse of discretion in
affirming the Order of the Med-Arbiter calling for a certification election despite: (a) the pendency of
an unfair labor practice case filed by petitioner charging respondent PAFLU as being company-
dominated; (b) the existence of a deadlock in negotiations for renewal of the collective bargaining
agreement between petitioner and the Central Textile Mills, Inc. (CENTEX, for short); and (c) a
reasonable doubt as to whether the 30% requirement for holding a certification election has been
met.

Petitioner is a legitimate labor organization, the incumbent collective bargaining

representative of all rank and file workers of CENTEX since 1956. Respondent PAFLU is also a
legitimate labor organization seeking representation as the bargaining agent of the rank and
file workers of CENTEX. chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

On August 31, 1978, petitioner filed a complaint for Unfair Labor Practice (R4-LRD-C-8-1493-78) (the
ULP Case, for brevity) against CENTEX and PAFLU alleging that CENTEX had "helped and cooperated
in the organization of the Central Textile Mills, Inc. Local PAFLU by allowing the organizing members
of the PAFLU to solicit signatures of employees of the company who are members of the complainant

Labor II – 1
union to disaffiliate from complainant union and join the respondent PAFLU, during company time
and inside the company premises on August 21, 1978 and the following days thereafter." 1

While the ULP Case was pending, PAFLU, on September 5, 1978, filed a Petition for Certification
Election (R4-LRD-M-9432-78) (the Certification Case, for short) among the rank and file workers of
CENTEX, alleging that: 1) there has been no certification election during the 12 months period prior
to the filing of the petition; 2) the petition is supported by signatures of 603 workers, or more than
30% of the rank and file workers of CENTEX; 3) the collective bargaining agreement between
CENTEX and petitioner will expire on October 31, 1978; 4) the petition is filed within the 60-day-
freedom-period immediately preceding the expiration of the CBA, and 6) there is no legal impediment
to the filing of the petition. 2

Petitioner intervened in the Certification Case and filed a Motion to Dismiss on September 27, 1978
on the grounds that: 1) the ULP Case charging that PAFLU is a company-dominated union
is a prejudicial question and bars the holding of the certification election; and 2) PAFLU
failed to comply with the 30% requirement for mandatory certification election since only 440 of the
603 are valid signatures and that 719 signatories are required as constitutive of 30% of the rank and
file workers totalling 2,397 and not 1,900 as alleged by PAFLU. 3

On October 16, 1978, petitioner filed a Notice of Strike with the Bureau of Labor Relations
for deadlock in the CBA negotiations with CENTEX. The parties having failed to effect a
conciliation, the Labor Minister assumed jurisdiction on November 9, 1978 in Case No. AJML-033-78
4 (referred to hereafter as the Deadlock Case) cralawnad

A Supplemental Motion to Dismiss in the Certification Case was filed by petitioner on December 7,
1978 alleging that the Labor Minister had already taken cognizance of the deadlock in the CBA
negotiations and constituted an impediment to the holding of a certification election. 5

On December 18, 1978, in the Deadlock Case, the Deputy Minister of Labor released a
Decision directing petitioner and CENTEX to execute and sign a CBA to take effect on
November 1, 1978 up to October 30, 1981 based on the guidelines enumerated therein, and to
furnish the Office of the Minister of Labor with a signed copy of the renewed agreement not later
than January 31, 1979. 6

On January 23, 1979, in the Certification Case, the Med-Arbiter issued an Order for the
holding of a certification election among CENTEX rank and file workers, whereby qualified voters
could choose either PAFLU or petitioner as the collective bargaining representative or No Union at all.
7 This was affirmed by respondent Director of the Bureau of Labor Relations on appeal, in the
challenged Resolution, dated May 25, 1979, stating that: 1) the Bureau has discretion to order
certification election where several unions are contending for representation and when there is doubt
as to whether the 30% requirement has been met; and 2) to preclude the filing of a petition for
certification election the notice of strike for deadlock in CBA negotiations must occur prior to the
petition. 8

A Motion for Reconsideration filed by petitioner was denied for lack of merit in the Resolution of
August 20, 1979 9 , also assailed herein.

Hence, this petition, on the general proposition that public respondent has committed serious error of
law and acted with grave abuse of discretion, and that petitioner has no plain and adequate remedy
in the ordinary course of law.

We issued a Temporary Restraining Order enjoining the conduct of the certification election, and
eventually gave the Petition due course.

The issues raised are: (1) is the pendency of the ULP Case charging a participating union in
Labor II – 1
the certification election proceedings as company-dominated a prejudicial question to the
conduct of the election? (2) Does the decision in the Deadlock Case directing the parties to
execute a CBA have the effect of barring the certification election? (3) Does respondent
Director have the discretion to call for a certification election even if the 30% consent requirement is
lacking?

The case can be resolved on the basis of the first issue alone, which must be answered in
the affirmative. Under settled jurisprudence, the pendency of a formal charge of company
domination is a prejudicial question that, until decided, bars proceedings for a certification
election 10 , the reason being that the votes of the members of the dominated union would
not be free. 11 The ULP Case herein was filed on August 31, 1978, or anterior to the Certification
Case, which was presented on September 5, 1978. The pendency of the charge was known to
respondent public official by virtue of the Motion to Dismiss filed by petitioner as intervenor in the
Certification Case. No allegation has been made that said ULP Case was instituted in bad faith to
forestall the Certification Case. The following ruling is thus squarely in point:
jgc:chanrobles.com.ph

"There is no assertion that such complaint was flimsy, or made in bad faith or filed purposely to
forestall the certification election. So, no reason existed for the Industrial Court to depart from its
established practice of suspending the election proceeding. And this seems to be accepted rule in the
law of labor relations, the reason being, in the words of Mr. Justice Montemayor, `if there is a
union dominated by the company, to which some of the workers belong, an election among
workers and employees of the company would not reflect the true sentiment and wishes of
the said workers and employees because the votes of the members of the dominated union
would not be free.’ (Manila Paper Mills Employees v. Court of Industrial Relations, 104 Phil. 10)

"And we have held, through Mr. Justice J.B.L. Reyes, that such charge of company
domination is a prejudicial question that until decided, shall suspend or bar proceedings
for certification election. (Standard Cigarette Workers’ Union v. Court of Industrial Relations, 101
Phil. 126)

"Indeed, if as a result of the Pelta’s complaint in Case No. 255-ULP, the Workers Union should be
ordered dissolved as a company dominated union, any election held in the meantime would be a
waste of energy and money to all parties concerned." 12

The rationale for the suspension of the election proceedings has been further amplified as follows: jgc:cha nrobles.com.ph

"What is settled law, dating from the case of Standard Cigarette Workers’ Union v. Court of Industrial
Relations (101 Phil. 126), decided in 1957, is that if it were a labor organization objecting to the
participation in a certification election of a company-dominated union, as a result of which a
complaint for an unfair labor practice case against the employer was filed, the status of the latter
union must be first cleared in such a proceeding before such voting could take place. In the language
of Justice J.B.L. Reyes as ponente: `As correctly pointed out by Judge Lanting in his dissenting
opinion on the denial of petitioner’s motion for reconsideration, a complaint for unfair labor practice
may be considered a prejudicial question in a proceeding for certification election when it is charged
therein that one or more labor unions participating in the election are being aided, or are controlled,
by the company or employer. The reason is that the certification election may lead to the selection of
an employer-dominated or company union as the employees’ bargaining representative, and when
the court finds that said union is employer-dominated in the unfair labor practice case, the union
selected would be decertified and the whole election proceedings would be rendered useless and
nugatory.’ (Ibid., 128). The next year, the same jurist had occasion to reiterate such doctrine in
Manila Paper Mills Employees and Workers Association v. Court of Industrial Relations (104 Phil. 10
[1958]), thus: `We agree with the CIR on the reasons given in its order that only a formal charge of
company domination may serve as a bar to and stop a certification election, the reason being that if
there is a union dominated by the Company, to which some of the workers belong, an election
among the workers and employees of the company would not reflect the true sentiment
Labor II – 1
and wishes of the said workers and employees from the standpoint of their welfare and
interest, because as to the members of the company dominated union, the vote of the said
members in the election would not be free. It is equally true, however, that the opposition to the
holding of a certification election due to a charge of company domination can only be filed and
maintained by the labor organization which made the charge of company domination, because it is
the entity that stands to lose and suffer prejudice by the certification election, the reason being that
its members might be overwhelmed in the voting by the other members controlled and dominated by
the Company,’ (Ibid., 15). It is easily understandable why it should be thus. There would be an
impairment of the integrity of the collective bargaining process if a company-dominated union were
allowed to participate in a certification election. The timid, the timorous, and the faint-hearted in the
ranks of labor could easily be tempted to cast their votes in favor of the choice of management.
Should it emerge victorious, and it becomes the exclusive representative of labor at the conference
table, there is a frustration of the statutory scheme. It takes two to bargain. There would be instead
a unilateral imposition by the employer. There is need therefore to inquire as to whether a labor
organization that aspires to be the exclusive bargaining representative is company-dominated before
the certification election." 13

With the suspension of the certification proceedings clearly called for by reason of a prejudicial
question, the necessity of passing upon the remaining issues is obviated. chanrobles.com.ph : virtual law library

WHEREFORE, the Resolution of August 20, 1979 issued by public respondent affirming the Order of
the Med-Arbiter, dated January 23, 1979, calling for a certification election is hereby REVERSED and
SET ASIDE. The Temporary Restraining Order heretofore issued by this Court shall continue to be in
force and effect until the status is cleared of respondent Philippine Association of Free Labor Unions
(July Convention) in Case No. R4-LRD-M-9-432-78 entitled "In the Matter of Certification Election
Among Rank and File Workers of Central Textile Mills, Inc., Philippine Association of Free Labor
Unions, Petitioner, United CMC Textile Workers Union, Intervenor." cralaw virtua1aw library

Labor II – 1
 40.) [G.R. No. L-53406. December 14, 1981.]

NATIONAL UNION OF BANK EMPLOYEES, Petitioner, v. THE HONORABLE MINISTER OF

LABOR, THE HONORABLE DEPUTY MINISTER OF LABOR, THE HONORABLE DIRECTOR OF
THE BUREAU OF LABOR RELATIONS, AND PRODUCERS BANK OF THE
PHILIPPINES, Respondents.

Jose G. Espinas for Petitioner.

Lorenzo Tan for Private Respondent.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Octavio R. Ramirez and
Trial Attorney Elimer A. Ybañez for public Respondent.

Jose G. Espinas for Petitioner.

Lorenzo Tan for Private Respondent.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Octavio R. Ramirez and
Trial Attorney Elimer A. Ybañez for public respondents.

[Issue here is WON the petition for cancellation of registration by respondent employer on
the ground of illegal strikes bars the petition for CE? Court ruled No. No order of
cancellation yet. Petition for cancellation was made to delay the CE case. There should be a
liberal approach in favor of employees choosing their rep]

SYNOPSIS

While a petition for the cancellation of the registration certificate of petitioner union on the ground of
the alleged illegal strikes staged by the leaders and members of the intervenor union and petitioner
union was pending resolution in the Bureau of Labor Relations, the Med-Arbiter issued an Order
directing the holding of certification election among the rank and file employees but sustained the
stand of respondent company as to the exclusion of certain employees. Both parties appealed to the
Director of Labor, the petitioner questioning the aforementioned exclusion while respondent company
questioned the jurisdiction of the Med-Arbiter to issue the aforesaid order, the same properly
belonging to the Office of the Minister of Labor. The Director of Labor affirmed the Order of the Med-
Arbiter with certain modifications which in effect rendered the question of jurisdiction moot and
academic. Respondent Bank appealed to the Minister of Labor who did not act on the appeal nor on
petitioner’s motion to dismiss with motion to execute.

On Mandamus, the Supreme Court held that the pendency of a petition for cancellation of the
certificate of registration should not suspend the holding of a certification election where there is no
order directing such cancellation.

Petition granted.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE OF THE PHILIPPINES; PETITION FOR
CANCELLATION OF UNION’S CERTIFICATE OF REGISTRATION; PENDENCY NOT A BAR TO
CERTIFICATION ELECTION. — The pendency of the petition for cancellation of the registration
certificate of petitioner union founded on the alleged illegal strikes staged by the leaders and
members of the intervenor union and petitioner union should not suspend the holding of a
Labor II – 1
 certification election because there is no order directing such cancellation (Cf. Dairy Queen Products
Company of the Phil., Inc., v. CIR, Et Al., No. L-35009, Aug. 31, 1977).

2. ID.; ID.; ID.; ID.; A CASE OF; PETITION INTENDED TO DELAY ELECTION; CASE AT BAR. — The
petition for cancellation of petitioner union’s registration certificate based on the alleged illegal strikes
staged on October 12, 1979 and later November 5-7, 1979 was evidently intended to delay the early
disposition of the case for certification election considering that the same was apparently filed only
after the October 18, 1979 Order of Med-Arbiter Plagata which directed the holding of a certification
election.

3. ID.; ID.; ID.; ID.; POLICY OF LIBERAL APPROACH OBSERVED BY THE COURT IN MATTERS OF
CERTIFICATION ELECTION. — In the recent case of Atlas Free Workers Union (AFWU) PSSLU Local v.
Hon. Carmelo C. Noriel, Et. Al. (No. 51005, May 26, 1981)," [T]he Court resolves to grant the
petition (for Mandamus) in line with the liberal approach consistently adhered to by this Court on
matters of certification election. The whole democratic process is geared towards the determination,
of representation not only in government but in other sectors as well, by election. Thus, the Court
has declared its commitment to the view that a certification election is crucial to the institution of
collective bargaining, for it gives substance to the principle of majority rule as one of the basic
concepts of a democratic policy" (National Mines and Allied Workers Union v. Luna, 83 SCRA 610).

4. ID.; ID.; ID.; ID.; VIOLATION OF THE LABOR CODE; CANCELLATION OF REGISTRATION
CERTIFICATE, NOT THE ONLY RESULTANT PENALTY. — As can be gleaned from Section 8, Role 11,
Book V of the Labor Code in relation to Article 273, Chapter IV, Title VIII thereof, cancellation of the
registration certificate is not the only resultant penalty in case of any violation of the Labor Code. The
penalty imposable should be commensurate to the nature or gravity of the illegal activities conducted
and to the number of members and leaders of the union staging the illegal strike.

5. CONSTITUTIONAL LAW; CONSTITUTION; PROVISIONS FOR THE PROTECTION OF LABOR;

ASSOCIATION SHOULD NOT BE PUNISHED FOR ACTS IMPUTABLE TO OFFICERS AND MEMBERS. —
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to self-
organization finds general and specific constitutional guarantees. Section 7, Article IV of the
Philippine Constitution provides that the right to form associations or societies for purposes not
contrary to law shall not be abridged. This right is more pronounced in the case of labor. Section 9,
Article II (ibid) specifically declares that the State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure and just and humane conditions of work. Such
constitutional guarantees should not be lightly taken, much less easily nullified. A healthy respect for
the freedom of association demands that acts imputable to officers or members be not easily visited
with capital punishments against the association itself."

DECISION

MAKASIAR, J.:

This is a petition for mandamus filed by petitioner Union to compel public respondents to conduct a
certification election among the rank and file employees of the respondent employer in Case No.
LRD-M-8-360-79 or in the alternative, to require the respondent Minister of Labor or his Deputy to
act on private respondent’s "Appeal" and on petitioner’s "Motion to Dismiss with Motion to Execute."
library
cralaw virtua1aw

It appears that on August 17, 1979, petitioner Union filed a petition to be directly certified as
collective bargaining agent of the rank and file employees of private respondent
corporation (Annex "A" ; p. 26, rec.) chanrobles law library

Labor II – 1
On September 7, 1979, the date of the hearing, private respondent was required to submit on
October 5, 1979 a payroll of employees as of July 31, 1979. On the same date, in a handwritten
manifestation, respondent employer through counsel, agreed that as soon as the registration
certificate of the local union was issued by the Ministry of Labor and that it was shown that the local
union represents the majority of the rank and file, the Bank would recognize the said union and
would negotiate accordingly (Annex "B" ; p. 27, rec.)

On October 5, 1979, the abovesaid registration certificate of the local union [Certificate No. 9352-LC,
issued by the Ministry of Labor] was secured. On October 15, 1979, petitioner filed a Manifestation
and Urgent Motion to Decide and submitted a copy of the Registration Certificate of the local union
and union membership application of 183 members out of more or less 259 rank and file employees
of employer Bank, authorizing the National Union of Bank Employees (NUBE) [herein petitioner] to
represent them "as their sole and exclusive collective bargaining agent in all matters relating to
salary rates, hours of work and other terms and conditions of employment in the Producers Bank of
the Philippines" (p. 38, rec.). Nonetheless, respondent corporation failed to submit the required
payroll and the list of rank and file workers based on said payroll.

On October 18, 1979, Med-Arbiter Climaco G. Plagata issued an order directing the holding
of a certification election, the dispositive portion of which reads: jgc:chanrobles.com.ph

"WHEREFORE, premises considered, a certification election is hereby ordered held, conducted, and
supervised by representation officers of this office within 20 days from receipt hereof. The same
representation officers shall conduct pre-election conferences in order to thresh out the mechanics
and other minor details of this election including the inclusion and exclusion proceedings to
determine the qualified electors in this election. The choice shall be either YES, for Petitioner, or NO,
for NO UNION DESIRED.

"SO ORDERED" (Annex "C", pp. 28-29, rec.)

On October 19, 1979, respondent corporation filed a motion to suspend further proceedings
in view of an allegedly prejudicial issue consisting of a pending proceeding for cancellation
of the registration of petitioning union for allegedly engaging in prohibited and unlawful
activities in violation of the laws (Annex "D" ; pp. 30-32, rec.)

On October 23, 1979, by agreement of the parties, respondent then Deputy Minister of Labor Amado
Inciong, acting for the Minister of Labor, assumed jurisdiction over the certification election case and
the application for clearance to terminate the services of thirteen (13) union officers by private
respondent corporation. Thus, an order was issued on the same date which reads: chanrobles law library : red

"On October 23, 1979 the parties entered into an agreement that the Office of the Ministry of Labor
shall assume jurisdiction over the following disputes under P.D. No. 823 in the interest of speedy
labor justice and industrial peace:jgc:chanrobles.com.ph

"1. certification election case; and

"2. application for clearance to terminate thirteen (13) employees with preventive suspension.

(Agreement, October 23, 1979)

"Accordingly, the Deputy Minister deputized Atty. Luna C. Piezas, Chief of the Med-Arbiter Section,
National Capital Region, to conduct summary investigations for the purpose of determining the
definition of the appropriate bargaining unit sought to be represented by the petitioning union as well
as compliance with the 30% mandatory written consent in support of the petition under the
bargaining unit as shall have been defined.

Labor II – 1
"On the application for clearance to terminate with preventive suspension, this Office deems it
necessary, for the mutual protection of each party’s interest and to assure continuance of the
exercise of their respective rights within legal limits, to lift the imposition of preventive suspension on
the subject employees. The lifting of the preventive suspension shall include Messrs. Castro and
Sumibcay, who are presently on leave of absence with pay in pursuance of the agreement reached at
the level of the Regional Director. Further, should the two (2) employees’ leave credits be exhausted,
they are to go on leave without pay, but this shall not be construed as done in pursuance of the
preventive suspension.

"Finally, the lifting of the preventive suspension shall be without prejudice to the continuance of the
hearing on the application for clearance involving the thirteen (13) employees the determination of
the merits of which shall be disposed of at the Regional level" (Annex "E", pp. 33-34, rec.)

Hence, Med-Arbiter Luna Piezas conducted hearings but withdrew, in view of the alleged utter
disrespect for authority, gross bad faith, malicious refusal to appreciate effective, prompt and honest
service and resorting in malicious and deliberate lying in dealing with Ministry of Labor officials by a
certain Mr. Jun Umali, spokesman of the Producers Bank Employees Association. The case was then
transferred to Med-Arbiter Alberto Abis on November 7, 1979 (Annex "F", p. 35, rec.)

During the hearing on November 9, 1979, respondent Bank failed to submit a list of rank and file
employees proposed to be excluded from the bargaining unit. Respondent Bank’s counsel however, in
a verbal manifestation pressed for the exclusion of the following personnel from the bargaining unit:
virtual 1aw library
chanrob1es

1. Secretaries;

2. Staff of Personnel Department;

3. Drivers;

4. Telephone Operators;

5. Accounting Department;

6. Credit Investigators;

7. Collectors;

8. Messengers;

9. Auditing Department Personnel;

10. Signature Verifiers;

11. Legal Department Personnel;

12. Loan Security Custodians; and

13. Trust Department Personnel.

On November 19, 1979, Med-Arbiter Alberto Abis Jr. ordered the holding of certification
election among the rank and file employees but sustained the stand of respondent
company as to the exclusion of certain employees. Thus, the pertinent portion of said order
reads: chanrobles virtual lawlibrary

"After a careful perusal of the records, evaluation of the evidence on hand and consideration of the
Labor II – 1
positions taken by the parties, we find and so hold that Petitioner-Union has substantially complied
with the mandatory and jurisdictional requirement of 30% subscription of all the employees in the
bargaining unit as prescribed by Section 2, Rule 5, Book V of the Rules and Regulations
Implementing the Labor Code. Submission by the Petitioner during the hearing of copies of the
application and membership forms of its members wherein they have duly authorized Petitioner ‘as
their sole and exclusive collective bargaining agent’ constitutes substantial compliance of the
mandatory and jurisdictional 30% subscription requirement, it appearing from the records that out of
the 264 total rank and file employees, 188 are union members who have so authorized Petitioner to
represent.

"With respect to respondent bank’s motion to suspend the proceedings in the instant case pending
resolution of the cancellation proceedings now pending in the Bureau of Labor Relations, we find that
the same is not tenable in the absence of a restraining order.

"In consideration of the agreement of the parties, it is hereby ordered that the scope or coverage of
the appropriate bargaining unit should include the Head Office of the Producers Bank of the
Philippines and all its branch offices and shall comprise of all the regular rank and file employees of
the bank. Excluded are all managerial and supervisory employees, probationary, contractual and
casual employees and security guards.

It is further ordered that by virtue and in consonance with industry practice as revealed by the CBAs
of 10 banks submitted by Petitioner-Union, the following positions should likewise be excluded from
the bargaining unit; Secretaries of bank officials; employees of the Personnel Department, EXCEPT
Manuel Sumibcay, Primi Zamora and Carmelita Sy; employees of the Accounting Department;
employees of the Legal Department; employees of the Trust Department, credit investigators,
telephone operators, and loan security custodians. Signature verifiers, drivers, messengers and other
non-confidential employees included in the bank’s list of proposed exclusions should be allowed to
vote, but the votes should be segregated as challenged. In case a doubt arises as to whether or not
the position held by an employee is confidential in nature, the employee should be allowed to vote,
but his vote should be segregated as challenged.

"WHEREFORE, in the light of the foregoing considerations, it is hereby ordered that a certification
election be conducted among the regular rank and file employees of the Producers Bank of the
Philippines (the appropriate bargaining unit of which is defined above) after the usual pre-election
conference called to formulate the list of qualified voters and discuss the mechanics of the election.

"It is further ordered that the election in the bank’s branches outside the Metro Manila area be
conducted by the appropriate Regional Offices of the Ministry of Labor having jurisdiction over them.

"SO ORDERED (pp. 5-7, Annex "G" ; pp. 41-43, rec.; Emphasis supplied)

On November 29, 1979, petitioner filed a partial appeal to the Director of Bureau of Labor Relations
questioning the exclusions made by Med-Arbiter Abis of those employees who are not among those
expressly enumerated under the law to be excluded. It vigorously urged the inclusion of the rest of
the employees which is allegedly the usual practice in the banking industry. It likewise urged the
holding of a certification election allowing all those excluded by Med-Arbiter Abis to vote but
segregating their votes as challenged in the meantime. Hence, it averred;

"It is in the position of the petitioner that notwithstanding the statements above that the petition for
certification should be held immediately by allowing all those not excluded from Arbiter Abis’ order to
vote without prejudice to a final decision on the matters subject of these appeal. Which we also
submit that in order to expedite the proceedings these exclusions should also be allowed to vote
even pending resolution of the appeal but segregating them for further consideration" (pp. 3-4,
Annex "H" ; p. 46-47, rec.)

Labor II – 1
On December 4, 1979, respondent bank likewise appealed from the aforesaid November 19, 1979
order of Med-Arbiter Alberto Abis, Jr. to the Minister of Labor on the following grounds;

(1) that the act of Med-Arbiter Abis in issuing the abovesaid Order is ultra vires, full and complete
jurisdiction over the questioned petition being vested in the office of the Minister of Labor and hence
the only adjudicative body empowered to resolve the petition;

(2) that the fact that petitioner’s Union registration was subject of cancellation proceedings with the
Bureau of Labor Relations rendered the issuance of the above questioned Order directing the holding
of a certification election premature; and

(3) that the bargaining unit was not appropriately defined [Annex "I" ; pp. 49-57, rec.]

On December 7, 1979, the entire records of the case were allegedly elevated as an appealed case by
Regional Director Francisco L. Estrella to the Director of the Bureau of Labor Relations and was
docketed thereat as appealed case No. A-1599-79. chanrobles.com.ph : virtual law library

On January 21, 1980, the Union of the Producers Bank Employees Chapter-NATU filed a motion to
intervene in the said petition for certification election alleging among other things that it has also
some signed up members in the respondent Bank and consequently has an interest in the petition for
certification election filed by petitioner as it will directly affect their rights as to who will represent the
employees in the collective bargaining negotiations (Annex "P" ; pp. 100-101, rec.)

On January 24, 1980, the Bureau of Labor Relations Director Carmelo C. Noriel rendered a decision
affirming the Med-Arbiter’s order with certain modifications, the pertinent portion of which reads: jgc:chanrobles.com.ph

"Preliminarily, the issue of jurisdiction is being raised by respondent bank but we need not be drawn
into nor tarry in this issue but instead proceed to consider the merits of the case. Suffice it rather to
say that the appealed order was signed by the med-arbiter a quo and the records of the case were
elevated on appeal to this Bureau by the Regional Director of the National Capital Region. Besides
respondent should not unduly press the jurisdictional issue. Such question does not lead nor
contribute to the resolution of the real pressing issue — the certification election issue. What is at
stake here is the right of the employees to organize and be represented for collective bargaining
purposes by a union at the respondent bank where none existed up to the present time. On this
consideration alone, respondent’s vigorous objection alleging want of jurisdiction cracks from
tangency of the issue.

x          x           x

"The matter of defining the bargaining unit, that is to say the appropriateness thereof, usually
presents for determination three questions, to wit, the general type of the bargaining unit or whether
it should be an industrial unit embracing all the employees in a broad class or a craft unit that is
confined to a small specialized group within a broad class, the scope of the bargaining unit or
whether it would embrace all employees in a given class at only one plant or at several plants of an
employer, and the specific composition of the bargaining unit, that is, whether or not the unit should
include employees of different occupational groups, like clerks, inspectors, technical employees, etc.
On these questions, we are not without legal guidelines. The law and the Rules are clear. The petition
for certification election, whether filed by a legitimate labor organization or by an employer in
appropriate case, shall contain, inter alia, the description of the bargaining unit which shall be the
employer unit unless circumstances otherwise require. Thus, the policy under the Labor Code on the
matter of fixing the bargaining unit is to favor larger units and this is sought to be implemented on a
two-tiered basis. On the lower tier, the law mandates the employer unit as the normal unit of
organization at the company level, thus discouraging if not stopping fragmentation into small craft or
occupational units as what prevailed prior to the Labor Code. But the Code envisions further
Labor II – 1
consolidation into larger bargaining units. Thus, on the higher tier, the law mandates the eventual
restructuring of the labor movement along the ‘one union, one industry’ basis. There should therefore
be no doubt as to the law and policy on the fixing of the appropriate bargaining unit which is
generally the employer unit. Applying this rule to the instant case, the appropriate bargaining unit
should embrace all the regular rank and file employees at the head as well as branch offices of
respondent bank. Of course, the exception to this employer unit rule is when circumstances
otherwise require. But such is not at issue here, respondent not having adduced circumstances that
would justify a contrary composition of the bargaining unit.

"Respondent however insists on the definition of the appropriate bargaining unit upon the question of
whether or not to exclude admittedly regular rank and file employees which it considers confidential,
managerial and technical. This question, it should be pointed out, does not enter the matter of
defining the bargaining unit. The definition of the appropriate unit refers to the grouping or more
precisely, the legal collectivity of eligible employees for purposes of collective bargaining. The
presumption is that these employees are entitled to the rights to self-organization and collective
bargaining, otherwise they would not be, in the first place be considered at all in the determination of
the appropriate bargaining unit.

"The question therefore of excluding certain rank and file employees for being allegedly confidential,
managerial or technical does not simply involve a definition of the bargaining unit but rather raises
the fundamental issue of coverage under or eligibility for the exercise of the workers’ rights to self-
organization and collective bargaining. On this score, the law on coverage and exclusion on the
matter should by now be very clear. Article 244 of the Labor Code states that all persons employed in
commercial, industrial and agricultural enterprises, including religious, charitable, medical or
educational institutions operating for profit shall have the right to self-organization and to form, join,
or assist labor organizations for purposes of collective bargaining. Articles 245 and 246 (ibid) provide
that security guards and managerial employees are not eligible to form, assist or join any labor
organization. As defined by the Code, a managerial employee is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees, or to effectively recommend such managerial
actions. All employees not falling within this definition are considered rank and file employees for
purposes of self-organization and collective bargaining.

"It is in the light of the foregoing provisions of law that the challenged order, in so far as it excludes
all managerial and supervisory employees, secretaries of bank officials, credit investigators,
telephone operators, loan security custodians, employees in the accounting, auditing, legal, trust and
personal departments respectively, should be modified for being either superfluous, discriminatory or
simply contrary to law. The express exclusion of managerial employees in the Order is superfluous
for the same is already provided for by law and is presumed when the bargaining unit was defined as
comprising all the regular rank and file employees of the bank. It is also anomalous and
discriminatory when it excluded employees of the personnel department but included specific
individuals like Manuel Sumibcay, Primi Zamora and Carmelita Sy. Exclusion as managerial employee
is not based on the personality of the occupant but rather on the nature and function of the positions.
The exclusion of the other positions is likewise contrary to law, there being no clear showing that
they are managerial employees. The mere fact of being a supervisor or a confidential employee does
not exclude him from coverage. He must strictly come within the category of a managerial employee
as defined by the Code. The Constitution assures to all workers such rights to self-organization and
collective bargaining. Exclusions, being the exception and being in derogation of such constitutional
mandate, should be construed in strictissimi juris.

"Furthermore, to uphold the order of exclusion would be to allow the emasculation of the workers’
right to self-organization and to collective bargaining, statutory rights which have received
constitutional recognition when they were enshrined in the 1973 Constitution. Indeed, the further
rulings that ‘other non-confidential employees included in the bank’s list of proposed exclusion be
allowed to vote but the votes should be segregated as challenged’ and ‘that in case of doubt as to
Labor II – 1
whether or not the position held by an employee is confidential in nature, the employee should be
allowed to vote but his vote should be segregated as challenged’ both complete the said order’s self-
nullifying effects.

"At the most and indeed as a policy, exclusion of confidential employees from the bargaining unit is a
matter for negotiation and agreement of the parties. Thus, the parties may agree in the CBA, to
exclude certain highly confidential positions from the bargaining unit. Absent such agreement,
coverage must be observed. In any event, any negotiation and agreement can come after the
representation issue is resolved and this is just the situation in the instant case.

"In fine, the appropriate bargaining unit shall include all the regular rank and file employees of the
respondent including the positions excluded in the challenged order dated 19 November 1979, with
the exception of the secretaries to the Bank President, Executive Vice-President, Senior Vice
President and other Vice Presidents as agreed upon by the parties during the hearings.

"Respondent vehemently interposes also the pendency of cancellation proceedings against petitioner
as a prejudicial issue which should suspend the petition for certification election.

"We cannot fully concur with this contention. Unless there is an order of cancellation which is final,
the union’s certificate of registration remains and its legal personality intact. It is entitled to the
rights and privileges accorded by law, including the right to represent its members and employees in
a bargaining unit for collective bargaining purposes including participation in a representation
proceeding. This is especially true where the grounds for the cancellation of its union certificate do
not appear indubitable.

"The rights of workers to self-organization finds general and specific constitutional guarantees.
Section 7, Article IV of the Philippine Constitution provides that the right to form associations or
societies for purposes not contrary to law shall not be abridged. This right is more pronounced in the
case of labor. Section 9, Article II (ibid) specifically declares that the State shall assure the rights of
workers to self-organization, collective bargaining, security of tenure and just and humane conditions
of work. Such constitutional guarantees should not be lightly taken much less easily nullified. A
healthy respect for the freedom of association demands that acts imputable to officers or members
be not easily visited with capital punishments against the association itself .

"On the 30% consent requirement, respondent contends that the bargaining unit is not appropriately
defined hence, the med-arbiter’s finding that there was compliance with the 30% ‘jurisdictional
requirement is patently erroneous.’ To this we must disagree. As earlier stated, the definition of the
appropriate bargaining unit does not call for an actual head count or identification of the particular
employees belonging thereto. That is done in the pre-election conference. It is sufficient that the
bargaining unit is defined such that the employees who are part thereof may be readily ascertained
for purposes of exclusions and inclusions during the pre-election conference when the list of the
eligible voters are determined.

"In this regard, respondent does not really seriously question the 264 total number of employees
except for the alleged exclusion which should reduce the number thus allegedly affecting the
sufficiency of the supporting signatures submitted. We have already ruled against the exclusions as
violative of the constitutional guarantee of workers’ right to self-organization. Consequently, since
188 of the 264 employees subscribed to the petition, which constitutes 70% of the total employees in
bargaining unit, the 30% consent requirement has been more than sufficiently complied with. In any
case, even if we grant the alleged exclusions totalling about 45, the same will not give any refuge to
respondent’s position. For assuming momentarily that the exclusions are valid, the same will not
fatally affect the 30% consent compliance.

"Finally, lest it be so easily forgotten, a certification election is but an administration device for
determining the true choice of the employees in the appropriate bargaining unit as to their
Labor II – 1
bargaining representative. Unnecessary obstacles should not therefore be thrown on its way. Rather,
the parties should take their case, if they have, directly to the real and ultimate arbiter on the
matter, the employees sought to be represented in the bargaining unit.

"WHEREFORE, in the light of the foregoing considerations, the Order dated 19 November 1979 calling
for a certification election is hereby affirmed with the modification that the same shall be conducted
among all the regular rank and file employees of the respondent bank and its head and branch
offices, including those excluded in said Order, except only the positions of secretary to the Bank
President, Executive Vice-President and other Vice-Presidents which agreed to be excluded from the
bargaining unit by the parties during the hearings. The choice shall be between the petitioner and no
union.

"Let the certification election be conducted within twenty (20) days from receipt hereof. The pre-
election conference shall be immediately called to thresh out the mechanics of the election. The list of
qualified voters shall be based on the July 1979 payroll of the company.

"SO ORDERED" (pp. 5-9, Annex "J" ; pp. 63-67, rec.; Emphasis supplied)

On February 11, 1980, petitioner received an undated and unverified appeal of the respondent bank
to the Minister of Labor questioning the decision of Bureau of Labor Relations Director Carmelo C.
Noriel which appeal alleged that: chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

"I. THE QUESTIONED ORDER IS NULL AND VOID FOR HAVING BEEN ISSUED WITHOUT OR IN
EXCESS OF JURISDICTION SINCE—

"(i) It is this Honorable Office, not the BLR, that has jurisdiction over the parties’ appeals from the
Order of Med-Arbiter Alberto A. Abis Jr.

"II. ASSUMING, AD ARGUENDO, THAT THE BLR HAS JURISDICTION, THE APPEALED ORDER IS
NONETHELESS NULL AND VOID, THE BLR HAVING GRAVELY ABUSED ITS DISCRETION IN NOT
FINDING THAT THE ORDER, DATED NOVEMBER 19, 1979, OF MED-ARBITER ABIS IS NULL AND VOID
FOR HAVING BEEN ISSUED WITHOUT AUTHORITY/JURISDICTION CONSIDERING THAT —

"(i) Full and complete jurisdiction over this petition is vested in this Office, which, under P.D. 823, as
amended, and by agreement of the parties, is the adjudicative body solely and exclusively
empowered to resolve this petition.

"(ii) The fact that petitioner’s Union registration is now the subject of cancellation proceedings before
the BLR renders the issuance of an Order directing the holding of a certification election premature;
and

"(iii) The bargaining unit is not appropriately defined; hence, the BLR’s and before it, the Med-
Arbiter’s finding that there was compliance with the 30% jurisdictional requirement is completely
without basis and, therefore, grossly erroneous.

"III. THE MOTION FOR INTERVENTION FILED BY INTERVENOR UNION OF PRODUCERS BANK
EMPLOYEE’S CHAPTER-NATU WHICH THE BLR, FOR UNKNOWN REASON(S), FAILED TO RESOLVE,
RENDERS IMPERATIVE THE REDETERMINATION OF WHETHER OR NOT THE MANDATORY 30%
JURISDICTIONAL REQUIREMENT HAS BEEN MET." (Pp. 2-3, Annex ‘K’; pp. 69-70, rec.)

On February 21, 1980, petitioner union filed a manifestation on respondent’s undated and unverified
appeal (Annex "L" ; pp. 91-94, rec.)

On the same date, petitioner filed a motion to dismiss with motion to execute (Annex "M" ; pp. 95-
96, rec.)
Labor II – 1
On March 3, 1980, petitioner filed an urgent motion to resolve respondent’s appeal together with
petitioner’s motion to dismiss and motion for execution (Annex "N" ; pp. 97-98, rec.)

On March 14, 1980, petitioner received a copy of a letter endorsement dated March 7, 1980 which
reads: jgc:chanrobles.com.ph

"Respectfully referred to the Honorable Minister of Labor, the herein attached Motion to Execute and
Manifestation to Dismiss with Motion to Execute and Manifestation on Respondent’s undated and
unverified Appeal dated February 21, 1980 and February 20, 1980 respectively, for appropriate
action.

"In a memorandum dated 9 November 1979, the Deputy Minister of Labor completely inhibited
himself in this case" (p 169, rec.)

Public respondent Director Carmelo C. Noriel did not proceed to hold the certification election, neither
did the Minister of Labor act on the appeal of private respondent and on petitioner’s motion to
dismiss with motion to execute.

Hence, petitioner filed the instant petition on March 19, 1980. chanrobles.com:cralaw:red

On May 2, 1980, private respondent Bank filed its comments (pp. 111-122, rec.)

On June 25, 1980, public respondents filed their comment (pp. 131-142, rec.)

On August 16, 1980, petitioner filed its memorandum (pp. 155-169, rec.)

On September 2, 1980, private respondent Bank filed its memorandum (pp. 179-197, rec.)

On October 1, 1980, public respondents filed a manifestation in lieu of memorandum alleging inter
alia that: jgc:chanrobles.com.ph

"1. The instant petition for mandamus seeks to compel the respondent Minister of Labor to act on
respondent Producers Bank’s Appeal and on petitioner’s motion to execute the decision of respondent
Director of Labor Relations dated January 24, 1980, directing the holding of a certification election in
said bank;.

"2. The said petition, however, is now moot and academic because: jgc:chanrobles.com.ph

"(a) Respondent Minister of Labor had already acted on the said appeal in his decisions dated April
11, 1980 the dispositive portion of which is as follows: jgc:chanrobles.com.ph

"Wherefore, respondent Bank’s Appeal is hereby dismissed and the validity of the Decision of January
24, 1980, herein adopted is hereby recognized. No motion for reconsideration of this Order shall be
entertained.’

"(b) Petitioner may now file, if it so desires, with respondent Director of Labor Relations, a motion for
the execution of his decision so that the certification election can be held at respondent bank;

"WHEREFORE, it is respectfully prayed that the instant petition be dismissed for being moot and
academic" (pp. 201-202, rec., Italics supplied).

On October 10, 1980, petitioner filed a "Manifestation Re: Decision of the Minister of Labor" alleging
among other things that: chanrob1es virtual 1aw library

Labor II – 1
 x          x           x

"2. Petitioner had not received any copy of such April 11, 1980 decision of the Minister of Labor
mentioned by the Honorable Solicitor General. In fact, the Comment of the public respondents dated
June 11, 1980 signed by Assistant Solicitor General Octavio R. Ramirez and Trial Attorney Elihu A.
Ybañez made no mention of the same in the private respondent’s memorandum of September 2,
1980" (p. 204, rec.)

On October 28, 1980, petitioner filed a comment on manifestation of the Honorable Solicitor General
dated 30 September 1980 and motion alleging therein that despite inquiries made, no official copy of
the alleged April 11, 1980 decision of the Minister of Labor mentioned in the manifestation of the
Solicitor General has been furnished the petitioner. Hence, it prayed that the Minister of Labor be
requested to submit to this Court a certified copy of the aforesaid April 11, 1980 decision of the
Minister of Labor.chanrobles lawlibrary : rednad

On October 30, 1980, petitioner filed a manifestation and comment stating that: jgc:chanrobles.com.ph

"1. On October 29, 1980, it received a copy of the decision of the Honorable Minister of Labor in Case
No. NCR-LRD-8-360-79 as may be seen from Annex ‘A’.

"2. The decision is dated October 23, 1980 and not April 11, 1980 as stated in the Manifestation in
Lieu of Memorandum of the Office of the Honorable Solicitor General, dated 30 September 1980.

"3. Petitioner respectfully request an explanation from the public respondents on this apparent
discrepancy which has in fact misled even this Honorable Court" (p. 211, rec.)

On November 11, 1980, private respondent Bank filed a manifestation /motion stating that the
aforementioned April 11, 1980 decision of the Minister of Labor is non-existent, as in fact the Minister
of Labor issued an order affirming the decision of BLR Director Noriel only on October 23, 1980.

x          x           x

"3. Notwithstanding the issuance of the October 23, 1980 Order by the Minister of Labor, the Bank
respectfully submits that this petition for mandamus, initiated by petitioner on March 19, 1980 and
given due course by this Honorable Court should not be dismissed. The petitioner herein prays from
this Honorable Court that ‘public respondents be ordered to conduct the certification election as
ordered by Med-Arbiter Plagata, Abis and BLR Director Noriel among the rank and file employees. . .’
of the Bank. Alternatively, the petitioner prays that the Minister of Labor or his Deputy be required
‘to act forthwith’ on the appeal filed by petitioner herein. As could be gleaned clearly from the
allegations and prayer in this petition for mandamus, the petitioner primarily seeks the holding of a
certification election. Only secondarily is it asking this Court to command the Minister of Labor or his
Deputy to resolve the appeal filed by the Bank.

"4. The affirmance by the Minister of the disputed order of BLR Director Noriel thus renders moot and
academic only the secondary or alternative prayer of the Union in this mandamus case. What still
remains for resolution by this Honorable Court is the issue squarely put before it on the propriety or
impropriety of holding a certification election. This issue has been traversed by the petitioner and the
Bank in their respective memoranda filed with this Court, with the Bank stressing that a certification
election would be improper because, among others, the petitioning Union violated the strike ban,
there is a pending case for cancellation of its registration certificate, and applications for clearance to
dismiss the Union’s striking members are pending approval by the BLR Director.

"5. A dismissal of this petition for mandamus would unduly delay the resolution of the issue of
Labor II – 1
whether a certification election should be held or not.

"IN VIEW OF THE FOREGOING, it is respectfully moved that this Honorable Court rule on the issue of
whether or not a certification election should be held under circumstances obtaining in the present
case" (pp. 214-216, rec.; Emphasis supplied)

On November 24, 1980, public respondents filed a reply to the manifestation and comment of
petitioner explaining the discrepancy of the two dates — October 23, 1980, the actual date of the
order of the Minister of Labor affirming the decision of the BLR Director and April 11, 1980, the date
mentioned by the Solicitor General as the alleged date of the aforesaid order of the Minister of Labor.
Thus the pertinent portion of the letter of Director Noriel to the Solicitor General likewise explaining
the apparent discrepancy of the aforesaid dates reads: chanrobles virtual lawlibrary

"I should likewise invite your attention to the date of the Order which is October 23, 1980 and not
April 11, 1980 as indicated in the ‘Manifestation in Lieu of Memorandum’ dated September 30, 1980
of the Solicitor General filed with the Supreme Court. The April 11, 1980 date must have been based
on a draft order which was inadvertently included in the records of the case that was forwarded to
your office. We wish to point out, however, that the dispositive portion as quoted in the Manifestation
is exactly the same as that in the Order eventually signed and released by the Labor Minister on
October 23, 1980" (p. 220, rec.)

Public respondents further averred that" (I)n any event, whether the order is dated April 11, 1980 or
October 23, 1980 will not matter since both ‘orders’ dismissed the appeal of the respondent Bank,
upon which dismissal the Manifestation in Lieu of Memorandum dated September 30, 1980, of public
respondents, was based." Public respondents thus reiterated their prayer that the instant petition be
dismissed for being allegedly moot and academic (pp. 219-222, rec.)

On December 5, 1980, petitioner filed a comment to manifestation/motion of counsel for private

respondent alleging inter alia that." . . should the Honorable Court be minded to resolve the issue
raised in the Manifestation/Motion of private respondent — i.e. — whether the alleged strike ban
violation is a bar to a certification election, it will be noted that the matter of whether there has
been a ‘violation’ of the strike ban or not is still to be heard by the Regional Director through
Labor Arbiter Crescencio Trajano after this Honorable Court dismissed G.R. No. L-52026 on the
matter of jurisdictional competence of the Regional Director to hear the question raised therein. To
the present, although, the Regional Director has commenced to act on the case, there is no decision
on whether the strike ban has been violated by the petitioner union." Petitioner union vigorously
asserted that while private respondent Bank has a pending petition for cancellation of the registration
certificate of herein petitioner union, it is still premature for private respondent Bank to claim that
the petitioner union has violated the strike ban. Petitioner then alleged that" (T)here is also no
proof or decision that acts indulged in by the petitioner and its members amounted to a
strike and even assuming arguendo that such act (which was the holding of a meeting for
30 minutes before office time in the morning) constitutes a ‘strike’ and further that such
act violates the strike ban. It has been held through Honorable Justice Antonio P. Barredo in
Petrophil v. Malayang Manggagawa sa Esso (75 SCRA 73) that only the leaders and members who
participated in the illegal activity are held responsible. If this were so, then the rest of the members
who are innocent are still entitled to the benefits of collective bargaining. There is thus no need to
delay the holding of a certification election on the alleged ground that there is a pending action of the
respondent company against the petitioner union for ‘violation of the strike ban’" (pp. 226-227, rec.)

It is likewise pointed out by petitioner union that even if it would be ultimately confirmed that indeed
petitioner union has violated the strike ban, cancellation of the registration certificate of petitioner
union is not the only disciplinary action or sanction provided for under the law but other penalties
may be imposed and not necessarily cancellation of its registration certificate.

On January 12, 1981, pursuant to the resolution of this Court dated December 4, 1980, petitioner
Labor II – 1
union filed its rejoinder which reiterated the stand of the Solicitor General that the present case has
become moot and academic by virtue of the decision of the Minister of Labor affirming the decision of
the BLR Director which ordered a certification election (p. 230, rec.)

It is quite obvious from the facts set forth above that the question of jurisdiction vigorously asserted
by herein private respondent Bank has become moot and academic.

What therefore remains for this Court to resolve is the issue as to whether or not a certification
election should be held under the circumstances obtaining in the present case. Is it proper
to order a certification election despite the pendency of the petition to cancel herein
petitioner union’s certificate of registration?

The Court rules in the affirmative. The pendency of the petition for cancellation of the
registration certificate of herein petitioner union is not a bar to the holding of a
certification election. The pendency of the petition for cancellation of the registration
certificate of petitioner union founded on the alleged illegal strikes staged by the leaders
and members of the intervenor union and petitioner union should not suspend the holding
of a certification election, because there is no order directing such cancellation (cf. Dairy
Queen Products Company of the Philippines, Inc. v. Court of Industrial Relations, Et Al., No. L-35009,
Aug. 31, 1977). In said Dairy Queen case, one of the issues raised was whether the lower court erred
and concomitantly committed grave abuse of discretion in disregarding the fact that therein
respondent union’s permit and license have been cancelled by the then Department of Labor and
therefore could not be certified as the sole and exclusive bargaining representative of the rank and
file employees of therein petitioner company.

While the rationale of the decision was principally rested on the subsequent rescission of the decision
ordering the cancellation of the registration certificate of the respondent union, thereby restoring its
legal personality and all the rights and privileges accorded by law to a legitimate organization, this
Court likewise declared: "There is no showing, however, that when the respondent court issued the
order dated December 8, 1971, certifying the Dairy Queen Employees Association-CCLU as the sole
and exclusive bargaining representative of all regular rank and file employees of the Dairy Queen
Products Company of the Philippines, Inc., for purposes of collective bargaining with respect to
wages, rates of pay, hours of work and other terms and conditions for appointment, the order of
cancellation of the registration certificate of the Dairy Queen Employees Association-CCLU had
become final" (78 SCRA 444-445, supra, Emphasis supplied). chanrobles law library

It may be worthy to note also that the petition for cancellation of petitioner union’s registration
certificate based on the alleged illegal strikes staged on October 12, 1979 and later November 5-7,
1979 was evidently intended to delay the early disposition of the case for certification election
considering that the same was apparently filed only after the October 18, 1979 Order of Med-Arbiter
Plagata which directed the holding of a certification election.

Aside from the fact that the petition for cancellation of the registration certificate of
petitioner union has not yet been finally resolved, there is another fact that militates
against the stand of private respondent Bank, the liberal approach observed by this Court
as to matters of certification election. In a recent case, Atlas Free Workers Union (AFWU)-PSSLU
Local v. Hon. Carmelo C. Noriel, Et. Al. (No. 51005, May 26, 1981)," [T]he Court resolves to grant
the petition (for mandamus) in line with the liberal approach consistently adhered to by this Court in
matters of certification election. The whole democratic process is geared towards the determination
of representation, not only in government but in other sectors as well, by election. Thus, the Court
has declared its commitment to the view that a certification election is crucial to the institution of
collective bargaining, for it gives substance to the principle of majority rule as one of the basic
concepts of a democratic policy" (National Mines and Allied Workers Union v. Luna, 83 SCRA 610)

Likewise, Scout Ramon V. Albano Memorial College v. Noriel, Et. Al. (L-48347, Oct. 3, 1978, 85 SCRA
Labor II – 1
494, 497, 498), this Court citing a long catena of cases ruled: jgc:chanrobles.com.ph

". . .’The institution of collective bargaining is, to recall Cox, a prime manifestation of industrial
democracy at work. The two parties to the relationship, labor and management, make their own
rules by coming to terms. That is to govern themselves in matters that really count. As labor,
however, is composed of a number of individuals, it is indispensable that they be represented by a
labor organization of their choice. Thus may be discerned how crucial is a certification election. So
our decisions from the earliest case of PLDT Employees Union v. PLDT Co., Free Telephone Workers
Union to the latest, Philippine Communications, Electronics & Electricity Workers’ Federation (PCWF)
v. Court of Industrial Relations, had made clear.’ The same principle was again given expression in
language equally emphatic in the subsequent case of Philippine Association of Free Labor Unions v.
Bureau of Labor Relations: "Petitioner thus appears to be woefully lacking in awareness of the
significance of a certification election for the collective bargaining process. It is the fairest and most
effective way of determining which labor organization can truly represent the working force. It is a
fundamental postulate that the will of the majority, if given expression in an honest election with
freedom on the part of the voters to make their choice, is controlling. No better device can assure the
institution of industrial democracy with the two parties to a business enterprise, management and
labor, establishing a regime of self-rule.’ That is to accord-respect to the policy of the Labor Code,
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" (Emphasis supplied).

It is true that under Section 8, Rule II, Book V of the Labor Code, cancellation of registration
certificate may be imposed on the following instances: chanrob1es virtual 1aw library

(a) Violation of Articles 234, 238, 239 and 240 of the Code;

(b) Failure to comply with Article 237 of the Code;

(c) Violation of any of the provisions of Article 242 of the Code; and

(d) Any violation of the provisions of this Book.

The aforementioned provisions should be read in relation to Article 273, Chapter IV, Title VIII which
explicitly provides:
jgc:chanrobles.com.ph

"Art. 273. Penalties.— (a) Violation of any provision of this Title shall be punished by a fine of One
Thousand Pesos [P1,000.00] to Ten Thousand Pesos [P10,000.00] and/or imprisonment of one (1)
year to five (5) years.

"(b) Any person violating any provision of this Title shall be dealt with in accordance with General
Order No. 2-A and General Order No. 49.

"(c) Violation of this Title by any legitimate labor organization shall be grounds for disciplinary action
including, but not limited to, the cancellation of its registration permit.

x          x           x

(Emphasis supplied)

From the aforequoted provisions, We are likewise convinced that as it can be gleaned from said
provisions, cancellation of the registration certificate is not the only resultant penalty in case of any
violation of the Labor Code.

Labor II – 1
Certainly, the penalty imposable should be commensurate to the nature or gravity of the illegal
activities conducted and to the number of members and leaders of the union staging the illegal
strike.
chanroblesvirtualawlibrary

As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to self-
organization, finds general and specific constitutional guarantees. Section 7, Article IV of the
Philippine Constitution provides that the right to form associations or societies for purposes not
contrary to law shall not be abridged. This right is more pronounced in the case of labor. Section 9,
Article II (ibid) specifically declares that the State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure and just and humane conditions of work. Such
constitutional guarantees should not be lightly taken much less easily nullified. A healthy respect for
the freedom of association demands that acts imputable to officers or members be not easily visited
with capital punishments against the association itself" (p. 8, Annex "J" ; p. 66, rec.)

WHEREFORE, THE WRIT OF MANDAMUS PRAYED FOIS GRANTED AND RESPONDENT BLR DIRECTOR
NORIEL HEREBY ORDERED TO CALL AND DIRECT THE IMMEDIATE HOLDING OF A CERTIFICATION
ELECTION. NO COSTS.

Labor II – 1
41.) G.R. No. 96425 February 4, 1992

PROGRESSIVE DEVELOPMENT CORPORATION, petitioner,

vs.
THE HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER EDGARDO
DELA CRUZ and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)-TUCP, respondents.

Beltran, Bacungan & Candoy for petitioner.

Jimenez & Associates co-counsel for petitioner.

[Respondent Kilusan filed a petition for CE. Petitioner opposed asserting that they have not submitted the
required documents yet and hence have no personality to file the CE. Med-Arb ordered. OSG asserts that by
virtue of the law, if it is an unorganized establishment, the CE should be ordered. Hence this petition. Issue
is WON the CE should proceed? No. While a petition for CE should immediately be ordered in an
unorganized establishment, the union which filed a petition for CE must have personality to file it in the first
place. In this case, Kilusan has no personality yet because the documents they submitted were not certified
under oath. Because of it then they had no personality to file the petition for CE. Even their mother union
could not have filed it for them because their mother union is their agent, yet their principal is not a LLO]

GUTIERREZ, JR., J.:

The controversy in this case centers on the requirements before a local or chapter of a federation may file a petition
for certification election and be certified as the sole and exclusive bargaining agent of the petitioner's employees.

Petitioner Progressive Development Corporation (PDC) filed this petition for certiorari to set aside the following:

1) Resolution dated September 5, 1990, issued by respondent Med-Arbiter Edgardo dela Cruz, directing the holding
of the certification election among the regular rank-and-file employees of PDC:

2) Order dated October 12, 1990, issued by the respondent Secretary of Labor and Employment, denying PDC's
appeal; and

3) Order dated November 12, 1990, also issued by the respondent Secretary, denying the petitioner's Motion for
Reconsideration.

On June 19, 1990, respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP (hereinafter referred to
as Kilusan) filed with the Department of Labor and Employment (DOLE) a petition for certification election
among the rank-and-file employees of the petitioner alleging that it is a legitimate labor federation and its local
chapter, Progressive Development Employees Union, was issued charter certificate No. 90-6-1-153. Kilusan
claimed that there was no existing collective bargaining agreement and that no other legitimate labor organization
existed in the bargaining unit.

Petitioner PDC filed its motion to dismiss dated July 11, 1990 contending that the local union failed to comply
with Rule II Section 3, Book V of the Rules Implementing the Labor Code, as amended, which requires the
submission of: (a) the constitution and by-laws; (b) names, addresses and list of officers and/or members; and (c)
books of accounts.

On July 16 , 1990, respondent Kilusan submitted a rejoinder to PDC's motion to dismiss claiming that it had
submitted the necessary documentary requirements for registration, such as the constitution and by-laws of the local
union, and the list of officers/members with their addresses. Kilusan further averred that no books of accounts could
be submitted as the local union was only recently organized.

Labor II – 1
In its "Supplemental Position Paper" dated September 3, 1990, the petitioner insisted that upon verification with the
Bureau of Labor Relations (BLR), it found that the alleged minutes of the organizational meeting was
unauthenticated, the list of members did not bear the corresponding signatures of the purported members, and the
constitution and by-laws did not bear the signature of the members and was not duly subscribed. It argued that the
private respondent therefore failed to substantially comply with the registration requirements provided by the rules.
Additionally, it prayed that Med-Arbiter Edgardo dela Cruz inhibit himself from handling the case for the reason that
he allegedly had prejudged the same.

In his September 5, 1990 resolution, Med Arbiter dela Cruz held that there was substantial compliance with the
requirements for the formation of the chapter. He further stated that mere issuance of the charter certificate by the
federation was sufficient compliance with the rules. Considering that the establishment was unorganized, he
maintained that a certification election should be conducted to resolve the question of representation.

Treating the motion for reconsideration filed by the PDC as an appeal to the Office of the Secretary, Undersecretary
Laguesma held that the same was merely a "reiteration of the issues already ventilated in the proceedings before
the Med-Arbiter, specifically, the matter involving the formal organization of the chapter." (Rollo, p. 20) PDC's motion
for reconsideration from the aforementioned ruling was likewise denied. Hence, this petition.

In an order dated February 25, 1991, the Court resolved to issue a temporary restraining order enjoining the public
respondents from carrying out the assailed resolution and orders or from proceeding with the certification election.
(Rollo, pp. 37-39)

It is the petitioner's contention that a labor organization (such as the Kilusan) may not validly invest the status of
legitimacy upon a local or chapter through the mere expedient of issuing a charter certificate and submitting such
certificate to the BLR (Rollo, p. 85) Petitioner PDC posits that such local or chapter must at the same time comply
with the requirement of submission of duly subscribed constitution and by-laws, list of officers and books of
accounts. (Rollo, p. 35) PDC points out that the constitution and by-laws and list of officers submitted were not duly
subscribed. Likewise, the petitioner claims that the mere filing of the aforementioned documents is insufficient; that
there must be due recognition or acknowledgment accorded to the local or chapter by BLR through a certificate of
registration or any communication emanating from it. (Rollo, p. 86)

The Solicitor General, in behalf of the public respondent, avers that there was a substantial compliance with the
requirements for the formation of a chapter. Moreover, he invokes Article 257 of the Labor Code which
mandates the automatic conduct by the Med-Arbiter of a certification election in any establishment where
there is no certified bargaining agreement.

The Court has repeatedly stressed that the holding of a certification election is based on a statutory policy that
cannot be circumvented. (Airtime Specialists, Inc. v. Ferrer-Calleja, 180 SCRA 749 [1989]; Belyca Corporation v.
Ferrer-Calleja, 168 SCRA 184 [1988]; George and Peter Lines, Inc. v. Associated Labor Unions, 134 SCRA 82
[1986]). The workers must be allowed to freely express their choice in a determination where everything is open to
their sound judgment and the possibility of fraud and misrepresentation is eliminated.

But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification election
in an unorganized establishment, it also requires that the petition for certification election must be filed by a
legitimate labor organization. Article 242 enumerates the exclusive rights of a legitimate labor organization
among which is the right to be certified as the exclusive representative of all the employees in an
appropriate collective bargaining unit for purposes of collective bargaining.

Meanwhile, Article 212(h) defines a legitimate labor organization as "any labor organization duly registered with the
DOLE and includes any branch or local thereof." (Emphasis supplied) Rule I, Section 1 (j), Book V of the
Implementing Rules likewise defines a legitimate labor organization as "any labor organization duly registered with
the DOLE and includes any branch, local or affiliate thereof. (Emphasis supplied)

The question that now arises is: when does a branch, local or affiliate of a federation become a legitimate
labor organization?

Labor II – 1
Ordinarily, a labor organization acquires legitimacy only upon registration with the BLR. Under Article 234
(Requirements of Registration):

Any applicant labor organization, association or group of unions or workers shall acquire legal
personality and shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the following requirements:

(a) Fifty-pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meeting and the list of the workers who participated in such meetings;

(c) The names of all its members comprising at least twenty 20% percent of all the employees in the
bargaining unit where it seek to operate;

(d) If the applicant has been in existence for one or more years, copies , of its annual financial
reports; and

(e) Four copies of the constitution and by-laws of the applicant union, the minutes of its adoption or
ratification and the list of the members who participated in it.

And under Article 235 (Action on Application)

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

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

Moreover, section 4 of Rule II, Book V of the Implementing Rules requires that the application should be signed by
at least twenty percent (20%) of the employees in the appropriate bargaining unit and be accompanied by a sworn
statement of the applicant union that there is no certified bargaining agent or, where there is an existing collective
bargaining agreement duly submitted to the DOLE, that the application is filed during the last sixty (60) days of the
agreement.

The respondent Kilusan questions the requirements as too stringent in their application but the purpose of the law in
prescribing these requisites must be underscored. Thus, in Philippine Association of Free Labor Unions
v. Secretary of Labor, 27 SCRA 40 (1969), the Court declared:

The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of
assembly and association guaranteed in the Bill of Rights is devoid of factual basis. The registration
prescribed in Paragraph (b) of said section is not a limitation to the right of assembly or association,
which may be exercised with or without said registration. The latter is merely a condition sine qua
non for the acquisition of legal personality by the labor organizations, associations or unions and the
possession of the "rights and privileges granted by law to legitimate labor organizations." The
Constitution does not guarantee these rights and the privileges, much less said personality, which
are mere statutory creations, for the possession and exercise of which registration is required to
protect both labor and the public against abuses, fraud or impostors who pose as organizers,
although not truly accredited agents of the union they purport to represent. Such requirement is a
valid exercise of the police power, because the activities in which labor organizations, associations
and unions of workers are engaged affect public interest, which should be protected. Furthermore,
the obligation to submit financial statements, as a condition for the non-cancellation of a certificate of
registration, is a reasonable regulation for the benefit of the members of the organization,
considering that the same generally solicits funds or membership, as well as oftentimes collects, on
behalf of its members, huge amounts of money due to them or to the organization. (Emphasis
supplied)

Labor II – 1
But when an unregistered union becomes a branch, local or chapter of a federation, some of the aforementioned
requirements for registration are no longer required. The provisions governing union affiliation are found in Rule II,
Section 3, Book V of the Implementing Rules, the relevant portions of which are cited below:

Sec. 3. Union affiliation; direct membership with national union. — An affiliate of a labor federation or
national union may be a local or chapter thereof or an independently registered union.

a) The labor federation or national union concerned shall 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 charter certificate.

b) An independently registered union shall be considered an affiliate of a labor federation or national

union after submission to the Bureau of the contract or agreement of affiliation within thirty (30) days
after its execution.

xxx xxx xxx

e) The local or chapter of a labor federation or national union shall have and maintain a constitution
and by laws, set of officers and books and accounts. For reporting purposes, the procedure
governing the reporting of independently registered unions, federations or national unions shall be
observed.

Paragraph (a) refers to the local or chapter of a federation which did not undergo the rudiments of registration while
paragraph (b) refers to an independently registered union which affiliated with a federation. Implicit in the foregoing
differentiation is the fact that a local or chapter need not be independently registered. By force of law (in this case,
Article 212[h]); such local or chapter becomes a legitimate labor organization upon compliance with the
aforementioned provisions of Section 3.

Thus, several requirements that are otherwise required for union registration are omitted, to wit:

(1) The requirement that the application for registration must be signed by at least 20% of the employees in the
appropriate bargaining unit;

2) The submission of officers' addresses, principal address of the labor organization, the minutes of organizational
meetings and the list of the workers who participated in such meetings;

3) The submission of the minutes of the adoption or ratification of the constitution and by the laws and the list of the
members who participated in it.

Undoubtedly, the intent of the law in imposing lesser requirements in the case of the branch or local of a registered
federation or national union is to encourage the affiliation of a local union with the federation or national union in
order to increase the local union's bargaining powers respecting terms and conditions of labor.

The petitioner maintains that the documentary requirements prescribed in Section 3(c), namely: the constitution and
by-laws, set of officers and books of accounts, must follow the requirements of law. Petitioner PDC calls for the
similar application of the requirement for registration in Article 235 that all requisite documents and papers be
certified under oath by the secretary or the treasurer of the organization and attested to by the president.

In the case at bar, the constitution and by-laws and list of officers submitted in the BLR, while attested to by the
chapter's president, were not certified under oath by the secretary. Does such defect warrant the withholding of the
status of legitimacy to the local or chapter?

In the case of union registration, the rationale for requiring that the submitted documents and papers be certified
under oath by the secretary or treasurer, as the case may be, and attested to by president is apparent. The
submission of the required documents (and payment of P50.00 registration fee) becomes the Bureau's basis for
approval of the application for registration. Upon approval, the labor union acquires legal personality and is entitled
Labor II – 1
to all the rights and privileges granted by law to a legitimate labor organization. The employer naturally needs
assurance that the union it is dealing with is a bona fide organization, one which has not submitted false statements
or misrepresentations to the Bureau. The inclusion of the certification and attestation requirements will in a marked
degree allay these apprehensions of management. Not only is the issuance of any false statement and
misrepresentation a ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is also a ground for a
criminal charge of perjury.

The certification and attestation requirements are preventive measures against the commission of fraud. They
likewise afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or
fly-by-night unions whose sole purpose is to control union funds or to use the union for dubious ends.

In the case of the union affiliation with a federation, the documentary requirements are found in Rule II, Section 3(e),
Book V of the Implementing Rules, which we again quote as follows:

(c) The local chapter of a labor federation or national union shall have and maintain a constitution
and by-laws, set of officers and books of accounts. For reporting purposes, the procedure governing
the reporting of independently registered unions, federations or national unions shall be
observed. (Emphasis supplied)

Since the "procedure governing the reporting of independently registered unions" refers to the certification and
attestation requirements contained in Article 235, paragraph 2, it follows that the constitution and by-laws, set of
officers and books of accounts submitted by the local and chapter must likewise comply with these requirements.
The same rationale for requiring the submission of duly subscribed documents upon union registration exists in the
case of union affiliation. Moreover, there is greater reason to exact compliance with the certification and attestation
requirements because, as previously mentioned, several requirements applicable to independent union registration
are no longer required in the case of formation of a local or chapter. The policy of the law in conferring greater
bargaining power upon labor unions must be balanced with the policy of providing preventive measures against the
commission of fraud.

A local or chapter therefore becomes a legitimate labor organization only upon submission of the following to the
BLR:

1) A charter certificate, within 30 days from its issuance by the labor federation or national union, and

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.

Absent compliance with these mandatory requirements, the local or chapter does not become a legitimate labor
organization.

In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the required documents under
oath is fatal to its acquisition of a legitimate status.

We observe that, as borne out by the facts in this case, the formation of a local or chapter becomes a handy tool for
the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient
device for a small group of employees to foist a not-so-desirable federation or union on unsuspecting co-workers
and pare the need for wholehearted voluntariness which is basic to free unionism. The records show that on June
16, 1990, Kilusan met with several employees of the petitioner. Excerpts of the "Minutes of the
Organizational/General Membership Meeting of Progressive Development Employees Union (PDEU) — Kilusan,"
are quoted below:

The meeting was formally called to order by Bro. Jose V. Parungao, KILUSAN secretary for
organization by explaining to the general membership the importance of joining the union. He
explained to the membership why they should join a union, and briefly explained the ideology of the
Pambansang Kilusan ng Paggawa-TUCP as a democratically based organization and then read the

Labor II – 1
 proposed Constitution and By-Laws, after which said Constitution and By-Laws was duly and
unanimously ratified after some clarification.

Bro. Jose Parungao was also unanimously voted by the group to act as the chairman of the
COMELEC in holding the organizational election of officers of the union.

Bro. Jose Parungao, officially opened the table for nomination of candidates after which the election
of officers followed by secret balloting and the following were the duly elected officers. (Original
Record, p. 25)

The foregoing shows that Kilusan took the initiative and encouraged the formation of a union which automatically
became its chapter. On June 18, 1990, Kilusan issued a charter certificate in favor of PDEU-KILUSAN (Records,
page 1). It can be seen that Kilusan was moving very fast.

On June 19, 1990, or just three days after the organizational meeting, Kilusan filed a petition for certification
election (Records, pages 2 and 3) accompanied by a copy each of the charter certificate, constitution and
by-laws and minutes of the organizational meeting. Had the local union filed an application for registration,
the petition for certification election could not have been immediately filed. The applicant union must firstly
comply with the "20% signature" requirement and all the other requisites enumerated in Article 234.
Moreover, since under Article 235 the BLR shall act on any application for registration within thirty (30) days
from its filing, the likelihood is remote that, assuming the union complied with all the requirements, the
application would be approved on the same day it was filed.

We are not saying that the scheme used by the respondents is per se illegal for precisely, the law allows such
strategy. It is not this Court's function to augment the requirements prescribed by law in order to make them wiser or
to allow greater protection to the workers and even their employer. Our only recourse is, as earlier discussed, to
exact strict compliance with what the law provides as requisites for local or chapter formation.

It may likewise be argued that it was Kilusan (the mother union) and not the local union which filed the petition for
certification election and, being a legitimate labor organization, Kilusan has the personality to file such petition.

At this juncture, it is important to clarify the relationship between the mother union and the local union. In the case
of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975]), the Court held that the
mother union, acting for and in behalf of its affiliate, had the status of an agent while the local union
remained the basic unit of the association, free to serve the common interest of all its members subject
only to the restraints imposed by the constitution and by-laws of the association. Thus, where as in this
case the petition for certification election was filed by the federation which is merely an agent, the petition
is deemed to be filed by the chapter, the principal, which must be a legitimate labor organization. The
chapter cannot merely rely on the legitimate status of the mother union.

The Court's conclusion should not be misconstrued as impairing the local union's right to be certified as the
employees' bargaining agent in the petitioner's establishment. We are merely saying that the local union must
first comply with the statutory requirements in order to exercise this right. Big federations and national
unions of workers should take the lead in requiring their locals and chapters to faithfully comply with the
law and the rules instead of merely snapping union after union into their folds in a furious bid with rival
federations to get the most number of members.

WHEREFORE, the petition is GRANTED. The assailed resolution and orders of respondent Med-Arbiter and
Secretary of Labor and Employment, respectively, are hereby SET ASIDE. The temporary restraining order dated
February 25, 1991 is made permanent.

Labor II – 1
 42.) [G.R. No. 102350. June 30, 1994.]

TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES WORLD FEDERATION OF

TRADE UNIONS (TUPAS-WFTU), Petitioners, v. HON. BIENVENIDO E. LAGUESMA, in his
capacity as Undersecretary of Labor & Employment and NATIONAL FEDERATION OF LABOR
UNIONS (NAFLU), Respondents.

DECISION
[Petitioner was the incumbent representative of PDIC. Their CBA expired. Afterwards,
PDIC received a letter from TUPAS union stating that they have disaffiliated with WFTU
and affiliated with PR NAFLU. Thus when the 60-d freedom period came, NAFLU filed a
petition for CE. Tupas filed a motion to refer the case to Labor Advisory Consultative
Council. From that council’s Code of Ethics, they assert that any disaffiliation of a local
union from any signatory national union should first be settled in the LACC. Med-Arb
ordered CE. Hence this petition on the ground it should have been referred first to their
LACC. Issue: WON the said Code of Ethics should have barred the CE? Court ruled no.
Whenever there is doubt to majority representative, the best way to determine is the
holding of CE. Further the LACC could not repeal the law as it is only a voluntary
agreement on intra-union disputes, the parties therein are not to first refer the matter to it
before they can go to the proper tribunals. In this case the party chose to file a petition for
CE.]

PUNO, J.:

The records reveal that the rank-and-file employees of the Philippine Development and
Industrial Corporation (PDIC), represented by petitioner Trade Unions of the Philippines
and Allied Services (TUPAS), entered into a collective bargaining agreement with said
company. The CBA expired on April 31, 1991. chanrobles law library : red

On March 8, 1991, PDIC received a letter from the president of petitioner’s local chapter
union. The company was informed that the union had resolved to disaffiliate from
petitioner and affiliate with private respondent National Federation of Labor Unions
(NAFLU). PDIC entertained reservations about the validity of the disaffiliation. It was not clear
whether the union’s board resolution to disaffiliate was ratified by the majority of its members.
Furthermore, PDIC had received reports that some employees were coerced to support the
disaffiliation.chanrobles virtual lawlibrary

On April 24, 1991, within the 60-day freedom period, PDIC and private respondent NAFLU
filed separate petitions for certification election with the Department of Labor and Employment
(DOLE), Regional Office No. 3 in San Fernando, Pampanga. Both petitions prayed for the holding
of a certification election between NAFLU and petitioner TUPAS, to determine the collective
bargaining agent of the rank-and-file employees in PDIC’s plant and quarry. The two
petitions were consolidated and docketed as Case No. RO33-9104-RU-006, with petitioner TUPAS as
compulsory intervenor.

On May 14, 1991, petitioner TUPAS filed an Urgent Motion To Refer Case To LACC Fraternal
Relations Committee, citing paragraph 1(b) of the LACC (Labor Advisory Consultative Council)
Code of Ethics which provides: jgc:chanrobles .com.ph

"1. Non-Union raiding

x          x           x

Labor II – 1
b. Where company is organized.

All organized local affiliates or unions of any LACC member must be discouraged from disaffiliating
from their incumbent labor federations/national union affiliation. However, LACC recognizes the
ultimate authority and right of the local unions to decide for themselves during the freedom period.
In the event that said local unions intend to disaffiliate from any LACC member and to affiliate with
another member, the latter must inform the former about the intention of their said local union and
to settle the matter by themselves. If not so settled, the matter will be brought to the attention of
the Fraternal Relations Committee of the LACC for final determination or settlement." 1 chanrobles.com.ph : virtual law library

Said Code of Ethics was adopted and signed by four base organizations, namely: Kilusang Mayo Uno
(KMU), to which private respondent NAFLU is affiliated; Federation of Free Workers (FFW); Lakas ng
Manggagawa Labor Center (LMLC); and Philippine World Federation of Trade Unions (WFTU)
Affiliates, which includes petitioner TUPAS. 2 Petitioner urged the DOLE to "give its imprimatur and
uphold the binding effect of the Code among the LACC members." 3

Despite the Urgent Motion, Med-Arbiter Antonio R. Cortez, on June 3, 1991, issued an Order with the
following dispositive portion: jgc:chanrobles.com.ph

"ACCORDINGLY, let a certification election be conducted among the regular rank-and-file

employees of the Philippine Development and Industrial Corporation, with the following choices, to
wit;

1. National Federation of Labor Unions (NAFLU);

2. Trade Unions of the Philippines Allied Services (TUPAS);

and

3. No Union.

"The January 1991 payrolls shall be used as the basis to determine the qualified voters in this
election.chanrobles.com:cralaw:red

"A pre-election conference intended to thresh out the mechanics of the aforesaid election will be
called by this Office after ten (10) days from receipt hereof. chanrobles virtual lawlibrary

"SO ORDERED." cralaw virtua1aw library

The Order was appealed to the Secretary of Labor and Employment, and the case was docketed as
OS-MA-A-7-212-91. On August 15, 1991, the Secretary of Labor and Employment affirmed the
Order. Labor Undersecretary Laguesma held, viz.: jgc:chanrobles.com.ph

"This Code of Ethics being invoked by TUPAS is internal to the Labor Advisory and
Consultative Council (LACC). In other words, it behooves on the signatories to the Code to
comply and respect its provisions. This Office, therefore, can only take cognizance of the Code
and recognize its provisions if the parties thereto fully and mutually respect the same. Otherwise, we
are left with no other recourse but to dispose of the instant case on the basis of existing and
applicable laws and rules.

"It appears that total reliance on the Code of Ethics is misplaced. It must be pointed out that no less
than the aforequoted provision of the Code of Ethics recognizes the ‘ultimate authority and right of
the local unions to decide for themselves during the freedom period.’ Necessarily, the Code of Ethics
Labor II – 1
itself does not sanction any act that would curtail the right of the workers to institute petitions for
certification election during the freedom period, as in the case at bar. chanrobles law library

"The emphasis given by the Code of Ethics on the right of the local unions to decide for themselves
during the freedom period is in accordance with the provision of the Labor Code which allows another
union to question the majority status of the incumbent bargaining agent within the sixty-day freedom
period. This is embodied in Article 256 of the Labor Code, as amended by RA 6715, to wit: chanrob1es virtual 1aw library

‘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 a collective
bargaining agreement, the Med-Arbiter shall automatically order an election be secret ballot when
the verified petition is supported by the written consent of at least twenty-five per cent (25%) of all
the employees in the bargaining unit to ascertain the will of the employees in the appropriate
bargaining unit.’

"It being not disputed that the petition of NAFLU is sufficient in form and in substance, a certification
election is indeed warranted." 4

On October 7, 1991, respondent undersecretary denied petitioner’s motion for reconsideration. chanrobles virtual lawlibrary

On October 27, 1991, a certification election was conducted among the rank-and-file
workers of PDIC at Iba, Meycauayan, Bulacan. One hundred eighteen (118) of the one hundred
thirty-six (136) qualified voters participated in the elections. Petitioner garnered six (6) votes,
while private respondent got one hundred twelve (112). On November 5, 1991, Med-Arbiter
Antonio R. Cortez issued an Order certifying private respondent as the sole and exclusive bargaining
agent of all rank-and-file workers of PDIC. 5

Thus, on November 6, 1991, petitioner filed this original action for Certiorari and Mandamus
with Prayer for the Issuance of Temporary Restraining Order and/or Preliminary Injunction, "seeking
to ANNUL the questioned Resolution dated August 15, 1991, and the Order dated October 7, 1991."
6

On November 18, 1991, we issued a temporary restraining order enjoining respondents from
enforcing the impugned Resolution and Order.

We find no merit in the petition.

Public respondent did not act with grave abuse of discretion amounting to lack or excess of
jurisdiction in affirmimg the Med-Arbiter’s Order, dated June 3, 1991. The order for the holding of a
certification election among the rank-and-file employees of PDIC finds legal warrant in Art. 256 of the
amended Labor Code, as earlier quoted. Under said provision, the Med-Arbiter shall automatically
order a certification election by secret ballot in an organized establishment such as PDIC, provided
the following requisites are met: (1) that a petition questioning the majority status of the incumbent
bargaining agent is filed before the DOLE within the sixty-day freedom period; (2) that such petition
is verified; and (3) that the petition is supported by the written consent of at least twenty-five (25%)
per cent of all employees in the bargaining unit. It is undisputed that all these requirements
were met by private respondent NAFLU in its petition before the DOLE Regional Office No. 3, in
San Fernando, Pampanga. Thus, Med-Arbiter Cortez, acting in accordance with Art. 256 of the Labor
Code, as amended, had no recourse but to automatically order the holding of a certification election
at PDIC. chanrobles.com:cralaw:red

It bears stressing that no obstacle must be placed to the holding of certification elections,
7 for it is a statutory policy that should not be circumvented. 8 We have held that
whenever there is doubt as to whether a particular union represents the majority of the
Labor II – 1
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. 9 Indeed, it is the keystone of industrial democracy.

Art. 256 of the Labor Code cannot be supplanted by the Code of Ethics of the LACC. Said
Code cannot amend or repeal a law. And, as correctly observed by the Office of the
Solicitor General, it merely provides for a voluntary mechanism to settle intra-union
disputes. It only applies when both parties to the dispute seek the mediation of said
Committee. However, when one of the parties decides to avail of the remedy provided for
under Art. 256 of our Labor Code and files the proper petition with the DOLE, jurisdiction
over the dispute is exclusively acquired by and cannot be wrenched away from the Med-
Arbiter. It is familiar learning that jurisdiction is vested by law, and not by agreement between or
among the parties. Moreover, labor disputes involve public interest, and hence any private
agreement on their settlement cannot prevail over what is provided for by our laws. chanrobles virtual lawlibrary

The court also recognizes the fact that the certification election sought to be stopped by petitioner is
now fait accompli, and the rank-and-file employees of PDIC have articulated their choice as to who
shall be their collective bargaining agent in no uncertain terms. In the certification election legally
held before we issued our temporary restraining order in the case, the PDIC workes voted, 112 to 6
(with 18 qualified voters not participating in the election), to make private respondent their sole and
exclusive bargaining agent. This democratic decision deserves utmost respect, especially since it was
not attended by any legal infirmity. Again, it bears stressing that labor legislation seeks in the main
to protect the interest of the members of the working class. It should never be used to subvert their
will.
chanrobles virtual lawlibrary

IN VIEW WHEREOF, the petition is DISMISSED for lack of merit. The Resolution dated August 15,
1991, and the Order dated October 7, 1991 of respondent Department of Labor and Employment
Undersecretary Bienvenido E. Laguesma in OS-MA-A-7-212-91 is hereby AFFIRMED IN TOTO.

Labor II – 1
 43.) 8.) 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 (NFL) 235

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

Petitioner moved for a reconsideration but its motion was denied in an order dated November 12,
1992. Hence, this petition.

Labor II – 1
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

Labor II – 1
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 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
 44.) [G.R. No. 142000. January 22, 2003.]

TAGAYTAY HIGHLAND’S INTERNATIONAL GOLF CLUB INCORPORATED, Petitioner, v.

TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO, Respondent.

DECISION

[respondent union filed a petition for CE. Petitioner opposed on the ground that their list of union
members included employees who are SU, resigned, terminated, or AWOL. DOLE ruled for CE. Stated
that the matter of which members can vote can be determined in an exclusion-inclusion proceedings.
Ruled that there if there are supervisory employees, they should just be removed. Hence this petition by
employer petitioner. Petitioners assert that by virtue of previous rulings, that a PCE should be filed a
LLO and it has to be determined first whether the union is a legitimate LLO. Issue: WON the matter of
personality of the union should first be ruled upon before the CE should be granted? Court ruled no.
Court ruled that personality of the union cannot be questioned collaterally in a PCE, should file a
separate petition for cancellation. Ruled that the assertions by petitioner that the signatures were
obtained through fraud should be brought up in a separate case for cancellation of registration. Further,
the assertion of withdrawal of the union members which shows that employees does not want respondent
to be their representative would be best determined in a CE.]
CARPIO MORALES, J.:

Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands
International Golf Club Incorporated (THIGCI) assailing the February 15, 2002 decision of the
Court of Appeals denying its petition to annul the Department of Labor and Employment (DOLE)
Resolutions of November 12, 1998 and December 29, 1998.

On October 16, 1997, the Tagaytay Highlands Employees Union (THEU) — Philippine Transport and
General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said
to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification
election before the DOLE Mediation-Arbitration Unit, Regional Branch No. IV.

THIGCI, in its Comment 1 filed on November 27, 1997, opposed THEU’s petition for certification
election on the ground that the list of union members submitted by it was defective and fatally
flawed as it included the names and signatures of supervisors, resigned, terminated and absent
without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation
distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were
actual rank-and-file employees of THIGCI. chanrob1es virtua1 1aw 1ibrary

THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed
2 to its Comment to the petition for certification election. And it therein incorporated the following
tabulation 3 showing the number of signatories to said petition whose membership in the union was
being questioned as disqualified and the reasons for disqualification: chanrob1es virtual 1aw library

# of Reasons for Disqualification

Signatures

13 Supervisors of THIGCI

6 Resigned employees of THIGCI

2 AWOL employees of THIGCI

Labor II – 1
53 Rank-and-file employees of The Country Club at

Tagaytay Highlands, Inc.

14 Supervisors of The Country Club at Tagaytay

Highlands, Inc.

6 Resigned employees of The Country Club at

Tagaytay Highlands, Inc.

3 Terminated employees of The Country Club at

Tagaytay Highlands, Inc.

1 AWOL employees of The Country Club at

Tagaytay Highlands, Inc.

4 Signatures that cannot be deciphered

16 Names in list that were erased

2 Names with first names only

THIGCI also alleged that some of the signatures in the list of union members were secured
through fraudulent and deceitful means, and submitted copies of the handwritten denial
and withdrawal of some of its employees from participating in the petition. 4

Replying to THIGCI’s Comment, THEU asserted that it had complied with all the requirements for
valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE
Department Order No. 9, series of 1997, 5 on account of which it was duly granted a Certification of
Affiliation by DOLE on October 10, 1997; 6 and that Section 5, Rule V of said Department Order
provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long
as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate
organization.

THEU thus concluded in its Reply 7 that under the circumstances, the Med-Arbiter should, pursuant
to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09,
automatically order the conduct of a certification election.

By Order of January 28, 1998, 8 DOLE Med-Arbiter Anastacio Bactin ordered the holding of a
certification election among the rank-and-file employees of THIGCI in this wise, quoted verbatim: chanrob1es virtual 1aw library

We evaluated carefully this instant petition and we are of the opinion that it is complete in form and
substance. In addition thereto, the accompanying documents show that indeed petitioner union is a
legitimate labor federation and its local/chapter was duly reported to this Office as one of its affiliate
local/chapter. Its due reporting through the submission of all the requirements for registration of a
local/chapter is a clear showing that it was already included in the roster of legitimate labor
organizations in this Office pursuant to Department Order No. 9 Series of 1997 with all the legal right
and personality to institute this instant petition. Pursuant therefore to the provisions of Article 257 of
the Labor Code, as amended, and its Implementing Rules as amended by Department Order No. 9,
since the respondent’s establishment is unorganized, the holding of a certification election is
mandatory for it was clearly established that petitioner is a legitimate labor organization. Giving due
Labor II – 1
course to this petition is therefore proper and appropriate. 9 (Emphasis supplied)

Passing on THIGCI’s allegation that some of the union members are supervisory, resigned and AWOL
employees or employees of a separate and distinct corporation,: the Med-Arbiter held that the same
should be properly raised in the exclusion-inclusion proceedings at the pre-election conference. As for
the allegation that some of the signatures were secured through fraudulent and deceitful means, he
held that it should be coursed through an independent petition for cancellation of union registration
which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-Arbiter held that
THIGCI failed to submit the job descriptions of the questioned employees and other supporting
documents to bolster its claim that they are disqualified from joining THEU.

THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside
the said Med-Arbiter’s Order and accordingly dismissed the petition for certification election on the
ground that there is a "clear absence of community or mutuality of interests," it finding that THEU
sought to represent two separate bargaining units (supervisory employees and rank-and-file
employees) as well as employees of two separate and distinct corporate entities. chanrob1es virtua1 1aw 1ibrary

Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by

authority of the DOLE Secretary, issued DOLE Resolution of November 12, 1998 10 setting aside the
June 4, 1998 Resolution dismissing the petition for certification election. In the November 12, 1998
Resolution, Undersecretary Dimapilis-Baldoz held that since THEU is a local chapter, the twenty
percent (20%) membership requirement is not necessary for it to acquire legitimate status, hence,
"the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file
members . . . cannot negate the legitimacy it has already acquired before the petition;" that rather
than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations, the
names of alleged disqualified supervisory employees and employees of the Country Club, Inc., a
separate and distinct corporation, should simply be removed from the THEU’s roster of membership;
and that regarding the participation of alleged resigned and AWOL employees and those whose
signatures are illegible, the issue can be resolved during the inclusion-exclusion proceedings at the
pre-election stage.

The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the conduct
of certification election.

THIGCI’s Motion for Reconsideration of the November 12, 1998 Resolution having been denied by the
DOLE Undersecretary by Resolution of December 29, 1998, 11 it filed a petition for certiorari before
this Court which, by Resolution of April 14, 1999, 12 referred it to the Court of Appeals in line with its
pronouncement in National Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, Et Al., 13 and
in strict observance of the hierarchy of courts, as emphasized in the case of St. Martin Funeral Home
v. National Labor Relations Commission. 14

By Decision of February 15, 2000, 15 the Court of Appeals denied THIGCI’s Petition for Certiorari and
affirmed the DOLE Resolution dated November 12, 1998. It held that while a petition for certification
election is an exception to the innocent bystander rule, hence, the employer may pray for the
dismissal of such petition on the basis of lack of mutuality of interests of the members of the union
as well as lack of employer-employee relationship following this Court’s ruling in Toyota Motor
Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union Et. Al. 16 and Dunlop
Slazenger [Phils.] v. Hon. Secretary of Labor and Employment Et. Al., 17 petitioner failed to adduce
substantial evidence to support its allegations.

Hence, the present petition for certiorari, raising the following

"ISSUES/ASSIGNMENT OF ERRORS: chanrob1es virtual 1aw library

THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12

Labor II – 1
NOVEMBER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULD SIMPLY
BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-FILE MEMBERSHIP INSTEAD OF RESOLVING
THE LEGITIMACY OF RESPONDENT UNION’S STATUS

THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12

NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES’ STATUS COULD READILY BE
RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS

THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF
PETITIONER HAD BEEN DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND
BY THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND CONTAINED IN THE
RECORDS OF THE CASE" 18

The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and vice-
versa, is Article 245 of the Labor Code, to wit: chanrob1es virtual 1aw library

Article 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.

While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-
file union, it does not provide what would be the effect if a rank-and-file union counts supervisory
employees among its members, or vice-versa.

Citing Toyota 19 which held that "a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all," and the subsequent case of Progressive
Development Corp. — Pizza Hut v. Ledesma 20 which held that: jgc:chanrobles.com.ph

"The Labor Code requires that in organized and unorganized establishments, a petition for
certification election must be filed by a legitimate labor organization. The acquisition of rights by any
union or labor organization, particularly the right to file a petition for certification election, first and
foremost, depends on whether or not the labor organization has attained the status of a legitimate
labor organization.

In the case before us, the Med-Arbiter summarily disregarded the petitioner’s prayer that the former
look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the
possession of a charter certificates so that ‘for all intents and purposes, Sumasaklaw sa Manggagawa
sa Pizza Hut (was) a legitimacy organization," ‘ 21 (Emphasis supplied),

petitioner contends that, quoting Toyota," [i]t becomes necessary . . ., 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." 22

Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary
"conveniently deferred the resolution on the serious infirmity in the membership of [THEU] and
ordered the holding of the certification election" which is frowned upon as the following ruling of this
Court shows: chanrob1es virtual 1aw library

We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the
membership of the respondent union can be remedied in "the pre-election conference thru the
exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions
will be excluded from the list of eligible voters." Public respondent gravely misappreciated the basic
antipathy between the interest of supervisors and the interest of rank-and-file employees. Due to the
Labor II – 1
irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota Motors Philippines
Corporation Labor Union, viz: chanrob1es virtual 1aw library

‘x       x       x

"Clearly, based on this provision Article 245, a labor organization composed of both rank-and-file and
supervisor 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 posses 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." (Emphasis by petitioner) (Dunlop
Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; (Emphasis supplied by petitioner.)
1ibrary
chanrob1es virtua1 1aw

The petition fails. After a certificate of registration is issued to a union, its legal personality
cannot be subject to collateral attack. It may be questioned only in an independent petition for
cancellation in accordance with Section 5 of Rule V, Book IV of the "Rules to Implement the Labor
Code" (Implementing Rules) which section reads: chanrob1es virtual 1aw library

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. (Emphasis supplied)

The grounds for cancellation of union registration are provided for under Article 239 of the Labor
Code, as follows: chanrob1es virtual 1aw library

Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds for
cancellation of union registration: chanrob1es virtual 1aw library

(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members
who took part in the ratification;

(b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days
from adoption or ratification of the constitution and by-laws or amendments thereto;

(c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of
the election of officers, the list of voters, or failure to subject these documents together with the list
of the newly elected/appointed officers and their postal addresses within thirty (30) days from
election;

(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing
of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial
report itself;

(e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any
activity prohibited by law;

(f) Entering into collective bargaining agreements which provide terms and conditions of employment
below minimum standards established by law;

(g) Asking for or accepting attorney’s fees or negotiation fees from employers;

Labor II – 1
(h) Other than for mandatory activities under this Code, checking off special assessments or any
other fees without duly signed individual written authorizations of the members;

(i) Failure to submit list of individual members to the Bureau once a year or whenever required by
the Bureau; and

(j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied),

while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the
Implementing Rules.

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 above-quoted Article 239 of the
Labor Code.

THEU, having been validly issued a certificate of registration, should be considered to have
already acquired juridical personality which may not be assailed collaterally.

As for petitioner’s allegation that some of the signatures in the petition for certification
election were obtained through fraud, false statement and misrepresentation, the proper
procedure is, as reflected above, for it to file a petition for cancellation of the certificate of
registration, and not to intervene in a petition for certification election.

Regarding the alleged withdrawal of union members from participating in the certification
election, this Court’s following ruling is instructive: jgc:chanrobles.com.ph

"‘[T]he best forum for determining whether there were indeed retractions from some of
the laborers is in the certification election itself wherein the workers can freely express
their choice in a secret ballot. Suffice it to say that the will of the rank-and-file employees should
in every possible instance be determined by secret ballot rather than by administrative or quasi-
judicial inquiry. Such representation and certification election cases are not to be taken as
contentious litigations for suits but as mere investigations of a non-adversary, fact-finding character
as to which of the competing unions represents the genuine choice of the workers to be their sole
and exclusive collective bargaining representative with their employer." 23

As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as
found by the court a quo, its failure to present substantial evidence that the assailed employees are
actually occupying supervisory positions.

While petitioner submitted a list of its employees with their corresponding job titles and ranks, 24
there is nothing mentioned about the supervisors’ respective duties, powers and prerogatives that
would show that they can effectively recommend managerial actions which require the use of
independent judgment.25 cralaw:red

As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor: 26

Designation should be reconciled with the actual job description of subject employees . . . The mere
fact that an employee is designated manager does not necessarily make him one. Otherwise, there
would be an absurd situation where one can be given the title just to be deprived of the right to be a
member of a union. In the case of National Steel Corporation v. Laguesma (G. R. No. 103743,
January 29, 1996), it was stressed that: chanrob1es virtual 1aw library

What is essential is the nature of the employee’s function and not the nomenclature or title given to
the job which determines whether the employee has rank-and-file or managerial status or whether
Labor II – 1
he is a supervisory employee. (Emphasis supplied).

WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of
origin, the Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a
certification election subject to the usual pre-election conference.
chanrob1es virtua1 1aw 

Labor II – 1
45.) G.R. No. 152094             July 22, 2004

DHL PHILIPPINES CORPORATION UNITED RANK AND FILE ASSOCIATION-FEDERATION OF FREE

WORKERS (DHL-URFA-FFW), petitioner,
vs.
BUKLOD NG MANGGAGAWA NG DHL PHILIPPINES CORPORATION, respondent.

DECISION

PANGANIBAN, J.:

False statements made by union officers before and during a certification election -- that the union is independent
and not affiliated with a national federation -- are material facts likely to influence the election results. This principle
finds application in the present case in which the majority of the employees clearly wanted an independent union to
represent them. Thus, after the members learned of the misrepresentation, and after a majority of them disaffiliated
themselves from the union and formed another one, a new certification election should be held to enable them to
express their true will.

The late filing of the Petition for a new election can be excused under the peculiar facts of this case, considering that
the employees concerned did not sleep on their rights, but promptly acted to protect their prerogatives. Petitioner
should not be permitted to use legal technicalities to perpetrate the betrayal foisted by its officers upon the majority
of the employees. Procedural technicalities should not be allowed to suppress the welfare of labor.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to annul the December 17, 1999
1 

Decision and the January 30, 2002 Resolution of the Court of Appeals (CA) in CA-GR SP No. 53270. The assailed
2  3 

Decision disposed as follows:

"WHEREFORE, the petition is hereby given due course. Accordingly, the decision of Rosalinda Dimapilis-
[B]aldoz, Undersecretary of Labor, in behalf of [the] Secretary of Labor and Employment, is
hereby ANNULED and SET ASIDE and DECLARED to have NO EFFECT whatsoever.

"Public respondent and its representatives are hereby enjoined to refrain and desist from implementing the
said decision." 4

The challenged Resolution denied petitioner’s Motion for Reconsideration.

The Facts

On November 25, 1997, a certification election was conducted among the regular rank and file employees in the
main office and the regional branches of DHL Philippines Corporation. The contending choices were petitioner and
"no union."

On January 19, 1998, on the basis of the results of the certification election, with petitioner receiving 546 votes and
"no union" garnering 348 votes, the election officer certified the former as the sole and exclusive bargaining agent of
the rank and file employees of the corporation. 5

Meanwhile, on December 19, 1997, Respondent Buklod ng Manggagawa ng DHL Philippines Corporation
(BUKLOD) filed with the Industrial Relations Division of the Department of Labor and Employment (DOLE) a
Petition for the nullification of the certification election. The officers of petitioner were charged with committing
Labor II – 1
fraud and deceit in the election proceedings, particularly by misrepresenting to the voter-employees that it was an
independent union, when it was in fact an affiliate of the Federation of Free Workers (FFW).

This misrepresentation was supposedly the basis for their selection of petitioner in the certification election.
Allegedly supporting this claim was the fact that those whom it had misled allegedly withdrew their membership from
it and subsequently formed themselves into an independent union. The latter union, BUKLOD, was issued a
Certificate of Registration by DOLE on December 23, 1997.

On May 18, 1998, Med-Arbiter Tomas F. Falconitin nullified the November 25, 1997 certification election and
ordered the holding of another one with the following contending choices: petitioner, respondent, and "no choice."

Setting aside the Decision of Med-Arbiter Falconitin, DOLE Undersecretary Rosalinda Dimapilis-Baldoz held on
appeal that the issue of representation had already been settled with finality in favor of petitioner, and that no
petitions for certification election would be entertained within one year from the time the election officer had issued
the Certification Order.

Ruling of the Court of Appeals

The CA held that the withdrawal of a great majority of the members of petitioner -- 704 out of 894 of them --
provided a compelling reason to conduct a certification election anew in order to determine, once and for all, which
union reflected their choice. Under the circumstances, the issue of representation was not put to rest by the mere
issuance of a Certification Order by the election officer.

According to the appellate court, broader considerations should be accorded the disaffiliating member-employees
and a new election held to finally ascertain their will, consistent with the constitutional and labor law policy of
according full protection to labor’s right to self-organization. The CA added that the best forum to determine the
veracity of the withdrawal or retraction of petitioner’s former members was another certification election.

The appellate court also held that the election officer’s issuance of a Certification Order on January 19, 1998 was
precipitate because, prior thereto, respondent had filed with the med-arbiter a Petition for nullification of the election.
Furthermore, the Certification was not in accordance with Department Order No. 9 (DO 9), Series of 1997. The
charges of fraud and deceit, lodged immediately after the election by petitioner’s former members against their
officers, should have been treated as protests or issues of eligibility within the meaning of Section 13 of DO 9.

Hence, this Petition. 6

Issues

In its Memorandum, petitioner submits the following issues for our consideration:

"I

Whether or not the Court of Appeals seriously erred and committed grave abuse of discretion amounting to
lack and/or excess of jurisdiction when it ‘annul[l]ed, set aside, and declared to have no effect whatsoever’,
the Decision of Undersecretary Rosalinda Dimapilis-Baldoz, which in effect, reinstated and affirmed the
Decision of the Med-Arbiter, nullifying the result of the certification election as well as ordering the conduct of
a new certification election at DHL Philippines Corporation, considering that:

(A) The Court of Appeals, as well as the Med-Arbiter, ignored the undisputed fact that petitioner a
quo (herein respondent) has not yet existed before, during and shortly after the conduct of
certification election on November 25, 1997, and not yet even registered at the time of the filing of its
Petition a quo on December 19, 1997, therefore, has no legal personality to institute an action.

(B) The Court of Appeals, as well as the Med-Arbiter ignored and unjustifiably refused to apply
Section 13, Rule XII of Department Order No. 9, there being no protest nor challenge raised before,
during and even after five (5) days have lapsed from the conduct of the certification election on
Labor II – 1
 November 25, 1997, as the Petition a quo was only filed on December 19, 1997 – a week before
herein respondent was able to obtain its Certificate of Registration.

(C) The Court of Appeals ignored and unjustifiably refused to apply Section 3, Rule V of Department
Order No. 9, or commonly know[n] as the ‘Certification-Year Rule’, which means that no certification
election should be entertained within one (1) year from the time the Election Officer issued the
Certification Order.

"II

Whether or not the Court of Appeals seriously erred and committed grave abuse of discretion, amounting to
lack and/or excess of jurisdiction in rendering the assailed Decision promulgated on December 17, 1999, as
the same was rendered without the [Office of the] Solicitor General having filed its comment on the Petition a
quo, despite having filed a Manifestation with Motion to the effect of not having received the Petition filed by
petitioner a quo, which [h]as remained unacted upon; as well as the Resolution promulgated on January 30,
2002, which denied herein petitioner’s Motion for Reconsideration, which was rendered without the required
comment thereon by the Petitioner a quo, thus, due process was violated.

"III

Whether or not the Court of Appeals seriously erred and committed grave abuse of discretion amounting to
lack and/or excess of jurisdiction in holding that the ‘resignation, withdrawal, retraction of the great majority
of the former members of United DHL should be treated as disaffiliation from such union.’

"IV

Whether or not, the Court of Appeals seriously erred and committed grave abuse of discretion amounting to
lack and/or excess of jurisdiction in declaring that ‘x x x while in the February 28, 1996 x x x decision of Med-
Arbiter Tomas Falconitin provides for a certification election among two (2) specific choices: the private
respondent (then as petitioner), and No Union ‘as the contending choices’, what was conducted on
November 25, 1996 (sic) was a referendum on a choice of yes or no and not certification order of the
Election Officer reflecting the results in the number of yes votes and no votes, without indicating the name of
the contending choices.

"V

Whether or not the Court of Appeals placed both parties in ‘Limbo’, as the dispositive portion of the Decision
or the fallo, which x x x actually constitutes the judgment or resolution of the court, failed to specify what
should be done by the parties after the rendition of the said Decision and Resolution, thus, there can be no
subject of execution." 7

In simpler terms, the issues being raised are as follows: 1) the validity of the CA Decision and Resolution; and 2) the
validity of the certification election.

The Court’s Ruling

The Petition lacks merit.

First Issue:
Validity of the CA Decision and Resolution

Petitioner assails the validity of the CA Decision for having been rendered without receipt of the required comment
of the Office of the Solicitor General (OSG) on respondent’s Petition; and the CA Resolution for having been issued
without receipt of respondent’s comment on petitioner’s Motion for Reconsideration.

This contention is untenable.

Labor II – 1
The applicable provision is Section 8 of Rule 65 of the Rules of Court, which provides:

"SECTION 8. Proceedings after comment is filed. -- After the comment or other pleadings required by the
court are filed, or the time for the filing thereof has expired, the court may hear the case or require the
parties to submit memoranda. If after such hearing or submission of memoranda or the expiration of the
period for the filing thereof the court finds that the allegations of the petition are true, it shall render judgment
for the relief prayed for or to which the petitioner is entitled. x x x". (Italics supplied)

From the foregoing provision, it is clear that the Petition may be resolved, notwithstanding the failure of the adverse
party to file a comment. Its failure to do so despite due notice is its own lookout. Indeed, when a respondent fails to
file its comment within the given period, the court may decide the case on the basis of the records before it,
specifically the petition and its attachments.8

Petitioner insists that the failure of the OSG to receive a copy of the Petition filed before the CA was the reason for
the OSG’s failure to file a Comment thereon. Be that as it may, as correctly pointed out by respondent, petitioner is
not the proper party to invoke such failure.

At any rate, it is the duty of petitioner to defend its position, as well as those that upheld it -- the tribunal, the board
and the officer -- because it is the party that is ultimately interested in sustaining the correctness of the disposition or
the validity of the proceedings.9

Petitioner further assails the validity of the CA Decision, on the ground that its dispositive portion or fallo failed to
specify what should be done by the parties after its promulgation.

All that the law requires is that the judgment must be definitive. That is, the rights of the parties must be stated with
finality by the decision itself, which must thus specifically deny or grant the remedy sought by the action. For review
10 

by the CA was Undersecretary Dimapilis-Baldoz’s Resolution reversing the Decision of Med-Arbiter Falconitin.

Parenthetically, the ultimate question presented before the appellate court was whether a new certification election
should be conducted among the employees of DHL Philippines Corporation. As correctly pointed out by respondent,
in reversing the undersecretary’s Resolution, the CA necessarily reinstated the med-arbiter’s earlier Decision to
conduct a new certification election.

A judgment is not confined to what appears on the face of the decision; it encompasses matters necessarily
included in or are necessary to such judgment. The Decision of Med-Arbiter Falconitin and Undersecretary
11 

Dimapilis-Baldoz should be read in the context of and in relation to the assailed Decision of the CA. The setting
aside of the undersecretary’s Resolution necessarily implies the holding of a new certification election by the med-
arbiter upon receipt of the records of the case and the motion of the interested party.

Second Issue:
Validity of the Certification Election

Under Section 13 of the Rules Implementing Book V (Labor Relations) of the Labor Code, as amended, the election
12 

officer’s authority to certify the results of the election is limited to situations in which there has been no protest filed;
or if there has been any, it has not been perfected or formalized within five days from the close of the election
proceedings.

Further, Section 14 of the same Rules provides that when a protest has been perfected, only the med-arbiter can
proclaim and certify the winner. Clearly, this rule is based on the election officer’s function, which is merely to
conduct and supervise certification elections. It is the med-arbiter who is authorized to hear and decide
13 

representation cases. Consequently, the decision whether to certify the results of an election or to set them aside
14 

due to incidents occurring during the campaign is within the med-arbiter’s discretion.

Petitioner argues that the CA gravely erred in rendering its assailed Decision, considering that no protest or
challenge had been formalized within five days, or raised during the election proceedings and entered in the

Labor II – 1
minutes thereof. Petitioner adds that respondent did not file any protest, either, against the alleged fraud and
misrepresentation by the former’s officers during the election.

We disagree. When the med-arbiter admitted and gave due course to respondent’s Petition for nullification of the
election proceedings, the election officer should have deferred issuing the Certification of the results thereof.
Section 13 of the Implementing Rules cannot strictly be applied to the present case.

Respondent’s contention is that a number of employees were lured by their officers into believing that petitioner was
an independent union. Since the employees had long desired to have an independent union that would represent
them in collective bargaining, they voted "yes" in favor of petitioner. Having been misled, a majority of them
eventually disaffiliated themselves from it and formed an independent union, respondent herein, which thereafter
protested the conduct of the election. Having been formed just after such exercise by the defrauded employees who
were former members of petitioner, respondent could not have reasonably filed its protest within five days from the
close of the election proceedings.

Notably, after it had applied for registration with the Bureau of Labor Relations (BLR), respondent filed its Petition to
nullify the certification election. Petitioner insistently opposed the Petition, as respondent had not yet been issued a
certificate of registration at the time. Because such certificate was issued in favor of the latter four days after the
filing of the Petition, on December 23, 1997, the misgivings of the former were brushed aside by the med-arbiter.
Indeed, the fact that respondent was not yet a duly registered labor organization when the Petition was filed is of no
moment, absent any fatal defect in its application for registration.

The circumstances in the present case show that the employees did not sleep on their rights. Hence, their failure to
follow strictly the procedural technicalities regarding the period for filing their protest should not be taken against
them. Mere technicalities should not be allowed to prevail over the welfare of the workers. What is essential is that
15 

they be accorded an opportunity to determine freely and intelligently which labor organization shall act on their
behalf. Having been denied this opportunity by the betrayal committed by petitioner’s officers in the present case,
16 

the employees were prevented from making an intelligent and independent choice.

False Statements of Union Officers

The making of false statements or misrepresentations that interfere with the free choice of the employees is a valid
ground for protest. A certification election may be set aside for misstatements made during the campaign, where 1)
a material fact has been misrepresented in the campaign; 2) an opportunity for reply has been lacking; and 3) the
misrepresentation has had an impact on the free choice of the employees participating in the election. A 17 

misrepresentation is likely to have an impact on their free choice, if it comes from a party who has special
knowledge or is in an authoritative position to know the true facts. This principle holds true, especially when the
employees are unable to evaluate the truth or the falsity of the assertions. 18

The fact that the officers of petitioner especially its president, misrepresented it to the voting employees as an
independent union constituted a substantial misrepresentation of material facts of vital concern to those employees.
The materiality of such misrepresentation is self-evident. The employees wanted an independent union to represent
them in collective bargaining, free from outside interference. Thus, upon knowing that petitioner was in fact an
affiliate of the FFW, the members disaffiliated from petitioner and organized themselves into an independent union.
Additionally, the misrepresentation came from petitioner’s recognized representative, who was clearly in a position
to hold himself out as a person who had special knowledge and was in an authoritative position to know the true
facts.

We are not easily persuaded by the argument of petitioner that the employees had sufficient time between the
misrepresentation and the election to check the truth of its claims. They could hardly be expected to verify the
accuracy of any statement regarding petitioner, made to them by its officers. No less than its president stated that it
was an independent union. At the time, the employees had no reason to doubt him.

We sustain the following findings of Med-Arbiter Falconitin:

Labor II – 1
 "x x x It must be noted at the outset that [respondent] has charged [petitioner’s] officers, agents and
representative with fraud or deception in encouraging its members to form or join and vote for DHL
Philippines Corporation United Rank-and-File Association which they represented as an independent labor
union not affiliated with any labor federation or national union. Such serious allegations, supported with
affidavits under oath executed by no less than seven hundred four (704) DHL Philippines Corporation’s
employees nationwide, cannot just be ignored.

"x x x             x x x             x x x

"Notwithstanding the fact that [petitioner] union was duly furnished copy of the petition and the affidavits as
its attachments, it surprisingly failed to question, much less contest, the veracity of the allegations contained
in such affidavits, more than just harping in general terms that the allegations are simply incredible and
[interposing] vehement denial. Being unassailed and unrefuted, the allegations in the affidavits which are
considered as x x x official documents must be given weight and consideration by this Office. Furthermore,
with the failure of [petitioner] to rebut the affidavits, more than just denying the allegations, they give rise to
the presumption that [petitioner] has admitted such allegations in the affidavit and with the admission, it is
inescapable that indeed there was fraud or machination committed by the [petitioner] that seriously affected
the validity and legitimacy of the certification election conducted on November 25, 1997 which gives rise to a
ground to annul or void the said election, having been marred by fraud, deceptions and machinations." 19

This finding of fact of a quasi-judicial agency of DOLE is persuasive upon the courts. 20

Although petitioner won in the election, it is now clear that it does not represent the majority of the bargaining
employees, owing to the affiliation of its members with respondent. The present uncertainty as to which union has
their support to represent them for collective bargaining purposes is a salient factor that this Court has seriously
considered.

The bargaining agent must be truly representative of the employees. At the time of the filing by respondent of the
21 

Petition for nullification, allegiances and loyalties of the employees were like shifting sands that radically affected
their choice of an appropriate bargaining representative. The polarization of a good number of them followed their
discovery of the fraud committed by the officers of petitioner. At any rate, the claim that 704 of the employees are
affiliated with respondent is not sufficiently rebutted by any evidence on record.

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, in the affirmative case, by
which one. 22

Once disaffiliation has been demonstrated beyond doubt, a certification election is the most expeditious way of
determining which union should be the exclusive bargaining representative of the employees. 23

WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Costs against petitioner.

Labor II – 1