Table of Contents

1.) G.R. No. L-31195 June 5, 1973 – PBMEO vs Philippine Blooming Mills.........................................2
2.) G.R. No. 85985 August 13, 1993 – PAL v NLRC (& PALEA)..................................................................14
3.) G.R. No. 151379             January 14, 2005 – University of Immaculate Conception vs. Secretary of
Labor (& UIC Teaching Union)......................................................................................................................18
4.) G.R. No. 140518             December 16, 2004 – Manila Diamond Hotel Union v CA (& Manila Diamond
Hotel) 23
5.) G.R. No. L-49046 January 26, 1988 – Victoria v Inciong.....................................................................26
6.) G.R. No. 181531               July 31, 2009 – NUWHRAIN-MPHC v HIMPHLU.........................................31
7.) G.R. No. 211145, October 14, 2015 – Samahan ng Mangagawa v Hanjin..........................................37
8.) Heritage Hotel v PIGLAS-HERITAGE...................................................................................................46
9.) Eagle Ridge v CA (& Eage Ridge Union).............................................................................................50
10.) Samahan ng Mangagawa sa Charter Chemical v Charter Chemical..................................................61
11.) Yokohama Tire v Yokohama Employees Union.................................................................................70
12.) Takata Corp v BLC (& Samahan Lakas Mangagawa ng Takata [SALAMAT])......................................74
13.) Hijo Resource v Mejares represented by NAMABDJERA-HRC [Union])...............................................80

Labor II – 1
1.) G.R. No. L-31195 June 5, 1973 – PBMEO vs Philippine Blooming Mills
PHILIPPINE BLOOMING MILLS EMPLOYMENT ORGANIZATION, NICANOR TOLENTINO, FLORENCIO,
PADRIGANO RUFINO, ROXAS MARIANO DE LEON, ASENCION PACIENTE, BONIFACIO VACUNA,
BENJAMIN PAGCU and RODULFO MUNSOD, petitioners,
vs.
PHILIPPINE BLOOMING MILLS CO., INC. and COURT OF INDUSTRIAL RELATIONS, respondents.

L.S. Osorio & P.B. Castillo and J.C. Espinas & Associates for petitioners.

Demetrio B. Salem & Associates for private respondent.

MAKASIAR, J.:

The petitioner Philippine Blooming Mills Employees Organization (hereinafter referred to as PBMEO) is a legitimate
labor union composed of the employees of the respondent Philippine Blooming Mills Co., Inc., and petitioners
Nicanor Tolentino, Florencio Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna,
Benjamin Pagcu and Rodulfo Munsod are officers and members of the petitioner Union.

Petitioners claim that on March 1, 1969, they decided to stage a mass demonstration at Malacañang on March 4,
1969, in protest against alleged abuses of the Pasig police, to be participated in by the workers in the first shift (from
6 A.M. to 2 P.M.) as well as those in the regular second and third shifts (from 7 A.M. to 4 P.M. and from 8 A.M. to 5
P.M., respectively); and that they informed the respondent Company of their proposed demonstration.

The questioned order dated September 15, 1969, of Associate Judge Joaquin M. Salvador of the respondent Court
reproduced the following stipulation of facts of the parties — parties —

3. That on March 2, 1969 complainant company learned of the projected mass demonstration at
Malacañang in protest against alleged abuses of the Pasig Police Department to be participated by
the first shift (6:00 AM-2:00 PM) workers as well as those working in the regular shifts (7:00 A.M. to
4:00 PM and 8:00 AM to 5:00 PM) in the morning of March 4, 1969;

4. That a meeting was called by the Company on March 3, 1969 at about 11:00 A.M. at the
Company's canteen, and those present were: for the Company: (1) Mr. Arthur L. Ang (2) Atty. S. de
Leon, Jr., (3) and all department and section heads. For the PBMEO (1) Florencio Padrigano, (2)
Rufino Roxas, (3) Mariano de Leon, (4) Asencion Paciente, (5) Bonifacio Vacuna and (6) Benjamin
Pagcu.

5. That the Company asked the union panel to confirm or deny said projected mass demonstration
at Malacañang on March 4, 1969. PBMEO thru Benjamin Pagcu who acted as spokesman of the
union panel, confirmed the planned demonstration and stated that the demonstration or rally cannot
be cancelled because it has already been agreed upon in the meeting. Pagcu explained further that
the demonstration has nothing to do with the Company because the union has no quarrel or dispute
with Management;

6. That Management, thru Atty. C.S. de Leon, Company personnel manager, informed PBMEO that
the demonstration is an inalienable right of the union guaranteed by the Constitution but
emphasized, however, that any demonstration for that matter should not unduly prejudice the normal
operation of the Company. For which reason, the Company, thru Atty. C.S. de Leon warned the
PBMEO representatives that workers who belong to the first and regular shifts, who without previous
leave of absence approved by the Company, particularly , the officers present who are the
organizers of the demonstration, who shall fail to report for work the following morning (March 4,

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 1969) shall be dismissed, because such failure is a violation of the existing CBA and, therefore,
would be amounting to an illegal strike;

7. That at about 5:00 P.M. on March 3, 1969, another meeting was convoked Company represented
by Atty. C.S. de Leon, Jr. The Union panel was composed of: Nicanor Tolentino, Rodolfo Munsod,
Benjamin Pagcu and Florencio Padrigano. In this afternoon meeting of March 3, 1969, Company
reiterated and appealed to the PBMEO representatives that while all workers may join the
Malacañang demonstration, the workers for the first and regular shift of March 4, 1969 should be
excused from joining the demonstration and should report for work; and thus utilize the workers in
the 2nd and 3rd shifts in order not to violate the provisions of the CBA, particularly Article XXIV: NO
LOCKOUT — NO STRIKE'. All those who will not follow this warning of the Company shall be
dismiss; De Leon reiterated the Company's warning that the officers shall be primarily liable being
the organizers of the mass demonstration. The union panel countered that it was rather too late to
change their plans inasmuch as the Malacañang demonstration will be held the following morning;
and

8. That a certain Mr. Wilfredo Ariston, adviser of PBMEO sent a cablegram to the Company which
was received 9:50 A.M., March 4, 1969, the contents of which are as follows: 'REITERATING
REQUEST EXCUSE DAY SHIFT EMPLOYEES JOINING DEMONSTRATION MARCH 4, 1969.'
(Pars. 3-8, Annex "F", pp. 42-43, rec.)

Because the petitioners and their members numbering about 400 proceeded with the demonstration despite the
pleas of the respondent Company that the first shift workers should not be required to participate in the
demonstration and that the workers in the second and third shifts should be utilized for the demonstration from 6
A.M. to 2 P.M. on March 4, 1969, respondent Company prior notice of the mass demonstration on March 4, 1969,
with the respondent Court, a charge against petitioners and other employees who composed the first shift, charging
them with a "violation of Section 4(a)-6 in relation to Sections 13 and 14, as well as Section 15, all of Republic Act
No. 875, and of the CBA providing for 'No Strike and No Lockout.' " (Annex "A", pp. 19-20, rec.). The charge was
accompanied by the joint affidavit of Arthur L. Ang and Cesareo de Leon, Jr. (Annex "B", pp. 21-24,
rec.). Thereafter, a corresponding complaint was filed, dated April 18, 1969, by Acting Chief Prosecutor Antonio T.
Tirona and Acting Prosecutor Linda P. Ilagan (Annex "C", pp. 25-30, rec.)

In their answer, dated May 9, 1969, herein petitioners claim that they did not violate the existing CBA because they
gave the respondent Company prior notice of the mass demonstration on March 4, 1969; that the said mass
demonstration was a valid exercise of their constitutional freedom of speech against the alleged abuses of some
Pasig policemen; and that their mass demonstration was not a declaration of strike because it was not directed
against the respondent firm (Annex "D", pp. 31-34, rec.)

After considering the aforementioned stipulation of facts submitted by the parties, Judge Joaquin M. Salvador, in an
order dated September 15, 1969, found herein petitioner PBMEO guilty of bargaining in bad faith and herein
petitioners Florencio Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin
Pagcu, Nicanor Tolentino and Rodulfo Munsod as directly responsible for perpetrating the said unfair labor practice
and were, as a consequence, considered to have lost their status as employees of the respondent Company (Annex
"F", pp. 42-56, rec.)

Herein petitioners claim that they received on September 23, 1969, the aforesaid order (p. 11, rec.); and that they
filed on September 29, 1969, because September 28, 1969 fell on Sunday (p. 59, rec.), a motion for reconsideration
of said order dated September 15, 1969, on the ground that it is contrary to law and the evidence, as well as asked
for ten (10) days within which to file their arguments pursuant to Sections 15, 16 and 17 of the Rules of the CIR, as
amended (Annex "G", pp. 57-60, rec. )

In its opposition dated October 7, 1969, filed on October 11, 1969 (p. 63, rec.), respondent Company averred that
herein petitioners received on September 22, 1969, the order dated September 17 (should be September 15), 1969;
that under Section 15 of the amended Rules of the Court of Industrial Relations, herein petitioners had five (5) days
from September 22, 1969 or until September 27, 1969, within which to file their motion for reconsideration; and that
because their motion for reconsideration was two (2) days late, it should be accordingly dismissed, invoking Bien vs.

Labor II – 1
Castillo,  which held among others, that a motion for extension of the five-day period for the filing of a motion for
1

reconsideration should be filed before the said five-day period elapses (Annex "M", pp. 61-64, rec.).

Subsequently, herein petitioners filed on October 14, 1969 their written arguments dated October 11, 1969, in
support of their motion for reconsideration (Annex "I", pp. 65-73, rec.).

In a resolution dated October 9, 1969, the respondent en banc dismissed the motion for reconsideration of herein
petitioners for being pro forma as it was filed beyond the reglementary period prescribed by its Rules (Annex "J",
pp. 74-75, rec.), which herein petitioners received on October 28, 196 (pp. 12 & 76, rec.).

At the bottom of the notice of the order dated October 9, 1969, which was released on October 24, 1969 and
addressed to the counsels of the parties (pp. 75-76, rec.), appear the requirements of Sections 15, 16 and 17, as
amended, of the Rules of the Court of Industrial Relations, that a motion for reconsideration shall be filed within five
(5) days from receipt of its decision or order and that an appeal from the decision, resolution or order of the C.I.R.,
sitting en banc, shall be perfected within ten (10) days from receipt thereof (p. 76, rec.).

On October 31, 1969, herein petitioners filed with the respondent court a petition for relief from the order dated
October 9, 1969, on the ground that their failure to file their motion for reconsideration on time was due to excusable
negligence and honest mistake committed by the president of the petitioner Union and of the office clerk of their
counsel, attaching thereto the affidavits of the said president and clerk (Annexes "K", "K-1" and "K-2", rec.).

Without waiting for any resolution on their petition for relief from the order dated October 9, 1969, herein petitioners
filed on November 3, 1969, with the Supreme Court, a notice of appeal (Annex "L", pp. 88-89, rec.).

There is need of briefly restating basic concepts and principles which underlie the issues posed by the case at bar.

(1) In a democracy, the preservation and enhancement of the dignity and worth of the human personality is the
central core as well as the cardinal article of faith of our civilization. The inviolable character of man as an individual
must be "protected to the largest possible extent in his thoughts and in his beliefs as the citadel of his person." 2

(2) The Bill of Rights is designed to preserve the ideals of liberty, equality and security "against the assaults of
opportunism, the expediency of the passing hour, the erosion of small encroachments, and the scorn and derision of
those who have no patience with general principles." 3

In the pithy language of Mr. Justice Robert Jackson, the purpose of the Bill of Rights is to withdraw "certain subjects
from the vicissitudes of political controversy, to place them beyond the reach of majorities and officials, and
to establish them as legal principles to be applied by the courts. One's rights to life, liberty and property, to free
speech, or free press, freedom of worship and assembly, and other fundamental rights may not be submitted to a
vote; they depend on the outcome of no elections."  Laski proclaimed that "the happiness of the individual, not the
4

well-being of the State, was the criterion by which its behaviour was to be judged. His interests, not its power, set
the limits to the authority it was entitled to exercise." 5

(3) The freedoms of expression and of assembly as well as the right to petition are included among the immunities
reserved by the sovereign people, in the rhetorical aphorism of Justice Holmes, to protect the ideas that we abhor or
hate more than the ideas we cherish; or as Socrates insinuated, not only to protect the minority who want to talk, but
also to benefit the majority who refuse to listen.  And as Justice Douglas cogently stresses it, the liberties of one are
6

the liberties of all; and the liberties of one are not safe unless the liberties of all are protected.
7

(4) The rights of free expression, free assembly and petition, are not only civil rights but also political rights essential
to man's enjoyment of his life, to his happiness and to his full and complete fulfillment. Thru these freedoms the
citizens can participate not merely in the periodic establishment of the government through their suffrage but also in
the administration of public affairs as well as in the discipline of abusive public officers. The citizen is accorded these
rights so that he can appeal to the appropriate governmental officers or agencies for redress and protection as well
as for the imposition of the lawful sanctions on erring public officers and employees.
Labor II – 1
(5) While the Bill of Rights also protects property rights, the primacy of human rights over property rights is
recognized.  Because these freedoms are "delicate and vulnerable, as well as supremely precious in our society"
8

and the "threat of sanctions may deter their exercise almost as potently as the actual application of sanctions," they
"need breathing space to survive," permitting government regulation only "with narrow specificity." 9

Property and property rights can be lost thru prescription; but human rights are imprescriptible. If human rights are
extinguished by the passage of time, then the Bill of Rights is a useless attempt to limit the power of government
and ceases to be an efficacious shield against the tyranny of officials, of majorities, of the influential and powerful,
and of oligarchs — political, economic or otherwise.

In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a preferred position as they
are essential to the preservation and vitality of our civil and political institutions;   and such priority "gives these
10

liberties the sanctity and the sanction not permitting dubious intrusions."  11

The superiority of these freedoms over property rights is underscored by the fact that a mere reasonable or rational
relation between the means employed by the law and its object or purpose — that the law is neither arbitrary nor
discriminatory nor oppressive — would suffice to validate a law which restricts or impairs property rights.   On the
12

other hand, a constitutional or valid infringement of human rights requires a more stringent criterion, namely
existence of a grave and immediate danger of a substantive evil which the State has the right to prevent. So it has
been stressed in the main opinion of Mr. Justice Fernando in Gonzales vs. Comelec and reiterated by the writer of
the opinion in Imbong vs. Ferrer.   It should be added that Mr. Justice Barredo in Gonzales vs. Comelec, supra, like
13

Justices Douglas, Black and Goldberg in N.Y. Times Co. vs. Sullivan,   believes that the freedoms of speech and of
14

the press as well as of peaceful assembly and of petition for redress of grievances are absolute when directed
against public officials or "when exercised in relation to our right to choose the men and women by whom we shall
be governed,"   even as Mr. Justice Castro relies on the balancing-of-interests test.   Chief Justice Vinson is partial
15 16

to the improbable danger rule formulated by Chief Judge Learned Hand, viz. — whether the gravity of the evil,
discounted by its improbability, justifies such invasion of free expression as is necessary to avoid the danger.  17

II

The respondent Court of Industrial Relations, after opining that the mass demonstration was not a
declaration of strike, concluded that by their "concerted act and the occurrence temporary stoppage of
work," herein petitioners are guilty bargaining in bad faith and hence violated the collective bargaining
agreement with private respondent Philippine Blooming Mills Co., inc.. Set against and tested by foregoing
principles governing a democratic society, such conclusion cannot be sustained. The demonstration held
petitioners on March 4, 1969 before Malacañang was against alleged abuses of some Pasig policemen, not
against their employer, herein private respondent firm, said demonstrate was purely and completely an exercise of
their freedom expression in general and of their right of assembly and petition for redress of grievances in particular
before appropriate governmental agency, the Chief Executive, again the police officers of the municipality of
Pasig. They exercise their civil and political rights for their mutual aid protection from what they believe were police
excesses. As matter of fact, it was the duty of herein private respondent firm to protect herein petitioner
Union and its members fro the harassment of local police officers. It was to the interest herein private
respondent firm to rally to the defense of, and take up the cudgels for, its employees, so that they can
report to work free from harassment, vexation or peril and as consequence perform more efficiently their
respective tasks enhance its productivity as well as profits. Herein respondent employer did not even offer
to intercede for its employees with the local police. Was it securing peace for itself at the expenses of its
workers? Was it also intimidated by the local police or did it encourage the local police to terrorize or vex its
workers? Its failure to defend its own employees all the more weakened the position of its laborers the alleged
oppressive police who might have been all the more emboldened thereby subject its lowly employees to further
indignities.

In seeking sanctuary behind their freedom of expression well as their right of assembly and of petition
against alleged persecution of local officialdom, the employees and laborers of herein private respondent
firm were fighting for their very survival, utilizing only the weapons afforded them by the Constitution — the
untrammelled enjoyment of their basic human rights. The pretension of their employer that it would suffer
loss or damage by reason of the absence of its employees from 6 o'clock in the morning to 2 o'clock in the
afternoon, is a plea for the preservation merely of their property rights. Such apprehended loss or damage
Labor II – 1
would not spell the difference between the life and death of the firm or its owners or its management. The
employees' pathetic situation was a stark reality — abused, harassment and persecuted as they believed they were
by the peace officers of the municipality. As above intimated, the condition in which the employees found
themselves vis-a-vis the local police of Pasig, was a matter that vitally affected their right to individual existence as
well as that of their families. Material loss can be repaired or adequately compensated. The debasement of the
human being broken in morale and brutalized in spirit-can never be fully evaluated in monetary terms. The wounds
fester and the scars remain to humiliate him to his dying day, even as he cries in anguish for retribution, denial of
which is like rubbing salt on bruised tissues.

As heretofore stated, the primacy of human rights — freedom of expression, of peaceful assembly and of
petition for redress of grievances — over property rights has been sustained.   Emphatic reiteration of this
18

basic tenet as a coveted boon — at once the shield and armor of the dignity and worth of the human personality, the
all-consuming ideal of our enlightened civilization — becomes Our duty, if freedom and social justice have any
meaning at all for him who toils so that capital can produce economic goods that can generate happiness for all. To
regard the demonstration against police officers, not against the employer, as evidence of bad faith in
collective bargaining and hence a violation of the collective bargaining agreement and a cause for the
dismissal from employment of the demonstrating employees, stretches unduly the compass of the
collective bargaining agreement, is "a potent means of inhibiting speech" and therefore inflicts a moral as
well as mortal wound on the constitutional guarantees of free expression, of peaceful assembly and of
petition. 
19

The collective bargaining agreement which fixes the working shifts of the employees, according to the respondent
Court Industrial Relations, in effect imposes on the workers the "duty ... to observe regular working hours." The
strain construction of the Court of Industrial Relations that a stipulated working shifts deny the workers the right to
stage mass demonstration against police abuses during working hours, constitutes a virtual tyranny over the mind
and life the workers and deserves severe condemnation. Renunciation of the freedom should not be predicated on
such a slender ground.

The mass demonstration staged by the employees on March 4, 1969 could not have been legally enjoined by any
court, such an injunction would be trenching upon the freedom expression of the workers, even if it legally appears
to be illegal picketing or strike.   The respondent Court of Industrial Relations in the case at bar concedes that the
20

mass demonstration was not a declaration of a strike "as the same not rooted in any industrial dispute although
there is concerted act and the occurrence of a temporary stoppage work." (Annex "F", p. 45, rec.).

The respondent firm claims that there was no need for all its employees to participate in the demonstration and that
they suggested to the Union that only the first and regular shift from 6 A.M. to 2 P.M. should report for work in order
that loss or damage to the firm will be averted. This stand failed appreciate the sine qua non of an effective
demonstration especially by a labor union, namely the complete unity of the Union members as well as their total
presence at the demonstration site in order to generate the maximum sympathy for the validity of their cause but
also immediately action on the part of the corresponding government agencies with jurisdiction over the issues they
raised against the local police. Circulation is one of the aspects of freedom of expression.   If demonstrators are
21

reduced by one-third, then by that much the circulation of the issues raised by the demonstration is diminished. The
more the participants, the more persons can be apprised of the purpose of the rally. Moreover, the absence of one-
third of their members will be regarded as a substantial indication of disunity in their ranks which will enervate their
position and abet continued alleged police persecution. At any rate, the Union notified the company two days in
advance of their projected demonstration and the company could have made arrangements to counteract or prevent
whatever losses it might sustain by reason of the absence of its workers for one day, especially in this case when
the Union requested it to excuse only the day-shift employees who will join the demonstration on March 4, 1969
which request the Union reiterated in their telegram received by the company at 9:50 in the morning of March 4,
1969, the day of the mass demonstration (pp. 42-43, rec.). There was a lack of human understanding or
compassion on the part of the firm in rejecting the request of the Union for excuse from work for the day
shifts in order to carry out its mass demonstration. And to regard as a ground for dismissal the mass
demonstration held against the Pasig police, not against the company, is gross vindictiveness on the part
of the employer, which is as unchristian as it is unconstitutional.

III

Labor II – 1
The respondent company is the one guilty of unfair labor practice. Because the refusal on the part of the
respondent firm to permit all its employees and workers to join the mass demonstration against alleged
police abuses and the subsequent separation of the eight (8) petitioners from the service constituted an
unconstitutional restraint on the freedom of expression, freedom of assembly and freedom petition for
redress of grievances, the respondent firm committed an unfair labor practice defined in Section 4(a-1) in
relation to Section 3 of Republic Act No. 875, otherwise known as the Industrial Peace Act. Section 3 of Republic
Act No. 8 guarantees to the employees the right "to engage in concert activities for ... mutual aid or
protection"; while Section 4(a-1) regards as an unfair labor practice for an employer interfere with, restrain
or coerce employees in the exercise their rights guaranteed in Section Three."

We repeat that the obvious purpose of the mass demonstration staged by the workers of the respondent firm on
March 4, 1969, was for their mutual aid and protection against alleged police abuses, denial of which was
interference with or restraint on the right of the employees to engage in such common action to better shield
themselves against such alleged police indignities. The insistence on the part of the respondent firm that the
workers for the morning and regular shift should not participate in the mass demonstration, under pain of dismissal,
was as heretofore stated, "a potent means of inhibiting speech."  22

Such a concerted action for their mutual help and protection deserves at least equal protection as the concerted
action of employees in giving publicity to a letter complaint charging bank president with immorality, nepotism,
favoritism an discrimination in the appointment and promotion of ban employees.   We further ruled in the Republic
23

Savings Bank case, supra, that for the employees to come within the protective mantle of Section 3 in relation to
Section 4(a-1) on Republic Act No. 875, "it is not necessary that union activity be involved or that collective
bargaining be contemplated," as long as the concerted activity is for the furtherance of their interests. 24

As stated clearly in the stipulation of facts embodied in the questioned order of respondent Court dated September
15, 1969, the company, "while expressly acknowledging, that the demonstration is an inalienable right of the Union
guaranteed by the Constitution," nonetheless emphasized that "any demonstration for that matter should not unduly
prejudice the normal operation of the company" and "warned the PBMEO representatives that workers who belong
to the first and regular shifts, who without previous leave of absence approved by the Company, particularly the
officers present who are the organizers of the demonstration, who shall fail to report for work the following morning
(March 4, 1969) shall be dismissed, because such failure is a violation of the existing CBA and, therefore, would be
amounting to an illegal strike (;)" (p. III, petitioner's brief). Such threat of dismissal tended to coerce the employees
from joining the mass demonstration. However, the issues that the employees raised against the local police, were
more important to them because they had the courage to proceed with the demonstration, despite such threat of
dismissal. The most that could happen to them was to lose a day's wage by reason of their absence from work on
the day of the demonstration. One day's pay means much to a laborer, more especially if he has a family to support.
Yet, they were willing to forego their one-day salary hoping that their demonstration would bring about the desired
relief from police abuses. But management was adamant in refusing to recognize the superior legitimacy of their
right of free speech, free assembly and the right to petition for redress.

Because the respondent company ostensibly did not find it necessary to demand from the workers proof of the truth
of the alleged abuses inflicted on them by the local police, it thereby concedes that the evidence of such abuses
should properly be submitted to the corresponding authorities having jurisdiction over their complaint and to whom
such complaint may be referred by the President of the Philippines for proper investigation and action with a view to
disciplining the local police officers involved.

On the other hand, while the respondent Court of Industrial Relations found that the demonstration "paralyzed to a
large extent the operations of the complainant company," the respondent Court of Industrial Relations did not make
any finding as to the fact of loss actually sustained by the firm. This significant circumstance can only mean that the
firm did not sustain any loss or damage. It did not present evidence as to whether it lost expected profits for failure
to comply with purchase orders on that day; or that penalties were exacted from it by customers whose orders could
not be filled that day of the demonstration; or that purchase orders were cancelled by the customers by reason of its
failure to deliver the materials ordered; or that its own equipment or materials or products were damaged due to
absence of its workers on March 4, 1969. On the contrary, the company saved a sizable amount in the form of
wages for its hundreds of workers, cost of fuel, water and electric consumption that day. Such savings could have
amply compensated for unrealized profits or damages it might have sustained by reason of the absence of its
workers for only one day.

Labor II – 1
IV

Apart from violating the constitutional guarantees of free speech and assembly as well as the right to
petition for redress of grievances of the employees, the dismissal of the eight (8) leaders of the workers for
proceeding with the demonstration and consequently being absent from work, constitutes a denial of social
justice likewise assured by the fundamental law to these lowly employees. Section 5 of Article II of the Constitution
imposes upon the State "the promotion of social justice to insure the well-being and economic security of all of the
people," which guarantee is emphasized by the other directive in Section 6 of Article XIV of the Constitution that "the
State shall afford protection to labor ...". Respondent Court of Industrial Relations as an agency of the State is under
obligation at all times to give meaning and substance to these constitutional guarantees in favor of the working man;
for otherwise these constitutional safeguards would be merely a lot of "meaningless constitutional patter." Under
the Industrial Peace Act, the Court of Industrial Relations is enjoined to effect the policy of the law "to
eliminate the causes of industrial unrest by encouraging and protecting the exercise by employees of their
right to self-organization for the purpose of collective bargaining and for the promotion of their moral,
social and economic well-being." It is most unfortunate in the case at bar that respondent Court of Industrial
Relations, the very governmental agency designed therefor, failed to implement this policy and failed to keep faith
with its avowed mission — its raison d'etre — as ordained and directed by the Constitution.

It has been likewise established that a violation of a constitutional right divests the court of jurisdiction; and as a
consequence its judgment is null and void and confers no rights. Relief from a criminal conviction secured at the
sacrifice of constitutional liberties, may be obtained through habeas corpus proceedings even long after the finality
of the judgment. Thus, habeas corpus is the remedy to obtain the release of an individual, who is convicted by final
judgment through a forced confession, which violated his constitutional right against self-incrimination;   or who is
25

denied the right to present evidence in his defense as a deprivation of his liberty without due process of law,   even
26

after the accused has already served sentence for twenty-two years.  27

Both the respondents Court of Industrial Relations and private firm trenched upon these constitutional immunities of
petitioners. Both failed to accord preference to such rights and aggravated the inhumanity to which the aggrieved
workers claimed they had been subjected by the municipal police. Having violated these basic human rights of the
laborers, the Court of Industrial Relations ousted itself of jurisdiction and the questioned orders it issued in the
instant case are a nullity. Recognition and protection of such freedoms are imperative on all public offices including
the courts   as well as private citizens and corporations, the exercise and enjoyment of which must not be nullified
28

by mere procedural rule promulgated by the Court Industrial Relations exercising a purely delegate legislative
power, when even a law enacted by Congress must yield to the untrammelled enjoyment of these human rights.
There is no time limit to the exercise of the freedoms. The right to enjoy them is not exhausted by the delivery of one
speech, the printing of one article or the staging of one demonstration. It is a continuing immunity to be invoked and
exercised when exigent and expedient whenever there are errors to be rectified, abuses to be denounced,
inhumanities to be condemned. Otherwise these guarantees in the Bill of Rights would be vitiated by rule on
procedure prescribing the period for appeal. The battle then would be reduced to a race for time. And in such a
contest between an employer and its laborer, the latter eventually loses because he cannot employ the best an
dedicated counsel who can defend his interest with the required diligence and zeal, bereft as he is of the financial
resources with which to pay for competent legal services.  -a28

VI

The Court of Industrial Relations rule prescribes that motion for reconsideration of its order or writ should filed within
five (5) days from notice thereof and that the arguments in support of said motion shall be filed within ten (10) days
from the date of filing of such motion for reconsideration (Sec. 16). As above intimated, these rules of procedure
were promulgated by the Court of Industrial Relations pursuant to a legislative delegation.  29

The motion for reconsideration was filed on September 29, 1969, or seven (7) days from notice on September 22,
1969 of the order dated September 15, 1969 or two (2) days late. Petitioners claim that they could have filed it on
September 28, 1969, but it was a Sunday.

Labor II – 1
Does the mere fact that the motion for reconsideration was filed two (2) days late defeat the rights of the petitioning
employees? Or more directly and concretely, does the inadvertent omission to comply with a mere Court of
Industrial Relations procedural rule governing the period for filing a motion for reconsideration or appeal in labor
cases, promulgated pursuant to a legislative delegation, prevail over constitutional rights? The answer should be
obvious in the light of the aforecited cases. To accord supremacy to the foregoing rules of the Court of Industrial
Relations over basic human rights sheltered by the Constitution, is not only incompatible with the basic tenet of
constitutional government that the Constitution is superior to any statute or subordinate rules and regulations, but
also does violence to natural reason and logic. The dominance and superiority of the constitutional right over the
aforesaid Court of Industrial Relations procedural rule of necessity should be affirmed. Such a Court of Industrial
Relations rule as applied in this case does not implement or reinforce or strengthen the constitutional rights
affected,' but instead constrict the same to the point of nullifying the enjoyment thereof by the petitioning employees.
Said Court of Industrial Relations rule, promulgated as it was pursuant to a mere legislative delegation, is
unreasonable and therefore is beyond the authority granted by the Constitution and the law. A period of five (5) days
within which to file a motion for reconsideration is too short, especially for the aggrieved workers, who usually do not
have the ready funds to meet the necessary expenses therefor. In case of the Court of Appeals and the Supreme
Court, a period of fifteen (15) days has been fixed for the filing of the motion for re hearing or reconsideration (See.
10, Rule 51; Sec. 1, Rule 52; Sec. 1, Rule 56, Revised Rules of Court). The delay in the filing of the motion for
reconsideration could have been only one day if September 28, 1969 was not a Sunday. This fact accentuates the
unreasonableness of the Court of Industrial are concerned.

It should be stressed here that the motion for reconsideration dated September 27, 1969, is based on the ground
that the order sought to be reconsidered "is not in accordance with law, evidence and facts adduced during the
hearing," and likewise prays for an extension of ten (10) days within which to file arguments pursuant to Sections
15, 16 and 17 of the Rules of the Court of Industrial Relations (Annex "G", pp. 57-60, rec.); although the arguments
were actually filed by the herein petitioners on October 14, 1969 (Annex "I", pp. 70-73, rec.), long after the 10-day
period required for the filing of such supporting arguments counted from the filing of the motion for reconsideration.
Herein petitioners received only on October 28, 1969 the resolution dated October 9, 1969 dismissing the motion for
reconsideration for being pro forma since it was filed beyond the reglementary period (Annex "J", pp. 74-75, rec.)

It is true that We ruled in several cases that where a motion to reconsider is filed out of time, or where the
arguments in suppf such motion are filed beyond the 10 day reglementary period provided for by the Court of
Industrial Relations rules, the order or decision subject of -a reconsideration becomes final and unappealable. But in
29

all these cases, the constitutional rights of free expression, free assembly and petition were not involved.

It is a procedural rule that generally all causes of action and defenses presently available must be specifically raised
in the complaint or answer; so that any cause of action or defense not raised in such pleadings, is deemed waived.
However, a constitutional issue can be raised any time, even for the first time on appeal, if it appears that the
determination of the constitutional issue is necessary to a decision of the case, the very lis mota of the case without
the resolution of which no final and complete determination of the dispute can be made.   It is thus seen that a
30

procedural rule of Congress or of the Supreme Court gives way to a constitutional right. In the instant case, the
procedural rule of the Court of Industrial Relations, a creature of Congress, must likewise yield to the constitutional
rights invoked by herein petitioners even before the institution of the unfair labor practice charged against them and
in their defense to the said charge.

In the case at bar, enforcement of the basic human freedoms sheltered no less by the organic law, is a most
compelling reason to deny application of a Court of Industrial Relations rule which impinges on such human
rights.  -a
30

It is an accepted principle that the Supreme Court has the inherent power to "suspend its own rules or to except a
particular case from its operation, whenever the purposes of justice require."  -b Mr. Justice Barredo in his
30

concurring opinion in Estrada vs. Sto. Domingo.  -c reiterated this principle and added that
30

Under this authority, this Court is enabled to cove with all situations without concerning itself about
procedural niceties that do not square with the need to do justice, in any case, without further loss of
time, provided that the right of the parties to a full day in court is not substantially impaired. Thus,
this Court may treat an appeal as a certiorari and vice-versa. In other words, when all the material
facts are spread in the records before Us, and all the parties have been duly heard, it matters little
Labor II – 1
 that the error of the court a quo is of judgment or of jurisdiction. We can then and there render the
appropriate judgment. Is within the contemplation of this doctrine that as it is perfectly legal and
within the power of this Court to strike down in an appeal acts without or in excess of jurisdiction or
committed with grave abuse of discretion, it cannot be beyond the admit of its authority, in
appropriate cases, to reverse in a certain proceed in any error of judgment of a court a quo which
cannot be exactly categorized as a flaw of jurisdiction. If there can be any doubt, which I do not
entertain, on whether or not the errors this Court has found in the decision of the Court of Appeals
are short of being jurisdiction nullities or excesses, this Court would still be on firm legal grounds
should it choose to reverse said decision here and now even if such errors can be considered as
mere mistakes of judgment or only as faults in the exercise of jurisdiction, so as to avoid the
unnecessary return of this case to the lower court for the sole purpose of pursuing the ordinary
course of an appeal. (Emphasis supplied).  -d
30

Insistence on the application of the questioned Court industrial Relations rule in this particular case at bar would an
unreasoning adherence to "Procedural niceties" which denies justice to the herein laborers, whose basic human
freedoms, including the right to survive, must be according supremacy over the property rights of their employer firm
which has been given a full hearing on this case, especially when, as in the case at bar, no actual material damage
has be demonstrated as having been inflicted on its property rights.

If We can disregard our own rules when justice requires it, obedience to the Constitution renders more imperative
the suspension of a Court of Industrial Relations rule that clash with the human rights sanctioned and shielded with
resolution concern by the specific guarantees outlined in the organic law. It should be stressed that the application
in the instant case Section 15 of the Court of Industrial Relations rules relied upon by herein respondent firm is
unreasonable and therefore such application becomes unconstitutional as it subverts the human rights of petitioning
labor union and workers in the light of the peculiar facts and circumstances revealed by the record.

The suspension of the application of Section 15 of the Court of Industrial Relations rules with reference to the case
at is also authorized by Section 20 of Commonwealth Act No. 103, the C.I.R. charter, which enjoins the Court of
Industrial Relations to "act according to justice and equity and substantial merits of the case, without regard to
technicalities or legal forms ..."

On several occasions, We emphasized this doctrine which was re-stated by Mr. Justice Barredo, speaking for the
Court, in the 1970 case of Kapisanan, etc. vs. Hamilton, etc., et. al.,  -e thus:
30

As to the point that the evidence being offered by the petitioners in the motion for new trial is not
"newly discovered," as such term is understood in the rules of procedure for the ordinary courts, We
hold that such criterion is not binding upon the Court of Industrial Relations. Under Section 20 of
Commonwealth Act No. 103, 'The Court of Industrial Relations shall adopt its, rules or procedure and
shall have such other powers as generally pertain to a court of justice: Provided, however, That in
the hearing, investigation and determination of any question or controversy and in exercising any
duties and power under this Act, the Court shall act according to justice and equity and substantial
merits of the case, without regard to technicalities or legal forms and shall not be bound by any
technical rules of legal evidence but may inform its mind in such manner as it may deem just and
equitable.' By this provision the industrial court is disengaged from the rigidity of the technicalities
applicable to ordinary courts. Said court is not even restricted to the specific relief demanded by the
parties but may issue such orders as may be deemed necessary or expedient for the purpose of
settling the dispute or dispelling any doubts that may give rise to future disputes. (Ang Tibay v.
C.I.R., G.R. No. 46496, Feb. 17, 1940; Manila Trading & Supply Co. v. Phil. Labor, 71 Phil. 124.) For
these reasons, We believe that this provision is ample enough to have enabled the respondent court
to consider whether or not its previous ruling that petitioners constitute a minority was founded on
fact, without regard to the technical meaning of newly discovered evidence. ... (Alonso v. Villamor,
16 Phil. 315; Chua Kiong v. Whitaker, 46 Phil. 578). (emphasis supplied.)

To apply Section 15 of the Court of Industrial Relations rules with "pedantic rigor" in the instant case is to rule in
effect that the poor workers, who can ill-afford an alert competent lawyer, can no longer seek the sanctuary of
human freedoms secured to them by the fundamental law, simply because their counsel — erroneously believing
that he received a copy of the decision on September 23, 1969, instead of September 22, 1969 - filed his motion for
Labor II – 1
reconsideration September 29, 1969, which practically is only one day late considering that September 28, 1969
was a Sunday.

Many a time, this Court deviated from procedure technicalities when they ceased to be instruments of justice, for the
attainment of which such rules have been devised. Summarizing the jurisprudence on this score, Mr. Justice
Fernando, speaking for a unanimous Court in Palma vs. Oreta,  -f Stated:
30

As was so aptly expressed by Justice Moreland in Alonso v. Villamor (16 Phil. 315 [1910]. The
Villamor decision was cited with approval in Register of Deeds v. Phil. Nat. Bank, 84 Phil. 600
[1949]; Potenciano v. Court of Appeals, 104 Phil. 156 [1958] and Uy v. Uy, 14243, June 30, 1961, 2
SCRA 675.), decided as far back as 1910, "technicality. when it deserts its proper-office as an aid to
justice and becomes its great hindrance and chief enemy, deserves scant consideration from
courts." (Ibid., p, 322.) To that norm, this Court has remained committed. The late Justice Recto in
Blanco v. Bernabe, (63 Phil. 124 [1936]) was of a similar mind. For him the interpretation of
procedural rule should never "sacrifice the ends justice." While "procedural laws are no other than
technicalities" view them in their entirety, 'they were adopted not as ends themselves for the
compliance with which courts have organized and function, but as means conducive to the
realization the administration of the law and of justice (Ibid., p.,128). We have remained steadfastly
opposed, in the highly rhetorical language Justice Felix, to "a sacrifice of substantial rights of a
litigant in altar of sophisticated technicalities with impairment of the sacred principles of justice."
(Potenciano v. Court of Appeals, 104 Phil. 156, 161 [1958]). As succinctly put by Justice Makalintal,
they "should give way to the realities of the situation." (Urbayan v. Caltex, L-15379, Aug. 31, 1962, 5
SCRA 1016, 1019). In the latest decision in point promulgated in 1968, (Udan v. Amon, (1968, 23
SCRA citing McEntee v. Manotok, L-14968, Oct. 27, 1961, 3 SCRA 272.) Justice Zaldivar was
partial to an earlier formulation of Justice Labrador that rules of procedure "are not to be applied in a
very rigid, technical sense"; but are intended "to help secure substantial justice." (Ibid., p. 843) ...  -g
30

Even if the questioned Court of Industrial Relations orders and rule were to be given effect, the dismissal or
termination of the employment of the petitioning eight (8) leaders of the Union is harsh for a one-day
absence from work. The respondent Court itself recognized the severity of such a sanction when it did not include
the dismissal of the other 393 employees who are members of the same Union and who participated in the
demonstration against the Pasig police. As a matter of fact, upon the intercession of the Secretary of Labor, the
Union members who are not officers, were not dismissed and only the Union itself and its thirteen (13) officers were
specifically named as respondents in the unfair labor practice charge filed against them by the firm (pp. 16-20,
respondent's Brief; Annexes "A", "B" and "C", pp. 20-30, rec.). Counsel for respondent firm insinuates that not all the
400 or so employee participated in the demonstration, for which reason only the Union and its thirteen (13) officers
were specifically named in the unfair labor practice charge (p. 20, respondent's brief). If that were so, then many, if
not all, of the morning and regular shifts reported for work on March 4, 1969 and that, as a consequence, the firm
continued in operation that day and did not sustain any damage.

The appropriate penalty — if it deserves any penalty at all — should have been simply to charge said one-
day absence against their vacation or sick leave. But to dismiss the eight (8) leaders of the petitioner Union is a
most cruel penalty, since as aforestated the Union leaders depend on their wages for their daily sustenance as well
as that of their respective families aside from the fact that it is a lethal blow to unionism, while at the same time
strengthening the oppressive hand of the petty tyrants in the localities.

Mr. Justice Douglas articulated this pointed reminder:

The challenge to our liberties comes frequently not from those who consciously seek to destroy our
system of Government, but from men of goodwill — good men who allow their proper concerns to
blind them to the fact that what they propose to accomplish involves an impairment of liberty.

... The Motives of these men are often commendable. What we must remember, however, is
that preservation of liberties does not depend on motives. A suppression of liberty has the same
effect whether the suppress or be a reformer or an outlaw. The only protection against misguided
zeal is a constant alertness of the infractions of the guarantees of liberty contained in our

Labor II – 1
 Constitution. Each surrender of liberty to the demands of the moment makes easier another, larger
surrender. The battle over the Bill of Rights is a never ending one.

... The liberties of any person are the liberties of all of us.

... In short, the Liberties of none are safe unless the liberties of all are protected.

... But even if we should sense no danger to our own liberties, even if we feel secure because we
belong to a group that is important and respected, we must recognize that our Bill of Rights is a
code of fair play for the less fortunate that we in all honor and good conscience must be observe.  31

The case at bar is worse.

Management has shown not only lack of good-will or good intention, but a complete lack of sympathetic
understanding of the plight of its laborers who claim that they are being subjected to indignities by the local police, It
was more expedient for the firm to conserve its income or profits than to assist its employees in their fight for their
freedoms and security against alleged petty tyrannies of local police officers. This is sheer opportunism. Such
opportunism and expediency resorted to by the respondent company assaulted the immunities and welfare of its
employees. It was pure and implement selfishness, if not greed.

Of happy relevance is the 1967 case of Republic Savings Bank vs. C.I.R.,   where the petitioner Bank dismissed
32

eight (8) employees for having written and published "a patently libelous letter ... to the Bank president demanding
his resignation on the grounds of immorality, nepotism in the appointment and favoritism as well as discrimination in
the promotion of bank employees." Therein, thru Mr. Justice Castro, We ruled:

It will avail the Bank none to gloat over this admission of the respondents. Assuming that the latter
acted in their individual capacities when they wrote the letter-charge they were nonetheless
protected for they were engaged in concerted activity, in the exercise of their right of self
organization that includes concerted activity for mutual aid and protection, (Section 3 of the Industrial
Peace Act ...) This is the view of some members of this Court. For, as has been aptly stated, the
joining in protests or demands, even by a small group of employees, if in furtherance of their
interests as such, is a concerted activity protected by the Industrial Peace Act. It is not necessary
that union activity be involved or that collective bargaining be contemplated. (Annot., 6 A.L.R. 2d 416
[1949]).

xxx xxx xxx

Instead of stifling criticism, the Bank should have allowed the respondents to air their grievances.

xxx xxx xxx

The Bank defends its action by invoking its right to discipline for what it calls the respondents' libel in
giving undue publicity to their letter-charge. To be sure, the right of self-organization of employees is
not unlimited (Republic Aviation Corp. vs. NLRB 324 U.S. 793 [1945]), as the right of the employer to
discharge for cause (Philippine Education Co. v. Union of Phil. Educ. Employees, L-13773, April 29,
1960) is undenied. The Industrial Peace Act does not touch the normal exercise of the right of the
employer to select his employees or to discharge them. It is directed solely against the abuse of that
right by interfering with the countervailing right of self organization (Phelps Dodge Corp. v. NLRB
313 U.S. 177 [1941])...

xxx xxx xxx

In the final sum and substance, this Court is in unanimity that the Bank's conduct, identified as an
interference with the employees' right of self-organization or as a retaliatory action, and/or as a
refusal to bargain collectively, constituted an unfair labor practice within the meaning and intendment
of section 4(a) of the Industrial Peace Act. (Emphasis supplied.)  33

Labor II – 1
If free expression was accorded recognition and protection to fortify labor unionism in the Republic Savings case,
supra, where the complaint assailed the morality and integrity of the bank president no less, such recognition and
protection for free speech, free assembly and right to petition are rendered all the more justifiable and more
imperative in the case at bar, where the mass demonstration was not against the company nor any of its officers.

WHEREFORE, judgement is hereby rendered:

(1) setting aside as null and void the orders of the respondent Court of Industrial Relations dated September 15 and
October 9, 1969; and

(2) directing the re instatement of the herein eight (8) petitioners, with full back pay from the date of their separation
from the service until re instated, minus one day's pay and whatever earnings they might have realized from other
sources during their separation from the service.

Labor II – 1
2.) G.R. No. 85985 August 13, 1993 – PAL v NLRC (& PALEA)
PHILIPPINE AIRLINES, INC. (PAL), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA and PHILIPPINE
AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents.

Solon Garcia for petitioner.

Adolpho M. Guerzon for respondent PALEA.

MELO, J.:

In the instant petition for certiorari, the Court is presented the issue of whether or not the formulation of a Code of
Discipline among employees is a shared responsibility of the employer and the employees.

On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The
Code was circulated among the employees and was immediately implemented, and some employees were
forthwith subjected to the disciplinary measures embodied therein.

Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint before
the National Labor Relations Commission (NLRC) for unfair labor practice (Case No. NCR-7-2051-85) with the
following remarks: "ULP with arbitrary implementation of PAL's Code of Discipline without notice and prior
discussion with Union by Management" (Rollo, p. 41). In its position paper, PALEA contended that PAL, by its
unilateral implementation of the Code, was guilty of unfair labor practice, specifically Paragraphs E and G of Article
249 and Article 253 of the Labor Code. PALEA alleged that copies of the Code had been circulated in limited
numbers; that being penal in nature the Code must conform with the requirements of sufficient publication,
and that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees. It prayed that
implementation of the Code be held in abeyance; that PAL should discuss the substance of the Code with
PALEA; that employees dismissed under the Code be reinstated and their cases subjected to further
hearing; and that PAL be declared guilty of unfair labor practice and be ordered to pay damages (pp. 7-14,
Record.)

PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe rules and
regulations regarding employess' conduct in carrying out their duties and functions, and alleging that by
implementing the Code, it had not violated the collective bargaining agreement (CBA) or any provision of the Labor
Code. Assailing the complaint as unsupported by evidence, PAL maintained that Article 253 of the Labor Code cited
by PALEA reffered to the requirements for negotiating a CBA which was inapplicable as indeed the current CBA had
been negotiated.

In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code was violated when
PAL unilaterally implemented the Code, and cited provisions of Articles IV and I of Chapter II of the Code as
defective for, respectively, running counter to the construction of penal laws and making punishable any offense
within PAL's contemplation. These provisions are the following:

Sec. 2. Non-exclusivity. — This Code does not contain the entirety of the rules and regulations of the
company. Every employee is bound to comply with all applicable rules, regulations, policies,
procedures and standards, including standards of quality, productivity and behaviour, as issued and
promulgated by the company through its duly authorized officials. Any violations thereof shall be
punishable with a penalty to be determined by the gravity and/or frequency of the offense.

Sec. 7. Cumulative Record. — An employee's record of offenses shall be cumulative. The

penalty for an offense shall be determined on the basis of his past record of offenses of any
Labor II – 1
 nature or the absence thereof. The more habitual an offender has been, the greater shall be the
penalty for the latest offense. Thus, an employee may be dismissed if the number of his past
offenses warrants such penalty in the judgment of management even if each offense considered
separately may not warrant dismissal. Habitual offenders or recidivists have no place in PAL. On the
other hand, due regard shall be given to the length of time between commission of individual
offenses to determine whether the employee's conduct may indicate occasional lapses (which may
nevertheless require sterner disciplinary action) or a pattern of incorrigibility.

Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed to appear at
the scheduled date. Interpreting such failure as a waiver of the parties' right to present evidence, the labor arbiter
considered the case submitted for decision. On November 7, 1986, a decision was rendered finding no bad faith on
the part of PAL in adopting the Code and ruling that no unfair labor practice had been committed. However, the
arbiter held that PAL was "not totally fault free" considering that while the issuance of rules and regulations
governing the conduct of employees is a "legitimate management prerogative" such rules and regulations must
meet the test of "reasonableness, propriety and fairness." She found Section 1 of the Code aforequoted as "an all
embracing and all encompassing provision that makes punishable any offense one can think of in the company";
while Section 7, likewise quoted above, is "objectionable for it violates the rule against double jeopardy thereby
ushering in two or more punishment for the same misdemeanor." (pp. 38-39, Rollo.)

The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated." Noting that PAL's
assertion that it had furnished all its employees copies of the Code is unsupported by documentary evidence, she
stated that such "failure" on the part of PAL resulted in the imposition of penalties on employees who thought all the
while that the 1966 Code was still being followed. Thus, the arbiter concluded that "(t)he phrase ignorance of the law
excuses no one from compliance . . . finds application only after it has been conclusively shown that the law was
circulated to all the parties concerned and efforts to disseminate information regarding the new law have been
exerted. (p. 39, Rollo.) She thereupon disposed:

WHEREFORE, premises considered, respondent PAL is hereby ordered as follows:

1. Furnish all employees with the new Code of Discipline;

2. Reconsider the cases of employees meted with penalties under the New Code of Discipline and
remand the same for further hearing; and

3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the decision.

All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit.

SO ORDERED. (p. 40, Rollo.)

PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner Encarnacion, with Presiding
Commissioner Bonto-Perez and Commissioner Maglaya concurring, found no evidence of unfair labor practice
committed by PAL and affirmed the dismissal of PALEA's charge. Nonetheless, the NLRC made the following
observations:

Indeed, failure of management to discuss the provisions of a contemplated code of discipline which
shall govern the conduct of its employees would result in the erosion and deterioration of an
otherwise harmonious and smooth relationship between them as did happen in the instant case.
There is no dispute that adoption of rules of conduct or discipline is a prerogative of management
and is imperative and essential if an industry, has to survive in a competitive world. But labor climate
has progressed, too. In the Philippine scene, at no time in our contemporary history is the need for a
cooperative, supportive and smooth relationship between labor and management more keenly felt if
we are to survive economically. Management can no longer exclude labor in the deliberation and
adoption of rules and regulations that will affect them.

Labor II – 1
 The complainant union in this case has the right to feel isolated in the adoption of the New Code of
Discipline. The Code of Discipline involves security of tenure and loss of employment — a property
right! It is time that management realizes that to attain effectiveness in its conduct rules, there should
be candidness and openness by Management and participation by the union, representing its
members. In fact, our Constitution has recognized the principle of "shared responsibility" between
employers and workers and has likewise recognized the right of workers to participate in "policy and
decision-making process affecting their rights . . ." The latter provision was interpreted by the
Constitutional Commissioners to mean participation in "management"' (Record of the Constitutional
Commission, Vol. II).

In a sense, participation by the union in the adoption of the code if conduct could have accelerated
and enhanced their feelings of belonging and would have resulted in cooperation rather than
resistance to the Code. In fact, labor-management cooperation is now "the thing." (pp. 3-4, NLRC
Decision ff. p. 149, Original Record.)

Respondent Commission thereupon disposed:

WHEREFORE, premises considered, we modify the appealed decision in the sense that the New
Code of Discipline should be reviewed and discussed with complainant union, particularly the
disputed provisions [.] (T)hereafter, respondent is directed to furnish each employee with a copy of
the appealed Code of Discipline. The pending cases adverted to in the appealed decision if still in
the arbitral level, should be reconsidered by the respondent Philippine Air Lines. Other dispositions
of the Labor Arbiter are sustained.

SO ORDERED. (p. 5, NLRC Decision.)

PAL then filed the instant petition for certiorari charging public respondents with grave abuse of discretion in: (a)
directing PAL "to share its management prerogative of formulating a Code of Discipline"; (b) engaging in quasi-
judicial legislation in ordering PAL to share said prerogative with the union; (c) deciding beyond the issue of unfair
labor practice, and (d) requiring PAL to reconsider pending cases still in the arbitral level (p. 7, Petition; p. 8, Rollo.)

As stated above, the Principal issue submitted for resolution in the instant petition is whether management may be
compelled to share with the union or its employees its prerogative of formulating a code of discipline.

PAL asserts that when it revised its Code on March 15, 1985, there was no law which mandated the sharing
of responsibility therefor between employer and employee.

Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the Labor
Code, that the law explicitly considered it a State policy "(t)o ensure the participation of workers in decision and
policy-making processes affecting the rights, duties and welfare." However, even in the absence of said clear
provision of law, the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs.
Medina (177 SCRA 565 [1989]) it was held that management's prerogatives must be without abuse of
discretion.

In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]), we upheld the company's
right to implement a new system of distributing its products, but gave the following caveat:

So long as a company's management prerogatives are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or circumventing the
rights of the employees under special laws or under valid agreements, this Court will uphold them.
(at p. 28.)

All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by
limitations found in law, a collective bargaining agreement, or the general principles of fair play and
justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as enunciated in Abbott

Labor II – 1
Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be duly established that the prerogative being invoked is
clearly a managerial one.

A close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented nor
do they concern the management aspect of the business of the company as in the San Miguel case. The
provisions of the Code clearly have repercusions on the employee's right to security of tenure. The
implementation of the provisions may result in the deprivation of an employee's means of livelihood which,
as correctly pointed out by the NLRC, is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268
[1986]). In view of these aspects of the case which border on infringement of constitutional rights, we must
uphold the constitutional requirements for the protection of labor and the promotion of social justice, for
these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of
the worker" (Employees Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628
[1991] 635).

Verily, a line must be drawn between management prerogatives regarding business operations per se and
those which affect the rights of the employees. In treating the latter, management should see to it that its
employees are at least properly informed of its decisions or modes action. PAL asserts that all its employees
have been furnished copies of the Code. Public respondents found to the contrary, which finding, to say the least is
entitled to great respect.

PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27, 1990, PALEA in
effect, recognized PAL's "exclusive right to make and enforce company rules and regulations to carry out the
functions of management without having to discuss the same with PALEA and much less, obtain the
latter's conformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180-181, Rollo.) Petitioner's view is based on
the following provision of the agreement:

The Association recognizes the right of the Company to determine matters of management it policy
and Company operations and to direct its manpower. Management of the Company includes the
right to organize, plan, direct and control operations, to hire, assign employees to work, transfer
employees from one department, to another, to promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and legal causes, to introduce new or
improved methods or facilities or to change existing methods or facilities and the right to make and
enforce Company rules and regulations to carry out the functions of management.

The exercise by management of its prerogative shall be done in a just reasonable, humane and/or
lawful manner.

Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights to
participate in the deliberation of matters which may affect their rights and the formulation of policies relative thereto.
And one such mater is the formulation of a code of discipline.

Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the
discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code (P.D. 442) was
amended by Republic Act No. 6715, it was already declared a policy of the State, "(d) To promote the
enlightenment of workers concerning their rights and obligations . . . as employees." This was, of course,
amplified by Republic Act No 6715 when it decreed the "participation of workers in decision and policy
making processes affecting their rights, duties and welfare." PAL's position that it cannot be saddled with
the "obligation" of sharing management prerogatives as during the formulation of the Code, Republic Act
No. 6715 had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be
sustained. While such "obligation" was not yet founded in law when the Code was formulated, the
attainment of a harmonious labor-management relationship and the then already existing state policy of
enlightening workers concerning their rights as employees demand no less than the observance of
transparency in managerial moves affecting employees' rights.

Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature of its
business cannot be overemphasized. In fact, its being a local monopoly in the business demands the most stringent
of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted cannot
Labor II – 1
be properly implemented in the absence of full cooperation of the employees. Such cooperation cannot be attained
if the employees are restive on account, of their being left out in the determination of cardinal and fundamental
matters affecting their employment.

WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special pronouncement is
made as to costs.

3.) G.R. No. 151379             January 14, 2005 – University of Immaculate

Conception vs. Secretary of Labor (& UIC Teaching Union)
UNIVERSITY of IMMACULATE, CONCEPCION, INC., petitioner,
vs.
The HONORABLE SECRETARY OF LABOR, THE UIC TEACHING and NON-TEACHING PERSONNEL AND
EMPLOYEES UNION, LELIAN CONCON, MARY ANN DE RAMOS, JOVITA MAMBURAM, ANGELINA
ABADILLA, MELANIE DE LA ROSA, ZENAIDA CANOY, ALMA VILLACARLOS, JOSIE BOSTON, PAULINA
PALMA GIL, GEMMA GALOPE, LEAH CRUZA, DELFA DIAPUEZ, respondent.

DECISION

AZCUNA, J.:

This is a petition for review of a decision of the Court of Appeals and the resolution denying reconsideration thereof.
The principal issue to be resolved in this recourse is whether or not the Secretary of Labor, after assuming
jurisdiction over a labor dispute involving an employer and the certified bargaining agent of a group of
employees in the workplace, may legally order said employer to reinstate employees terminated by the
employer even if those terminated employees are not part of the bargaining unit.

This case stemmed from the collective bargaining negotiations between petitioner University of Immaculate
Concepcion, Inc. (UNIVERSITY) and respondent The UIC Teaching and Non-Teaching Personnel and
Employees Union (UNION). The UNION, as the certified bargaining agent of all rank and file employees of
the UNIVERSITY, submitted its collective bargaining proposals to the latter on February 16, 1994. However,
one item was left unresolved and this was the inclusion or exclusion of the following positions in the scope
of the bargaining unit:

a. Secretaries

b. Registrars

c. Accounting Personnel

d. Guidance Counselors 1

This matter was submitted for voluntary arbitration. On November 8, 1994, the panel of voluntary arbitrators
rendered a decision, the dispositive portion of which states:

WHEREFORE, premises considered, the Panel hereby resolves to exclude the above-mentioned secretaries,
registrars, chief of the accounting department, cashiers and guidance counselors from the coverage of the
bargaining unit. The accounting clerks and the accounting staff member are hereby ordered included in the
bargaining unit.2

The UNION moved for the reconsideration of the above decision. Pending, however, the resolution of its motion,
on December 9, 1994, it filed a notice of strike with the National Conciliation and Mediation Board (NCMB) of
Davao City, on the grounds of bargaining deadlock and unfair labor practice. During the thirty (30) day
cooling-off period, two union members were dismissed by petitioner. Consequently, the UNION went on
strike on January 20, 1995.
Labor II – 1
On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor, issued an Order assuming
jurisdiction over the labor dispute. The dispositive portion of the said Order states:

WHEREFORE, ABOVE PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, as
amended, this Office hereby assumes jurisdiction over the entire labor dispute at the University of the Immaculate
Concepcion College.

Accordingly, all workers are directed to return to work within twenty-four (24) hours upon receipt of this Order
and for Management to accept them back under the same terms and conditions prevailing prior to the strike.

Parties are further directed to cease and desist from committing any or all acts that might exacerbate the
situation.

Finally, the parties are hereby directed to submit their respective position papers within ten (10) days from receipt
hereof.

SO ORDERED.3

On February 8, 1995, the panel of voluntary arbitrators denied the motion for reconsideration filed by the
UNION. The UNIVERSITY then furnished copies of the panel’s denial of the motion for reconsideration and the
Decision dated November 8, 1995 to the individual respondents herein:

1. Lelian Concon – Grade School Guidance Counselor

2. Mary Ann de Ramos – High School Guidance Counselor

3. Jovita Mamburam – Secretary to [the] Vice President for Academic Affairs/ Dean of College

4. Angelina Abadilla – Secretary to [the] Vice President for Academic Affairs/ Dean of College

5. Melanie de la Rosa – Secretary to [the] Dean of [the] College of Pharmacy/ Academic Affairs/ Dean of
College

6. Zenaida Canoy – Secretary to [the] Vice President for Academic Affairs/ Dean of College

7. Alma Villacarlos – Guidance Counselor (College)

8. Josie Boston – Grade School Psychometrician

9. Paulina Palma Gil – Cashier

10. Gemma Galope – High School Registrar

11. Leah Cruza – Guidance Counselor (College)

12. Delfa Diapuez – High School Psychometrician 4

Thereafter, the UNIVERSITY gave the abovementioned individual respondents two choices: to resign from
the UNION and remain employed as confidential employees or resign from their confidential positions and
remain members of the UNION. The UNIVERSITY relayed to these employees that they could not remain as
confidential employees and at the same time as members or officers of the Union. However, the individual
respondents remained steadfast in their claim that they could still retain their confidential positions while
being members or officers of the Union. Hence, on February 21, 1995, the UNIVERSITY sent notices of
termination to the individual respondents. 1a\^/phi1.net

Labor II – 1
On March 10, 1995, the UNION filed another notice of strike, this time citing as a reason the UNIVERSITY’s
termination of the individual respondents. The UNION alleged that the UNIVERSITY’s act of terminating the
individual respondents is in violation of the Order of the Secretary of Labor dated January 23, 1995.

On March 28, 1995, the Secretary of Labor issued another Order reiterating the directives contained in the
January 23, 1995 Order. The Secretary also stated therein that the effects of the termination from
employment of these individual respondents be suspended pending the determination of the legality
thereof. Hence, the UNIVERSITY was directed to reinstate the individual respondents under the same terms and
conditions prevailing prior to the labor dispute.

The UNIVERSITY, thereafter, moved to reconsider the aforesaid Order on March 28, 1995. It argued that the
Secretary’s Order directing the reinstatement of the individual respondents would render nugatory the decision of
the panel of voluntary arbitrators to exclude them from the collective bargaining unit. The UNIVERSITY’s motion
was denied by the Secretary in an Order dated June 16, 1995, wherein the Secretary declared that the decision of
the panel of voluntary arbitrators to exclude the individual respondents from the collective bargaining unit did not
authorize the UNIVERSITY to terminate their employment. The UNIVERSITY filed a second motion for
reconsideration, which was again denied in an Order dated July 19, 1995. Undeterred, the UNIVERSITY filed a third
motion for reconsideration. In the Order dated August 18, 1995, then Acting Secretary Jose S. Brilliantes denied
the third motion for reconsideration, but modified the two previous Orders by adding:

xxx

Anent the Union’s Motion, we find that superseding circumstances would not warrant the physical
reinstatement of the twelve (12) terminated employees. Hence, they are hereby ordered placed under payroll
reinstatement until the validity of their termination is finally resolved.5

xxx

Still unsatisfied with the Order of the Secretary of Labor, the UNIVERSITY filed a petition for certiorari with this
Court on September 15, 1995. However, its petition was referred to the Court of Appeals, following the ruling in St.
Martin Funeral Homes v. Court of Appeals . 6

On October 8, 2001, the Court of Appeals promulgated its Decision, affirming the questioned Orders of the
Secretary of Labor. The dispositive portion of the Decision states:

WHEREFORE, the instant petition is DISMISSED for lack of merit.7

The UNIVERSITY then moved for the reconsideration of the abovementioned Decision,8 but on January 10, 2002,
the Court of Appeals denied the motion on the ground that no new matters were raised therein that would warrant a
reconsideration.9

Hence, this petition.

The UNIVERSITY assigns the following error:

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE ORDERS OF THE
SECRETARY OF LABOR THAT SUSPENDED THE EFFECTS OF THE TERMINATION OF TWELVE
EMPLOYEES WHO WERE NOT PART OF THE BARGAINING UNIT INVOLVED IN A LABOR DISPUTE OVER
WHICH THE SECRETARY OF LABOR ASSUMED JURISDICTION.10

The Court of Appeals relied upon the doctrine in St. Scholastica’s College v. Torres.11 In the case therein, this Court,
citing International Pharmaceuticals Incorporated v. the Secretary of Labor,12 declared that:

x x x [T]he Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume
jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable
to the national interest, and decide the same accordingly. Necessarily, the authority to assume jurisdiction
Labor II – 1
over the said labor dispute must include and extend to all questions and controversies arising therefrom,
including cases over which the Labor Arbiter has exclusive jurisdiction.

The UNIVERSITY contends that the Secretary cannot take cognizance of an issue involving employees who
are not part of the bargaining unit. It insists that since the individual respondents had already been
excluded from the bargaining unit by a final and executory order by the panel of voluntary arbitrators, then
they cannot be covered by the Secretary’s assumption order.

This Court finds no merit in the UNIVERSITY’s contention. In Metrolab Industries, Inc. v. Roldan-Confessor ,13 this
Court declared that it recognizes the exercise of management prerogatives and it often declines to interfere with the
legitimate business decisions of the employer. This is in keeping with the general principle embodied in Article XIII,
Section 3 of the Constitution,14 which is further echoed in Article 211 of the Labor Code.15 However, as expressed
in PAL v. National Labor Relations Commission,16 this privilege is not absolute, but subject to exceptions. One of
these exceptions is when the Secretary of Labor assumes jurisdiction over labor disputes involving industries
indispensable to the national interest under Article 263(g) of the Labor Code. This provision states:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of automatically enjoining the intended or impending
strike or lockout as specified in the assumption or certification order. If one has already taken place at the
time of assumption or certification, all striking or locked out employees shall immediately return to work
and the employer shall immediately resume operations and readmit all workers under the same terms and
conditions prevailing before the strike or lockout. x x x

When the Secretary of Labor ordered the UNIVERSITY to suspend the effect of the termination of the
individual respondents, the Secretary did not exceed her jurisdiction, nor did the Secretary gravely abuse
the same. It must be pointed out that one of the substantive evils which Article 263(g) of the Labor Code seeks to
curb is the exacerbation of a labor dispute to the further detriment of the national interest. In her Order dated March
28, 1995, the Secretary of Labor rightly held:

It is well to remind both parties herein that the main reason or rationale for the exercise of the Secretary of Labor
and Employment’s power under Article 263(g) of the Labor Code, as amended, is the maintenance and upholding of
the status quo while the dispute is being adjudicated. Hence, the directive to the parties to refrain from performing
acts that will exacerbate the situation is intended to ensure that the dispute does not get out of hand, thereby
negating the direct intervention of this office.
l^vvphi1.net

The University’s act of suspending and terminating union members and the Union’s act of filing another Notice of
Strike after this Office has assumed jurisdiction are certainly in conflict with the status quo ante. By any standards[,]
these acts will not in any way help in the early resolution of the labor dispute. It is clear that the actions of both
parties merely served to complicate and aggravate the already strained labor-management relations.17

Indeed, it is clear that the act of the UNIVERSITY of dismissing the individual respondents from their employment
became the impetus for the UNION to declare a second notice of strike. It is not a question anymore of whether or
not the terminated employees, the individual respondents herein, are part of the bargaining unit. Any act committed
during the pendency of the dispute that tends to give rise to further contentious issues or increase the tensions
between the parties should be considered an act of exacerbation and should not be allowed.

With respect to the Secretary’s Order allowing payroll reinstatement instead of actual reinstatement for the individual
respondents herein, an amendment to the previous Orders issued by her office, the same is usually not allowed.
Article 263(g) of the Labor Code aforementioned states that all workers must immediately return to work and all
employers must readmit all of them under the same terms and conditions prevailing before the strike or
lockout.  The phrase "under the same terms and conditions" makes it clear that the norm is actual reinstatement.
l^vvphi1.net

This is consistent with the idea that any work stoppage or slowdown in that particular industry can be detrimental to
the national interest.

Labor II – 1
In ordering payroll reinstatement in lieu of actual reinstatement, then Acting Secretary of Labor Jose S. Brillantes
said:

Anent the Union’s Motion, we find that superseding circumstances would not warrant the physical reinstatement of
the twelve (12) terminated employees. Hence, they are hereby ordered placed under payroll reinstatement until the
validity of their termination is finally resolved.18

As an exception to the rule, payroll reinstatement must rest on special circumstances that render actual
reinstatement impracticable or otherwise not conducive to attaining the purposes of the law.19

The "superseding circumstances" mentioned by the Acting Secretary of Labor no doubt refer to the final decision of
the panel of arbitrators as to the confidential nature of the positions of the twelve private respondents, thereby
rendering their actual and physical reinstatement impracticable and more likely to exacerbate the situation. The
payroll reinstatement in lieu of actual reinstatement ordered in these cases, therefore, appears justified as an
exception to the rule until the validity of their termination is finally resolved. This Court sees no grave abuse of
discretion on the part of the Acting Secretary of Labor in ordering the same. Furthermore, the issue has not been
raised by any party in this case.

WHEREFORE, the Decision of the Court of Appeals dated October 8, 2001 and its Resolution dated January 10,
2002 in CA-G.R. SP No. 61693 are AFFIRMED.

Labor II – 1
4.) G.R. No. 140518             December 16, 2004 – Manila Diamond Hotel Union
v CA (& Manila Diamond Hotel)
MANILA DIAMOND HOTEL EMPLOYEES’ UNION, petitioner,
vs.
THE HON. COURT OF APPEALS, THE SECRETARY OF LABOR AND EMPLOYMENT, and THE MANILA
DIAMOND HOTEL, respondents.

DECISION

AZCUNA, J.:

This petition for review of a decision of the Court of Appeals arose out of a dispute between the Philippine Diamond
Hotel and Resort, Inc. ("Hotel"), owner of the Manila Diamond Hotel, and the Manila Diamond Hotel Employees’
Union ("Union"). The facts are as follows:

On November 11, 1996, the Union filed a petition for a certification election so that it may be declared the
exclusive bargaining representative of the Hotel’s employees for the purpose of collective
bargaining. The petition was dismissed by the Department of Labor and Employment (DOLE) on January 15,
1997. After a few months, however, on August 25, 1997, the Union sent a letter to the Hotel informing it of its
desire to negotiate for a collective bargaining agreement. In a letter dated September 11, 1997, the Hotel’s
1 

Human Resources Department Manager, Mary Anne Mangalindan, wrote to the Union stating that the Hotel cannot
recognize it as the employees’ bargaining agent since its petition for certification election had been earlier
dismissed by the DOLE. On that same day, the Hotel received a letter from the Union stating that they were not
2 

giving the Hotel a notice to bargain, but that they were merely asking for the Hotel to engage in collective
bargaining negotiations with the Union for its members only and not for all the rank and file employees of
the Hotel.3

On September 18, 1997, the Union announced that it was taking a strike vote. A Notice of Strike was
thereafter filed on September 29, 1997, with the National Conciliation and Mediation Board (NCMB) for the Hotel’s
alleged "refusal x x x to bargain" and for alleged acts of unfair labor practice. The NCMB summoned both
parties and held a series of dialogues, the first of which was on October 6, 1997.

On November 29, 1997, however, the Union staged a strike against the Hotel. Numerous confrontations between
the two parties followed, creating an obvious strain between them. The Hotel claims that the strike was illegal
and it had to dismiss some employees for their participation in the allegedly illegal concerted activity. The
Union, on the other hand, accused the Hotel of illegally dismissing the workers. What is pertinent to this
case, however, is the Order issued by the then Secretary of Labor and Employment Cresenciano B. Trajano
assuming jurisdiction over the labor dispute. A Petition for Assumption of Jurisdiction was filed by the Union on
April 2, 1998. Thereafter, the Secretary of Labor and Employment issued an Order dated April 15, 1998, the
dispositive portion of which states:

WHEREFORE, premises considered[,] this Office CERTIFIES the labor dispute at the Manila Diamond
Hotel to the National Labor Relations Commission, for compulsory arbitration, pursuant to Article 263
(g) of the Labor Code, as amended.

Accordingly, the striking officers and members of the Manila Diamond Hotel Employees Union ---
NUWHRAIN are hereby directed to return to work within twenty-four (24) hours upon receipt of this Order
Labor II – 1
 and the Hotel to accept them back under the same terms and conditions prevailing prior to the strike. The
parties are enjoined from committing any act that may exacerbate the situation.

The Union received the aforesaid Order on April 16, 1998 and its members reported for work the next day,
April 17, 1998. The Hotel, however, refused to accept the returning workers and instead filed a Motion for
Reconsideration of the Secretary’s Order.

On April 30, 1998, then Acting Secretary of Labor Jose M. Español, issued the disputed Order, which
modified the earlier one issued by Secretary Trajano. Instead of an actual return to work, Acting Secretary
Español directed that the strikers be reinstated only in the payroll. The Union moved for the reconsideration of
4 

this Order, but its motion was denied on June 25, 1998. Hence, it filed before this Court on August 26, 1998, a
petition for certiorari under Rule 65 of the Rules of Court alleging grave abuse of discretion on the part of the
Secretary of Labor for modifying its earlier order and requiring instead the reinstatement of the employees in the
payroll. However, in a resolution dated July 12, 1999, this Court referred the case to the Court of Appeals, pursuant
to the principle embodied in National Federation of Labor v. Laguesma. 5

On October 19, 1999, the Court of Appeals rendered a Decision dismissing the Union’s petition and affirming
the Secretary of Labor’s Order for payroll reinstatement. The Court of Appeals held that the challenged order is
merely an error of judgment and not a grave abuse of discretion and that payroll reinstatement is not prohibited by
law, but may be "called for" under certain circumstances. 6

Hence, the Union now stands before this Court maintaining that:

THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN RULING THAT THE SECRETARY
OF LABOR’S UNAUTHORIZED ORDER OF MERE "PAYROLL REINSTATEMENT" IS NOT GRAVE
ABUSE OF DISCRETION 7

The petition has merit.

The Court of Appeals based its decision on this Court’s ruling in University of Santo Tomas (UST) v. NLRC. There,8 

the Secretary assumed jurisdiction over the labor dispute between striking teachers and the university. He ordered
the striking teachers to return to work and the university to accept them under the same terms and conditions.
However, in a subsequent order, the NLRC provided payroll reinstatement for the striking teachers as an alternative
remedy to actual reinstatement. True, this Court held therein that the NLRC did not commit grave abuse of
discretion in providing for the alternative remedy of payroll reinstatement. This Court found that it was merely an
error of judgment, which is not correctible by a special civil action for certiorari. The NLRC was only trying its best to
work out a satisfactory ad hoc solution to a festering and serious problem.

However, this Court notes that the UST ruling was made in the light of one very important fact: the teachers could
not be given back their academic assignments since the order of the Secretary for them to return to work was given
in the middle of the first semester of the academic year. The NLRC was, therefore, faced with a situation where the
striking teachers were entitled to a return to work order, but the university could not immediately reinstate them
since it would be impracticable and detrimental to the students to change teachers at that point in time.

In the present case, there is no showing that the facts called for payroll reinstatement as an alternative remedy. A
strained relationship between the striking employees and management is no reason for payroll
reinstatement in lieu of actual reinstatement. Petitioner correctly points out that labor disputes naturally
involve strained relations between labor and management, and that in most strikes, the relations between
the strikers and the non-strikers will similarly be tense. Bitter labor disputes always leave an aftermath of strong
9 

emotions and unpleasant situations. Nevertheless, the government must still perform its function and apply the law,
especially if, as in this case, national interest is involved.

After making the distinction between UST and the present case, this Court now addresses the issue of whether the
Court of Appeals erred in ruling that the Secretary did not commit any grave abuse of discretion in ordering
payroll reinstatement in lieu of actual reinstatement. This question is answered by the nature of Article
263(g). As a general rule, the State encourages an environment wherein employers and employees themselves

Labor II – 1
must deal with their problems in a manner that mutually suits them best. This is the basic policy embodied in Article
XIII, Section 3 of the Constitution, which was further echoed in Article 211 of the Labor Code. Hence, a voluntary,
10  11 

instead of compulsory, mode of dispute settlement is the general rule.

However, Article 263, paragraph (g) of the Labor Code, which allows the Secretary of Labor to assume jurisdiction
over a labor dispute involving an industry indispensable to the national interest, provides an exception:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or certification order. If one has already taken
place at the time of assumption or certification, all striking or locked out employees shall immediately return
to work and the employer shall immediately resume operations and readmit all workers under the same
terms and conditions prevailing before the strike or lockout. x x x

This provision is viewed as an exercise of the police power of the State. A prolonged strike or lockout can be
inimical to the national economy and, therefore, the situation is imbued with public necessity and involves the right
of the State and the public to self-protection.
12

Under Article 263(g), all workers must immediately return to work and all employers must readmit all of
them under the same terms and conditions prevailing before the strike or lockout. This Court must point out
that the law uses the precise phrase of "under the same terms and conditions," revealing that it
contemplates only actual reinstatement. This is in keeping with the rationale that any work stoppage or
slowdown in that particular industry can be inimical to the national economy. It is clear that Article 263(g)
was not written to protect labor from the excesses of management, nor was it written to ease management
from expenses, which it normally incurs during a work stoppage or slowdown. It was an error on the part of
the Court of Appeals to view the assumption order of the Secretary as a measure to protect the striking
workers from any retaliatory action from the Hotel. This Court reiterates that this law was written as a
means to be used by the State to protect itself from an emergency or crisis. It is not for labor, nor is it for
management.

It is, therefore, evident from the foregoing that the Secretary’s subsequent order for mere payroll
reinstatement constitutes grave abuse of discretion amounting to lack or excess of jurisdiction. Indeed, this
Court has always recognized the "great breadth of discretion" by the Secretary once he assumes jurisdiction over a
labor dispute. However, payroll reinstatement in lieu of actual reinstatement is a departure from the rule in
these cases and there must be showing of special circumstances rendering actual reinstatement
impracticable, as in the UST case aforementioned, or otherwise not conducive to attaining the purpose of the law
in providing for assumption of jurisdiction by the Secretary of Labor and Employment in a labor dispute that affects
the national interest. None appears to have been established in this case. Even in the exercise of his discretion
under Article 236(g), the Secretary must always keep in mind the purpose of the law. Time and again, this Court has
held that when an official by-passes the law on the asserted ground of attaining a laudable objective, the same will
not be maintained if the intendment or purpose of the law would be defeated. 13

WHEREFORE, the petition is GRANTED and the assailed Decision of the Court of Appeals dated October 19, 1999
is REVERSED and SET ASIDE. The Order dated April 30, 1998 issued by the Secretary of Labor and Employment
modifying the earlier Order dated April 15, 1998, is likewise SET ASIDE. No pronouncement as to costs.

Labor II – 1
5.) G.R. No. L-49046 January 26, 1988 – Victoria v Inciong
SATURNO A. VICTORIA, petitioner,
vs.
HON. AMADO G. INCIONG, DEPUTY MINISTER, and FAR EAST BROADCASTING COMPANY,
INC., respondents.

FERNAN, J.:

Petition for review of the Order of the then Acting Secretary of Labor Amado G. Inciong dated June 6, 1978, in NLRC Case No. RB-1764-75, reversing the
decision of the National Labor Relations Commission dated November 17, 1976 and holding that, under the law and facts of the case, there was no necessity for
private respondent to obtain a clearance for the termination of petitioner's employment under Article 257 [b] of the Labor Code, as amended, and that a mere
report of such termination was sufficient, under Section 11 [f]. Rule XIV of the Rules and Regulations implementing said Code.

Petitioner Saturno Victoria was employed on March 17, 1956 by private respondent Far East Broadcasting
Company, Incorporated as a radio transmitter operator. Sometime in July 1971, he and his co-workers
organized the Far East Broadcasting Company Employees Association. After registering their association
with the then Department of Labor, they demanded recognition of said association by the company but the
latter refused on the ground that being a non-profit, non-stock, non-commercial and religious corporation, it
is not covered by Republic Act 875, otherwise known as the Industrial Peace Act, the labor law enforced at
that time.

Several conciliation meetings were held at the Department of Labor and in those meetings, the Director of Labor
Relations Edmundo Cabal advised the union members that the company could not be forced to recognize them or
to bargain collectively with them because it is a non-profit, non-commercial and religious organization.
Notwithstanding such advice, the union members led by Saturno Victoria as its president, declared a strike
and picketed the company's premises on September 6, 1972 for the purpose of seeking recognition of the labor
union.

As a countermeasure, the company filed a case for damages with preliminary injunction against the strikers
before the then Court of First Instance of Bulacan docketed as Civil Case No. 750-V. Said court issued an
injunction enjoining the three-day-old strike staged against the company. The complaint was later amended
seeking to declare the strike illegal.

Upon the declaration of martial law on September 21, 1972 and the promulgation of Presidential Decree No.
21 creating the National Labor Relations Commission, the ad hoc National Labor Relations Commission
took cognizance of the strike through NLRC Case No. 0021 entitled "Far East Broadcasting Company Employees
Association, complainant versus Far East Broadcasting Company, respondent" and NLRC Case No. 0285 entitled
"Generoso Serino, complainant, versus Far East Broadcasting Company, respondent", both cases for reinstatement
due to the company's return to accept the union's offer to return to work during the pendency of the case in the
Court of First Instance.

On December 28, 1972, Arbitrator Flavio Aguas rendered a joint decision in the two cases mentioned above
recognizing the jurisdiction of the Court of First Instance of Bulacan, the dispositive portion reading as follows:

IN VIEW WHEREOF, and in the interest of justice and equity, it is hereby directed that:

1. That striking members of the Far East Broadcasting Company Employees Association

return to their respective positions in the corporation;

2. The respondent Far East Broadcasting Company Incorporated to accept back the returning
strikers without loss in rank seniority or status;

Labor II – 1
 3. The workers shall return to work within [10] days from receipt of this resolution otherwise they
shall be deemed to have forfeited such right;

4. The respondent shall report compliance with this decision within fifteen [15] days from receipt
hereof.

This Order shall, however, be without prejudice to whatever decision the Court of First
Instance of Bulacan may promulgate in Civil Case No. 750-V and to the requirements the
existing order may need of people working with the mass media of communications.

IT IS SO ORDERED.  1

The decision of the arbitrator was successively appealed to the ad hoc National Labor Relations Commission, the
Secretary of Labor and the Office of the President of the Philippines, and was affirmed in all instances.

On April 23, 1975, the Court of First Instance of Bulacan rendered judgment, to wit:

WHEREFORE, judgment is hereby rendered:

1. Making injunction against defendants permanent;

2. Declaring that this Court has jurisdiction to try and hear the instant case despite Section 2 of
Presidential Decree No. 2;

3. Declaring that plaintiff Far East Broadcasting Company is a non-profit organization since it does
not declare dividends;

4. Declaring that the strike admitted by the defendants to have been declared by them is
illegal inasmuch as it was for the purpose of compelling the plaintiff-company to recognize
their labor union which could not be legally done because the plaintiffs were not covered by
Republic Act 875;

5. Declaring that the evidence presented is insufficient to show that defendants caused the
damage to the plaintiff consequent on the destruction of its relays and its antennas as well as
its transmission lines.

SO ORDERED.  2

On April 24, 1975, by virtue of the above decision, the company notified Saturno Victoria that he is
dismissed effective April 26, 1975. Thereupon, he filed Case No. RB-IV-1764 before the National Labor
Relations Commission, Regional Branch IV against the company alleging violation of article 267 of the
Labor Code which requires clearance from the Secretary of Labor for every shutdown of business
establishments or dismissal of employees. On February 27, 1976, Labor Arbiter Manuel B. Lorenzo rendered
a decision in petitioner's favor declaring the dismissal to be illegal, thereby ordering reinstatement with fun
backwages. On appeal, the arbiter's decision was aimed by the National Labor Relations Commission. But
when the commission's decision was in turn appealed to the Secretary of Labor, it was set aside and in lieu
thereof the questioned Order dated June 6, 1978 was issued.

In view of its brevity and for a better understanding of the reasons behind it, We quote the disputed Order in full:

ORDER

This is an appeal by respondent from the Decision of the National Labor Relations Commission,
dated November 17, 1976.

Labor II – 1
 The Commission upheld the Decision of the labor arbiter dated February 27, 1976 ordering
respondent to reinstate with full backwages herein complainant Saturno A. Victoria based on the
finding that respondent did not file any application for clearance to terminate the services of
complainant before dismissing him from his employment.

Briefly the facts of this case are as follows:

Complainant Saturno Victoria is the president of the Far East Broadcasting Company Employees
Union. On September 8, 1972, the said union declared a strike against respondent company. On
September 11, 1972, respondent filed with the Court of First Instance of Bulacan, Civil Case No.
750-V, for the issuance of an injunction and a prayer that the strike be declared illegal.

On October 24, 1972, complainant together with the other strikers filed with the ad hoc National
Labor Relations Commission Case Nos. 0021 and 0285 for reinstatement. The Arbitrator rendered a
decision in said case on December 28, 1972, wherein he ordered respondent to reinstate
complainants subject to the following condition:

"This Order shall, however, be without prejudice to whatever decision the Court of
First Instance may promulgate on Civil Case No. 750-V and to the requirements the
existing order may need of people working with the mass media of communications."

Since said decision was affirmed by the NLRC, the Secretary of Labor, and the Office of the
President of the Philippines, complainants were reinstated pursuant thereto.

In a Decision dated April 23, 1975, in Civil Case No. 750-V, promulgated by the Court of First
Instance of Bulacan, the strike staged by herein complainant and the other strikers was declared
illegal. Based on said Decision, respondent dismissed complainant from his employment. Hence,
complainant filed the instant complaint for illegal dismissal.

Under the aforecited facts, we do not agree with the ruling of the Commission now subject of
this appeal that an application for clearance to terminate herein complainant is mandatory on
the part of respondent before terminating complainant's services. We believe that what would
have been necessary was a report as provided for under Section 11 [f] Rule XIV, Book V of the
Rules and Regulations Implementing the Labor Code. Moreover, even if an application for clearance
was flied, this Office would have treated the same as a report. Otherwise, it would render nugatory
the Decision of the Arbitrator dated December 28, 1972 in Case Nos. 0021 and 0285 which was
affirmed by the Commission, the Secretary of Labor and the Office of the President of the
Philippines, ordering his temporary reinstatement, subject to whatever Decision the CFI of Bulacan
may promulgate in Civil Case No. 750-V. It could be clearly inferred from said CFI Decision that
if the strike is declared illegal, the strikers will be considered to have lost their employment
status under the then existing laws and jurisprudence, otherwise strikers could stage illegal
strike with impunity. Since the strike was declared illegal, respondent acted in good faith
when it dispensed with the services of herein complainant.

For failure of respondent to file the necessary report and based on equitable considerations,
complainant should be granted separation pay equivalent to one-half month salary for every year of
service.

WHEREFORE, let the decision of the National Labor Relations Commission dated November 17,
1976 be, as it is hereby, set aside and a new judgment is entered, ordering respondent to give
complainant separation pay equivalent to one-half month salary for every year of service.

SO ORDERED.  3

Petitioner elevates to Us for review on certiorari the aforequoted Order seeking to persuade this Court that
then Acting Secretary of Labor Amado G. Inciong committed reversible error in holding that, under the law

Labor II – 1
and facts of this case, a mere report of the termination of the services of said petitioner was
sufficient. Petitioner assigns the following errors:

WHETHER OR NOT A CLEARANCE FROM THE SECRETARY OF LABOR IS STILL NECESSARY BEFORE
THE PETITIONER HEREIN COULD BE DISMISSED CONSIDERING THE RESTRICTIVE CONDITION IN THE
DECISION OF THE COMPULSORY ARBITRATOR IN NLRC CASE NOS. 0021 AND 0285.

II

WHETHER OR NOT THE DECISION OF THE COURT OF FIRST INSTANCE OF BULACAN IN CIVIL CASE NO.
750-V IPSO FACTO GAVE THE RESPONDENT COMPANY AUTHORITY TO DISMISS HEREIN PETITIONER
WITHOUT ANY CLEARANCE FROM THE SECRETARY OF LABOR.  4

The substantive law on the matter enforced during the time of petitioner's dismissal was Article 267 [b] of the Labor
Code [in conjunction with the rules and regulations implementing said substantive law.] Article 267 reads:

No employer that has no collective bargaining agreement may shut down his establishment
or dismiss or terminate the service of regular employees with at least one [1] year of service
except managerial employees as defined in this book without previous written clearance from
the Secretary of Labor.

Petitioner maintains that the abovecited provision is very clear. It does not make any distinction as to the
ground for dismissal. Whether or not the dismissal sought by the employer company is for cause, it is
imperative that the company must apply for a clearance from the Secretary of Labor.

In a recent case   penned by Justice Abraham F. Sarmiento promulgated on June 30, 1987, we had occasion to rule
5

in agreement with the findings of then Presidential Assistant for Legal Affairs Ronaldo Zamora that the purpose in
requiring a prior clearance from the Secretary of Labor in cases of shutdown or dismissal of employees, is
to afford the Secretary ample opportunity to examine and determine the reasonableness of the request.

The Solicitor General, in relation to said pronouncement and in justification of the Acting Labor Secretary's decision
makes the following observations:

It is true that article 267 [b] of the Labor Code requires that before any business
establishment is shut down or any employee is dismissed, written clearance from the
Secretary of Labor must first be obtained. It is likewise true that in the case of petitioner,
there was no written clearance in the usual form. But while there may not have been strict
compliance with Article 267 there was substantial compliance. The Secretary of Labor twice
manifested his conformity to petitioner's dismissal.

The first manifestation of acquiescence by the Secretary of Labor to the dismissal of petitioner was
his affirmance of the decision of the arbitrator in NLRC Case Nos. 0021 and 0285. The arbitrator
ordered the reinstatement of the strikers but subject to the decision of the CFI of Bulacan in Civil
Case No. 750-V. The Secretary of Labor affirmed the decision of the arbitrator. In effect, therefore,
the Secretary of Labor issued a carte blanche to the CFI of Bulacan to either dismiss or retain
petitioner.

The second manifestation was his decision in NLRC Case No. RB-IV-1764-65 wherein he said that
clearance for the dismissal of petitioner was not required, but only a report; that even if an
application for clearance was filed, he would have treated it as a mere report. While this is
not prior clearance in the contemplation of Article 267, it is at least a ratification of the dismissal of
petitioner. 
6

Labor II – 1
We agree with the Solicitor General. Technically speaking, no clearance was obtained by private respondent
from the then Secretary of Labor, the last step towards full compliance with the requirements of law on the
matter of dismissal of employees. However, the rationale behind the clearance requirement was fully met.
The Secretary of Labor was apprised of private respondent's intention to terminate the services of
petitioner. This in effect is an application for clearance to dismiss petitioner from employment. The affirmance of
the restrictive condition in the dispositive portion of the labor arbiter's decision in NLRC Case Nos. 0021
and 0285 by the Secretary of Labor and the Office of the President of the Philippines, signifies a grant of
authority to dismiss petitioner in case the strike is declared illegal by the Court of First Instance of Bulacan.
Consequently and as correctly stated by the Solicitor General, private respondent acted in good faith when it
terminated the employment of petitioner upon a declaration of illegality of the strike by the Court of First Instance of
Bulacan. Moreover, the then Secretary of Labor manifested his conformity to the dismissal, not once, but
twice. In this regard, the mandatory rule on clearance need not be applied.

The strike staged by the union in 1972 was a futile move. The law then enforced, Republic Act 875
specifically excluded respondent company from its coverage. Even if the parties had gone to court to
compel recognition, no positive relief could have been obtained since the same was not sanctioned by law.
Because of this, there was no necessity on the part of private respondent to show specific acts of petitioner
during the strike to justify his dismissal.

This is a matter of responsibility and of answerability. Petitioner as a union leader, must see to it that the policies
and activities of the union in the conduct of labor relations are within the precepts of law and any deviation from the
legal boundaries shall be imputable to the leader. He bears the responsibility of guiding the union along the path of
law and to cause the union to demand what is not legally demandable, would foment anarchy which is a prelude to
chaos.

Petitioner should have known and it was his duty to impart this imputed knowledge to the members of the union that
employees and laborers in non- profit organizations are not covered by the provisions of the Industrial Peace
Act and the Court of Industrial Relations [in the case at bar, the Court of First Instance] has no jurisdiction
to entertain petitions of labor unions or organizations of said non-profit organizations for certification as
the exclusive bargaining representatives of said employees and laborers.  7

As a strike is an economic weapon at war with the policy of the Constitution and the law at that time, a resort thereto
by laborers shall be deemed to be a choice of remedy peculiarly their own and outside of the statute, and as such,
the strikers must accept all the risks attendant upon their choice. If they succeed and the employer succumbs, the
law will not stand in their way in the enjoyment of the lawful fruits of their victory. But if they fail, they cannot
thereafter invoke the protection of the law for the consequences of their conduct unless the right they
wished vindicated is one which the law will, by all means, protect and enforce.  8

We further agree with the Acting Secretary of Labor that what was required in the case of petitioner's dismissal was
only a report as provided under Section 11 [f] of Rule XIV of the Rules and Regulations implementing the Labor
Code which provides:

Every employer shall submit a report to the Regional Office in accordance with the form presented
by the Department on the following instances of termination of employment, suspension, lay-off or
shutdown which may be effected by the employer without prior clearance within five [5] days
thereafter:

xxx xxx xxx

[f] All other terminations of employment, suspension, lay-offs or shutdowns, not otherwise specified
in this and in the immediately preceding sections.

To hold otherwise would render nugatory the conditions set forth in the decision of Labor Arbiter Aguas on the basis
of which petitioner was temporarily reinstated.

Labor II – 1
Inasmuch as there was a valid and reasonable ground to dismiss petitioner but no report as required by the
implementing rules and regulations of the Labor Code was filed by respondent Company with the then Department
of Labor, petitioner as held by the Acting Secretary of Labor, is entitled to separation pay equivalent to one-half
month salary for every year of service.

WHEREFORE, the petition is dismissed. The decision of the acting Secretary of Labor is AFFIRMED in toto.

6.) G.R. No. 181531               July 31, 2009 – NUWHRAIN-MPHC v HIMPHLU

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIES- MANILA
PAVILION HOTEL CHAPTER, Petitioner,
vs.
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.

Labor II – 1
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 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

Labor II – 1
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.

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. 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
Labor II – 1
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)

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 organization s for their mutual aid and protection and other
legitimate purposes except collective bargaining. (Emphasis supplied)

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

xxxx

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)

xxxx

Labor II – 1
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

(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)

xxxx

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)

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 Labor 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.

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,

Labor II – 1
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. 1avvph!1

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.

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.

Labor II – 1
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
7.) G.R. No. 211145, October 14, 2015 – Samahan ng Mangagawa v Hanjin
SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD REP. BY ITS PRESIDENT, ALFIE
ALIPIO, Petitioner, v. BUREAU OF LABOR RELATIONS, HANJIN HEAVY INDUSTRIES AND
CONSTRUCTION CO., LTD. (HHIC-PHIL.), Respondents.

DECISION

MENDOZA, J.:

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

This is a petition for review on certiorari seeking to reverse and set aside the July 4, 2013
Decision1 and the January 28, 2014 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No.
123397, which reversed the November 28, 2011 Resolution3 of the Bureau of Labor Relations (BLR)
and reinstated the April 20, 2010 Decision4 of the Department of Labor and Employment (DOLE)
Regional Director, cancelling the registration of Samahan ng Manggagawa sa Hanjin Shipyard
(Samahan) as a worker's association under Article 243 (now Article 249) of the Labor Code.

The Facts

On February 16, 2010, Samahan, through its authorized representative, Alfie F. Alipio, filed
an application for registration5 of its name "Samahan ng Mga Manggagawa sa Hanjin
Shipyard" with the DOLE. Attached to the application were the list of names of the association's
officers and members, signatures of the attendees of the February 7, 2010 meeting, copies of their
Constitution and By-laws. The application stated that the association had a total of 120 members.

On February 26, 2010, the DOLE Regional Office No. 3, City of San Fernando, Pampanga
(DOLE-Pampanga), issued the corresponding certificate of registration 6 in favor of Samahan.

On March 15, 2010, respondent Hanjin Heavy Industries and Construction Co., Ltd. Philippines
(Hanjin), with offices at Greenbeach 1, Renondo Peninsula, Sitio Agustin, Barangay Cawag, Subic Bay
Freeport Zone, filed a petition7 with DOLE-Pampanga praying for the cancellation of
registration of Samahan's association on the ground that its members did not fall under
any of the types of workers enumerated in the second sentence of Article 243 (now 249).

Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed,
and those without definite employers may form a workers' association. It further posited
that one third (1/3) of the members of the association had definite employers and the
continued existence and registration of the association would prejudice the company's
goodwill.

On March 18, 2010, Hanjin filed a supplemental petition,8 adding the alternative ground that
Samahan committed a misrepresentation in connection with the list of members and/or voters who
took part in the ratification of their constitution and by-laws in its application for registration. Hanjin
claimed that Samahan made it appear that its members were all qualified to become members of the
workers' association.

On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan requested for a 10-
day period to file a responsive pleading. No pleading, however, was submitted. Instead, Samahan
filed a motion to dismiss on April 14, 2010.9

Labor II – 1
The Ruling of the DOLE Regional Director

On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of Hanjin. He found that the
preamble, as stated in the Constitution and By-Laws of Samahan, was an admission on its part that
all of its members were employees of Hanjin, to wit:
KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay naglalayong na isulong ang
pagpapabuti ng kondisyon sa paggawa at katiyakan sa hanapbuhay sa pamamagitan ng patuloy na
pagpapaunlad ng kasanayan ng para sa mga kasapi nito. Naniniwala na sa pamamagitan ng aming
mga angking lakas, kaalaman at kasanayan ay anting maitataguyod at makapag-aambag sa
kaunlaran ng isang lipunan. Na mararating at makakamit ang antas ng pagkilala, pagdakila at
pagpapahalaga sa mga tulad naming mga manggagawa.

x x x10
The same claim was made by Samahan in its motion to dismiss, but it failed to adduce evidence that
the remaining 63 members were also employees of Hanjin. Its admission bolstered Hanjin's claim
that Samahan committed misrepresentation in its application for registration as it made an express
representation that all of its members were employees of the former. Having a definite employer,
these 57 members should have formed a labor union for collective bargaining.11 The dispositive
portion of the decision of the Dole Regional Director, reads:
WHEREFORE, premises considered, the petition is hereby GRANTED. Consequently, the Certificate of
Registration as Legitimate Workers Association (LWA) issued to the SAMAHAN NG MGA
MANGGAGAWA SA HANJIN SHIPYARD (SAMAHAN) with Registration Numbers R0300-1002-WA-009
dated February 26, 2010 is hereby CANCELLED, and said association is dropped from the roster of
labor organizations of this Office.

SO DECIDED.12
The Ruling of the Bureau of Labor Relations

Aggrieved, Samahan filed an appeal13 before the BLR, arguing that Hanjin had no right to petition for
the cancellation of its registration. Samahan pointed out that the words "Hanjin Shipyard," as used in
its application for registration, referred to a workplace and not as employer or company. It explained
that when a shipyard was put up in Subic, Zambales, it became known as Hanjin Shipyard. Further,
the remaining 63 members signed the Sama-Samang Pagpapatunay which stated that they were
either working or had worked at Hanjin. Thus, the alleged misrepresentation committed by Samahan
had no leg to stand on.14

In its Comment to the Appeal,15 Hanjin averred that it was a party-in-interest. It reiterated that
Samahan committed misrepresentation in its application for registration before DOLE Pampanga.
While Samahan insisted that the remaining 63 members were either working, or had at least worked
in Hanjin, only 10 attested to such fact, thus, leaving its 53 members without any workplace to
claim.

On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling of the Regional
Director. It stated that the law clearly afforded the right to self-organization to all workers including
those without definite employers.16 As an expression of the right to self-organization, industrial,
commercial and self-employed workers could form a workers' association if they so desired but
subject to the limitation that it was only for mutual aid and protection.17 Nowhere could it be found
that to form a workers' association was prohibited or that the exercise of a workers' right to self-
organization was limited to collective bargaining.18

The BLR was of the opinion that there was no misrepresentation on the part of Samahan. The phrase,
"KAMI, ang mga Manggagawa sa Hanjin Shipyard" if translated, would be: "We, the workers at
Hanjin Shipyard." The use of the preposition "at" instead of "of " would indicate that "Hanjin
Shipyard" was intended to describe a place.19 Should Hanjin feel that the use of its name had
affected the goodwill of the company, the remedy was not to seek the cancellation of the
Labor II – 1
association's registration. At most, the use by Samahan of the name "Hanjin Shipyard" would only
warrant a change in the name of the association.20 Thus, the dispositive portion of the BLR decision
reads:
WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE Region III Director Ernesto C. Bihis
dated 20 April 2010 is REVERSED and SET ASIDE.

Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall remain in the roster of
legitimate workers' association.21
On October 14, 2010, Hanjin filed its motion for reconsideration.22

In its Resolution,23 dated November 28, 2011, the BLR affirmed its September 6, 2010 Decision, but
directed Samahan to remove the words "Hanjin Shipyard" from its name. The BLR explained that the
Labor Code had no provision on the use of trade or business name in the naming of a worker's
association, such matters being governed by the Corporation Code. According to the BLR, the most
equitable relief that would strike a balance between the contending interests of Samahan and Hanjin
was to direct Samahan to drop the name "Hanjin Shipyard" without delisting it from the roster of
legitimate labor organizations. The fallo reads:
WHEREFORE, premises considered, our Decision dated 6 September 2010 is hereby AFFIRMED with a
DIRECTIVE for SAMAHAN to remove "HANJIN SHIPYARD" from its name.

SO RESOLVED.24
Unsatisfied, Samahan filed a petition for certiorari25 under Rule 65 before the CA, docketed as CA-
G.R. SP No. 123397.

In its March 21, 2012 Resolution,26 the CA dismissed the petition because of Samahan's failure to file
a motion for reconsideration of the assailed November 28, 2011 Resolution.

On April 17, 2012, Samahan filed its motion for reconsideration27 and on July 18, 2012, Hanjin filed
its comment28 to oppose the same. On October 22, 2012, the CA issued a resolution granting
Samahan's motion for reconsideration and reinstating the petition. Hanjin was directed to file a
comment five (5) days from receipt of notice.29

On December 12, 2012, Hanjin filed its comment on the petition,30 arguing that to require Samahan
to change its name was not tantamount to interfering with the workers' right to self-
organization.31 Thus, it prayed, among others, for the dismissal of the petition for Samahan's failure
to file the required motion for reconsideration.32

On January 17, 2013, Samahan filed its reply.33

On March 22, 2013, Hanjin filed its memorandum.34

The Ruling of the Court of Appeals

On July 4, 2013, the CA rendered its decision, holding that the registration of Samahan as a
legitimate workers' association was contrary to the provisions of Article 243 of the Labor Code.35 It
stressed that only 57 out of the 120 members were actually working in Hanjin while the phrase in the
preamble of Samahan's Constitution and By-laws, "KAMI, ang mga Manggagawa sa Hanjin Shipyard"
created an impression that all its members were employees of HHIC. Such unqualified manifestation
which was used in its application for registration, was a clear proof of misrepresentation which
warranted the cancellation of Samahan's registration.

It also stated that the members of Samahan could not register it as a legitimate worker's association
because the place where Hanjin's industry was located was not a rural area. Neither was there any
evidence to show that the members of the association were ambulant, intermittent or itinerant
workers.36
Labor II – 1
At any rate, the CA was of the view that dropping the words "Hanjin Shipyard" from the association
name would not prejudice or impair its right to self-organization because it could adopt other
appropriate names. The dispositive portion reads:
WHEREFORE, the petition is DISMISSED and the BLR's directive, ordering that the words "Hanjin
Shipyard" be removed from petitioner association's name, is AFFIRMED. The Decision dated April 20,
2010 of the DOLE Regional Director in Case No. R0300-1003-CP-001, which ordered the cancellation
of petitioner association's registration is REINSTATED.

SO ORDERED.37
Hence, this petition, raising the following
ISSUES

I. THE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT SAMAHAN CANNOT FORM
A WORKERS' ASSOCIATION OF EMPLOYEES IN HANJIN AND INSTEAD SHOULD HAVE
FORMED A UNION, HENCE THEIR REGISTRATION AS A WORKERS' ASSOCIATION SHOULD
BE CANCELLED.

II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE REMOVAL/DELETION OF

THE WORD "HANJIN" IN THE NAME OF THE UNION BY REASON OF THE COMPANY'S
PROPERTY RIGHT OVER THE COMPANY NAME "HANJIN."38
Samahan argues that the right to form a workers' association is not exclusive to
intermittent, ambulant and itinerant workers. While the Labor Code allows the workers "to
form, join or assist labor organizations of their own choosing" for the purpose of collective
bargaining, it does not prohibit them from forming a labor organization simply for purposes of mutual
aid and protection. All members of Samahan have one common place of work, Hanjin
Shipyard. Thus, there is no reason why they cannot use "Hanjin Shipyard" in their name.39

Hanjin counters that Samahan failed to adduce sufficient basis that all its members were employees
of Hanjin or its legitimate contractors, and that the use of the name "Hanjin Shipyard" would create
an impression that all its members were employess of HHIC.40

Samahan reiterates its stand that workers with a definite employer can organize any
association for purposes of mutual aid and protection. Inherent in the workers' right to self-
organization is its right to name its own organization. Samahan referred "Hanjin Shipyard" as their
common place of work. Therefore, they may adopt the same in their association's name.41

The Court's Ruling

The petition is partly meritorious.

Right to self-organization includes right to form a union, workers' association and labor
management councils

More often than not, the right to self-organization connotes unionism. Workers, however,
can also form and join a workers' association as well as labor-management councils
(LMC). Expressed in the highest law of the land is the right of all workers to self-organization.
Section 3, Article XIII of the 1987 Constitution states:
Section 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all. It shall
guarantee the rights of all workers to self-organization,

collective bargaining and negotiations, and peaceful concerted activities, including the right to strike
in accordance with law. xxx

Labor II – 1
 [Emphasis Supplied]
And Section 8, Article III of the 1987 Constitution also states:
Section 8. The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for purposes not contrary to law shall not be abridged.
In relation thereto, Article 3 of the Labor Code provides:
Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of
work.

[Emphasis Supplied]
As Article 246 (now 252) of the Labor Code provides, the right to self-organization includes the
right to form, join or assist labor organizations for the purpose of collective bargaining
through representatives of their own choosing and to engage in lawful concerted activities
for the same purpose for their mutual aid and protection. This is in line with the policy of the
State to foster the free and voluntary organization of a strong and united labor movement as well as
to make sure that workers participate in policy and decision-making processes affecting their rights,
duties and welfare.42

The right to form a union or association or to self-organization comprehends two notions,

to wit: (a) the liberty or freedom, that is, the absence of restraint which guarantees that
the employee may act for himself without being prevented by law; and (b) the power, by
virtue of which an employee may, as he pleases, join or refrain from joining an
association.43

In view of the revered right of every worker to self-organization, the law expressly allows and even
encourages the formation of labor organizations. A labor organization is defined as "any union
or association of employees which exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms and conditions of
employment."44 A labor organization has two broad rights: (1) to bargain collectively and
(2) to deal with the employer concerning terms and conditions of employment. To bargain
collectively is a right given to a union once it registers itself with the DOLE. Dealing with
the employer, on the other hand, is a generic description of interaction between employer
and employees concerning grievances, wages, work hours and other terms and conditions
of employment, even if the employees' group is not registered with the DOLE. 45

A union refers to any labor organization in the private sector organized for collective
bargaining and for other legitimate purpose, 46 while a workers' association is an
organization of workers formed for the mutual aid and protection of its members or for
any legitimate purpose other than collective bargaining.47

Many associations or groups of employees, or even combinations of only several persons, may qualify
as a labor organization yet fall short of constituting a labor union. While every labor union is a labor
organization, not every labor organization is a labor union. The difference is one of organization,
composition and operation.48

Collective bargaining is just one of the forms of employee participation. Despite so much interest in
and the promotion of collective bargaining, it is incorrect to say that it is the device and no other,
which secures industrial democracy. It is equally misleading to say that collective bargaining is the
end-goal of employee representation. Rather, the real aim is employee participation in
whatever form it may appear, bargaining or no bargaining, union or no union.49 Any labor
organization which may or may not be a union may deal with the employer. This explains why a
workers' association or organization does not always have to be a labor union and why employer-
employee collective interactions are not always collective bargaining.50
Labor II – 1
To further strengthen employee participation, Article 255 (now 261)51 of the Labor Code mandates
that workers shall have the right to participate in policy and decision-making processes of the
establishment where they are employed insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and employers may form LMCs.

A cursory reading of the law demonstrates that a common element between unionism and
the formation of LMCs is the existence of an employer-employee relationship. Where neither
party is an employer nor an employee of the other, no duty to bargain collectively would exist.52 In
the same manner, expressed in Article 255 (now 261) is the requirement that such workers be
employed in the establishment before they can participate in policy and decision making processes.

In contrast, the existence of employer-employee relationship is not mandatory in the

formation of workers' association. What the law simply requires is that the members of the
workers' association, at the very least, share the same interest. The very definition of a
workers' association speaks of "mutual aid and protection."

Right to choose whether to form or join a union or workers' association belongs to

workers themselves

In the case at bench, the Court cannot sanction the opinion of the CA that Samahan should
have formed a union for purposes of collective bargaining instead of a workers' association
because the choice belonged to it. The right to form or join a labor organization
necessarily includes the right to refuse or refrain from exercising the said right. It is self-
evident that just as no one should be denied the exercise of a right granted by law, so also, no one
should be compelled to exercise such a conferred right.53 Also inherent in the right to self-
organization is the right to choose whether to form a union for purposes of collective bargaining or a
workers' association for purposes of providing mutual aid and protection.

The right to self-organization, however, is subject to certain limitations as provided by law. For

instance, the Labor Code specifically disallows managerial employees from joining, assisting or
forming any labor union. Meanwhile, supervisory employees, while eligible for membership in labor
organizations, are proscribed from joining the collective bargaining unit of the rank and file
employees.54 Even government employees have the right to self-organization. It is not, however,
regarded as existing or available for purposes of collective bargaining, but simply for the furtherance
and protection of their interests.55

Hanjin posits that the members of Samahan have definite employers, hence, they should
have formed a union instead of a workers' association. The Court disagrees. There is no
provision in the Labor Code that states that employees with definite employers may form,
join or assist unions only.

The Court cannot subscribe either to Hanjin's position that Samahan's members cannot form the
association because they are not covered by the second sentence of Article 243 (now 249), to wit:
Article 243. Coverage and employees' right to self-organization. All persons employed in
commercial, industrial and agricultural enterprises and in 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 organizations of their own choosing for purposes of collective
bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural
workers and those without any definite employers may form labor organizations for their
mutual aid and protection. (As amended by Batas Pambansa Bilang 70, May 1, 1980)

[Emphasis Supplied]
Further, Article 243 should be read together with Rule 2 of Department Order (D.O.) No. 40-03,
Series of 2003, which provides:
Labor II – 1
 RULE II

COVERAGE OF THE RIGHT TO SELF-ORGANIZATION

Section 1. Policy. - It is the policy of the State 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 unions and workers associations, determination of representation status and
resolution of inter/intra-union and other related labor relations disputes. Only legitimate or registered
labor unions shall have the right to represent their members for collective bargaining and other
purposes. Workers' associations shall have the right to represent their members for purposes other
than collective bargaining.

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.

[Emphases Supplied]
Clearly, there is nothing in the foregoing implementing rules which provides that workers,
with definite employers, cannot form or join a workers' association for mutual aid and
protection. Section 2 thereof even broadens the coverage of workers who can form or join a
workers' association. Thus, the Court agrees with Samahan's argument that the right to form a
workers' association is not exclusive to ambulant, intermittent and itinerant workers. The
option to form or join a union or a workers' association lies with the workers themselves,
and whether they have definite employers or not.

No misrepresentation on the part of Samahan to warrant cancellation of registration

In this case, Samahan's registration was cancelled not because its members were prohibited from
forming a workers' association but because they allegedly committed misrepresentation for using the
phrase, "KAMI, ang mga Manggagawa sa HAN JIN Shipyard."

Misrepresentation, as a ground for the cancellation of registration of a labor organization, is

committed "in connection with the adoption, or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, the list of members who took part in the ratification
of the constitution and by-laws or amendments thereto, and those in connection with the election of
officers, minutes of the election of officers, and the list of voters, xxx."56

In Takata Corporation v. Bureau of Relations,57 the DOLE Regional Director granted the petition for
the cancellation of certificate of registration of Samahang Lakas Manggagawa sa Takata (Salamat)
Labor II – 1
after finding that the employees who attended the organizational meeting fell short of the 20% union
registration requirement. The BLR, however, reversed the ruling of the DOLE Regional Director,
stating that petitioner Takata Corporation (Takata) failed to prove deliberate and malicious
misrepresentation on the part of respondent Salamat. Although Takata claimed that in the list of
members, there was an employee whose name appeared twice and another was merely a project
employee, such facts were not considered misrepresentations in the absence of showing that the
respondent deliberately did so for the purpose of increasing their union membership. The Court ruled
in favor of Salamat.

In S.S. Ventures International v. S.S. Ventures Labor Union,58 the petition for cancellation of
certificate of registration was denied. The Court wrote:
If the union's application is infected by falsification and like serious irregularities, especially
those appearing on the face of the application and its attachments, a union should be denied
recognition as a legitimate labor organization. Prescinding from these considerations, the
issuance to the Union of Certificate of Registration No. RO300-00-02-UR-0003 necessarily implies
that its application for registration and the supporting documents thereof are prima facie free from
any vitiating irregularities. Another factor which militates against the veracity of the allegations in
the Sinumpaang Petisyon is the lack of particularities on how, when and where respondent
union perpetrated the alleged fraud on each member. Such details are crucial for in the
proceedings for cancellation of union registration on the ground of fraud or
misrepresentation, what needs to be established is that the specific act or omission of the union
deprived the complaining employees-members of their right to choose.

[Emphases Supplied]
Based on the foregoing, the Court concludes that misrepresentation, to be a ground for the
cancellation of the certificate of registration, must be done maliciously and deliberately.
Further, the mistakes appearing in the application or attachments must be grave or refer
to significant matters. The details as to how the alleged fraud was committed must also be
indubitably shown.

The records of this case reveal no deliberate or malicious intent to commit misrepresentation on the
part of Samahan. The use of such words "KAMI, ang mga Manggagawa sa HANJIN Shipyard" in the
preamble of the constitution and by-laws did not constitute misrepresentation so as to warrant the
cancellation of Samahan's certificate of registration. Hanjin failed to indicate how this phrase
constitutes a malicious and deliberate misrepresentation. Neither was there any showing that the
alleged misrepresentation was serious in character. Misrepresentation is a devious charge that cannot
simply be entertained by mere surmises and conjectures.

Even granting arguendo that Samahan's members misrepresented themselves as employees or

workers of Hanjin, said misrepresentation does not relate to the adoption or ratification of its
constitution and by-laws or to the election of its officers.

Removal of the word "Hanjin Shipyard" from the association's name, however, does not
infringe on Samahan's right to self-organization

Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must be removed in the name of
the association. A legitimate workers' association refers to an association of workers organized for
mutual aid and protection of its members or for any legitimate purpose other than collective
bargaining registered with the DOLE.59 Having been granted a certificate of registration, Samahan's
association is now recognized by law as a legitimate workers' association.

According to Samahan, inherent in the workers' right to self-organization is its right to name its own
organization. It seems to equate the dropping of words "Hanjin Shipyard" from its name as a
restraint in its exercise of the right to self-organization. Hanjin, on the other hand, invokes that
"Hanjin Shipyard" is a registered trade name and, thus, it is within their right to prohibit its use.
Labor II – 1
As there is no provision under our labor laws which speak of the use of name by a workers'
association, the Court refers to the Corporation Code, which governs the names of juridical persons.
Section 18 thereof provides:
No corporate name may be allowed by the Securities and Exchange Commission if the proposed
name is identical or deceptively or confusingly similar to that of any existing corporation or to
any other name already protected by law or is patently deceptive, confusing or contrary to existing
laws. When a change in the corporate name is approved, the Commission shall issue an amended
certificate of incorporation under the amended name.

[Emphases Supplied]
The policy underlying the prohibition in Section 18 against the registration of a corporate name which
is "identical or deceptively or confusingly similar" to that of any existing corporation or which is
"patently deceptive" or "patently confusing" or "contrary to existing laws," is the avoidance of fraud
upon the public which would have occasion to deal with the entity concerned, the evasion of legal
obligations and duties, and the reduction of difficulties of administration and supervision over
corporations.60

For the same reason, it would be misleading for the members of Samahan to use "Hanjin Shipyard"
in its name as it could give the wrong impression that all of its members are employed by Hanjin.

Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly states:
The change of name of a labor organization shall not affect its legal personality. All the rights and
obligations of a labor organization under its old name shall continue to be exercised by the labor
organization under its new name.
Thus, in the directive of the BLR removing the words "Hanjin Shipyard," no abridgement of
Samahan's right to self-organization was committed.

WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013 Decision and the January 28,
2014 Resolution of the Court of Appeals are hereby REVERSED and SET ASIDE. The September 6,
2010 Resolution of the Bureau of Labor Relations, as modified by its November 28, 2011 Resolution,
is REINSTATED.

Labor II – 1
8.) Heritage Hotel v PIGLAS-HERITAGE
[G.R. NO. 177024 : October 30, 2009] -

THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA HOTEL

CORPORATION) Petitioner, v. PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA
HERITAGE MANILA (PIGLAS-HERITAGE), Respondent.

DECISION

ABAD, J.:

This case is about a company's objections to the registration of its rank and file union for non-
compliance with the requirements of its registration.

The Facts and the Case

Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila
(petitioner company) formed the "Heritage Hotel Employees Union" (the HHE union). The
Department of Labor and Employment-National Capital Region (DOLE-NCR) later issued a
certificate of registration1 to this union.

Subsequently, the HHE union filed a petition for certification election 2 that petitioner
company opposed. The company alleged that the HHE union misrepresented itself to be an
independent union, when it was, in truth, a local chapter of the National Union of Workers
in Hotel and Restaurant and Allied Industries (NUWHRAIN). The company claimed that the
HHE union intentionally omitted disclosure of its affiliation with NUWHRAIN because the
company's supervisors union was already affiliated with it. 3 Thus, the company also filed a
petition for the cancellation of the HHE union's registration certificate.4

Meanwhile, the Med-Arbiter granted the HHE union's petition for certification election.5 Petitioner
company appealed the decision to the Secretary of Labor but the latter denied the appeal.6 The
Secretary also denied petitioner's motion for reconsideration, prompting the company to file a
petition for certiorari 7 with the Court of Appeals.

On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding of the HHE
union's certification election, effective until the petition for cancellation of that union's registration
shall have been resolved with finality.8 The decision of the Court of Appeals became final when
the HHE union withdrew the Petition for Review that it filed with this Court.9

On December 10, 2003 certain rank and file employees of petitioner company held a meeting
and formed another union, the respondent Pinag-Isang Galing at Lakas ng mga
Manggagawa sa Heritage Manila (the PIGLAS union). This union applied for registration
with the DOLE-NCR10 and got its registration certificate on February 9, 2004. Two months
later, the members of the first union, the HHE union, adopted a resolution for its dissolution.
The HHE union then filed a petition for cancellation of its union registration.11

On September 4, 2004 respondent PIGLAS union filed a petition for certification

election12 that petitioner company also opposed, alleging that the new union's officers and
members were also those who comprised the old union. According to the company, the
employees involved formed the PIGLAS union to circumvent the Court of Appeals'
injunction against the holding of the certification election sought by the former

Labor II – 1
union. Despite the company's opposition, however, the Med-Arbiter granted the petition for
certification election.13

On December 6, 2004 petitioner company filed a petition to cancel the union registration of

respondent PIGLAS union.14 The company claimed that the documents submitted with the
union's application for registration bore the following false information:

(a) The List of Members showed that the PIGLAS union had 100 union members; 15

(b) The Organizational Minutes said that 90 employees attended the meeting on December
10, 2003;16

(c) The Attendance Sheet of the meeting of December 10, 2003 bore the signature of 127
members who ratified the union's Constitution and By-Laws; 17 and

(d) The Signature Sheet bore 128 signatures of those who attended that meeting. 18

Petitioner company alleged that the misrepresentation was evidenced by the discrepancy
in the number of union members appearing in the application and the list as well as in the
number of signatories to the attendance and signature sheets. The minutes reported that
only 90 employees attended the meeting. The company further alleged that 33 members of
respondent PIGLAS union were members of the defunct HHE union. This, according to the
company, violated the policy against dual unionism and showed that the new union was
merely an alter ego of the old.

On February 22, 2005 the DOLE-NCR denied the company's petition to cancel respondent PIGLAS
union's registration for the reason that the discrepancies in the number of members stated in the
application's supporting documents were not material and did not constitute misrepresentation. As
for the charge of dual unionism, the same is not a ground for canceling registration. It merely
exposed a union member to a possible charge of disloyalty, an internal matter. Here, the members of
the former union simply exercised their right to self-organization and to the freedom of association
when they subsequently joined the PIGLAS union.19

On appeal, the Bureau of Labor Relation (BLR) affirmed the ruling of the DOLE-NCR. It reasoned that
respondent PIGLAS union's organization meeting lasted for 12 hours. It was possible for the number
of attendees to have increased from 90 to 128 as the meeting progressed. Besides, with a total of
250 employees in the bargaining unit, the union needed only 50 members to comply with the 20
percent membership requirement. Thus, the union could not be accused of misrepresentation since it
did not pad its membership to secure registration.

As for the issue of dual unionism, it has become moot and academic, said the BLR, because of the
dissolution of the old union and the cancellation of its certificate of registration.20

Petitioner company filed a petition for certiorari with the Court of Appeals,21 assailing the order of the
BLR. But the latter court dismissed the petition, not being accompanied by material documents and
portions of the record.22 The company filed a motion for reconsideration, attaching parts of the record
that were deemed indispensable but the court denied it for lack of merit.23 Hence, the company filed
this Petition for Review under Rule 45.

Issues Presented

The petition presents the following issues:

Labor II – 1
1. Whether or not the Court of Appeals erred in dismissing the petition for certiorari before it for
failure of petitioner company to attach certain material portions of the record;

2. Whether or not the union made fatal misrepresentation in its application for union
registration; and cralawlibrary

3. Whether or not "dual unionism" is a ground for canceling a union's registration.

The Rulings of the Court

First. While the Court of Appeals correctly dismissed the company's petition initially for failure to
attach material portions of the record, the court should have bended back a little when petitioner
company subsequently attached those missing materials to its motion for reconsideration. As a
general rule, petitions for certiorari that lack copies of essential pleadings and portions of the record
may be dismissed but this rule has not been regarded as absolute. The omission may be cured.24

The Court of Appeals has three courses of action when the annexes to the petition are insufficient. It
may dismiss the petition,25 require the submission of the relevant documents, or order the filing of an
amended petition with the required pleadings or documents. A petition lacking in essential pleadings
or portions of the record may still be given due course, or reinstated if earlier dismissed, upon
subsequent submission of the necessary documents or to serve the higher interest of justice.26

Second. Since a remand of the case to the Court of Appeals for a determination of the substantive
issues will only result in more delays and since these issues have been amply argued by the opposing
sides in the various pleadings and documents they submitted to this Court, the case may now be
resolved on the merits.

Did respondent PIGLAS union commit fraud and misrepresentation in its application for
union registration? We agree with the DOLE-NCR and the BLR that it did not. Except for the
evident discrepancies as to the number of union members involved as these appeared on the
documents that supported the union's application for registration, petitioner company has no other
evidence of the alleged misrepresentation. But those discrepancies alone cannot be taken as an
indication that respondent misrepresented the information contained in these documents.

The charge that a labor organization committed fraud and misrepresentation in securing its
registration is a serious charge and deserves close scrutiny. It is serious because once such charge is
proved, the labor union acquires none of the rights accorded to registered organizations.
Consequently, charges of this nature should be clearly established by evidence and the surrounding
circumstances.27

Here, the discrepancies in the number of union members or employees stated in the various
supporting documents that respondent PIGLAS union submitted to labor authorities can be explained.
While it appears in the minutes of the December 10, 2003 organizational meeting that only
90 employees responded to the roll call at the beginning, it cannot be assumed that such
number could not grow to 128 as reflected on the signature sheet for attendance. The
meeting lasted 12 hours from 11:00 a.m. to 11:00 p.m. There is no evidence that the
meeting hall was locked up to exclude late attendees. ςrαlαω

There is also nothing essentially mysterious or irregular about the fact that only 127
members ratified the union's constitution and by-laws when 128 signed the attendance
sheet. It cannot be assumed that all those who attended approved of the constitution and
by-laws. Any member had the right to hold out and refrain from ratifying those documents or to
simply ignore the process.

Labor II – 1
At any rate, the Labor Code28 and its implementing rules29 do not require that the number of
members appearing on the documents in question should completely dovetail. For as long as the
documents and signatures are shown to be genuine and regular and the constitution and by-laws
democratically ratified, the union is deemed to have complied with registration requirements.

Petitioner company claims that respondent PIGLAS union was required to submit the
names of all its members comprising at least 20 percent of the employees in the
bargaining unit. Yet the list it submitted named only 100 members notwithstanding that
the signature and attendance sheets reflected a membership of 127 or 128
employees. This omission, said the company, amounted to material misrepresentation that
warranted the cancellation of the union's registration.

But, as the labor authorities held, this discrepancy is immaterial. A comparison of the documents
shows that, except for six members, the names found in the subject list are also in the attendance
and signature sheets. Notably, the bargaining unit that respondent PIGLAS union sought to
represent consisted of 250 employees. Only 20 percent of this number or 50 employees
were required to unionize. Here, the union more than complied with such requirement.

Labor laws are liberally construed in favor of labor especially if doing so would affirm its
constitutionally guaranteed right to self-organization.30 Here, the PIGLAS union's supporting
documents reveal the unmistakable yearning of petitioner company's rank and file employees to
organize. This yearning should not be frustrated by inconsequential technicalities.

Third. The fact that some of respondent PIGLAS union's members were also members of
the old rank and file union, the HHE union, is not a ground for canceling the new union's
registration. The right of any person to join an organization also includes the right to leave
that organization and join another one. Besides, HHE union is dead. It had ceased to exist and
its certificate of registration had already been cancelled. Thus, petitioner's arguments on this point
may also be now regarded as moot and academic.

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Bureau of Labor
Relations in BLR-A-26-3-05 dated May 26, 2006.

Labor II – 1
9.) Eagle Ridge v CA (& Eage Ridge Union)
[G.R. No. 178989 : March 18, 2010]

EAGLE RIDGE GOLF & COUNTRY CLUB, PETITIONER, VS. COURT OF APPEALS AND EAGLE
RIDGE EMPLOYEES UNION (EREU), RESPONDENTS.

DECISION

VELASCO JR., J.:

In this petition for certiorari under Rule 65, Eagle Ridge Golf & Country Club (Eagle Ridge) assails and
seeks to nullify the Resolutions of the Court of Appeals (CA) dated April 27, 2007[1] and June 6, 2007,
[2]
 issued in CA-G.R. SP No. 98624, denying a similar recourse petitioner earlier interposed to set
aside the December 21, 2006 Decision[3] of the Bureau of Labor Relations (BLR), as reiterated in a
Resolution[4] of March 7, 2007.

Petitioner 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. The instant case is an off-shot of the desire
of a number of these employees to organize themselves as a legitimate labor union and their
employer's opposition to their aspiration.

The Facts

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),[5] elected a set of officers,
[6]
 and ratified[7] their constitution and by-laws.[8]

On December 19, 2005, EREU formally applied for registration[9] and filed BLR Reg. Form No. I-
LO, s. 1998[10] before the Department of Labor and Employment (DOLE) Regional Office IV (RO IV).
In time, DOLE RO IV granted the application and issued EREU Registration Certificate (Reg.
Cert.) No. RO400-200512-UR-003.

The EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club,
docketed as Case No. RO400-0601-RU-002. Eagle Ridge opposed this petition,[11] followed by
its filing of a petition for the cancellation[12] of Reg. Cert. No. RO400-200512-UR-003. Docketed
as RO400-0602-AU-003, 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.

Going into specifics, Eagle Ridge 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.

Finally, Eagle Ridge 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[13] on February 15, 2006, attesting that they
arrived late at said meeting which they claimed to be drinking spree; that they did not

Labor II – 1
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.

As a counterpoint, EREU, in its Comment,[14] argued in gist:

1) the petition for cancellation was procedurally deficient as it does not contain a certification against
forum shopping and that the same was verified by one not duly authorized by Eagle Ridge's board;

2) the alleged discrepancies are not real for 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;

3) 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;

4) the retraction of 5 union members should not be given any credence for the reasons that: (a) 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; (b) the retracting members did not
deny signing the union documents; (c) following, Belyca  Corporation v. Ferrer-Calleja[15] and Oriental
Tin Can Labor Union v. Secretary of Labor and Employment,[16] it can be presumed that "duress,
coercion or valuable consideration" was brought to bear on the retracting members; and (d) citing La
Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations,
[17]
 Belyca  Corporation and Oriental Tin Can Labor Union, where the Court ruled that "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," it asserted the applicability of said ruling as the petition for
certification election was filed on January 10, 2006 or long before February 15, 2006 when
the affidavits of retraction were executed by the five union members, thus contending that
the retractions do not affect nor be deemed compelling enough to cancel its certificate of
registration.

The Union presented the duly accomplished union membership forms[18] dated December 8, 2005 of
four additional members. And to rebut the allegations in the affidavits of retraction of the five union
members, it presented the Sama-Samang Sinumpaang Salaysay[19]  dated March 20, 2006 of eight
union members; another Sama-Samang Sinumpaang Salaysay,[20] also bearing date March 20, 2006,
of four other union members; and the Sworn Statement[21] dated March 16, 2006 of the Union's legal
counsel, Atty. Domingo T. Añonuevo. These affidavits attested to the orderly and proper
proceedings of the organizational meeting on December 6, 2005.

In its Reply,[22] Eagle Ridge reiterated the grounds it raised in its petition for cancellation and
asserted further that the four additional members were fraudulently admitted into the Union. As
Eagle Ridge claimed, the applications of the four neither complied with the requirements under
Section 2, Art. IV of the union's constitution and by-laws nor were they shown to have been duly
received, issued receipts for admission fees, processed with recommendation for approval, and
approved by the union president.

Moreover, Eagle Ridge presented another Sinumpaang Salaysay[23] of retraction dated March 15,
2006 of another union member. The membership of EREU had thus been further reduced to only 19

Labor II – 1
or 20. This same member was listed in the first Sama-Samang Sinumpaang Salaysay[24] presented by
the Union but did not sign it.

The Ruling of the DOLE Regional Director

After due proceedings, the DOLE Regional Director, Region IV-A, focusing on the question of
misrepresentation, issued on April 28, 2006 an Order[25] finding for Eagle Ridge, its petition to cancel
Reg. Cert. No. RO400-200512-UR-003 being granted and EREU being delisted from the roster of
legitimate labor organizations.

Aggrieved, the Union appealed to the BLR, the recourse docketed as BLR A-C-30-5-31-06 (Case No.
RO400-0602-AU-003).

The Ruling of the BLR

Initially, the BLR, then headed by an Officer-in-Charge (OIC), affirmed[26] the appealed order of the
DOLE Regional Director.

Undeterred by successive set backs, EREU interposed a motion for reconsideration, contending that:

1) Contrary to the ruling of the BLR OIC Director, a certificate of non-forum shopping is mandatory
requirement, under Department Order No. (DO) 40-03 and the Rules of Court, non-compliance with
which is a ground to dismiss a petition for cancellation of a certificate of registration;

2) It was erroneous for both the Regional Director and the BLR OIC Director to give credence to the
retraction statements of union members which were not presented for reaffirmation during any of the
hearings of the case, contrary to the requirement for the admission of such evidence under Sec. 11,
Rule XI of DO 40-03.

In a Decision dated December 21, 2006, the BLR, now headed by Director Rebecca C. Chato, set
aside the July 28, 2006 order of the BLR OIC Director, disposing as follows:

WHEREFORE, the motion for reconsideration is hereby GRANTED and our Resolution dated 28 July
2006 is hereby VACATED. Accordingly, the Eagle Ridge Employees Union (EREU) shall remain in the
roster of legitimate organizations.

In finding for the Union, the BLR Director eschewed procedural technicalities. Nonetheless, she found
as without basis allegations of misrepresentation or fraud as ground for cancellation of EREU's
registration.

In turn aggrieved, Eagle Ridge sought but was denied reconsideration per the BLR's Resolution dated
March 7, 2007.

Eagle Ridge thereupon went to the CA on a petition for certiorari.

The Ruling of the CA

On April 27, 2007, the appellate court, in a terse two-page Resolution,[27] dismissed Eagle Ridge's
petition for being deficient, as:

1. the questioned [BLR] Decision dated December 21, 2006 and the Resolution dated March 7,
2007 Resolution [appended to the petition] are mere machine copies; and

Labor II – 1
 2. the verification and certification of non-forum shopping was subscribed to by Luna C. Piezas on
her representation as the legal counsel of the petitioner, but sans [the requisite] Secretary's
Certificate or Board Resolution authorizing her to execute and sign the same.

The CA later denied, in its second assailed resolution, Eagle Ridge's motion for reconsideration, albeit
the latter had submitted a certificate to show that its legal counsel has been authorized, per a board
resolution, to represent the corporation.

The Issues

Eagle Ridge is now before us via this petition for certiorari on the submissions that:

I.

[THE CA] COMMITTED SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN DISMISSING THE COMPANY'S PETITION FOR CERTIORARI AND
DENYING ITS MOTION FOR RECONSIDERATION CONSIDERING THAT THE COMPANY'S PREVIOUS
COUNSEL WAS AUTHORIZED TO REPRESENT THE COMPANY IN THE PETITION FOR CERTIORARI
FILED BEFORE THE [CA];

II.

IN ORDER NOT TO FURTHER PREJUDICE THE COMPANY, IT IS RESPECTFULLY SUBMITTED THAT THIS
HONORABLE COURT COULD TAKE COGNIZANCE OF THE MERITS OF THIS CASE AND RESOLVE THAT
BASED ON THE EVIDENCE ON RECORD, THERE WAS FRAUD, MISREPRESENTATION AND/OR FALSE
STATEMENT WHICH WARRANT THE CANCELLATION OF CERTIFICATE OF REGISTRATION OF EREU.[28]

The Court's Ruling

We dismiss the petition.

Procedural Issue: Lack of Authority

Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of right.

[29]
 Accordingly, the party who seeks to avail of it must strictly observe the rules laid down by law.[30]

Petitions for certiorari under Rule 65 of the Rules of Court require a "sworn certification of non-forum
shopping as provided in the third paragraph of Section 3, Rule 46."[31] Sec. 3, paragraphs 4 and 6 of
Rule 46 pertinently provides:

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. -- x x x x

xxxx

xxxx

The petitioner shall also submit together with the petition a sworn certification that he has not
theretofore commenced any action involving the same issues in the Supreme Court, the Court
of Appeals x x x, or any other tribunal or agency; if there is such other action or proceeding, he must
state the status of the same x x x.

xxxx

Labor II – 1
The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition. (Emphasis supplied.)

Evidently, the Rules requires the petitioner, not his counsel, to sign under oath the requisite
certification against non-forum shopping. Such certification is a peculiar personal representation on
the part of the principal party, an assurance to the court that there are no other pending cases
involving basically the same parties, issues, and cause of action.[32]

In the instant case, the sworn verification and certification of non-forum shopping in the petition for
certiorari of Eagle Ridge filed before the CA carried the signature of its counsel without the requisite
authority.

Eagle Ridge tried to address its faux pas by submitting its board secretary's Certificate[33] dated May
15, 2007, attesting to the issuance on May 10, 2007 of Board Resolution No. ERGCCI 07/III-01 that
authorized its counsel of record, Atty. Luna C. Piezas, to represent it before the appellate court.

The CA, however, rejected Eagle Ridge's virtual plea for the relaxation of the rules on the signing of
the verification and certification against forum shopping, observing that the board resolution
adverted to was approved after Atty. Piezas has signed and filed for Eagle Ridge the petition for
certiorari.

The appellate court's assailed action is in no way tainted with grave abuse of discretion, as Eagle
Ridge would have this Court believed. Indeed, a certification of non-forum shopping signed by
counsel without the proper authorization is defective and constitutes a valid cause for dismissal of the
petition.[34]

The submission of the board secretary's certificate through a motion for reconsideration of the CA's
decision dismissing the petition for certiorari may be considered a substantial compliance with the
Rules of Court.[35] Yet, this rule presupposes that the authorizing board resolution, the approval of
which is certified to by the secretary's certification, was passed within the reglementary period for
filing the petition. This particular situation does not, however, obtain under the premises. The records
yield the following material dates and incidents: Eagle Ridge received the May 7, 2007 resolution of
the BLR Director on March 9, 2007, thus giving it 60 days or up to May 8, 2007 to file a petition for
certiorari, as it in fact filed its petition on April 18, 2007 before the CA. The authorization for its
counsel, however, was only issued in a meeting of its board on May 10, 2007 or a couple of days
beyond the 60-day reglementary period referred to in filing a certiorari action. Thus, there was no
substantial compliance with the Rules.

As with most rules of procedure, however, exceptions are invariably recognized and the relaxation of
procedural rules on review has been effected to obviate jeopardizing substantial justice.[36] This
liberality stresses the importance of review in our judicial grievance structure to accord every party
litigant the amplest opportunity for the proper and just disposition of his cause, freed from the
constraints of technicalities.[37] But concomitant to a liberal interpretation of the rules of procedure
should be an effort on the part of the party invoking liberality to adequately explain his failure to
abide by the rules.[38]

To us, Eagle Ridge has not satisfactorily explained its failure to comply. It may be true, as Eagle
Ridge urges, that its counsel's authority to represent the corporation was never questioned before
the DOLE regional office and agency. But EREU's misstep could hardly lend Eagle Ridge comfort. And
obviously, Eagle Ridge and its counsel erred in equating the latter's representation as legal counsel
with the authority to sign the verification and the certificate of non-forum shopping in the former's
behalf. We note that the authority to represent a client before a court or quasi-judicial agency does
not require an authorizing board resolution, as the counsel-client relationship is presumed by the
counsel's representation by the filing of a pleading on behalf of the client. In filing a pleading, the
counsel affixes his signature on it, but it is the client who must sign the verification and the
Labor II – 1
certification against forum shopping, save when a board resolution authorizes the former to sign so.

It is entirely a different matter for the counsel to sign the verification and the certificate of non-forum
shopping. The attestation or certification in either verification or certification of non-forum shopping
requires the act of the principal party. As earlier indicated, Sec. 3 of Rule 46 exacts this requirement;
so does the first paragraph of Sec. 5 of Rule 7 pertinently reading:

SEC. 5. Certification against forum shopping. -- The plaintiff or principal party shall certify under
oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore
commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-
judicial agency and, to the best of his knowledge, no such other action or claim is pending therein;
(b) if there is such other pending action or claim, a complete statement of the present status thereof;
and (c) if he should thereafter learn that the same or similar action or claim has been filed or is
pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed. (Emphasis added.)

It is, thus, clear that the counsel is not the proper person to sign the certification against forum
shopping. If, for any reason, the principal party cannot sign the petition, the one signing on his
behalf must have been duly authorized.[39]

In addition, Eagle Ridge maintains that the submitted board resolution, albeit passed after the filing
of the petition was filed, should be treated as a ratificatory medium of the counsel's act of signing the
sworn certification of non-forum shopping.

We are not inclined to grant the desired liberality owing to Eagle Ridge's failure to sufficiently explain
its failure to follow the clear rules.

If for the foregoing considerations alone, the Court could very well dismiss the instant petition.
Nevertheless, the Court will explore the merits of the instant case to obviate the inequity that might
result from the outright denial of the petition.

Substantive Issue: No Fraud in the Application

Eagle Ridge cites the grounds provided under Art. 239(a) and (c) of the Labor Code for its
petition for cancellation of the EREU's registration. On the other hand, the Union
asserts bona fide compliance with the registration requirements under Art. 234 of the
Code, explaining the seeming discrepancies between the number of employees who
participated in the organizational meeting and the total number of union members at the
time it filed its registration, as well as the typographical error in its certification which
understated by one the number of union members who ratified the union's constitution
and by-laws.

Before their amendment by Republic Act No. 9481[40] on June 15, 2007, the then governing Art. 234
(on the requirements of registration of a labor union) and Art. 239 (on the grounds for cancellation of
union registration) of the Labor Code respectively provided as follows:

ART. 234. REQUIREMENTS OF REGISTRATION. -- Any applicant labor organization, association or

group of unions or workers shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization,

Labor II – 1
the minutes of the organizational meetings and the list of workers who participated in such
meetings;

(c) The names of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate;

xxxx

(e) Four copies (4) of the constitution and by-laws of the applicant union, minutes of its adoption
or ratification and the list of the members who participated in it.[41]

xxxx

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. -- The following shall constitute
grounds for cancellation of union registration:

(a) Misrepresentation, false statements 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;

xxxx

(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 submit these
documents together with the list of the newly elected/appointed officers and their postal addresses
within thirty (30) days from election.[42] (Emphasis supplied.)

A scrutiny of the records fails to show any misrepresentation, false statement, or fraud
committed by EREU to merit cancellation of its registration.

First. The Union submitted the required documents attesting to the facts of the organizational
meeting on December 6, 2005, the election of its officers, and the adoption of the Union's
constitution and by-laws. It submitted before the DOLE Regional Office with its Application for
Registration and the duly filled out BLR Reg. Form No. I-LO, s. 1998, the following documents, to wit:

(a) the minutes of its organizational meeting[43] held on December 6, 2005 showing 26 founding

members who elected its union officers by secret ballot;

(b) the list of rank-and-file employees[44] of Eagle Ridge who attended the organizational meeting and
the election of officers with their individual signatures;

(c) the list of rank-and-file employees[45] who ratified the union's constitution and by-laws showing
the very same list as those who attended the organizational meeting and the election of officers with
their individual signatures except the addition of four employees without their signatures, i.e., Cherry
Labajo, Grace Pollo, Annalyn Poniente and Rowel Dolendo;

(d) the union's constitution and by-laws[46] as approved on December 6, 2005;

(e) the list of officers[47] and their addresses;

(f) the list of union members[48] showing a total of 30 members; and

(g) the Sworn Statement[49] of the union's elected president and secretary. All the foregoing
documents except the sworn statement of the president and the secretary were accompanied by
Certifications[50] by the union secretary duly attested to by the union president.
Labor II – 1
Second. 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.

Third. The Union has sufficiently explained the discrepancy between the number of those
who attended the organizational meeting showing 26 employees and the list of union
members showing 30. The difference is due to the additional four members admitted two
days after the organizational meeting as attested to by their duly accomplished Union
Membership forms. Consequently, the total number of union members, as of December 8,
2005, was 30, which was truthfully indicated in its application for registration on
December 19, 2005.

As aptly found by the BLR Director, the Union already had 30 members when it applied for
registration, for the admission of new members is neither prohibited by law nor was it
concealed in its application for registration. Eagle Ridge's contention is flawed when it equated
the requirements under Art. 234(b) and (c) of the Labor Code. Par. (b) clearly required the
submission of the minutes of the organizational meetings and the list of workers who participated in
the meetings, while par. (c) merely required the list of names of all the union members comprising at
least 20% of the bargaining unit. The fact that EREU had 30 members when it applied for
registration on December 19, 2005 while only 26 actually participated in the
organizational meeting is borne by the records.

Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the inclusion of the additional
four members allegedly for not complying with what it termed as "the sine qua non requirements" for
union member applications under the Union's constitution and by-laws, specifically Sec. 2 of Art. IV.
We are not persuaded. Any seeming infirmity in the application and admission of union membership,
most especially in cases of independent labor unions, must be viewed in favor of valid membership.

The right of employees to self-organization and membership in a union must not be trammeled by
undue difficulties. In this case, when the Union said that the four employee-applicants had been
admitted as union members, it is enough to establish the fact of admission of the four that they had
duly signified such desire by accomplishing the membership form. The fact, as pointed out by Eagle
Ridge, that the Union, owing to its scant membership, had not yet fully organized its different
committees evidently shows the direct and valid acceptance of the four employee applicants rather
than deter their admission--as erroneously asserted by Eagle Ridge.

Fifth. The difference between the number of 26 members, who ratified the Union's
constitution and by-laws, and the 25 members shown in the certification of the Union
secretary as having ratified it, is, as shown by the factual antecedents, a typographical
error. It was an insignificant mistake committed without malice or prevarication. The list of
those who attended the organizational meeting shows 26 members, as evidenced by the signatures
beside their handwritten names. Thus, the certification's understatement by one member, while not
factual, was clearly an error, but neither a misleading one nor a misrepresentation of what had
actually happened.

Sixth. In the more meaty issue of the affidavits of retraction executed by six union members, we
hold that the probative value of these affidavits cannot overcome those of the supporting affidavits of
12 union members and their counsel as to the proceedings and the conduct of the organizational
meeting on December 6, 2005. The DOLE Regional Director and the BLR OIC Director obviously erred
in giving credence to the affidavits of retraction, but not according the same treatment to the
supporting affidavits.

Labor II – 1
The six affiants of the affidavits of retraction were not presented in a hearing before the Hearing
Officer (DOLE Regional Director), as required under the Rules Implementing Book V of the Labor
Code covering Labor Relations. Said Rules is embodied in Department Order No. (DO) 40-03 which
was issued on February 17, 2003 and took effect on March 15, 2003 to replace DO 9 of 1997. Sec.
11, Rule XI of DO 40-03 specifically requires:

Section 11. Affirmation of testimonial evidence. - Any affidavit submitted by a party to prove

his/her claims or defenses shall be re-affirmed by the presentation of the affiant before
the Med-Arbiter or Hearing Officer, as the case may be. Any affidavit submitted without the
re-affirmation of the affiant during a scheduled hearing shall not be admitted in evidence,
except when the party against whom the affidavit is being offered admits all allegations therein and
waives the examination of the affiant.

It is settled that affidavits partake the nature of hearsay evidence, since they are not generally
prepared by the affiant but by another who uses his own language in writing the affiant's statement,
which may thus be either omitted or misunderstood by the one writing them.[51] The above rule
affirms the general requirement in adversarial proceedings for the examination of the affiant by the
party against whom the affidavit is offered. In the instant case, it is required for affiants to re-affirm
the contents of their affidavits during the hearing of the instant case for them to be examined by the
opposing party, i.e., the Union.

For their non-presentation and consonant to the above-quoted rule, the six affidavits of retraction are
inadmissible as evidence against the Union in the instant case. Moreover, the affidavit and joint-
affidavits presented by the Union before the DOLE Regional Director were duly re-affirmed in the
hearing of March 20, 2006 by the affiants. Thus, a reversible error was committed by the DOLE
Regional Director and the BLR OIC Director in giving credence to the inadmissible affidavits of
retraction presented by Eagle Ridge while not giving credence to the duly re-affirmed affidavits
presented by the Union.

Evidently, the allegations in the six affidavits of retraction have no probative value and at the very
least cannot outweigh the rebutting attestations of the duly re-affirmed affidavits presented by the
Union.

Seventh. 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. The query
is whether such separation from the Union can detrimentally affect the registration of the
Union.

We answer in the negative.

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.

Besides, it cannot be argued that the six affidavits of retraction retroact to the time of the
application of registration or even way back to the organizational meeting. Prior to their
withdrawal, the six employees in question were bona fide union members. More so, they
never disputed affixing their signatures beside their handwritten names during the organizational
Labor II – 1
meetings. While they alleged that they did not know what they were signing, it bears stressing that
their affidavits of retraction were not re-affirmed during the hearings of the instant case rendering
them of little, if any, evidentiary value.

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.

Eagle Ridge further argues that the list of union members includes a supervisory employee. This is a
factual issue which had not been raised at the first instance before the DOLE Regional Director and
cannot be appreciated in this proceeding. To be sure, Eagle Ridge knows well who among its
personnel belongs or does not belong to the supervisory group. Obviously, its attempt to raise the
issue referred to is no more than an afterthought and ought to be rejected.

Eighth. Finally, it may not be amiss to note, given the factual antecedents of the instant case, that
Eagle Ridge has apparently resorted to filing the instant case for cancellation of the Union's certificate
of registration to bar the holding of a certification election. This can be gleaned from the fact that the
grounds it raised in its opposition to the petition for certification election are basically the same
grounds it resorted to in the instant case for cancellation of EREU's certificate of registration. This
amounts to a clear circumvention of the law and cannot be countenanced.

For clarity, we reiterate the following undisputed antecedent facts:

(1) On December 6, 2005, the Union was organized, with 26 employees of Eagle Ridge attending;

(2) On December 19, 2005, the Union filed its formal application for registration indicating a total of
30 union members with the inclusion of four additional members on December 8, 2005 (Reg. Cert.
No. RO400-200512-UR-003 was eventually issued by the DOLE RO IV-A);

(3) On January 10, 2006, the Union filed before the DOLE RO IV-A its petition for certification
election in Eagle Ridge;

(4) On February 13, 2006, Eagle Ridge filed its Position Paper opposing the petition for certification
election on essentially the same grounds it raised in the instant case; and

(5) On February 24, 2006, Eagle Ridge filed the instant case for cancellation of the Union's certificate
of registration on essentially the same grounds it raised in its opposition to the Union's petition for
certification election.

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 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]

Labor II – 1
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.

Labor II – 1
10.) Samahan ng Mangagawa sa Charter Chemical v Charter Chemical
[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 Decision[1] in CA-G.R. SP No. 58203, which annulled and set aside the January 13, 2000
Decision[2] of the Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-
019) and the September 16, 2005 Resolution[3] 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 Dismiss [4] 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 Decision[6] 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 Code[7] 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.

Labor II – 1
Department of Labor and Employment's Ruling

On July 16, 1999, the DOLE initially issued a Decision[8] 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.
Labor II – 1
 Issues

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
Labor II – 1
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.

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. 9481[16] 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 regulations[19] 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
Labor II – 1
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

(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-laws[26]-- 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.

Labor II – 1
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 245 [27] 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 Union[28] (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
descriptions[29] 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.

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

Labor II – 1
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 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
Labor II – 1
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]

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.

Labor II – 1
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
11.) Yokohama Tire v Yokohama Employees Union
G.R. No. 163532               March 10, 2010

YOKOHAMA TIRE PHILIPPINES, INC., Petitioner,

vs.
YOKOHAMA EMPLOYEES UNION, Respondent.

RESOLUTION

CARPIO, J.:

This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the 16 January
2004 Decision2 and 12 May 2004 Resolution3 of the Court of Appeals in CA-G.R. SP No. 65460. The Court of
Appeals affirmed the 12 March4 and 3 May5 2001 Resolutions of the Bureau of Labor Relations (BLR) in BLR-A-C-7-
2-05-01, reversing the 18 December 2000 Decision6 of the Department of Labor and Employment (DOLE) Regional
Office No. 3, San Fernando, Pampanga (Regional Office), in Case No. RO300-0001-CP-002.

Yokohama Employees Union (YEU) is the labor organization of the rank-and-file employees of Yokohama
Tire Philippines, Inc. (YTPI). YEU was registered as a legitimate labor labor union on 10 September 1999.

YEU filed before the Regional Office a petition for certification election. YTPI filed before the Regional Office
a petition7 dated 24 January 2000 for the revocation of YEU’s registration. YTPI alleged that YEU violated
Article 239(a)8 of the Labor Code: (1) YEU fraudulently included the signature of a certain Ronald O. Pineda
(Pineda) in the organizational documents; (2) Pineda was not aware of any election of union officers; (3)
YEU fraudulently obtained the employees’ signatures by making them believe that they were signing a
petition for a 125% increase in the minimum wage, not a petition for registration; (4) the employees did not
belong to a single bargaining unit; and (5) YEU fraudulently stated in its organizational meeting minutes
that its second vice president was Bernard David, not Bernardo David.

In its 18 December 2000 Decision, the Regional Office granted the 24 January 2000 petition. The Regional Office
held that YEU committed misrepresentation: (1) YEU failed to remove Pineda’s signature from the organizational
documents despite instructions to do so; and (2) YEU declared that it conducted an election of union officers when,
in truth, it did not.

YEU appealed the 18 December 2000 Decision to the BLR. In its 12 March 2001 Resolution, the BLR reversed the
18 December 2000 Decision. The BLR found that (1) Pineda did not approach any officer of YEU to have his
signature removed from the organizational documents; (2) Pineda’s affidavit that no election of officers took place
was unreliable and inconsistent with his earlier written statement; (3) the affidavit of a certain Rachelle Gonzales
(Gonzales) that no election of officers took place was unreliable and inconsistent with her earlier resignation letter;
(4) the affidavit of a certain Arthur Calma (Calma) did not state that no election of officers took place; (5) at least 82
other members of YEU did not question the legality of YEU’s organization; and (6) 50 YEU members executed
a Sama-Samang Pahayag9 stating that:

3. Noong ika-25 ng Hulyo 1999, kami ay dumalo sa isang pulong para sa pag-oorganisa ng aming Unyon at
pagraratipika ng Saligang Batas at Alituntunin nito. x x x

xxxx

5. Walang katotohanan ang alegasyon ng Yokohama na walang naganap na pagpupulong kaugnay ng pag-
oorganisa o pagtatayo namin ng Unyon. Nakakatuwa ring isipin ang alegasyon ng kompanya na hindi namin lubos
na naiintindihan ang aming kapasyahang magtayo at sumapi sa aming Unyon.

Labor II – 1
6. Malinaw na ginagawa ng kompanya ang lahat ng paraan upang hadlangan ang aming karapatan sa pag-
oorganisa at kilalanin bilang kinatawan ng lahat ng mga regular na manggagawa para sa sama-samang
pakikipagtawaran.

7. Sa kabila ng lahat ng ito, kami ay lubos pa ring naninindigan sa aming Unyon at patuloy na ipaglalaban ang
aming karapatan sa pag-oorganisa at sa sama-samang pakikipagtawaran;10

The BLR also held that (1) YTPI was estopped from questioning the fact that the Sama-Samang Pahayag was an
unsworn document since it filed the 24 January 2000 petition for the revocation of YEU’s registration based on
unsworn documents; (2) the fact that there was no express mention of an election of union officers in the Sama-
Samang Pahayag did not necessarily mean that no election occurred; (3) there was an organizational meeting and
an organizational meeting may include an election of union officers; (4) any infirmity in the election of union officers
may be remedied under the last paragraph11 of Article 241 of the Labor Code and under Rule XIV of DOLE
Department Order No. 9; and (5) cancellation of union registration must be done with great caution.

YTPI filed before the BLR a motion12 for reconsideration. In its 3 May 2001 Resolution, the BLR denied the motion
for lack of merit.

YTPI filed before the Court of Appeals a petition13 for certiorari under Rule 65 of the Rules of Court. In its 16 January
2004 Decision, the Court of Appeals denied the petition and held that the BLR did not commit grave abuse of
discretion: (1) Pineda’s affidavit that no election of officers took place was unreliable and inconsistent with his earlier
written statement; (2) Gonzales’ affidavit that no election of officers took place was unreliable and inconsistent with
her earlier resignation letter; (3) Calma’s affidavit was unreliable because he admitted that he stayed at the
organizational meeting for only 20 minutes; (4) the affidavit of a certain Bernardino David (David) that no election of
officers took place was unreliable and inconsistent with his earlier sinumpaang salaysay; (5) David’s affidavit was
only filed before the BLR when YTPI filed its motion for reconsideration of the BLR’s 12 March 2001 Resolution; (6)
Pineda did not approach any officer of YEU to have his signature removed from the organizational documents; (7)
the Sama-Samang Pahayag was entitled to credit even if it was an unsworn document; (8) the allegation that the
signatures of a certain Denry Villanueva (Villanueva) and a certain Apolinar Bognot (Bognot) in the Sama-Samang
Pahayag were forged was only raised for the first time before the BLR when YTPI filed its motion for reconsideration
of the BLR’s 12 March 2001 Resolution; (9) Villanueva and Bognot were not signatories to YEU’s organizational
documents; (10) cancellation of union registration must be done with great caution; (11) YTPI, in filing the petition for
revocation of YEU’s registration, had the burden of proving that YEU committed fraud and misrepresentation; and
(12) YTPI failed to prove that YEU committed fraud and misrepresentation. 1avvphi1

YTPI filed before the Court of Appeals a motion14 for reconsideration. In its 12 May 2004 Resolution, the Court of
Appeals denied the motion for lack of merit.

Hence, the present petition. YTPI raises as issues that (1) the Court of Appeals erred in finding that YEU did
not commit fraud or misrepresentation, and (2) the Court of Appeals erred in holding that YTPI had the
burden of proving that YEU committed fraud and misrepresentation.

The petition is unmeritorious.

The Court of Appeals found that YEU did not commit fraud or misrepresentation:

Anent whether an election of officers was conducted or not, the petitioner relied largely on the affidavit of Pineda to
substantiate its claim that no election of officers was held by the union. However, respondent BLR Director accorded
greater credence to Pineda’s handwritten statement, wherein he made references to at least 2 meetings he had
attended during which he had signed the organizational documents, than to Pineda’s later affidavit, whereby he
denied any knowledge of the holding of an election. A perusal of the affirmative handwritten statement easily
explains why the public respondent preferred it to the negating affidavit, to wit:

Noong unang araw na pumirma ako galing ako sa graveyard. Pagkatapos yung pangalawang meeting graveyard
din ako, pinapirma ako doon sa siyam (9) na pirasong papel noong umagang pag-uwi namin. x x x

Labor II – 1
July 25, 99 - Unang Pirmahan

July 26, 99 - Pinirmahan ko ang siyam na piraso

July 27, 99 - Pinatatanggal ko ang aking pangalan sa listahan

The petitioner also relied on the affidavit of Ma. Rachelle Gonzales attesting that there was no election of officers,
but respondent BLR Director dismissed the affidavit as nothing but the petitioner’s belated attempt to establish its
claim about the election being held considering that Gonzales did not even intimate such matter in her handwritten
resignation letter to YEU.

Another affidavit, that of Arthur Calma, stated that no election was held, but, again, respondent BLR Director gave
Calma’s affidavit scant consideration because the affiant admittedly remained in the YEU office for only 20
minutes. In contrast, the public respondent accorded more weight to the sama-samang pahayag executed by 50
YEU members who averred about the holding of an organizational meeting. The public respondent justifiably
favored the latter, deeming the meeting to include the holding of an election of officers, for, after all, Art. 234,
(b), Labor Code, does not itself distinguish between the two.

Respondent BLR Director is further assailed for not taking into consideration the affidavit asserting that no election
of officers was ever conducted, which Bernardino David, YEU’s second vice president, executed. The omission is
not serious enough, however, because the affidavit was submitted only when the petitioner moved for the
reconsideration of the questioned decision, and because the affidavit was even inconsistent with David’s
earlier sinumpaang salaysay, whereby he attested to his attendance at the organizational meeting and to his
election thereat as vice president.

As to the inclusion of Pineda’s signature in the organizational documents, the BLR Director correctly ruled that
evidence to prove the participation of YEU in the failure to delete Pineda’s signature from the organizational
documents was wanting. It is not deniable that Pineda never approached any officer of YEU; and that Pineda
approached a certain Tonton whom he knew to be a union organizer but who was not an officer of the union nor an
employee of the company.

If the petitioner was [sic] sincere and intent on this imputed error, its effort to show so does not [sic] appear in the
record. What appears is its abject failure to establish Tonton’s actual identity. The petitioner seemed content in
making the insinuation in the petition for certiorari that Tonton was widely recognized as the organizer behind the
creation of YEU. That was not enough.

In sum, the BLR Director was neither capricious nor whimsical in his exercise of judgment, and, therefore, did not
commit grave abuse of discretion. For certiorari to lie, more than mere abuse of discretion is required to be
established by the petitioner. Herein, no degree of abuse of discretion was attendant.15

YTPI claims that the Court of Appeals erred in finding that YEU did not commit fraud or misrepresentation. YTPI
stated that:

There was evidence that respondent committed fraud and misrepresentation in its failure to omit the name of
Ronald Pineda prior to the filing of the respondents organizational documents with the Department of Labor and
Employment. On the other hand, the Regional Director held that there was no election of officers that had
taken place during respondent’s alleged organizational meeting as there was no proof of such
election.16 (Emphasis in the original)

The Court is not convinced. A petition for review on certiorari under Rule 45 of the Rules of Court should include
only questions of law — questions of fact are not reviewable. A question of law exists when the doubt centers on
what the law is on a certain set of facts, while a question of fact exists when the doubt centers on the truth or falsity
of the alleged facts. There is a question of law if the issue raised is capable of being resolved without need of
reviewing the probative value of the evidence. Once the issue invites a review of the evidence, the question is one
of fact.17

Labor II – 1
Whether YEU committed fraud and misrepresentation in failing to remove Pineda’s signature from the list of
employees who supported YEU’s application for registration and whether YEU conducted an election of its officers
are questions of fact. They are not reviewable.

Factual findings of the Court of Appeals are binding on the Court. Absent grave abuse of discretion, the Court will
not disturb the Court of Appeals’ factual findings.18 In Encarnacion v. Court of Appeals,19 the Court held that, "unless
there is a clearly grave or whimsical abuse on its part, findings of fact of the appellate court will not be disturbed.
The Supreme Court will only exercise its power of review in known exceptions such as gross misappreciation of
evidence or a total void of evidence." YTPI failed to show that the Court of Appeals gravely abused its discretion.

The Court of Appeals held that YTPI had the burden of proving that YEU committed fraud and misrepresentation:

The cancellation of union registration at the employer’s instance, while permitted, must be approached with
caution and strict scrutiny in order that the right to belong to a legitimate labor organization and to enjoy
the privileges appurtenant to such membership will not be denied to the employees. As the applicant for
cancellation, the petitioner naturally had the burden to present proof sufficient to warrant the cancellation.
The petitioner was thus expected to satisfactorily establish that YEU committed misrepresentations, false
statements or fraud in connection with the election of its officers, or with the minutes of the election of
officers, or in the list of votes, as expressly required in Art. 239, (c), Labor Code. But, as the respondent
BLR Director has found and determined, and We fully agree with him, the petitioner simply failed to
discharge its burden.20

YTPI claims that the Court of Appeals erred in holding that YTPI had the burden of proving that YEU
committed fraud and misrepresentation. YTPI stated that:

5.5 In the Decision dated 16 January 2004, the Honorable Court of Appeals upheld the BLR Director’s ruling that the
petitioner had the burden of proving that subject election of officers never took place.

5.6 However, the petitioner does not have the burden of proof vis-à-vis whether or not the said elections took
place. The respondent has the burden of proof in showing that an election of officers took place.21 (Emphasis
in the original)

The Court is not convinced. YTPI, being the one which filed the petition for the revocation of YEU’s
registration, had the burden of proving that YEU committed fraud and misrepresentation. YTPI had the
burden of proving the truthfulness of its accusations — that YEU fraudulently failed to remove Pineda’s signature
from the organizational documents and that YEU fraudulently misrepresented that it conducted an election of
officers.

In Heritage Hotel Manila v. Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila,22 the employer
filed a petition to revoke the registration of its rank-and-file employees’ union, accusing it of committing fraud and
misrepresentation. The Court held that the petition was rightfully denied because the employer failed to prove that
the labor union committed fraud and misrepresentation. The Court held that:

Did respondent PIGLAS union commit fraud and misrepresentation in its application for union registration? We
agree with the DOLE-NCR and the BLR that it did not. Except for the evident discrepancies as to the number of
union members involved as these appeared on the documents that supported the union’s application for
registration, petitioner company has no other evidence of the alleged misrepresentation. But those
discrepancies alone cannot be taken as an indication that respondent misrepresented the information contained in
these documents.

The charge that a labor organization committed fraud and misrepresentation in securing its registration is a
serious charge and deserves close scrutiny. It is serious because once such charge is proved, the labor union
acquires none of the rights accorded to registered organizations. Consequently, charges of this nature should be
clearly established by evidence and the surrounding circumstances.23 (Emphasis supplied)

Labor II – 1
WHEREFORE, we DENY the petition. We AFFIRM the 16 January 2004 Decision and 12 May 2004 Resolution of
the Court of Appeals in CA-G.R. SP No. 65460.

Labor II – 1
12.) Takata Corp v BLC (& Samahan Lakas Mangagawa ng Takata [SALAMAT])
G.R. No. 196276               June 4, 2014

TAKATA (PHILIPPINES) CORPORATION, Petitioner,

vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS MANGGAGAWA NG TAKATA
(SALAMAT), Respondents.

DECISION

PERALTA, J.:

Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines Corporation assailing the
Decision  dated December 22, 2010 and the Resolution  dated March 28, 2011 of the Court of Appeals in CA-G.R.
1 2

SP No. 112406.

On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE) Regional Office a
Petition  for Cancellation of the Certificate of Union Registration of Respondent Samahang Lakas
3

Manggagawa ng Takata (SALAMA1) on the ground that the latter is guilty of misrepresentation, false
statement and fraud with respect to the number of those who participated in the organizational meeting, the
adoption and ratification of its Constitution and By-Laws, and in the election of its officers. It contended
that in the May 1, 2009 organizational meeting of respondent, only 68 attendees signed the attendance
sheet, and which number comprised only 17% of the total number of the 396 regular rank- and-file
employees which respondent sought to represent, and hence, respondent failed to comply with the 20%
minimum membership requirement. Petitioner insisted that the document "Pangalan ng mga Kasapi ng Unyon"
bore no signatures of the alleged 119 union members; and that employees were not given sufficient information on
the documents they signed; that the document "Sama-Samang Pahayag ng Pagsapi" was not submitted at the
time of the filing of respondent's application for union registration; that the 119 union members were
actually only 117; and, that the total number of petitioner's employees as of May 1, 2009 was 470, and not
396 as respondent claimed. 4

Respondent denied the charge and claimed that the 119 union members were more than the 20% requirement for
union registration. The document "Sama-Samang Pahayag ng Pagsapi sa Unyon" which it presented in its petition
for certification election  supported their claim of 119 members. Respondent also contended that petitioner was
5

estopped from assailing its legal personality as it agreed to a certification election and actively participated in the
pre-election conference of the certification election proceedings.  Respondent argued that the union members were
6

informed of the contents of the documents they signed and that the 68 attendees to the organizational meeting
constituted more than 50% of the total union membership, hence, a quo rumexisted for the conduct of the said
meeting. 7

On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a Decision  granting the petition
8

for cancellation of respondent's certificate of registration, the dispositive portion of which reads:

WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED. Accordingly, the respondent
Union Certificate of Registration No. RO400A-2009-05-01-UR-LAG, dated May 19, 2009 is hereby REVOCKED (sic)
and /or CANCELLED pursuant to paragraph (a) & (b), Section 3, Rule XIV of Department Order No. 40-03 and the
Samahang Lakas ng Manggagawa ng TAKATA (SALAMAT) is hereby delisted from the roll of legitimate labor
organization of this office.9

In revoking respondent's certificate of registration, the Regional Director found that the 68 employees who
attended the organizational meeting was obviously less than 20% of the total number of 396 regular rank-
and-file employees which respondent sought to represent, hence, short of the union registration
requirement; that the attendance sheet which contained the signatures and names of the union members
totalling to 68 contradicted the list of names stated in the document denominated as "Pangalan ng mga
Labor II – 1
Kasaping Unyon." The document "Sama-Samang Pahayag ng Pagsapi" was not attached to the application for
registration as it was only submitted in the petition for certification election filed by respondent at a later date. The
Regional Director also found that the proceedings in the cancellation of registration and certification elections are
two different and entirely separate and independent proceedings which were not dependent on each other.

Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal Officer, Domingo P. Mole,
filed a Notice and Memorandum of Appeal  with the Bureau of Labor Relations (BLR). However, on September
10

28,2009, respondent, through its counsels, Attys.

Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with Formal Entry of
Appearance  to the Office of the DOLE Secretary, which the latter eventually referred to the BLR. Petitioner filed an
11

Opposition to the Appeals  praying for their dismissal on the ground of forum shopping as respondent filed two
12

separate appeals in two separate venues; and for failing to avail of the correct remedy within the period; and that the
certificate of registration was tainted with fraud, misrepresentation and falsification.

In its Answer,  respondent claimed that there was no forum shopping as BMP's Paralegal Officer was no longer
13

authorized to file an appeal on behalf of respondent as the latter's link with BMP was already terminated and only
the Union President was authorized to file the appeal; and that it complied with Department Order No. 40-03.

On December 9, 2009, after considering respondent's Appeal Memorandum with Formal Entry of Appearance and
petitioner's Answer, the BLR rendered its Decision  reversing the Order of the Regional Director, the decretal
14

portion of which reads:

WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo S. Martinez, Sr., dated
27 August 2009, is hereby REVERSEDand SET ASIDE.

Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the roster of labor
organizations. 15

In reversing, the BLR found that petitioner failed to prove that respondent deliberately and maliciously
misrepresented the number of rank-and-file employees. It pointed out petitioner's basis for the alleged
noncompliance with the minimum membership requirement for registration was the attendance of 68
members to the May 1, 2009 organizational meeting supposedly comprising only 17% of the total 396
regular rank-and-file employees. However, the BLR found that the list of employees who participated in the
organizational meeting was a separate and distinct requirement from the list of the names of members
comprising at least 20% of the employees in the bargaining unit; and that there was no requirement for
signatures opposite the names of the union members; and there was no evidence showing that the
employees assailed their inclusion in the list of union members.

Petitioner filed a motion for reconsideration, which was denied by the BLR in a Resolution  dated January 8, 2010.
16

Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.

After the submission of the parties' respective pleadings, the case was submitted for decision.

On December 22, 2010, the CA rendered its assailed decision which denied the petition and affirmed the decision of
the BLR. Petitioner's motion for reconsideration was denied in a Resolution dated March 29, 2011.

Hence this petition for review filed by petitioner raising the following issues, to wit:

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN AFFIRMING THE
DECISION OF PUBLIC RESPONDENT BLR AND NOT FINDING ANY VIOLATION BY SAMAHANG LAKAS
MANGGAGAWA SA TAKATA (SALAMAT) OF THE RULE ON FORUM SHOPPING IN THE FILING OF TWO
VERIFIED APPEALS FOR AND ITS BEHALF. BOTH OF THE APPEALS SHOULD HAVE BEEN DISMISSED
OUTRIGHT BY PUBLIC RESPONDENT BLR, ON GROUND OF FORUM SHOPPING.

Labor II – 1
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE APPLICATION FOR
REGISTRATION OF SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) WAS COMPLIANT WITH
THE LAW. CONSIDERING THE CIRCUMSTANCES OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS
CLEAR THAT THE SAME IS TAINTED WITH FRAUD, MISREPRESENTATION AND FALSIFICATION.
SALAMAT DID NOT POSSESS THE REQUIREDNUMBER OF MEMBERS AT THE TIME OF FILING OF ITS
APPLICATION FOR REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION, AND
FALSE STATEMENTS AND FRAUD IN CONNECTION THEREWITH. 17

Anent the first issue, petitioner contends that respondent had filed two separate appeals with two different
representations at two different venues, in violation of the rule on multiplicity of suits and forum shopping, and
instead of dismissing both appeals, the appeal erroneously filed before the Labor Secretary was the one held validly
filed, entertained and even granted; that it is not within the discretion of BLR to choose which between the two
appeals should be entertained, as it is the fact of the filing of the two appeals that is being prohibited and not who
among the representatives therein possessed the authority.

We are not persuaded.

We find no error committed by the CA in finding that respondent committed no forum shopping. As the CA correctly
concluded, to wit:

It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal on behalf of
union SALAMAT and that BMP was duly informed that its services was already terminated. SALAMAT even
submitted before the BLR its "Resolusyon Blg. 01-2009" terminating the services of BMP and revoking the
representation of Mr. Domingo Mole in any of the pending cases being handled by him on behalf of the union. So,
considering that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal when it filed the
Notice and Memorandum of Appeal to DOLE Regional Office No. IV-A, the same can no longer be treated as an
appeal filed by union SALAMAT. Hence, there is no forum shopping to speak of in this case as only the Appeal
Memorandum with Formal Entry of Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty. Jehn Louie W.
Velandrez is sanctioned by SALAMAT. 18

Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such appeal is considered to
have not been filed at all. It has been held that "if a complaint is filed for and in behalf of the plaintiff who is not
authorized to do so, the complaint is not deemed filed.

An unauthorized complaint does not produce any legal effect." 19

Respondent through its authorized representative filed its Appeal Memorandum with Formal Entry of Appearance
before the Labor Secretary, and not with the BLR. As the appeal emanated from the petition for cancellation of
certificate of registration filed with the Regional Office, the decision canceling the registration is appealable to the
BLR, and not with the Labor Secretary. However, since the Labor Secretary motu propio referred the appeal with the
BLR, the latter can now act on it. Considering that Mole's appeal with the BLR was not deemed filed, respondent’s
appeal, through Banzuela and Associates, which the Labor Secretary referred to the BLR was the only existing
appeal with the BLR for resolution. There is, therefore, no merit to petitioner's claim that BLR chose the appeal of
Banzuela and Associates over Mole's appeal.

The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union  cited by petitioner is not
20

at all applicable in this case as the issue therein is the authority of the Labor Secretary to review the decision of the
Bureau of Labor Relations rendered in the exercise of its appellate jurisdiction over decision of the Regional Director
in cases involving cancellations of certificate of registration of labor unions. We found no grave abuse of discretion
committed by the Secretary of Labor in not acting on therein petitioner's appeal. The decision of the Bureau of Labor
Relations on cases brought before it on appeal from the Regional Director are final and executory. Hence, the
remedy of the aggrieved party is to seasonably avail of the special civil action of certiorari under Rule 65 and the
Rules of Court. In this case, after the Labor Secretary motu propio referred respondent's appeal filed with it to the
BLR which rendered its decision reversing the Regional Director, petitioner went directly to the CA via a petition for
certiorari under Rule 65.

Labor II – 1
As to the second issue, petitioner seeks the cancellation of respondent's registration on grounds of fraud
and misrepresentation bearing on the minimum requirement of the law as to its membership, considering
the big disparity in numbers, between the organizational meeting and the list of members, and so
misleading the BLR that it obtained the minimum required number of employees for purposes of
organization and registration.

We find no merit in the arguments.

Art. 234 of the Labor Code provides:

ART. 234. Requirements of Registration. - A federation, national union or industry or trade union center or
an independent union shall acquire legal personality and shall be entitled to the rights and privileges
granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the
following requirements:

(a) Fifty pesos (₱50.00)registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such
meetings;

(c) In case the applicant is an independent union, the names of all its members comprising at least
twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and

(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it."

And after the issuance of the certificate of registration, the labor organization's registration could be assailed directly
through cancellation of registration proceedings in accordance with Articles 238 and 239 of the Labor Code. And the
cancellation of union certificate of registration and the grounds thereof are as follows:

ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor organization, whether
national or local, may be cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239
hereof.

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

(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.

Petitioner's charge that respondent committed misrepresentation and fraud in securing its certificate of registration is
a serious charge and must be carefully evaluated. Allegations thereof should be compounded with supporting
circumstances and evidence.  We find no evidence on record to support petitioner's accusation.
21

Labor II – 1
Petitioner's allegation of misrepresentation and fraud is based on its claim that during the organizational
meeting on May 1, 2009, only 68 employees attended, while respondent claimed that it has 119 members as
shown in the document denominated as "Pangalan ng mga Kasapi ng Unyon;" hence, respondent
misrepresented on the 20% requirement of the law as to its membership.

We do not agree.

It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational meeting must
comprise 20% of the employees in the bargaining unit. In fact, even the Implementing Rules and Regulations of
the Labor Code does not so provide. It is only under Article 234 (c) that requires the names of all its members
comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to
operate. Clearly, the 20% minimum requirement pertains to the employees’ membership in the union and
not to the list of workers who participated in the organizational meeting. Indeed, Article 234 (b) and (c)
provide for separate requirements, which must be submitted for the union's registration, and which
respondent did submit. Here, the total number of employees in the bargaining unit was 396, and 20% of
which was about 79. Respondent submitted a document entitled "Pangalan ng Mga Kasapi ng Unyon"
showing the names of 119 employees as union members, thus respondent sufficiently complied even
beyond the 20% minimum membership requirement. Respondent also submitted the attendance sheet of the
organizational meeting which contained the names and signatures of the 68 union members who attended the
meeting. Considering that there are 119 union members which are more than 20% of all the employees of the
bargaining unit, and since the law does not provide for the required number of members to attend the
organizational meeting, the 68 attendees which comprised at least the majority of the 119 union members
would already constitute a quorum for the meeting to proceed and to validly ratify the Constitution and By-
laws of the union. There is, therefore, no basis for petitioner to contend that grounds exist for the
cancellation of respondent's union registration. For fraud and misrepresentation to be grounds for
cancellation of union registration under Article 239 of the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union
members. 22

Petitioner's claim that the alleged union members signed documents without adequate information is not persuasive.
The one who alleges a fact has the burden of proving it and a mere allegation is not evidence.  In fact, we note that
23

not one of those listed in the document denominated as "Pangalan ng Mga Kasaping Unyon" had come forward to
deny their membership with respondent. Notably, it had not been rebutted that the same union members had signed
the document entitled "Sama-Samang Pahayag ng Pagsapi," thus, strengtheningtheir desire to be members of the
respondent union.

Petitioner claims that in the list of members, there was an employee whose name appeared twice and another
employee who was merely a project employee. Such could not be considered a misrepresentation in the absence of
showing that respondent deliberately did so for the purpose of increasing their union membership. In fact, even if
those two names were not included in the list of union members, there would still be 117 members which was still
more than 20% of the 396 rank-and-file employees.

As to petitioner's argument that the total number of its employees as of May 1, 2009 was 470, and not 396 as
respondent claimed, still the 117 union members comprised more than the 20% membership requirement for
respondent's registration.

In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment,  we said:
24

For the purpose of de-certifying a union such as respondent, 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, the 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.

The bare fact that two signatures appeared twice on the list of those who participated in the organizational meeting
would not, to our mind, provide a valid reason to cancel respondent’s certificate of registration. The cancellation of a
Labor II – 1
union’s registration doubtless has an impairing dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration under the Labor Code, the nature of
the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority
of union members. 1âwphi1

In this case, we agree with the BLR and the CA that respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged failure of respondent to indicate with mathematical
precision the total number of employees in the bargaining unit is of no moment, especially as it was able to comply
with the 20% minimum membership requirement. Even if the total number of rank-and-file employees of petitioner is
528, while respondent declared that it should only be 455, it still cannot be denied that the latter would have more
than complied with the registration requirement.
25

WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated December 22, 2010
and the Resolution dated March 28, 2011 of the Court of Appeals, in CA-G.R. SP No. 112406, are AFFIRMED.

SO ORDERED.

Labor II – 1
13.) Hijo Resource v Mejares represented by NAMABDJERA-HRC [Union])
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.

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,
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

Labor II – 1
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
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.

Labor II – 1
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 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.
Labor II – 1
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
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
Labor II – 1
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
14.) AIM v AIM Faculty
January 23, 2017

G.R. No. 207971

ASIAN INSTITUTE OF MANAGEMENT, Petitioner,

vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION, Respondent.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari assails the January 8, 2013 Decision  of the Court of Appeals (CA) which
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dismissed the Petition for Certiorari in CA-G.R. SP No. 114122, and its subsequent June 27, 2013
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Resolution   denying herein petitioner's Motion for Reconsideration. 

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Factual Antecedents

Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, non-profit educational institution.
Respondent Asian Institute of Management Faculty Association (AFA) is a labor organization composed of
members of the AIM faculty, duly registered under Certificate of Registration No. NCR-UR-12-4076-2004.

On May 16, 2007, respondent filed a petition for certification election  seeking to represent a bargaining unit in
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AIM consisting of forty (40) faculty members. The case was docketed as DOLE Case No. NCR-OD-M-0705-
007. Petitioner opposed the petition, claiming that respondent's members are neither rank-and-file nor
supervisory, but rather, managerial employees. 7

On July 11, 2007, petitioner filed a petition for cancellation of respondent's certificate of

registration  - docketed as DOLE Case No. NCROD-0707-001-LRD - on the grounds of misrepresentation in
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registration and that respondent is composed of managerial employees who are prohibited from organizing
as a union.

On August 30, 2007, the Med-Arbiter in DOLE Case No. NCR-OD-M-0705-007 issued an Order  denying the 9

petition for certification election on the ground that AIM' s faculty members are managerial employees. This
Order was appealed by respondent before the Secretary of the Department of Labor and Employment
(DOLE),   who reversed foe same via a February 20, 2009 Decision   and May 4, 2009 Resolution,   decreeing
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thus:

WHEREFORE, the appeal filed by the Asian Institute of Management Faculty Association (AIMFA) is GRANTED.
The Order dated 30 August 2007 of DOLE-NCR Mediator-Arbiter Michael T. Parado is hereby REVERSED and SET
ASIDE.

Accordingly, let the entire records of the case be remanded to DOLEN CR for the conduct of a certification election
among the faculty members of the Asian Institute of Management (AIM), with the following choices:

1. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION (AIMFA); and

2. No Union.

SO ORDERED. 13

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Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order  dated February 16, 2009 was issued by DOLE-
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NCR Regional Director Raymundo G. Agravante granting AIM's petition for cancellation of respondent's certificate of
registration and ordering its delisting from the roster of legitimate labor organizations. 1bis Order was appealed by
respondent before the Bureau labor Relations  (BLR), which, in a December 29, 2009 Decision,  reversed the same
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and ordered respondent's retention in the roster of legitimate labor organizations. The BLR held that the grounds
relied upon in the petition for cancellation are not among the grounds authorized under Article 239 of the
Labor Code,   and that respondent's members are not managerial employees. Petitioner moved to reconsider,
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but was rebuffed in a March 18, 2010 Resolution.  18

CA-G.R. SP No.109487 and G.R. No.197089

Petitioner filed a Petition for Certiorari before the CA, questioning the DOLE Secretary's February 20, 2009 Decision
and May 4, 2009 Resolution relative to DOLE Case No. NCR-OD-M-0705-007, or respondent's petition for
certification election. Docketed as CA-G.R. SP No. 109487, the petition is based on the arguments that 1) the
bargaining unit within AIM sought to be represented is composed of managerial employees who are not eligible to
join, assist, or form any labor organization, and 2) respondent is not a legitimate labor organization that may conduct
a certification election.

On October 22, 2010, the CA rendered its Decision  containing the following pronouncement:
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AIM insists that the members of its tenure-track faculty are managerial employees, and therefore, ineligible to join,
assist or form a labor organization. It ascribes grave abuse of discretion on SOLE  for its rash conclusion that the
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members of said tenure-track faculty are not managerial employees solely because the faculty's actions are still
subject to evaluation, review or final approval by the board of trustees ("BOT'). AIM argues that the BOT does not
manage the day-to-day affairs, nor the making and implementing of policies of the Institute, as such functions are
vested with the tenure-track faculty.

We agree.

Article 212(m) of the Labor Code defines managerial employees as:

'ART. 212. Definitions. – x x x

(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the employer, effectively recommend
such 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.'

There are, therefore, two (2) kinds of managerial employees under Art. 212(m) of the Labor Code. Those who
'lay down x x x management policies', such as the Board of Trustees, and those who 'execute management
policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees'.

xxxx

On its face, the SOLE's opinion is already erroneous because in claiming that the 'test of
'supervisory' or 'managerial status' depends on whether a person possesses authority to act in the interest of his
employer in the matter specified in Article 212(m) of the Labor Code and Section l(m) of its Implementing Rules', he
obviously was referring to the old definition of a managerial employee. Such is evident in his use of 'supervisory
or managerial status', and reference to 'Section l(m) of its Implementing Rules'. For presently, as aforequoted in
Article 212(m) of the Labor Code and as amended by Republic Act 6715 which took effect on March 21, 1989, a
managerial employee is already different from a supervisory employee. x x x

xxxx

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In further opining that a managerial employee is one whose 'authority is not merely routinary or clerical in
nature but requires the use of independent judgment', a description which fits now a supervisory
employee under Section l(t), Rule I, Book V of the Omnibus Rules Implementing the Labor Code, it then follows
that the SOLE was not aware of the change in the law and thus gravely abused its discretion amounting to lack of
jurisdiction in concluding that AIM's 'tenure-track' faculty are not managerial employees.

SOLE further committed grave abuse of discretion when it concluded that said tenure-track faculty
members are not managerial employees on the basis of a 'footnote' in AIM's Policy Manual, which provides
that 'the policy[-] making authority of the faculty members is merely recommendatory in nature considering
that the faculty standards they formulate are still subject to evaluation, review or final approval by the
[AIM]'s Board of Trustees'. x x x

xxxx

Clearly, AIM's tenure-track faculty do not merely recommend faculty standards.  They 'determine all faculty
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standards', and are thus managerial employees. The standards' being subjected to the approval of the Board of
Trustees would not make AIM's tenure-track faculty non-managerial because as earlier mentioned, managerial
employees are now of two categories: (1) those who 'lay down policies', such as the members of the Board of
Trustees, and (2) those who 'execute management policies (etc.)’, such as AIM's tenure-track faculty.

xxxx

It was also grave abuse of discretion on the part of the SOLE when he opined that AIM' s tenure-track faculty
members are not managerial employees, relying on an impression that they were subjected to rigid observance of
regular hours of work as professors. x x x

xxxx

More importantly, it behooves the SOLE to deny AFA's appeal in light of the February 16, 2009 Order of
Regional Director Agravante delisting AFA from the roster of legitimate labor organizations. For, only
legitimate labor organizations are given the right to be certified as sole and exclusive bargaining agent in an
establishment.

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Here, the SOLE committed grave abuse of discretion by giving due course to AFA's petition for certification election,
despite the fact that: (1) AFA's members are managerial employees; and (2) AFA is not a legitimate labor
organization. 'These facts rendered AFA ineligible, and without any right to file a petition for certification election, the
object of which is to determine the sole and exclusive bargaining representative of qualified AIM employees.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated February 20, 2009 and Resolution
dated May 4, 2009 are hereby REVERSED and SET ASIDE. The Order dated August 30, 2007 of Mediator-Arbiter
Parado is hereby REINSTATED.

SO ORDERED.  (Emphasis in the original)

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Respondent sought reconsideration, but was denied. It thus instituted a Petition for Review on Certiorari before this
Court on July 4, 2011. The Petition, docketed as G.R. No. 197089, remains pending to date.

The Assailed Ruling of the Court of Appeals

Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or petitioner AIM's petition for cancellation of
respondent's certificate of registration, petitioner filed on May 24, 20 l 0 a Petition for Certiorari before the CA,
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questioning the BLR's December 29, 2009 decision and March 18, 2010 resolution. The petition, docketed as CA-
G.R. SP No. 114122, alleged that the BLR committed grave abuse of discretion in granting respondent's appeal and

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affirming its certificate of registration notwithstanding that its members are managerial employees who may not join,
assist, or form a labor union or organization.

On January 8, 2013, the CA rendered the assailed Decision, stating as follows:

The petition lacks merit

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It is therefore incumbent upon the Institute to prove that the BLR committed grave abuse of discretion in issuing the
questioned Decision.  Towards this end, AIM must lay the basis by showing that any of the grounds provided under
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Article 239 of the Labor Code, exists, to wit:

Article 239. Grounds for cancellation of union registration. - The following may constitute grounds for cancellation of
union registration:

(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.

Article 238 of the Labor Code provides that the enumeration of the grounds for cancellation of union registration, is
exclusive; in other words, no other grow1ds for cancellation is acceptable, except for the three (3) grounds stated in
Article 239. The scope of the grounds for cancellation has been explained-

For the purpose of de-certifying a union such as respondent, 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, the 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.

The bare fact that two signatures appeared twice on the list of those who participated in the organizational meeting
would not, to our mind, provide a valid reason to cancel respondent's certificate of registration. The cancellation of a
union's registration doubtless has an impairing dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration under the Labor Code, the nature of the fraud
andmisrepresentation must be grave and compelling enough to

vitiate the consent of a majority of union members. 23

In this regard, it has also been held that:

Another factor which militates against the veracity of the allegations in the Sinumpaang Petisyon is the lack of
particularities on how, when and where respondent union perpetrated the alleged fraud on each member. Such
details are crucial for, in the proceedings for cancellation of union registration on the ground of fraud or
misrepresentation, what needs to be established is that the specific act or omission of the union deprived the
complaining employees-members of their right to choose. 24

A cursory reading of the Petition shows that AIM did NOT allege any specific act of fraud or misrepresentation
committed by AFA. What is clear is that the Institute seeks the cancellation of the registration of AFA based on
Article 245 of the Labor Code on the ineligibility of managerial employees to form or join labor unions. Unfortunately
for the petitioner, even assuming that there is a violation of Article 245, such violation will not result in the
cancellation of the certificate of registration of a labor organization.

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It should be stressed that a Decision had already been issued by the DOLE in the Certification Election case; and
the Decision ordered the conduct of a certification election among the faculty members of the Institute, basing its
directive on the finding that the members of AFA were not managerial employees and are therefore eligible to form,
assist and join a labor union. As a matter of fact, the certification election had already been held on October 16,
2009, albeit the results have not yet been resolved as inclusion/exclusion proceedings are still pending before the
DOLE. The remedy available to the Institute is not the instant Petition, but to question the status of the individual
union members of the AFA in the inclusion/exclusion proceedings pursuant to Article 245-A of the Labor Code,
which reads:

Article 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.

Petitioner insists that Article 245-A is not applicable to this case as all AF A members are managerial employees.
We are not persuaded.

The determination of whether any or all of the members of AFA should be considered as managerial employees is
better left to the DOLE because,

It has also been established that in the determination of whether or not certain employees are managerial
employees, this Court accords due respect and therefore sustains the findings of fact made by quasi-judicial
agencies which are supported by substantial evidence considering their expertise in their respective fields. 25

From the discussion, it is manifestly clear that the petitioner foiled to prove that the BLR committed grave abuse of
discretion; consequently, the Petition must fail.

WHEREFORE, the Petition is hereby DENIED. The Decision and Resolution of public respondent Bureau of Labor
Relations in BLR-A-C-19-3-6-09 (NCR-OD-0707-001) are hereby AFFIRMED.

SO ORDERED.  (Emphasis in the original)

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Petitioner filed its Motion for Reconsideration, which was denied by the CA via its June 27, 2013 Resolution. Hence,
the instant Petition.

In a November 10, 2014 Resolution,  the Court resolved to give due course to the Petition.
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Issue

Petitioner claims that the CA seriously erred in affirming the dispositions of the BLR and thus validating the
respondent's certificate of registration notwithstanding the fact that its members are all managerial
employees who are disqualified from joining, assisting, or forming a labor organization.

Petitioner's Arguments

Praying that the assailed CA dispositions be set aside and that the DOLE-NCR Regional Director's February 16,
2009 Order granting AIM's petition for cancellation of respondent's certificate of registration and ordering its delisting
from the roster of legitimate labor organizations be reinstated instead, petitioner maintains in its Petition and
Reply  that respondent's members are all managerial employees; that the CA erred in declaring that even if
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respondent's members are all managerial employees, this alone is not a ground for cancellation of its
certificate of registration; that precisely, the finding in DOLE Case No. NCR-ODM- 0705-007, which the CA
affirmed in CA-G.R. SP No. 109487, is that respondent's members are managerial employees; that respondent's
declaration that its members are eligible to join, assist, or form a labor organization is an act of misrepresentation,
given the finding in CA-G.R. SP No. 109487 that they are managerial employees; and that the grounds for
cancellation of union registration enumerated in Article 239 of the Labor Code are not exclusive.

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Respondent's Arguments

In its Comment,  respondent maintains that the CA was right to treat petitioner’s case for cancellation of its union
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registration with circumspection; that petitioner's ground for filing the petition for cancellation is not
recognized under Article 239; that petitioner's accusation of misrepresentation is unsubstantiated, and is being
raised for the first time at this stage; that its members are not managerial employees; and that petitioner's opposition
to respondent's attempts at self-organization constitutes harassment, oppression, and violates the latter's rights
under the Labor Code and the Constitution.

Our Ruling

In Holy Child Catholic School v. Hon. Sto. Tomas, this Court declared that "[i]n case of alleged inclusion of
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disqualified employees in a union, the proper procedure for an employer like petitioner is to directly file a petition for
cancellation of the union's certificate of registration due to misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor Code, as amended."

On the basis of the ruling in the above-cited case, it can be said that petitioner was correct in filing a petition for
cancellation of respondent's certificate of registration. Petitioner's sole ground for seeking cancellation of
respondent's certificate of registration - that its members are managerial employees and for this reason, its
registration is thus a patent nullity for being an absolute violation of Article 245 of the Labor Code which
declares that managerial employees are ineligible to join any labor organization --- is, in a sense, an
accusation that respondent is guilty of misrepresentation for registering under the claim that its members
are not managerial employees.

However, the issue of whether respondent's members are managerial employees is still pending resolution
by way of petition for review on certiorari in G.R. No. 197089, which is the culmination of all proceedings in
DOLE Case No. NCR-OD-M-0705-007 -- where the issue relative to the nature of respondent's membership
was first raised by petitioner itself and is there fiercely contested. The resolution of this issue cannot be
pre-empted; until it is determined with finality in G.R. No. l 97089, the petition for cancellation of
respondent's certificate of registration on the grounds alleged by petitioner cannot be resolved. As a matter
of courtesy and in order to avoid conflicting decisions, We must await the resolution of the petition in G.R.
No. 197089.

x x x If a particular point or question is in issue in the second action, and the judgment will depend on the
determination of that particular point or question, a former judgment between the same parties or their privies will be
final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit. x x x
Identity of cause of action is not required, but merely identity of issues.  (Citation omitted)
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WHEREFORE, considering that the outcome of this case depends on the resolution of the issue relative to the
nature of respondent's membership pending in G.R. No. 197089, this case is ordered CONSOLIDATED with G.R.
No. 197089.

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